It is unclear what the problem is with the title, which is the same as it was back in 2000 when the measure was on the ballot as Measure J.
Up until last week, the fight over the renewal of Measure J looked like a formality, with no council opposition to the Measure. However, an opposition statement appeared on the ballot from Joseph Whitcombe, significant because his father John Whitcombe has huge development interests in and around town. He was defeated in the first ever Measure J vote when voters struck down Measure X 60-40.
Mr. Whitcombe in his argument against Measure R asked if Davis has “benefited since passage of Measure R 10 years ago?” He continued to argue that “Measure R has not slowed growth. but instead pushed growth toward neighborhood open space and bordering jurisdictions. UC Davis responded to Measure R by starting a housing project, on land the City of Davis now hopes to annex.”
Finally he concludes that Measure R is a “ticking time bomb” where by 2013, SACOG will
“require Davis to approve 1,000 to 3000 new housing units. Under Measure R, these units likely would be placed in existing neighborhoods, and thus will not generate funds for traffic safety improvements or schools. Such shortsighted planning could lead to even worse funding imbalances than our town and schools are currently experiencing.”
Proponents for Measure R counter that Measure J is neither pro-growth nor anti-growth, it simply allows the Davis residents to decide on projects that would develop on open space or agricultural land.
“Measure J is a citizen-based ordinance drafted by Davis residents and passed by voters in 2000. It is neither pro-growth nor anti-growth. It is neutral. It simply requires the City provide all project descriptions, environmental impact reports, fiscal analyses, and other information to the public prior to a vote for approval or denial. Measure R renews Measure J, giving citizens the leverage needed to get the best-designed projects with amenities and other features that would not otherwise be achieved. It gives developers the incentive to offer the most and the best in a proposal.”
This court challenge in our view is extremely significant. Supporters of Measure J (R) have become complacent believing that renewal is a done-deal. The machinations by one of the more influential developer families in Davis prove otherwise. The Whitcombe’s would not be throwing so much time and energy into this if they were not serious about harming it at the ballot box.
And why should they not be serious here?
Their first project Covell Village (Measure X) was defeated by a 60-40 vote back in 2005. Now they have put a huge amount of resources into a proposed Senior Housing Development at the same spot. The problem is that almost no one believes a Measure J (R) vote would pass given the current housing market. A very small development at Wildhorse Ranch (Measure P) was defeated last November by an even larger 75-25 margin.
The hope by the Whitcombe’s is obviously that somehow they can use the legal system thwart the will of the people.
Our read on this suit is that it probably has little chance, that the Judge will say this is a political issue not a legal one and he will will likely deny the motion and defer to allow the voters to decide.
However, the bigger threat comes down the road. This suit may signal that the Whitcombes will undertake a legal challenge to Measure J. The measure was carefully constructed to avoid legal problems that have befallen other such land-use measures, however, it is untested in court. There may yet be vulnerabilities in Measure J that have yet been untested in the legal system.
Nevertheless, the Vanguard will bring the latest on this developing situation following today’s 4 pm court hearing.
—David M. Greenwald reporting
Joseph Whitcome states that he has less than a 1% financial stake in his father’s real estate dealings, as if that somehow separates his interests in defeating Measure R from his father’s. This guy is either really dumb, or thinks we are.
Since the will of the people doesn’t coincide with developer interests it looks like they might try and ram it down the public’s throat another way because they know what’s good for you.
Sounds like what the Democrats just pulled on Healthcare.
Oh give me a break rusty, the Democrats were duly elected by the people and in fact promised to enact health care legislation. This is NOTHING like health care. (Here’s Rexroad’s view on that very topic ([url]http://rexroad.com/tabid/59/articleType/ArticleView/articleId/2543/We-are-a-democracy.aspx[/url])). This is using the legal system to thwart the people’s right to vote on a given measure. Don’t change the subject here. This is a developer who knows he cannot win at the polls, trying to use the legal system to confuse the matter.
David: Their first project was defeated by a 60-40 vote back in 2005
Under Measuire J, yes, but their history with that property goes back much farther. For perspective, a little more background from Growing Pains: Thirty Years in the History of Davis:
[In 1994] John Whitcombe put forward plans for Covell Center . . He wanted to build 660 residences . . and a 75-acre youth sports complex. . far fewer than the 1,500 for Crossroads Place [an earlier proposal] .
Oops. Here’s the [url]link[/url] to the book.
