![](https://davisvanguard.org/wp-content/uploads/2021/07/Duplex-AT-765x510.jpg)
By David M. Greenwald
Davis, CA – Inexplicably people often act as though laws of supply and demand do not apply to housing costs. Unfortunately part of the reason for this is no one has really done the research about how much things like restrictive zoning and other measures to block residential development have really added to the costs.
This week, the San Francisco Chronicle put out an article, “This is how much single-family zoning is costing San Franciscans.” It is interesting research at a time when California is considering easing some restrictions on single-family zoning through SB 9, to allow for the construction of fourplexes in single-family zoned land.
Critics see this as destroying single-family neighborhoods, while proponents see it as a way to add density and achieve affordability by design, to allow middle and lower income people access to single-family neighborhoods that are currently out of their price range.
The Chronicle, for instance, notes, “The Bay Area needs to build over 440,000 units of housing between 2023 and 2031 to keep pace with its population, an average of nearly 50,000 units a year.” At the same time, over the last three years, they have been adding under 25,000 units annually.
They argue, “That’s because the region is one of the hardest places in the country in which to build homes, thanks to restrictive zoning, intensive permitting procedures and state laws that have historically allowed local groups to block residential development.”
Researchers from the University pf Pennsylvania attempt to estimate the impact of restrictive land use regulations on the price of land across major US housing markets.
They created an estimate they call the “zoning tax”—“the amount by which land prices are bid up due to supply side regulations.”
They find that zoning taxes “are especially burdensome in large coastal markets.”
The price impacts are especially big in west coast markets such as San Francisco, Los Angeles and Seattle.
In fact, they find “the price of land everywhere within those three markets have been bid up by amounts that at least equal typical household income.”
Even worse, the San Francisco Metro Area including San Francisco, Alameda, Contra Costa, Marin and San Mateo, has the worst zoning tax in the nation, with the estimate being $409,000—more than four times the median income of the region.
The Chronicle notes: “To put that number into perspective, imagine you’re a Google software developer making $200,000 a year, over twice the median household income of the central Bay. The median ‘zoning tax’ alone is twice your annual salary. This estimated extra cost makes up about one third of the area’s median home price of $1.26 million, making it unlikely you would qualify for a mortgage on a home at or near the median without a large down payment.”
“That’s how you know it’s expensive, when Google engineers are getting priced out” of a median home, Joseph Gyourko, an economist at the University of Pennsylvania and the study’s lead author, told The Chronicle.
Basically he argued that if you are making closer to a traditionally middle class wage, forget about homeownership.
But in Davis we don’t want to believe that restrictive zoning is driving up pricing. Perhaps some of that is that we are impacted by this less than they are in the Bay Area, where the prices are far higher. On the other hand, Davis is generally far more expensive than surrounding areas. Some of that might be desirability—but a lot of that is probably simply scarcity.
Moreover, I would argue that we really haven’t seen the full impact of this on the community. That’s because of lot of the residents, especially those over the age of 60, still live in homes purchased in the 70s and 80s when the prices were modest. What happens when the ownership finally turns over for those places and, instead of homes purchased at $80 to $100K, we have homes purchased for closer to $800K—what does that do to demographics in the city?
The Chronicle noted that the effect of zoning taxes impacts the cost of apartments and condos as well.
“As an economist, I undoubtedly believe that’s true. Why? Because the restrictions against multifamily are almost always more severe” than for single-family homes, he said. “People hate apartments, particularly in the suburbs.”
The Chronicle points out renters end up paying more because of restrictive zoning. That’s because fewer multi-family buildings get built at all and, second, “the increased expense of purchasing a house means more high-income renters, who then compete with middle and lower-income renters for the limited units on offer.”
While the Penn study focused on Metro areas, maybe Davis ought to finally attempt to look at the impact of such policies as Measure J on home prices and rental rates. In the 20 years since the measure has passed, astonishingly, little has been studied except cursory and anecdotally on the impact on supply and affordability.
