Fred Schnaubelt's Response to Don Wood
May 2, 2003
Dear Don,
Thanks for your question.
You present a couple of oxymorons. "High density housing" and $1macmansions do
not go hand in hand.
Welfare and subsidies are related to taking money from one group of people and
giving to another group.
Subsidized housing appears to cost up to 40% more than non-subsidized, according
to several Comptroller General of The United States Reports, and as evidenced
locally by some recently approved projects in San Diego whereby
non-profit apartments are costing $199,000 per unit at 39th & Polk and $247,000
at 9th & F Streets, more than double the median selling price of all for-profit
units sold since 1/1/02 in San Diego. The free market provides the most
affordable housing.
I don't know how many of my recent articles you have received but would be glad
to send you a more thorough exposition if you would like. You imply developers
get "local politicians to upzone" and control the process. I am forwarding my
article on MALIGN NEGLECT for you to see how many regulations have been passed
by politicians over the objections of developers, which have doubled the price
of housing.
The way the free market works is silk stockings, clocks, watches and computers
were originally made for wealthy people. When that market was saturated, they
were then mass produced for the "masses."
After developers sell as many $10 million dollars homes as the market will bear,
they then build $5 million homes, then $1 million dollar homes and so on.
Except if the market is restricted by government. You may recall 20 years ago
the U.S. government put quotas on Japanese imported cars, Honda, Nissan,
Toyota. So if the Japanese could only sell a limited number of cars they
started producing Acuras, Infinities, and Lexus. These high profit vehicles cut
into Detroit's bottom line even more than the low priced imports, and Detroit
outsmarted itself and the quotas were dropped.
Local government regulations dictate that no housing comparable to Volkswagen,
Chevy and Ford can be built today, so developers go where the cost of regulation
can be passed on to the housing consumer, $400,000 to $800,000 homes.
When homes sell
as quickly as they put them on the market, and profits are higher than normal,
its a free market signal that there is a shortage and that consumers are eager
and more urgently willing to pay for more of the product. The signal says that
resources should be reallocated with more going for "more" housing, but
community planning groups/voters say over my dead body.
Hope this stimulates some more critical
thinking on your part. Thanks for your inquiry.
Fred
Fred Schnaubelt
2728 Adams Avenue
San Diego, California
(619) 280-2082
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