“the Democrats were duly elected by the people and in fact promised to enact health care legislation.”
I’ll give you that David, but Obama also promised transparency, reaching across the isle, no earmarks, no pork, no dirty backroom dealings, should I go on? What happened to those promises?
I hope that Council members are “pressed” to publicly comment on Whitcombe’s attempt to thwart their will concerning how Measure J will be presented to the voters. Councilperson Saylor’s response to to his patron’s plans will, no doubt, be classic “Saylorese” but still will be interesting to hear.
……perhaps a Council member can offer a resolution affirming the Council’s decision to place Measure J on the ballot, titled “The Citizen’s Right to Vote on Future Use of Open Space and Agricultural Lands”.
“…..however, it is untested in court.”
If a court challenge does materialize, how “vigorously” the city defends Davis voter’s Measure J will have to be monitored very carefully. Legal representation, independent of Harriet Steiner’s firm(under contract to represent the city and will of the Council Majority) will probably be necessary.
[i]This is NOTHING like health care.[/i]
It’s a lot like health care, David. I live in Davis, and I have guaranteed health insurance. The question in both cases is whether someone like me is willing to share. The difference in that in one case, elected people expect to be thanked by the have nots; while in the other case, the haves gave themselves direct control.
Maybe we should have a Measure R for health insurance: A popular referendum among those who already have coverage, to decide whether to extend coverage to those who do not.
FYI:
The lawsuit is only challenging the language on the official ballot stating that Measure R covers “open space” like parks, school sites, community gardens and play fields. Measure R doesn’t cover open space, so I want that language removed.
My goal is not to get Measure R removed from the ballot, just to ensure that there is a level playing field.
And Crilly, the Enterprise asked that question, and I answered it.
And I’m filing the action without hired counsel (pro se) as a concerned citizen.
To characterize this as the developer steamroller in action is a bit of a stretch.
[i]”The question in both cases is whether someone like me is willing to share. The difference in that in one case, elected people expect to be thanked by the have nots; while in the other case, the haves gave themselves direct control.”[/i]
I am by no means anti-growth. But given the state of the housing market and the large supply of unbuilt, yet approved housing units and the coming of West Village and the decline in demand due to the university’s steep budget situation, even if the purpose and effect of passing Measure R is to deny all large new projects in Davis which don’t yet have a green light, I don’t think it matters at all (for at least another 5 years). That is, we have or will have plenty of supply.
I have mixed feelings about Measure J (or hereafter Measure R): on the one hand, I think peripheral growth does have the chance to substantially alter the nature of Davis, and so it does not strike me as unreasonable to let the people who reside here to have the final say on whether they want their town altered in the ways being proposed; on the other hand, I agree with Greg that its intent is to just stop all growth and say to those on the outside looking in, “Too f***ing bad, losers, you got here too late! Na-na-na!”
It is really strange to hear people who call themselves leftists to take a position which (once demand surpasses supply) clearly harms the financial interests of poorer and younger people and serves the financial interests of wealthier and older folks.
Much of the so-called “progressive” rhethoric is an attack against the profit-seeking motives of home builders, as if they themselves, were they in business, would act in some greater altruistic manner. The ironic truth is that no one gains more from strict growth controls than developers do. The people pushing Measure J (R) are putting money in developers’ pockets.
The home builders who have land which has been approved for new projects can command much higher prices due to the artificial supply shock created by growth control. And the ones who hold peripheral lands find the value of their land rising when insufficient new product is reaching the market.
And obviously, no one is more hurt by growth control than people who want to buy a house but cannot afford the going rates.
[i]But given the state of the housing market and the large supply of unbuilt, yet approved housing units and the coming of West Village and the decline in demand due to the university’s steep budget situation[/i]
I wouldn’t say that it doesn’t matter at all, but it is true that Measure R has lucky timing and that it probably won’t matter all that much…for the next 5 years. But (a) Measure R is for 10 years, not 5 years; and (b) when Measure J took force, it was the opposite. There has been a ramp-up of students and workers commuting from out of town. Admittedly, the pushback against growth has more to it than Measure J. And anti-growth politics, even though looks selfish and is selfish, is not the only reason for the housing shortage and out-of-town commutes.
[i]I agree with Greg that its intent is to just stop all growth and say to those on the outside looking in, “Too f***ing bad, losers, you got here too late! Na-na-na!”[/i]
Yeah, that really is what it comes down to.