Of course, even with a robust study, it might not make a huge difference in policy. One thing we saw a few weeks ago during public comment was a very clear demographic/generational dividing line, where people under the age of 40 or so tended to support increasing housing strategies, whereas people over 60 tended to support more restrictive ones.
A lot of that is probably due to whether someone owns a home and therefore wishes to protect their quality of life, while someone looking to purchase a home is therefore more concerned about creating a market that they can buy into.
—David M. Greenwald reporting
For the most part, people do not like change … especially when they believe that change affects their pocketbook. So the resistance to changes in single family residential zoning is not a surprise … it is human nature.
The key to reduce the fear and its attendant resistance to change is to clearly show how the change is not going to affect the pocketbooks of those who are resistant to the change. I may have missed it, but I haven’t seen anyone share any examples of duplex intermingling that show how the change can be done successfully.
So, I’m going to share one such example here in Davis, and I encourage others to provide other examples.
Willowbank 10, which includes Redbud Drive, Pistachio Court, Cottonwood Drive and Mahogany Lane has a number of duplexes scattered in amongst the single family residences of that neighborhood. It is actually hard for the casual visitor to pick out the duplexes from the SFRs.
The photo above is taken by Senator Atkins is of a duplex in a single family neighborhood.
Matt, were these areas zoned SFR? Were the duplexes that you cite transitioned from a SFR to a duplex?
Keith, the neighborhood is essentially zoned SFR, but the reality of Davis is that very, very few neighborhoods are zoned SFR. The most frequent zoning seen on the City’s zoning map is PD, which stands for Planned Development.
The duplexes in Willowbank 10 were built at the same time as the SFRs in that neighborhood. They were transitioned from SFR to Duplex in the design phase, as opposed to retrofitted.
You asked your questions for a reason Keith. Can you expand on that reason?
Because it’s not the same as someone buying in a SFR zoned neighborhood then having their neighbor sell to a developer resulting in the next-door lot being split and duplexes or four plexus being built.
Why?
Why? Fear of change of course 😐 It’s all about FEAR OF CHANGE 😐 WHODUTHUNK that people would buy a property and not expect to have 13 windows overlooking their previously semi-private back yard? How horrible and selfish of these people. They must be . . . . . . . . (I won’t say it, I’ll let y’all THINK it)
Actually, Matt it is prevalent in Davis, and has been for decades… might not have been recognized as such due to the fact the land was zoned ‘PD’… split lot duplexes (‘affordable’ component) amidst std, SFR (actually SFR goes up to 4 units per lot, in several of Davis ordinances)… Northstar, Covell Park, Stonegate, along Imperial (subdivision name eludes me)… but all those mentioned were in PD’s, not ‘straight zoning’… and part of the original design. So everyone had the opportunity to know what they were buying into.
I opine the issue isn’t the mixture, it is a perception of “bait and switch”… for the most part… NOT racism, classism, etc.
Where the ‘rubber will meet the road’ in neighborhoods with small, older (often less energy efficient and some with too much ‘deferred maintenance’) houses, on large lots… a neighborhood with ‘McMansions’, newer homes, have “no worries”… demo, new construction to create more units? That won’t “pencil out”…
Of course there could be a move towards something akin to the “quartering act”… one of the ‘intolerable acts’ that lead “the revolution”… unlikely, but I wouldn’t put it past a few members of the State Legislature, to “try”…
The Quartering Act | American Battlefield Trust (battlefields.org)
The impact of a change to single-family housing zoning in Davis would disproportionately affect east Davis, especially the lower-cost housing towards L and 5th Streets. It would likely annihilate the small amount of actual affordable housing stock in Davis. The impact would actually be quite counterproductive.
I doubt you’d see a lot of change in Stonegate or Lake Alhambra Estates. But the character of Davis Manor would change and the increased housing supply would be at the expense of those who can least afford it.
Also, Old North. And, the areas to the north of that… we’ve already seen that.
Talk about irony or “unintended consequences”!
