‘The Rent Is Too Damn High’ in San Diego

‘The Rent Is Too Damn High’ in San Diego

Photo by Sam Hodgson

Matt Yglesias speaks at Voice of San Diego's One Voice at a Time event at Luce Loft in East Village.

 

Last night we were in San Diego’s East Village, near the ballpark, in a dairy factory converted to an urban loft, with a food truck selling empanadas on the street outside. It proved a great setting for a wide-ranging conversation last night with a guy who’s done a lot of thinking about cities and development and housing and how to do them all better.

Matt Yglesias, a Washington, D.C.-based business and economics blogger for Slate, joined us at Luce Loft for the first 2013 installment in our “One Voice at a Time” series. We talked a lot about themes from his book, The Rent Is Too Damn High.

I hosted the conversation, and more than 120 readers attended and a few pitched in thoughts and questions. We’ll have a few short videos from last night to share with you early next week, but for now, here are a few highlights from the night.

Yglesias’s most frequent point last night was that cities should allow more development — a greater supply of homes — so that those homes can be cheaper to rent or buy.

“Ultimately, the reason that we build houses is that people need places to live,” he said. “And the reason to buy a house is the same reason to rent a house — you and your family need to be somewhere. And ultimately, trying to have houses be expensive isn’t a sustainable economic strategy for a country or a region.”

What about the governmental programs that try to restrict prices and rents in gentrifying areas?

“I think that what any city needs to look at is not just the question of, ‘Is a certain share of the population going to be low-income and quote-unquote “affordable,”‘ but in the aggregate how many people are going to be able to afford to come here?” he said. “You need to produce, I think, not just affordable housing, but adequate housing.”

So, how do you do that?

Yglesias pointed to a number of liberally minded jurisdictions in coastal California, but said they often have an accompanying “real taste for regulation.” There’s not enough production of new housing in coastal California, he said. I mentioned my colleague Andy Keatts’ recent post on the coastal height limit in San Diego that restricts building west of Interstate 5 to 30 feet.

“I think you have to ease up on some of it, and you have to say that people can build new things,” he said.

I asked about the push last decade to increase the share of Americans who own their homes rather than rent. Without the silliness of the loans the country was using for that effort, is that pursuit worthwhile?

Yglesias said he still endorses the push to bring families to a point where they can afford to own real estate. But whether we want to promote homeownership or not, he said, the problem was counting on housing values increasing in place of rising wages and incomes.

“I think what we got into recently, which was really dangerous, was the idea of homeownership as the key wealth-building strategy for individuals,” he said.

Yglesias makes the point in his book that the price per square foot hasn’t changed all that much for the construction of houses. It’s the size of the houses that has changed considerably.

What happens is that as people get richer, they want bigger houses. The average newly built single-family home in 1950 was 983 square feet … By 2006, average housing sizes were up to 2,349 square feet.

So I asked him:

What would you build, from scratch? What size house would you build, knowing what you know about costs and economics of housing?

“Unfortunately, I’m no different than anyone else. And what I would like, in my dreams, is a house that’s slightly bigger than my friends’ houses,” he joked. “And I do think that that is one of the reasons why home sizes have tended to grow.”

This question came from the crowd:

What role can or should other governments — states or national — play to push city governments to increase density?

Yglesias said federal transportation money is already beginning to be tied to cities’ willingness to absorb population growth. That kind of funding can help incentivize denser development, he said.

“The money’s going to go to places that are looking to add people,” he said. “If you want to say our city is closed off, it’s a gated community, no more people are coming, that’s fine — local issues are local issues. But the national taxpayers don’t need to fund your local transportation infrastructure if you’re not letting any more people come.”

We covered some other topics, like education and even federal subsidies for asparagus, over the course of the evening. And Yglesias stuck around for some informal conversations.

You can see what people were writing on Twitter at the event here.

Thanks to all of you who came and participated in the discussion. What’d you think of Yglesias’s points? What would you like to see in a future One Voice event? Leave us a note below.

Photos by Sam Hodgson.

I’m Kelly Bennett, reporter for Voice of San Diego. You can reach me directly at kelly.bennett@voiceofsandiego.org or 619.325.0531.

Disclosure: Voice of San Diego members and supporters may be mentioned or have a stake in the stories we cover. For a complete list of our contributors, click here.

Voice of San Diego is a nonprofit that depends on you, our readers. Please donate to keep the service strong. Click here to find out more about our supporters and how we operate independently.


Kelly Bennett

Kelly Bennett

Kelly Bennett is a freelance contributor to Voice of San Diego. You can reach her directly at kelly@vosd.org.

  • 755 Posts
  • 11
    Followers

Show comments
Before you comment, read these simple guidelines on what is not allowed.

18 comments
bob dorn
bob dorn subscriber

“Unfortunately, I’m no different than anyone else. And what I would like, in my dreams, is a house that’s slightly bigger than my friends’ houses,” he joked. “And I do think that that is one of the reasons why home sizes have tended to grow.”

dorndiego
dorndiego

“Unfortunately, I’m no different than anyone else. And what I would like, in my dreams, is a house that’s slightly bigger than my friends’ houses,” he joked. “And I do think that that is one of the reasons why home sizes have tended to grow.”