[i]It is really strange to hear people who call themselves leftists to take a position which (once demand surpasses supply) clearly harms the financial interests of poorer and younger people and serves the financial interests of wealthier and older folks.[/i]
It’s not all that strange. You show me a zealot who sticks to an ideology regardless of the facts, and I’ll show you a hypocrite who has lost his moral compass. That is the way that politics works at every far end of every political spectrum. It’s not just “progressives” in Davis who do this. It’s equally well “conservatives” in Alaska who beg for federal funds and raid oil taxes.
[i]The ironic truth is that no one gains more from strict growth controls than developers do. The people pushing Measure J (R) are putting money in developers’ pockets.[/i]
I don’t think that it’s quite like that. But what is true is that most developers aren’t all that upset; they’ll just go where the market is. People in Davis may fancy that they have licked the big bad developer, but a major reason that they “won” is that most developers would rather move on than fight. Davis has not made the mistake that devastated Half Moon Bay, which first approved a development and then tried to stop it with legal tricks.
[i]And obviously, no one is more hurt by growth control than people who want to buy a house but cannot afford the going rates.[/i]
That is absolutely true. This is not really a fight against developers just because developers are rich and greedy. The current owner of Trader Joe’s is a billionaire named Theo Albrecht. The difference between him and a developer is that he sells things that people in Davis want, while a developer sells things of no use to people who already live here.
[i]”It’s not all that strange. You show me a zealot who sticks to an ideology regardless of the facts, and I’ll show you a hypocrite who has lost his moral compass.”[/i]
My plan was to give the civil libertarian zealots the day off … but you are right, they did lose their moral compass when it comes to the mentally ill living on the street who “choose” that lifestyle.
[i]My plan was to give the civil libertarian zealots the day off … but you are right, they did lose their moral compass when it comes to the mentally ill living on the street who “choose” that lifestyle.[/i]
That’s just not the same thing. You could argue that the legal reforms had unintended consequence, or maybe that they were misguided. But no one supported these cases out of selfish hypocrisy.
“Measure R doesn’t cover open space, so I want that language removed. “
The term, “open space” has a defining history in Davis’ Measure O where it is used by the city to describe Measure O, a Davis voter-initiated self- tax that is to be used to protect “open space” outside of Davis city limits, by purchasing easements and other vehicles to keep the land from residential development.
[i]”The term, “open space” has a defining history in Davis’ Measure O where it is used by the city to describe Measure O …”[/i]
So D2, you then agree with Mr. Whitcombe, here? You are arguing that “open space” protection should be used with regard to Measure O, which is not the same as Measure J or the new Measure R, and thus should be stricken from the ballot, as Mr. Whitcombe believes?
[quote]Greg Kuperberg said . . .
I live in Davis, and I have guaranteed health insurance. The question in both cases is whether someone like me is willing to share.[/quote]
Greg, the reality is that you and all the rest of us who have health insurance are already “sharing” with those who don’t have health insurance. When individual hospitals write off hundreds of millions of dollars each year for care they give away free to people who don’t have insurance, they have to recoup those costs somewhere. In simple terms it is through higher rates negotiated with insurance companies, who in turn pass those costs on to you and me in the form of rate hikes. So don’t fool yourself, you are sharing whether you want to or not . . . and in the most inefficient manner possible.
No Rich…It has nothing to do with “protection” but rather usage of the term “open space” As used in Measure O, it is the term used to describe property outside of Davis city limits, mostly but not necessarily agricultural. To further illustrate the use of the term “open space” with regard to Measure R, the city Measure O map, offered to the voters(in 1987??), illustrated the County property abutting the Davis city boundary line as the “open space” referred to in the Measure O ballot. This IS essentially the same property(with the exception of the Wildhorse Ranch property) that Measure J addressed in 2000.
The term “open space” ,as used in Measure O and Measure R, has nothing whatever to do with “parks school sites, community gardens and playfields” as Mr. Whitcombe is suggesting.
[i]So don’t fool yourself, you are sharing whether you want to or not . . . and in the most inefficient manner possible.[/i]
I’m under no illusions about it, Matt. But even otherwise, I believe in fairness. I’m not going to keep health insurance away from other people just because I have it.
And that’s the whole issue with Measure J and Measure R. The entire time that I have lived in Davis, I have told outsiders what a great town it is. It’s safe, it’s well-planned, it’s green (in the environmental sense), it’s generally enlightened. The only part that I really don’t like is to then say, “And that’s why you can’t move here.” That part is not enlightened.