Much truth… we began raising of family in a part of Davis Manor (house built in 1968, large lot by today’s standards)… lot could have easily accommodated at least a second, slightly smaller unit (except that was straight zoning)… we chose to buy a larger house in MR (lot was slightly smaller)… for financial reasons, we kept the old house as a rental, and families moved in over the years… the rent charges were pretty much a ‘break-even’ proposition… some minor profit. Due to changes in finances, and a ‘bad’ tenant, we put the house on the market… sold to a family renting across the street… we both retained the same broker, who was in effect, responsible to both to get to a fair price, and conditions [we paid for some repairs and enhancements, many of which were not within the appraised value]. They have further improved the property… no regrets.
Never would have occurred to me, even with the proposed zoning thingy, to divide it into two lots… although it would have been possible.
Not trying to make a particular point, for or against… more for “context”.
Don,
Huh? Are you saying that there would be a change in zoning in East Davis TO SFH? That area is not zoned SFH now–there’s all sorts of MF in that neighborhood. I’ve seen two lots there recently converted to multi-unit on I St. Davis Manor similarly has a substantial amount of duplexes and MF housing.
The dirty little not a secret is that the consequences are intended. These are strangely within the ‘opportunity zones’ – as was said, you aren’t going to change Lake Alhambra or White People Heights, but Davis Manor, for example is an opportunity for developers to displace ‘low income’ people living in ‘blight’ with expensive housing with an ‘affordable’ element. In other words, destroy neighborhoods with character and displace our low income and artists crowd, maybe to Woodland or Winters.
Yup.
Gent Riff Ick Nation
Bill has illuminated what I think is the key challenge the idea faces. As long as the focus is on the process, and the personal feelings that naturally arise when individuals feel they can’t control the process, then we can expect one “battle” (dare I say “war”) after another after another. However, if the focus ends up on the outcome (how well the design fits into the neighborhood), the bloodshed should be minimal.
The question is whether the redevelopers are willing to have that kind of collaboration with the existing neighborhood.
Fear of change alert! Whoop! Whoop!
What people don’t like is change that s¨cks, and usually a large building next to one, s¨cks and degrades quality of life.
This may be true but there are all kinds of restrictions on any type of building. Right now the target is on single family zoning and allowing split lots with duplexes to fourplexes. What’s next, allowing high-rises on single family lots?
You can build four plex or a duplex in scale with the rest of the buildings in a neighborhood.
You missed my point.
No I didn’t – I pointed out the difference between what is proposed now and what you asked.
Keith O
“Slippery slope” analogies rarely hold up.
I’ll bet that people saying that someday people might be able to build a four plex right next door to your single family home in a SFR zoned neighborhood was also considered a slippery slope argument.
Well here we are.
SB 9 would not authorize fourplexes. It authorizes a duplex on a single lot. It also allows lot splitting, which could result in two duplexes next door to one another.
The new housing would also have to comply with the city or county’s objective standards, such as building height, setbacks, and lot coverage, as long as these constraints would not unduly preclude the development of two units of at least 800 square feet.
So 2 + 2 = 4
Two duplexes on adjoining lots does not equal a fourplex any more than two single family homes on adjoining lots are a duplex.
If the lot next to you splits then builds two duplexes tell the people living next-door it’s not four plexes. The result is pretty much the same, four families, four units and four times as many cars, noise and people.
Housing for four families who likely couldn’t afford to buy or rent a single-family home. Oh! The horror!
Four units constructed right next door to someone who paid a premium price for their dream knowing they had bought in a SFR neighborhood just to have the rules changed and the rug pulled out from under their feet.
Oh! The Horror!
I’m failing to see how such a think pulls the rug out from under someone’s feet. If they limit the size, what are you envisioning as the impact?
“… for their dream …”
Now you’re getting close to the reason R-1 zoning was established in the first place: To provide a more subtle means than restrictive covenants, redlining, etc. for excluding lower income families from predominantly white, suburban neighborhoods:
https://www.kqed.org/news/11840548/the-racist-history-of-single-family-home-zoning
Not at all. That’s the reason progressives/liberals like to frame it as.
I hope they keep it up, it’s a losing issue come election time.
