Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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Sunday, May 26, 2024

Reply to ChanZuckerberg Affordable Housing Solutions. Couple Ideas Might Work but Rest Would Make it Worse, by Mary Cummins.

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I just read ChanZuckerberg's "7 Creative Solutions to Affordable Housing in California." ( ) These people are clueless about the real causes and solutions to California's housing crisis. Their article makes me think it's an AI article, i.e. "Please write an article about how to solve the housing crisis using inspiring, positive terms in 1,000 words or less." I will reply to each idea noting which are total bombs and which will actually help. 

"At CZI, we believe that, yes, California can solve its affordable housing crisis. We’ve seen several creative solutions to affordable housing work.""We’ve learned a lot over the years about how to solve California’s housing crisis. The solutions below are proof that, yes, it can happen."

If positive words and ideas could solve the problem, it would have been solved 50 years ago. This is not a new problem which they at least admit "This problem has been decades in the making." Many, many people have tried throwing inspiring words at the problem with no success.

1. "Exploring New Methods for Constructing and Producing Homes"

Construction costs aren't the main issue. The issue is the extremely high cost of land in California. California land value is 30-80% of the value of the home. Median home in California is $900,000 as of April 2024 compared to $400,000 for the US. In the rest of the affordable country land is generally 10 to 20% maximum of total home value. The high price of land was caused by, you guessed it, lack of development of sufficient housing units, i.e. the housing crisis. Lack of housing drives up home prices per simple supply and demand. Who cares if you just plop down a $50 prefab cubicle on the property if land costs $1,000,000 not to mention permit fees and California's costly, time consuming and difficult red tape. That's not affordable. 

2. "Encouraging Alternative Forms of Home Ownership"

First off, the author doesn't know what the word "redlining" means. Here's an article I wrote about it. ( ) Back in the day redlining by lenders made it difficult for mainly white property owners to get property loans not people of color. Most property owners in the red line areas were white. The people who lived there were  mainly lower income tenants. Those tenants moved there because rent and homes were cheaper. Loans were not denied because of racial makeup of residents. It was based on many factors which caused low property values with higher maintenance costs and risk. These factors caused prices, rents to be low which is what attracted lower income people who are generally people of color. Research has shown that redlining doesn't affect properties today. People love to use the term to sound woke and DEI.

Their article includes racist stereotypes. Blacks, Latinos are not less likely to own homes just because they're black, Latino. People who make less money have less money and are therefore less likely to own a home. Blacks, Latinos make less money than whites. This is an income gap issue which has nothing to do with housing or access to housing. According to the scientific method in order to solve a problem you must first identity the problem. It's the income gap, stupid! Help all less wealthy people increase their income regardless of color, race and they can afford houses but first there must be enough houses to afford and own.

"Community land trusts, housing cooperatives or resident-owned communities, and more affordable condos like Tenancy in Commons" won't solve the problem. They need to be able to afford to rent, buy the homes. There need to be enough homes to buy. People with more money will be the ones buying the property trusts. You aren't helping the people who really need help.

3. "Advancing Cross-Sector Housing Solutions"

"They are collaborative efforts that address interconnected challenges in our communities — such as equitable access to housing, healthcare, transportation and economic opportunity." While this is a nice thought that could help some people it doesn't solve the problem of lack of housing. Equitable access doesn't help if there isn't enough housing. Equitable access goes back to the income gap or housing affordability.

4. "Learning From Successful COVID-19 Housing Solutions"

Were the Covid-19 "housing solutions" successful? Homelessness is up. Evictions are up. Rent is up. Mom and pop landlords couldn't afford to keep their buildings because the government forced them to subsidize their tenants' rent for years. They sold their buildings to big landlords. All tenants had to do was sign a form saying they couldn't pay rent. Many were still working and could pay but chose not to pay. For many landlords their tiny fourplex is their entire retirement savings and income. Many were just Mom owned and not Mom and Pop owned. The eviction moratorium actually made things worse. If people vacated during the moratorium, landlords refused to rerent the units for fear of lying Covid mooches. Those units stayed vacant for two years and people lost housing.

They suggested "sending cash aid to tenants and landlords to prevent evictions and foreclosures." Problem is you'd have to do this forever because most California wages don't cover rent and expenses. This again goes back to income and lack of housing problems which existed pre Covid. If we had more housing, housing costs would be lower. It's supply and demand.There is limited supply but high demand in this state.