[i]” In simple terms it is through higher rates negotiated with insurance companies, who in turn pass those costs on to you and me in the form of rate hikes.”[/i]
It’s worth pointing out, when discussing where costs are passed to (prior to the recent passage of ObamaCare), that roughly 50% ([url]http://www.npr.org/blogs/health/2010/02/health_spending_grows_no_matte.html[/url]) of all direct health care expenses are paid for by government. (By contrast, government in Canada pays about 70% of the health care bill in the Great White North.)
But the direct spending by government on health care in the U.S. is only part of the picture, because everyone — well, maybe there are a few exceptions but almost everyone — who has “private” health insurance in the United States paid for (all or in part) by a “private” employer is being subsidized in that purchase in two respects. First, the employer deducts 100% of that bill from his income, saving about 35% ([url]http://www.smbiz.com/sbrl001.html#ci[/url]), some more, some less, of the cost at the federal level if the employer is incorporated and pays and also saving off of state corporate income taxes; and second, the income itself to the employee is untaxed income, despite the fact that it is otherwise “earned.” That effectively is another subsidy to all employees, equal I suppose to the employees marginal income tax rate, in most cases 33%, but likely 35% in most cases in which the insurance plan is gold-plated, like most government workers get.
[i]”To further illustrate the use of the term “open space” with regard to Measure R, the city Measure O map, offered to the voters [b](in 1987??)[/b], illustrated the County property abutting the Davis city boundary line as the “open space” referred to in the Measure O ballot.”[/i]
Measure O, the “Davis Open Space Protection Tax,” was voted on Nov 7, 2000.
I voted in favor of Measure O, but I now regret it. The money has been completely wasted and the idea, of buying land (not easements) near our periphery has never been implemented. Instead, Measure O funds (as well as the haul of money the City got in the Wildhorse development) have been used to enrich wealthy farmers who own land out in the middle of nowhere, land which is already zoned for agriculture and will not be developed. They simply have to threaten the cities with some hare-brained development idea and the Davis City Council jumps up and screams, “No, please, no! God, no! Here, we will give you $500,000 for a paper-restriction on your land which is zoned agricultural if you will agree to keep farming this land which has been farmed in your family out in the middle of nowhere for the last 160 years! Please, take the money! We need you to take our money! You could use it–to buy another Mercedes!” And then the members of the council jump for joy and pat each other on the ass in praise of having done God’s work.
No doubt in my mind that money would be better used in a myriad of ways, not just to make rich farmers (who get millions in subsidies ([url]http://www.ewg.org/farmsubsidies[/url]) already) even richer. For example, due to budget revenue shortages at the county, the health care program the county offers for indigents has greatly been reduced. I would much rather see the City of Davis Measure O money go to help the poor who need health care than buy a classic car collection for remote farmers who like to farm and will continue to farm no matter what the Davis City Council does.
Greg, I completely disagree with you. There are lots of things in life that I would like to have, but in simple terms I’m not a successful enough capitalist to afford them. I don’t have a penthouse on Park Avenue, or a home in Montecito, or a beachhouse in the Hamptons, or a chalet in the South of France, or newly pressed cotton sheets on my bed each night when I go to bed, or a live-in maid, or season tickets to every performance at the Mondavi. If I want any or all of those things, then I’m simply going to have to work harder and work smarter during the every minute of the rest of my life. As a mattter of a fact . . . that is “the American Dream.”
You are trying to put a lie to the expression, “You can’t please all of the people all of the time.”
“And that’s why you can’t move here.”
There are always homes for sale in Davis, in quite a range of prices: 75 on trulia.com right now.
Measure O in 2000? I’ll take your word for it. I agree that Measure O was not implemented in a manner that the voters believed it would be when they imposed this self-tax. You can lay this at the feet of the Council Majority, essentially unchanged(in policy) since the days of Mayor Wagstaff. Because it was never EXPLICItLY stated in the Measure O ballot language that the monies were to be used on Davis’ periphery, although the city’s Measure O ballot map clearly indicated this,the Council Majorities(Asmundson, Saylor, Souza, former Davis Postmaster(??)chose to direct the monies out into the County, removing any threat to the peripheral property of their developer patrons.
[i]I don’t have a penthouse on Park Avenue[/i]
There you go, Matt. Davis is a great town that does so many things right, both for its residents and for the environment. But if you want to move here…well, it’s like wanting a penthouse on Park Avenue.