Oh, pulling on the heartstrings . . . my heart cries for the children, and therefore I support this legislation 😐
How about instead saying ‘four meth-heads who likely will get in on the affordable housing requirement, and burn the place down cooking drugs’. Oh, the humanity!
About as likely, just not so many violins.
“maybe Davis ought to finally attempt to look at the impact of such policies as Measure J on home prices and rental rates.”
Now you want to study what has been obvious for more than a decade. Too bad you didn’t call for this when it might have mattered, before the Measure D election. What an amazing epiphany David, you read an article in the Chronicle and what happened, did a light bulb go off in your brain?
You don’t need to do a study you can do this by comparing land prices on both sides of the line. As I recall the land at Sterling sold for 100 times the cost of land at 391.
” Too bad you didn’t call for this when it might have mattered, before the Measure D election. ”
I actually did.
Just one example: https://davisvanguard.org/2020/09/commentary-measure-d-might-stand-for-lack-of-good-data/
The article concludes ” We lack good data. We lack robust data analysis. And without having it, we are not going to make informed decisions.”
Yet you supported D.
Actually we have the data on land values on both sides of the line as I pointed out above. Yet you still supported D. So at best you supported something without adequate information. A dubious position for someone who is fully aware of the issues. At worst you supported a position you know full well favors the rich against the poor.
Below is the comment I made on the article referred to by David to the SF Chron—the first comment, letter, (or anything) I have made to it in 50 or so years of reading it??? It is sad that the Davis Vanguard mirrors the SF Chron, or vice versa:
“I suggest first that the readers look at the source of this article and the “academic” research it was based on. The authors of the paper used by the Chron for this story are respectively a professor of Real Estate at the Wharton School of Business, and a doctoral candidate in that field supervised by the former—I found out with a quick Google. Just how credible and unbiased is an article from this source? How much funding directly or indirectly do the authors and their department get from the real estate industry?
The SF Chron is just relentless in its attacks on single family zoning to the point where it has no credibility at all. It never publishes (or allows to be published) any article with the main and many arguments against the wholesale abolition of single family zoning. It is a proxy for the real estate industry.
How Trump, who did his best to make an issue of this in the 2020 Prez campaign, must be loving this! It looks likely that most of the legislation before the state leg. will result in the end of single family zoning in CA. How is that going to play for Democrats statewide and nationally among suburban voters, and many others voters for that matter? You don’t have to be a rocket scientist to guess. But the SF Chron obviously has other priorities.”
Don C.
The study likely was not funded directly by any particular source. Doctoral theses (such as this one) are generally funded out of university grant sources (mine was). You can research the funding source with either will be listed in article or in the dissertation. The burden of proof is on you to positively prove (1) that it was funded by the the special interests that you speculate about and (2) that the results were biased by that funding. Speculation doesn’t count. In addition, the report builds on a series of previous studies from various sources that have similar findings, so this is not a one-shot deal.
Instead of making a vicious, unsupported, speculative attack on the messenger because you don’t like the answer, you should read the actual study and critique the methods and data sources.
Now come on, David only uses or cites the most credible and reliable sources and studies. Just ask him, he’ll be more than happy to tell you.
It’s a peer reviewed academic article
He was indeed more then happy to tell us 😐
Pot. Kettle. Glad to make your introduction.
Still not admitting he was wrong, but chiseling away at the edges.
That 40-60 group is so lost.
How dare they!
That’s like supporting high-speed rail (creating a train) because you don’t want to drive or fly to LA next week.
Let’s go back and see who wrote the ballot argument against renewal of Measure R. Let’s see, was it Ron G? Alan M? Oh wait, there was no ballot argument against renewal. Just a lot of fulminating on the Vanguard.
Those who were opposed to renewal might have reached a broader audience if they’d taken 1 1/2 minutes to write a couple of hundred words on the topic for the voters.
Don S
Yes, perhaps Measure R might have won by a few points less if people had put in a ballot measure argument that few voters would have read. The fact is that review of the ballot measure required a comprehensive, transparent hearing process by the City Council, which never occurred. The Council simply put the renewal on the ballot without any study or solicited public input. That those of us who opposed it weren’t involved isn’t our fault because there was never a truly public input process to have a real effect. (I will say that the timing of the pandemic had an impact on this, but the Council should have launched a comprehensive review a year ahead which was several months before the lockdown.)
