More from the Planning Penalty

The American Dream Coalition website has a map of the calculated planning penalty by state. Very informative but it should have been done on a per capita basis. Otherwise, states with large populations are disproportionally marked as red. For instance, Florida and New Jersey have the same planning penalty but different populations; NJ has twice as much per capita penalty as FL.

Annual per capita penalty for the top three, using 2000 census data:
1. California - $3700
2. Massachusetts - $2300
3. New Jersey - $1950

CA tops the list for both total and per capita penalty. Wow.

A fellow real estate contrarian

Here's a very interesting read I came across last week (somehow the date on that page is always the current date). The author shares my non-mainstream views of the real estate market.

The first part of this article sums up pretty well why I've been so pessimistic about the Bay Area housing market over the past year, plus some facts and reasons I didn't know.

EDIT: I checked out the U-haul rates. A 26' truck from Richardson, TX, to San Jose costs $632, but the same truck moving in the other direction costs $2929, or 4.6 times as much! (Richardson, like San Jose, is home to a whole bunch of high tech companies.)

So that's why it's so expensive in the SF Bay Area

This is a report on the effects of urban growth planning on real estate prices. The "penalty" in real estate price that buyers have to pay seems to be estimated based on factors such as price-to-income ratio of housing.

For CA, the report's results are dismal. In San Francisco and San Jose, growth planning allegedly cost $850K and $513K respectively. Part of the problem is the government's purchase of land for parks and open space preserves: "Today, parks and preserves in the five-county San Francisco-Oakland area total nearly 550,000 acres, not counting areas outside of urban-growth boundaries that are protected by restrictive zoning. By comparison, the 2000 census found that the urbanized land in these counties (including parks in those urban areas) totaled only 502,000 acres."

The section on San Jose is quite interesting, as I've lived here for 15 years but never knew about this until last year. "San Jose housing was still affordable in 1969. But fears of “Los Angelization” led San Jose and Santa Clara County to impose an urban-growth boundary and other planning restrictions in 1974." That would explain why housing prices here are so high.

The rest of the report covers other areas and offers interesting commentary on various topics related to housing and growth planning. Only one major complaint: the report partly blames the planning penalty on Proposition 13 for restricting property tax revenues and thus forcing city governments to avoid expanding the growth boundaries. The real fault in this chain of events lies with the city governments for establishing those boundaries in the first place.

Why does this blog exist?

Real estate has been a hot market over the past few years, especially here in the SF Bay Area where you can expect to pay upwards of $750K for a single-family home. As one who follows the real estate market, I'll post whatever relevant information I find that relates to housing, especially from financial and economic perspectives. Hopefully this can serve as an archive of sources that I find over time, for my own reference.

In any case, you found this blog because you're interested in real estate right? Read on, brave and adventurous soul.