The thing is, when I moved to Davis in 1996, it wasn’t like wanting a penthouse on Park Avenue. It’s really pretty amazing: I have lived in Davis for better than free. And so have a lot of people.
Then too, if someone has a prior medical condition, wanting health insurance can also be like wanting a penthouse on Park Avenue. That is why Obama did something about it.
[i]There are always homes for sale in Davis, in quite a range of prices[/i]
Yeah, from high to very high. There are also always apartments available, but there you agree that there aren’t enough of them.
Greg, the difference in housing pricing from 1996 to 2008 in Davis tracked very closely to the differences all across the State of California, and to a slightly lesser extent to the differences all across the Nation.
What I hear you saying is that you think the historical increase of housing prices was wrong. If that is the case, then you are doing a very good Don Quixote impersonation.
[i]”What I hear you saying is that you think the historical increase of housing prices was wrong.”[/i]
I don’t hear Greg saying that at all–in this argument. However, given the massive inflation in house prices in Davis*, California and most of the U.S. (particularly in coastal states) from 2000-2006 and then the subsequent collapse of housing prices everywhere that prices skyrocketted, it’s almost impossible to disagree with the notion that “the historical increase of housing prices was wrong.”
In simple economic terms, demand was artificially (or at least unsustainably) overheated by the policies of our elected representatives, by other agencies of the government, by quasi-public banks (like Freddie Mac), by private banks, by loan insurers and asleep at the switch regulators of those insurers and of course by the madness of the crowd of borrowers/investors. When you get a bubble, it ultimately will burst, and that bursting proves without a doubt that the prices (by the end of the run-up) were wrong.
*One example in my neighborhood. My next door neighbor’s house (a 3/2 tract house in good shape on a normal-sized 1960s lot in a quiet area) sold in 2000 for $230,000. Other houses in our neighborhood sold for roughly that around that time. Yet five and 1/2 years later, the house next door to that one, two doors from mine, also a 3/2 tract but on a larger, corner lot and a slightly larger model (same as mine, as it happens), sold for $670,000. If that corner house would have sold in 2000 for $250,000, then the annual, compounded inflation for it was 19.6% per year!
[i]Greg, the difference in housing pricing from 1996 to 2008 in Davis tracked very closely to the differences all across the State of California,[/i]
No, it didn’t. The Zillow home value index for Sacramento County went from a high of $387K in September 2005, to $197K in December 2009, which is a drop of 49%. The Zillow home value index for Davis went from a high of $589K in December 2005, to $456K in December 2009, which is a drop of 23%. Both Davis and the region saw an enormous run-up in prices from 1997 to 2005, but the region’s prices have fallen back down, while Davis has retained most of its gains. There are similarities, but the final outcome is not the same.
If homeowners in Davis truly believed in the progressive standard of affordable housing, then they would be willing to accept a more typical trajectory of home values. Very few voters anywhere are willing to give up $100K just out of sheer fairness. The money talks. It speaks louder than any real concern for the environment, for the poor, or even for the lower middle class.
In fact I do think that it’s quixotic. How would I talk people out of 100 grand? I’d have to lie through my teeth. I don’t always argue things correctly, but at any conscious level, I’m a very bad liar. Quixotic though it may be, it’s good for the soul to speak the truth.
At a larger level, the Measure J mentality in Davis is a reflection of Proposition 13 and other bad state policies. The state could change its tax and zoning system so dispel some of the enormous incentive against growth. Some of these reforms could actually be justified by self-interest at the state level. Even at the level of SACOG, there could be reforms. I’m getting the impression that SACOG largely operates on the honor system, and that Davis is not participating in good faith.
And also, a particular remark to Don: On both this issue and on the issue of sales taxes and property taxes, your general perspective has been that the economy has entirely gone to hell, and that now is the worst imaginable time for the government to impose on taxpayers or property owners. Now, you are an independent retailer, and if I understand correctly, a homeowner in Dixon. If so, then from your perspective, there truly has been a huge fall. Retail sales have taken a huge hit, and so have property values in Dixon. On that second point, according to the Zillow home value index, homes in Dixon were worth 84% of homes in Davis just a few years ago. Now they are worth 52% of what homes in Davis are worth.