5. "Transforming Surplus and Underutilized Lands Into Affordable Homes"

Now they're getting warmer. "We need to build homes at a sustainable rate to match population growth in the U.S. The Huffington Post reported that, despite population growth, fewer homes are now on the market than in 1982." Bingo! "One innovative way to address this extreme housing shortage is to convert surplus and underutilized lands — owned by school districts, faith organizations, government agencies, etc.— into permanently affordable housing."

I support this but there's a problem. If you build on government land you must have 100% affordable housing. This doesn't make economic sense and is not sustainable because property owners would lose money building and renting the units so they won't be built. Some projects I've seen wouldn't even allow some market rate units and some very low income units. Projects must make financial sense or it won't happen. The project I cited above died because developer said he'd lose too much money. Private businesses can't build buildings for free for the government. The government sure can't do it based on past public housing failures. We need real world economically feasible sustainable ideas not wishful thinking, thoughts and prayers.

Now if you alter zoning, planning, building restrictions for the entire state and not just some properties, that would help. Churches, schools, nonprofits, cities, counties have legal mission statements. They can only do what's in their mission statement. Church mission could be to help Christians in a certain parish. Nonprofit mission could be to help low income abused women. They also have a lot of restrictions and their own red tape. Make it statewide and everyone could be helped.

6.  "Leveraging Infill Housing and Densifying Neighborhoods"

They're getting warmer again. "Infill housing refers to building new residential units on vacant or underutilized lots within existing urban areas or neighborhoods. These types of housing can include accessory dwelling units or ADUs, splitting lots, conversion of non-residential buildings, and demolishing and rebuilding on vacant lots or parking lots within neighborhoods."

As I've said for years "we can't ADU our way out of the housing crisis." While ADUs help they are expensive per unit and don't create enough units. One great idea is conversion of non-residential buildings like office, industrial, warehouse buildings and shopping malls. The problem here is government red tape, zoning, planning, Building and Safety requirements and of course NIMBYs. There are also logistical office conversion issues which I explain in this article ( ). 

Haney Bill AB 3068 titled "Adaptive reuse: streamlining: incentives" could help and must be passed. "By mandating by-right approval processes for mixed-use housing conversion projects in city centers, AB 3068 will pave the way for the construction of several thousands of new housing units." This is what we need.

7. "Preserving Existing Lower-Cost Housing"

And now they're ice cold. This is one of the causes of the housing crisis and not a solution! "An often overlooked piece of the solution to this challenge is to protect what’s referred to as naturally occurring affordable housing — existing, affordable multifamily rental properties. These buildings tend to be older and owned by mom-and-pop landlords." 

If property owners were allowed to tear down a run down small rental home or four unit building to build 12 new larger units which house fives times as many people 20 or 30 years ago, those units would be affordable housing today. Older buildings costs less to rent than newer ones. Instead many people lost housing for 20 to 30 years because property owners were not allowed to build more units. It was either too cost prohibitive or difficult because of rent control tenants, NIMBYs, government red tape or long construction times which equal higher construction costs. Government, economy also lost billions in loss of property taxes, revenue, business tax from loss of more rental income from more units. If they build those 12 units today, land cost is up 1,000%, construction costs are up 500% so they must rent it for full new market rent which is at least triple affordable rent or what an older building would rent for today. 

They state preserving existing affordable housing will prevent "private equity (from buying) out owners and raise rents quickly — displacing existing residents, exacerbating gentrification, and contributing to homelessness." Wrong. Forcing small landlords to pay their tenants rents for over two years during Covid caused moms with no pops to have to sell their buildings to large landlords who will push out those tenants.

Rents have risen because there's not enough housing! People move around all over the world to places they can afford. It's economics 101. They also clearly don't understand the meaning of the word "gentrification." I wrote another article here about gentrification ( ). Gentrification is actually just the real estate cycle of revitalization which is GOOD for communities. People are pushed out of, displaced from more expensive areas because of high costs caused by the housing crisis. They go to nearby areas which cost less. This causes those areas to improve and property values and rents rise. Owners who live there or sell their properties are happy about this! A few lower income tenants aren't happy because their rent rises. Most tenants would move to another low income area, rent a smaller place, share a place with friends, try to make more money... Most would not end up homeless. The people who move out of those cheap rent areas are generally POC because of the income race correlation and not because of race. Poor whites have to move too. Housing is not the main cause of homelessness. There are many factors including mainly steady income, savings, physical/mental health, family situations, having children, legal issues... 

