On 7/31/2018 2:49 PM, Joerg wrote:
On 2018-07-31 13:07, jbeattie wrote:
On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote:

snip

An apartment building is not a commodity item like a house. The
sale price of a building is determined based on its net cash flow
which is related to building quality only to the extent that it
increases rents and decreases expense, e.g. new building doesn't
need a new roof, immediate maintenance, etc.

Whether a building gets built depends on what net cash it will
produce, ...


Bingo! And that depends on the cost of construction. If it goes up
for all developers, and with this mandate it does, then the market
move up in price.

That's where you go wrong.


Nope. The housing shortage is getting worse here and all those mandates,
permit fees, et cetera is what developers say is driving that.

That's what developers say, but it isn't necessarily true. In reality
the fees are far too low. They don't cover the cost of adding water
infrastructure, they don't cover the costs of new schools or expanding
existing schools, they don't cover the costs of adding or widening roads
to accommodate additional traffic, they don't cover the cost of more
parks, etc.. All of those costs are externalized onto existing property
owners or the costs are covered by increased fees and other taxes.

In the Bay Area, there was a recent fee/tax increase that passed (or
didn't pass depending on who you believe) that raises bridge tolls by $3
(actually more), to fund transportation projects unrelated to the
bridges. This is currently being challenged in court because technically
while votes on increased fees can pass with a simple majority, there
must be a nexus between the "fee" and what the money is spent on. Since
there is not such a nexus in this case, a 2/3 majority is required,
according to the plaintiffs. The defendants are saying 'well if we buy
more BART cars with this money then less people will drive over the
bridges and hence there will be less congestion on the bridges," a real
stretch but who knows what the courts will say.

I was just at a meeting last Saturday where a developer was pitching a
new development and the subject of solar came up. On a townhouse that
will sell for probably $1.8 million, the cost of putting solar on the
roof, at the time of construction, is lost in the noise. It would be
about $2500 per unit if put in when the building is going up, but if
each owner added solar on their own, and the building wasn't prepped for
it, it would cost them at least $15K (after tax credits) for a
relatively small, high-quality system with noncrystalline panels. The
societal benefits of more solar on homes are so compelling that the
state has a responsibility to act in the best interest of its citizens.

Last night, at our City Council, we discussed putting on the ballot, a
proposal to eliminate our per-square-foot based business license tax and
to replace it with a per-employee based business tax (in California,
this sort of change needs to go to voters). Some small companies would
pay less under this change, most would see no increase or a minimal
increase, but a very big fruit company in town would pay much more. We
decided to not put in on the 2018 ballot, and come back in 2020 with a
more complete proposal. This apparently was such big news that three TV
stations showed up with satellite vans. I hope they didn't get my bald
spot on camera.

The problem cities are having is that companies are cramming far more
workers into a building than in the past (used to be around 300 square
feet per worker, now many tech companies are at less than 100 square
feet per worker, as they've moved from offices, to smaller and smaller
cubicles, to open offices, and now to big shared desks. This is
aggravating housing issues and transportation issues. Mountain View has
put such a business license tax change on the November 2018 ballot, with
the agreement of their largest employer, Google. Many cities already do
base their business license tax on number of employees rather than
square feet of buildings. We agreed to put off until 2020