COMMENTARY | COLUMNISTS | FRED SCHNAUBELT

The charade of affordable housing

The unaffordability of “affordable housing” has been much in the news recently. One report states, “Most people probably have no chance at buying...” i.e., an affordable home in San Diego, with 40,000 people on the waiting list.

The only way, only way, only way (as Tolstoy might say), to increase the supply of affordable housing in general is to increase the total supply of housing at a rate faster than the increase in annual household formations and decouplings.

The news media inadvertently guarantees this will never happen since long ago editorials opined that two candidates and a cement mixer were running for office. Since then, the media has perpetuated this impression and excoriated by insinuation any candidate for office or re-election that has proposed increasing housing development or densities in the county beyond the barest minimum.

Hence, no one can be elected in San Diego who proposes a free-market solution to the affordable-housing crisis, a crisis decried by so many affordable-housing advocates. Furthermore, no advocates have ever publicly testified in favor of increasing densities in hundreds of proposed housing developments (except inclusionary projects that raise the housing cost for 95 percent of the population that is not subsidized).

There is no shortage of land, labor or capital in San Diego so why is the median-priced San Diego home over double the U.S. median. One major reason is 60.9 percent of county land is politically off-limits to development; another is regulations that require 5- to 20-year delays in obtaining approvals for subdivision maps. Indefensible!

When the free market is able to complete apartments, they sell for less than half the cost of government so-called affordable housing, judging by prices bragged about in the media. Looked at differently, the new apartments provided through the government cost more than 90 percent of the unsubsidized apartments in San Diego, Section 8 vouchers not included.

Historically, the way most people obtain better housing was described in a University of Michigan study, “New Homes and Poor People” affirming that the construction of 1,000 new homes and apartments makes it possible for 3,545 households to move to better accommodations. Of the 3,545 moves surveyed, 1,290 were by low- and moderate-income families.

The couple that starts out in an apartment, moves to a starter home of say $400,000, whose seller moves into a $500,000 home, whose seller moves into an $800,000 home, with each move leaving a less expensive dwelling behind for an average of 3.53 moves. Anyone who didn’t move into a brand-new house or apartment when leaving his or her parent’s home or graduating from college knows personally how the housing market works.

This is the essence of upward mobility — better housing as work experience and income rise. Unfortunately, the budgets, salaries or sense-of-self of professional affordable-housing advocates depends on placing people with no money into society’s most expensive consumer product.

Apparently, the used dwellings 95 percent of renters live in through upward mobility are not good enough for the advocates’ charade. Affordable doesn’t mean decent, safe, clean housing for low-income families, but brand-new or nearly new housing that is provided by the taxpayers, including self-supporting renters.

Once the government intervened in the housing market to determine where and when new housing would be built, homes and apartments became increasingly unaffordable. Largely unreported, San Diego homes and apartments were cheaper than the national average before smart growth, managed growth and planned growth.

As they said in the former Soviet Union, “You can have government planning or housing — but not both.”


Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 45 years and was a San Diego city councilman from 1977 to 1981.

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David 10:41pm March 27, 2015

Still at it, Fred? Good for you. Never give up the good fight. Eventually, the statists will be shown to be bankrupt charlatans. I see in your bio that your son is a retired colonel. As a Vietnam vet, Fort Benning Infantry OCS (not retired), I appreciate anyone who serves and retires.