I'm amazed they didn't specifically mention rent control in this item though it's part of preserving older low income units. We have rent control in many cities, counties and the state of California. Rent control actually causes rents to rise overall. I wrote an article which explains this ( ). It also costs cities, counties, states and individuals billions of dollars in lost income every year. That money paid to the government could have been used to help the housing crisis. Rent control doesn't even help low income people. While some are lower income most are not. They could easily afford market rent but stay put for many years and save or spend that money on other things. The private landlord is subsidizing their tenants. Some are paying $350/month for a $3,500 unit. I've seen some tenants buy a house with the rent savings all at the expense of the landlord.

In conclusion the ChanZuckerberg article states "With continued support for innovative housing solutions like the ones shared above, we can improve housing affordability and access so people from all backgrounds and income levels can live, work, and thrive."

Most of their suggestions not only don't help solve the problem but make it worse. They need some real estate experts with experience to help them. Many think landlords, developers, people in real estate are "evil," "greedy" "scum." They're not. It's a profession just like being a secretary or doctor. They're actually trying to solve the housing crisis and just end the scapegoat, whipping boy. This is probably why no real estate people were involved in ChanZuckerberg's project or article which is a shame. Maybe they could have come up with effective solutions if they had.

Some Real Solutions to the Housing Crisis

Now for some solutions which will actually help the housing crisis in California. BUILD MORE HOUSING! Reduce development red tape and construction times for new construction, conversions and additions. Zoning, Planning, Cities, Counties and the state must allow more housing and more dense housing in some areas. We could use more legal micro-units, communal units with less mandatory parking if near public transportation. I'm not talking about building a 20 unit building on a smaller home site with only single family homes in the area. I'm talking building 2-4 units (or 2-3 ADUs behind a house) on some single family sites in some areas and build 2-8 units in areas that already have duplexes, fourplexes and are zoned for multifamily R2+ zoning. 

Pass the Adaptive Reuse bill to more easily convert office buildings into residential units. Planning and Zoning needs to quickly modify zones and uses to allow more legal uses especially mixed use zones. Building and Safety must modify some residential requirements to make these projects feasible while still maintaining health and safety. Many more office buildings could be reused this way instead of demolishing them, wasting materials and contributing to climate change. Right now an older office building must be brought up to residential code. If it's older, it's cheaper to demolish or gut to the shell and rebuild which is a waste and horrible for the environment. This can't be done with historic buildings or buildings in HPOZ so they can't be considered.

Most importantly don't allow NIMBYs to stop projects if they meet all regulations. NIMBYs have been extorting developers and cities for years with demands and many were mainly for the benefit of the specific local NIMBYs alone. The approval process takes years because of NIMBY involvement. Their goal is to cause it to become so expensive that developers abandon the project which they do frequently. Just because a NIMBY has a place to live doesn't give them the right to not allow, take away housing from others who don't.

A last related issue is helping people make more money to keep up with housing costs. You need two people making minimum wage in Los Angeles to afford a cheap median one bedroom $2,100. A single person can't afford a one bedroom on minimum wage which is actually high compared to the rest of the nation. This is another reason we need cheaper microunits, communical living units with shared kitchens, living rooms and more studios, singles.

In conclusion we need more than just inspiring words and pie in the sky ideas to solve the housing crisis. Some of ChanZuckerberg's ideas would actually make things worse. The housing crisis has existed for over 50 years because there hasn't been enough residential development. There hasn't been enough development because of government red tape and NIMBYs. We need to work with developers, builders to construct the housing that we desperately need. JUST BUILD MORE HOUSING!

**UPDATE: I just asked chatgpt to write an article stating how to solve the housing crisis in California. It wrote a very, very, very similar article to ChanZuckerberg Affordable Housing Solutions article. The same word salad, similar major ideas, same two bad ideas, sound bytes, woke language and wishful thinking. The only difference is item one was increase housing supply which included sub ideas I suggested. Chatgpt article made much more sense than ChanZuckerberg article and it was free.

Who wrote ChanZuckerberg's article? A lazy employee using chatgpt? Is this some stunt by Zuckerberg? Did they hire people for a task force and pay them thousands per month for a few months to come up with this article? If so, I could see how so much money gets wasted on trying to fix the housing crisis and homeless situation with no actual results. 

#housingcrisis #housing #affordablehousing #marycummins #realestateappraiser #california #adaptiveresuse #officebuildings #losangeles #realestateappraisal

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 40 years of experience.

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