Let’s go back and see if it was reasonable for folk to assume “someone” would have…
That said, like Alan M, and Ron G, I didn’t submit a ballot argument against D(-umb, -elteteious, -eluded)… I believed someone with more ‘creds’ than me would have… my error, my bad, won’t happen again…
Lack of ‘vocal opposition’ is not “affirmation”… there was a lack of “vocal opposition” to the “final solution” 80 years ago… there was some… and most of them (this is where the analogy fails, big time) were sanctioned, imprisoned or killed… yet the majority of German folk believed someone else would intervene (assuming they even knew what was being enacted).
On that note, am thinking of circulating a referendum petition to overturn D… we could probably get the required signatures… anyone willing to support that effort? Looking for effort, NOT $$$… no ‘developers’ need apply… am thinking grass roots… developing the rationale, expressing it in writing, clearly, then doing the word-of-mouth canvassing thing… no paid petition circulators… I’ll put up $500 for printing the petitions, and am willing to spend time to do the work… thank you Don, for triggering this response… sincerely…
Anyone interested? Am no Don Quixote…
I should have done that. Mine argument would be quite colorful. Included the word ‘dumbarses’ for example.
Actually, I would have thought someone who would have a financial stake would have put in the effort. I would assume building exurbs would sell, for example, lots of trees and landscaping plants.
Nor no Don Shor…
Measure R makes no difference to my income. I sell plenty of plants to people in Spring Lake and Dixon.
“ I should have done that. Mine argument would be quite colorful. Included the word ‘dumbarses’ for example”
That would have worked well.
Two Shay
Would have been more entertaining than the usual “Reality is Real, No Reality is Not Real” arguments in the voter guide.
.
Four Sure
David… you should explore how building codes, particularly related to energy-efficient, “green” concepts have added to housing costs… also affects re-sale as to bringing residences “up to” current standards… that isn’t necessarily “de minimus”… suspect it is 5% for re-sale, based on current ordinances, 4-6% for new construction (adding charging stations)… 4% of 400,000 +?
Land costs, for sure… application, process costs, for sure… impact fees (which some feel too low, others see as too high), for sure… upgrade/higher standards for sure… ever heard of ‘compounding’?
A big increase in a small # is negligible… consistent, multiple, small increases in a big number is a big number… basic fact… not theory…
We paid about $ 52/sf for our first Davis house, ~$100/sf for current, ~ $300-400/sf today’s ‘value…
That’s impossible, Don. The article states that the resulting housing would be cheaper. 🙂
Probably a reason that they didn’t examine the impact of the “technology industry”, in regard to housing prices in San Francisco and the Bay Area. Or interest rates, corporate purchasers of single-family dwellings (with the intent to rent them out), or any of the other factors impacting housing prices, nationwide. Including “FOMO” (Fear Of Missing Out), which is also driving the current real estate mania. (Right up to the next downturn, which we won’t find out about until AFTER it’s started to occur.)
For that matter, the article doesn’t state which regulations they’re referring to (or lack thereof) they’re comparing it to.
That’s for sure. It’s the Vanguard of San Francisco. 🙂
Ron: Actually they did study the impact of the technology industry by norming housing costs to income. That controls for it right there.
The article focused on the cost of housing, not whether those in the technology industry can afford it.
If you’re saying that they “reduced” the cost of housing in their model by a proportional amount (to account for the higher salaries), that would be different. But, they did not do so.
Are you (or the authors) claiming that the technology industry has had no impact on housing prices in the Bay Area? Really?
The measure itself – if you look at the journal article – is a function of cost and income.
Let’s see if we can establish exactly what the claims are, from the article.
So, are the authors are claiming that by allowing developers to tear down all single-family houses (and replacing them with fourplexes), the “zoning tax” described in the next sentence will “disappear”? Is that correct? What are they basing that on, and what are they comparing it to?
Has there ever been a real-world example of such changes resulting in an elimination of a so-called “zoning tax”?
