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title: "People live in poorly maintained warehouses in the Bay Area because…"
date: 2016-12-05
source: facebook
type: Archer T. Ships shared a link.
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# People live in poorly maintained warehouses in the Bay Area because…

*December 5, 2016 · Facebook*

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[http://www.nber.org/papers/w10124.pdf](http://www.nber.org/papers/w10124.pdf){target="_blank"}
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People live in poorly maintained warehouses in the Bay Area because they\'re one of the few remaining sources of affordable housing.\
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And I would argue that the root cause of high housing costs is a regulatory/political regime that has resulted in the housing supply severely lagging the demand.\
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And that regulatory regime is caused by:\
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\* \"smart growth\" regulations\
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\* rent control regulations\
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\* building code/zoning regulations driven by rent-seeking from the hotel/construction industry\
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\* existing property owners not wanting to see their multi-million dollar investment driven down in value by a drastically increased supply of housing\
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The combined effect of the above regulations drives the cost of housing to 30-50% more than it would otherwise be:\
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\"\[O\]ur estimate of the Regulatory Tax as a percentage of average house value\...amounts to from one-third to one half of home value\...\[in Los Angeles, Oakland, San Francisco, and San Jose metropolitan areas\]. In Boston, Newport News, and Washington, DC, the gap constitutes about one-fifth of total property value.\
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Thus, the evidence for single-family housing markets across a diverse set of metropolitan areas recently tracked by the American Housing Survey suggests a big role for regulatory restrictions in accounting for high house prices in a select set of primarily coastal markets.\"\
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[http://www.nber.org/papers/w10124.pdf](http://www.nber.org/papers/w10124.pdf){target="_blank"}
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