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CA housing costs “crowding out” personal consumption, cash going to landlords and lenders instead of retail

By Patrick following x   2018 Apr 24, 6:30pm 695 views   3 comments   watch   sfw   quote     share    


Californians could be spending at least $50 billion more than they do dining out, going to the movies or shopping. But high housing costs are “crowding out” personal consumption, with more cash going to landlords and lenders instead.

If their housing costs weren’t so high, Californians would have enough dollars to buy 15 billion more Happy Meals than it does. They would have enough cash to buy 1.5 billion more Major League Baseball game tickets or 455 million tickets to Universal Studios Hollywood. ...

Home building hasn’t been able to keep up with growth, and that’s costing us — big time.

“We have just been fundamentally under-producing housing in California,” said Mark Stivers, a state affordable housing official who served 16 years as a consultant to the California Senate Transportation and Housing Committee. “It’s gotten so bad that people making … (up to) $80,000 a year are having a hard time finding housing that they can afford.”

California ranks dead last in home construction on a per capita basis in recent years, said Jonathan Woetzel, lead author of the much-cited McKinsey Global Institute report on the state’s housing crisis.
1   pkennedy   ignore (0)   2018 Apr 24, 6:58pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

If rents weren't so high, incomes wouldn't be so high.

People are paying those rents to competitively block lower income people from those areas. If people didn't want to pay those rents, they could exchange it for a 3-4 hour commute each day, but they don't want that, so they outbid each other to force the poorer person out.

They aren't bidding against each other, they're simply having to outbid the guy who doesn't want to do 3-4 hour and is paying the absolute maximum he can to avoid it, which means the person who does outbid him must pay slightly more, which basically puts him at his maximum.
2   FortWayne   ignore (4)   2018 Apr 24, 7:09pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

We need more housing, many more SFR’s.
3   SFace   ignore (0)   2018 Apr 24, 8:00pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

If renter pays the landlords, then the landlords eats and the economy is humming.

Seriously look at warriors tickets, its 10x more expensive than san Antonio. You literally would be better off flying to sanAntonio, watch your favorite team even with airfare and hotel then to consume it locally.

There's way too much consumption already.

Rent is absorbed at the margins. Your normal renter in ca is consuming just as much than flyover state.

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