So, assuming this zoning tax “disappears” as a result of allowing fourplexes to replace (all?) single-family houses, how do they account for the other 2/3 of the cost?
And again, are they claiming that the technology industry has had no impact on housing prices?
How do they account for the extreme rise in housing prices in places like Austin, which has aggressively pursued the technology industry?
https://learn.roofstock.com/blog/austin-real-estate-market
https://www.kvue.com/article/money/economy/boomtown-2040/austin-home-prices-climb-sky-high-as-real-estate-experts-issue-warning-to-city-leaders/269-fb7047c2-294f-41d9-8415-f7849c33d63e
Not in any of the new housing, that’s for sure. Even in (AGW) “Anything Goes Woodland”. Also known as the city that “never met a development that it didn’t like”.
There’s a tract home (granted, it’s a “model” home) for sale right now in Spring Lake, for $975,000. Other than that, there’s nothing special about it.
https://www.lennar.com/new-homes/california/sacramento/woodland/magnolia-at-spring-lake
(Click on “‘Quick Move-In Homes”, to see it.)
There’s usually homes for sale much cheaper than that in Mace Ranch (and other locations throughout Davis). And in my opinion, Davis is a much better town.
Yes, it’s a cute little handpicked photo of a small duplex. I think people are more worried about something resulting like in the pic below:
https://static.seattletimes.com/wp-content/uploads/2018/11/11302018_housingapartmaridon_172928-780×513.jpg
There’s a solution for that – zoning regulations for maximum height and intensity
And then, we’re right back to that so-called “zoning tax”, again. 🙂
The entire issue reminds me of an episode of The Simpsons (from years ago), in which the character from Texas said that the environment was giving them problems – so they “got rid of it” (the environment).
Something like that.
I believe you just sunk yourself in a circular argument. That’s what single family zoning is – a note of assurance a fourplex won’t go in next door. So your solution to problems with removing zoning is more zoning? What faith should people have in the new zoning, when they already saw the old zoning taken away when it became ‘inconvenient’ ? I’m surprised that even came out of your mouth (keyboard).
And that was part of my initial point. Why is anyone to believe that maximum heights and density won’t also be changed down the road in the name of we need more housing and it’s racist not to increase heights and density? After all, if this bill goes through, people had SFR zoning changed on them.
They do not. San Francisco has one of the strictest rent-contol laws in the nation.
I know someone who lives in a very desirable neighborhood in San Francisco, in a two-story unit (with a garage) – who pays less in rent than many new homeowners do in property taxes/Mello-Roos (alone) in places like The Cannery or Spring Lake. That’s a fact, not an opinion.
The owners did try to kick him out at one time (years ago), but failed.
My final comment for the day.
“Let’s go back and see who wrote the ballot argument against renewal of Measure R. Let’s see, was it Ron G? ”
Why is that my responsibility? I was not going to take this on by myself during the pandemic. I did ask the CC for a two year renewal so that an actual campaign could be engaged.
Fair response… and the
part is a significant (yet futile) attempt to protest… unheeded, as the “fix was in”… cowering politicians, rather than ‘leaders’… wet finger, place in air to determine where you think the wind (double entendre not intended) is blowing… little thought, convictions, ethics… the “new normal”…
Locally, State-wide, National… the “new normal”…
No “Profiles in Courage” candidates… all about not ‘serving’, but getting ‘re-elected’…
I decided to take another look at what the researchers actually measured (as referenced in the article, above):
Other than perhaps Houston, is there any place in the city in the country where folks can build a home “wherever they wanted” (and presumably of any type) on their property? And, is there any place that does not have “permitting procedures and state laws” governing development applications?
It would be interesting to see exactly how they quantified this, and what they’re comparing it to.
Are there lots of “quarter-acre” single-family plots of land in San Francisco? I don’t think so.
Gee, do you think that might be “part” of the problem? Where else is a development being considered again, which would add “more jobs than housing”? (Assuming that the commercial portion is actually successful, of course.) Thanks to Measure D, that hasn’t happened – so far.