Michael Robertson
Michael Robertson subscribermember

One aspect most don't realize is that the city/county and schools both extort developers. They charge them substantial fees to be able to build a house. If a developer builds a house then schools will get new property tax money. That's not enough though. They force the developer to pay big fee up front just for the pleasure of building a house. City/county do the same thing. They'll charge a big fee (many thousands) and then often will force the person building the house to improve sidewalks, roads, water systems, etc - not just where their building is but in other places. It's extortion and its wrong. It also drives up the cost by chasing away developers.

mp3michael
mp3michael

One aspect most don't realize is that the city/county and schools both extort developers. They charge them substantial fees to be able to build a house. If a developer builds a house then schools will get new property tax money. That's not enough though. They force the developer to pay big fee up front just for the pleasure of building a house. City/county do the same thing. They'll charge a big fee (many thousands) and then often will force the person building the house to improve sidewalks, roads, water systems, etc - not just where their building is but in other places. It's extortion and its wrong. It also drives up the cost by chasing away developers.

Tracey McNeel
Tracey McNeel subscriber

Exactly!!!! And even when I was working and pulling in a small sized income for a single female with no dependents, I still had to LIVE with my mother and Father because as mentioned in this article, THE RENT here is San Diego is too damn High!!!.

GalaxianStar
GalaxianStar

Exactly!!!! And even when I was working and pulling in a small sized income for a single female with no dependents, I still had to LIVE with my mother and Father because as mentioned in this article, THE RENT here is San Diego is too damn High!!!.

Fotis Tsimboukakis
Fotis Tsimboukakis subscribermember

Iglesias Sounds "almost" like a lobbyist for the bad developer types. Build,Build,build and mark it up cause of it's location,close to the water. Huge profits for most developers for what they deliver. Smaller homes and multi-unit developments are a good idea when are cost efficient and sensibly priced AND are also accompanied with amenities that make quality of life better,like open spaces,instead of just bars,stadiums and nightclubs (Gaslamp District).

FrankT
FrankT

Iglesias Sounds "almost" like a lobbyist for the bad developer types. Build,Build,build and mark it up cause of it's location,close to the water. Huge profits for most developers for what they deliver. Smaller homes and multi-unit developments are a good idea when are cost efficient and sensibly priced AND are also accompanied with amenities that make quality of life better,like open spaces,instead of just bars,stadiums and nightclubs (Gaslamp District).

Jim Jones
Jim Jones subscriber

Greater density = more cost and lower standard of living. Even though it is somewhat counter intuitive, when you really look into it city cores are expensive, unhealthy, polluted and generally have worse schools, more highly stressed infrastructure, lower standard of living, greater disease including mental diseases and are generally a worse place overall than suburban area. It is important to realize that the drive to densification is an idealist one rather than a logistical one.

Jim Jones
Jim Jones

Greater density = more cost and lower standard of living. Even though it is somewhat counter intuitive, when you really look into it city cores are expensive, unhealthy, polluted and generally have worse schools, more highly stressed infrastructure, lower standard of living, greater disease including mental diseases and are generally a worse place overall than suburban area. It is important to realize that the drive to densification is an idealist one rather than a logistical one.

Norman Hamlin
Norman Hamlin subscriber

Actually that sounds pretty much like the housing policy in San Diego.

nhamlin
nhamlin

Actually that sounds pretty much like the housing policy in San Diego.

Richard Bagnell
Richard Bagnell subscriber

Does this person understand that California sends more funds to the federal government than they receive in return. And when have we stopped people from coming here? You don't even need to be in the country legally to come here.

RB
RB

Does this person understand that California sends more funds to the federal government than they receive in return. And when have we stopped people from coming here? You don't even need to be in the country legally to come here.

Don Wood
Don Wood subscriber

He doesn't make much sense when he says one reason rents and home prices have gone up because developers are building bigger houses, then admits that he wants a bigger house than his neighbors. I tend to distruct Washington DC experts coming here and telling us how to handle development in San Diego when they haven't lived or spent any time here. His promotion of more density to bring down rentals costs may work in other cities, but in San Diego where billoinaires like Mitt Romney are moving in and buying houses for our sunshine, beaches, and other attractions, that theory may not hold water.

Don Wood
Don Wood

He doesn't make much sense when he says one reason rents and home prices have gone up because developers are building bigger houses, then admits that he wants a bigger house than his neighbors. I tend to distruct Washington DC experts coming here and telling us how to handle development in San Diego when they haven't lived or spent any time here. His promotion of more density to bring down rentals costs may work in other cities, but in San Diego where billoinaires like Mitt Romney are moving in and buying houses for our sunshine, beaches, and other attractions, that theory may not hold water.

Bill Bradshaw
Bill Bradshaw subscribermember

Instead of micromanaging cities, let's do some simple things that encourage smaller homes and greater density, starting with eliminating tax breaks that encourage the opposite. Changes like this don't require a massive government bureaucracy to administer and poke it's nose into our private affairs.

toulon
toulon

Instead of micromanaging cities, let's do some simple things that encourage smaller homes and greater density, starting with eliminating tax breaks that encourage the opposite. Changes like this don't require a massive government bureaucracy to administer and poke it's nose into our private affairs.