That change in relative home values is part of a larger picture. Things in Davis aren’t great, but compared to many places, what we have is “Recession Lite”. UC Davis is a stable employer. Yes, we have 8% furloughs, but it’s not like Circuit City, which has 100% furloughs. Likewise with home values, the great party has died down some here in Davis, but it hasn’t ended. There have been almost no foreclosures within city limits.
So if we want to, most of us in Davis can afford the sales tax, we can afford the parcel tax, and we can afford some home construction. Maybe we want these things and maybe we don’t, but the idea that we are pressed against a wall or that some catastrophe looms is absurd. Given the depth of trouble everywhere else nearby, I don’t think it’s very decent for folks in Davis to complain too much.
55% of Davis residents are renters. They are already paying a premium for renting in Davis rather than in a nearby community. That premium exists because there is not sufficient rental housing in Davis to have a reasonable vacancy rate.
So when you say “…most of us in Davis can afford the sales tax, we can afford the parcel tax…” you may be correct when speaking about the homeowners, who are a minority of the residents. Renters pay the parcel tax indirectly, they pay the sales tax directly, and renters can afford both of those regressive taxes less than homeowners can.
We need more rental housing in Davis. We don’t need more expensive homes.
[i]”We need more rental housing in Davis.”[/i]
I’m not sure what the current vacancy rate is–the university does a survey periodically–but I have noticed more and more apartment buildings in town in the last few months featuring prominent displays in their front yards which say that units are available now or they are taking reservations for the fall. It’s possible that means nothing, that the balloons, signs, homeless guys dressed up as clowns waving signs, etc. is par for the course in March and I just don’t remember past years. But it appears to me landlords are struggling to fill up their units. And if that is true, marginal rents will (in real dollars) come down, if they have not already.
Okay, I looked up the numbers. This comes from The Enterprise, four months ago: [quote]The apartment vacancy rate in Davis has jumped fourfold since last fall to 3.2 percent, while rent increased 1.05 percent, according to an annual survey by UC Davis.
A total of 166 complexes representing a total of 8,720 apartment units responded to the UCD Office of Student Housing survey in October and November. Between them, 278 units stood empty.
The average monthly rent for unfurnished two-bedroom apartments, the most abundant size of unit, increased from $1,225 to $1,226. Two-bedroom units made up 45 percent of units in the survey.[/quote] The nominal stability in rents represents, as I would have thought, a (small) decline in rents in inflation adjusted dollars.
And if my observations about the efforts of landlords to attract tenants means anything, that 3.2% vacancy rate in December, 2009 should be higher in December, 2010; and real rents should be lower still.
[i]55% of Davis residents are renters.[/i]
It is a shade lower than that because owned units have higher occupancy, but okay.
[i]Renters pay the parcel tax indirectly[/i]
In context, I very much doubt that. Renters are only affected by property taxes to the extent that those taxes reduce supply. Under any circumstance, only a portion of property taxes are passed onto renters. In Davis, supply is frozen in place by zoning, so the influence of property taxes on rents should be approximately zero. Property taxes might have some effect on amenities.
Yes, they pay the sales tax. But the extra sales tax in Davis is only about $50 per resident. Yes, renters have not had the privilege of living in Davis for better than free. But, except for undergraduates, many of them do have the privilege of stable employment. Among the ways that Davis has it relatively good in 2010, stable employment matters at least as much as home values.
If it’s just the undergraduates, then okay, I feel a bit bad for hitting undergraduates up for an extra half percent sales tax. A bit. But again, this is only about $50 per person, undergraduates are only one segment of Davis residents, and generally the better-off undergraduates are the ones who take city rentals these days.
[i]We need more rental housing in Davis. We don’t need more expensive homes.[/i]
I totally agree that if Davis were to grow at all, I would have it grow at the lower end of the housing scale, particularly rentals. But as taxes work around here, current residents have even more to lose from inexpensive growth than from expensive growth, and both developers and city planners know it. If people complain that even McMansions don’t “pencil out” for the city budget, no one is about to propose McStudios.
Again, if I ran the city, I would do it. But I am the scum of politics: the selfless voter. At least, I would like to think so.
[i]But it appears to me landlords are struggling to fill up their units.[/i]
They’re doing the work to fill up their units at a good price, Rich. Just because there’s a shortage, that doesn’t mean that there isn’t a market. Every bird will still get a worm in this market; the serious birds wants the juicier ones. If anything, scarcity leads to a higher level of amenities, just as it does on Park Avenue.
