Just about everybody agrees that there is a housing crisis in California. Even the politicians in Sacramento agree that this is a significant issue. As the price of houses continue to go up, fewer and fewer are able to afford to buy a home. This problem disproportionately affects those in the middle and lower strata of income levels, as they become increasingly unable to save the necessary down payment which goes up as the price of housing goes up. Just today in our local newspaper a sub-headline noted that the average cost of a house in San Diego had risen to $580,000. With a 20% down payment this equates to $116,000 down, and at 10%, $58,000 down . . . to purchase an average house. For those who are at the entry level in the housing market (without any equity in a present home), saving $58,000-$116,000 is nearly impossible, especially now with the cost of water rising 6% this month. (Another typical example of a “left hand, right hand” story – for another day!)
In response to this housing affordability problem, what do the Democratic politicians in Sacramento do? . . . Of course they exacerbate the problem making the cost of new homes even more expensive! Beginning in January, 2020, newly constructed homes must have solar panels. Does the left hand know what the right hand is doing?According to California’s Energy Commission (CEC), that mandate will add between $8,000 and $10,000 to the cost of a new home, which translates into an increased downpayment. Sure over the long haul, the decrease in their cost of electricity will most likely pay for these solar panels, but again, this does little for those trying to scrape together enough for a downpayment.
Danielle Hale, chief economist at Realtor.com, told CNBC’s “On the Money” that the new solar requirement could undermine a segment of the real estate market that’s struggled to add to new homes relative to demand . . . those exact people that I have referenced above. (Is this another situation where the Democrats in charge in Sacramento do things that are going to have a disproportionately deleterious effect on those at the lower levels of society? It certainly seems that way to me!)
In the same newspaper, on the same day, another example of the left hand seemingly not knowing what the right hand is doing. A front page story noted that the rates to ride public transportation are going up at the beginning of next month. Again, all I can do is to shake my head when I read about the things that our enlightened Democratic City Council passes. On one hand those in charge locally are trying do discourage driving by expanding bike lanes especially downtown. However, in the next breath they have okayed the rise in the cost of public transportation . . . which will, of course, discourage the use of public transportation, and cause more people to drive. Expanding the use of bike lanes in downtown may well encourage an increased use of bicycles downtown, but 95% of the populace does not live downtown! Aye-yay-aye! (Again, not to bore you with the same theme, but doesn’t increasing the cost of public transportation disproportionately effect those at the lower levels of society that need to work, but cannot afford a car?)
Last week in what I initially thought was a “tongue-in-cheek” letter to the editor, someone suggested that the best way to encourage the use of public transportation would be to make it free, as it is in some Scandinavian countries. The more I think about it, this “tongue-in-cheek” guy might be onto something. Hopefully, the Democratic politicians did not read his letter, as they will screw it up for sure (left hand, right hand)!
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