[i]That 3.2% vacancy rate in December, 2009 should be higher in December, 2010; and real rents should be lower still.[/i]
You’re probably right, they will be lower. But as with home values, they will still be high.
Greg, you are either cherry picking numbers to support your argument, or you didn’t read what I said. 1) The numbers you are citing have to do with the more recent deflation of prices not the inflation of those prices from your arrival in 1996 to he point in time when the inflation trend flattened off and then reversed. 2) It was the inflationary period that made housing unaffordable for the people you described.
So to get back to the point I originally made, what was the Zillow index movement for both Davis and the State of California from your arrival in 1996 to the end of the housing price inflation period? And secondly, what was the National Zillow index movement for that same period?
[i]Greg, you are either cherry picking numbers to support your argument, or you didn’t read what I said.[/i]
I didn’t give numbers for all sides of the discussion, but no, I didn’t “cherry-pick” anything. Here is a more complete set of home values at the end of the year, adjusted for overall inflation to 2009 dollars:
Davis home values: $340K in 2000, $624K in 2005, $442K in 2009
Sacramento county: $197K in 2000, $410K in 2005, $192K in 2009
United States: $170K in 2000, $258K in 2005, $185K in 2009
So in real dollars, Davis home values are up 30% in 9 years, Sacramento county is down 3%, and the US is up 9%. As I said, we have lived in Davis for better than free. And that’s very unusual for the region or for the country. (Because, a 9% increase isn’t better than Treasury rates for the same period.)
[i]So to get back to the point I originally made, what was the Zillow index movement for both Davis and the State of California from your arrival in 1996 to the end of the housing price inflation period?[/i]
Instead of interrogating me, you should see for yourself ([url]http://www.zillow.com/local-info/CA-Davis-home-value/r_51659/[/url]) in Zillow. Look at the data for any cities that you want. Note that Zillow only shows you a home value index for 10 years, and you have to adjust for inflation separately.
[i](Because, a 9% increase isn’t better than Treasury rates for the same period.)[/i]
To explain this more clearly: National home values may be up 9%, but you have to deduct from that upkeep, taxes, and what you could have gotten from a risk-free investment such as Treasuries. Everything that we have paid since 2000, and the interest that we passed up, do not together match the 30% real gain in home values.
Greg, why do you include the period after the market peak in 2006? The people you represent were left behind by the upturn in housing prices long before 2006. Further you are only including the period from 2000 on, why not start form 1996 when you arrived in Davis. That way you would be able to see the pre-Measure J effect compared to the post-Measure J effect.
However, lets deal with the numbers you did provide. Davis home values rose 80% from 2000 to 2005. Sacramento home values rose 110%. Where exactly is the Measure J effect you decry? California home values rose 130% in that same period from $209K to $474K. Again, how is that your Measure J effect produced Davis values that increased at a slower rate than the rest of California? Nationwide, values increased 70%, so again, what exactly was the measure J effect?
Greg, there is a huge difference between Treasuries and a home, and you haven’t factored that difference into the equation. In simple terms the home provides its owner hearth and shelter. So to draw an equivalency between Treasuries and a home you need to factor in the value of that hearth and shelter. If we don’t stray from this Blog we can come up with $1,225 per month value for a home that is equivalent in hearth and shelter value to a 2-bedroom apartment. Most homes far exceed that, but simple math says that $1,225 times 12 months times 10 years is $147,000
[i]Greg, why do you include the period after the market peak in 2006?[/i]
In order to focus on fundamentals instead of the real estate bubble.
[i]However, lets deal with the numbers you did provide. Davis home values rose 80% from 2000 to 2005. Sacramento home values rose 110%. Where exactly is the Measure J effect you decry?[/i]
Again, the real estate bubble masked the lasting effect of Measure J. Real estate conditions created a rush of middle class home ownership, which clearly elevated prices more at the low end than at the high end. Now that the bubble has blown and the dust has settled, we see the facts on the ground: Measure J has abetted a scarcity of housing in Davis. It did not eliminate the market from existence, as Don pointed out, but that’s not the usual type of scarcity.
[i]So to draw an equivalency between Treasuries and a home you need to factor in the value of that hearth and shelter.[/i]
I’m not drawing an equivalence, I’m making a comparison. The comparison is that if you have owned a home in Davis since before the real estate bubble, you have gotten that hearth and shelter for better than free. Even if you subtract upkeep, taxes, and realistic interest that you would have earned from the paid equity, it is still better than free.