Antonio's Billion Dollar Gamble
Housing affordability in Los Angeles is an issue. The issue is, if you can't afford to buy or rent a home in Los Angeles, you can't afford to live in Los Angeles.
I would like to live in New York, but I can't afford it. Therefore, I live in LA.
There is no constitutional guarantee to equal affordability of a given community. Does LA cost too much for you? You might have to live in Palmdale, or Vegas or Arizona. Make yourself more valuable and you can earn the money needed to live in a major city.
Among the reasons for a lack of housing at lower prices in Los Angles are the government regulations and bureaucracy that stand in the way. Its very difficult to create new housing in Los Angeles. Along with the cost of land, with the expense that comes from the excessive regulations, developers can only recoup their costs by building primarily high-end housing.
The free market can solve this problem if it is allowed to. With schemes like affordable housing trust funds, inclusionary zoning and mandating builders to set aside housing for sale at below market/below cost pricing, fewer people will risk their money investing in new housing.
It has always amazed me that we place controls on the buying and selling of housing that we don't on other items - like cars, furniture, vacations, etc. Imagine if the City told GM that 1 out of every 10 Cadillacs sold would have to be sold for 20% of their value. Ridiculous, huh?
In addition to onerous government regulation on the housing industry, the other concerning aspect to this is the addition of more bond debt. Where does the Mayor think the money will come from to pay off $1 billion? With every bond we pass, we wind up paying double the amount of the bond. We've been adding bond debt like crazy every election, homeowners taxes to pay off these bonds keep going up, up, up. With an ever shrinking middle class, who is going to pay the bills for the goodies politicians are giving out to the underclass? The rich? Don't think so, not enough of them to start with and they're moving out of the state at an alarming rate. Industry and business? Same thing, they'll move where its cheaper to do business.
However, a few rich folks like Babs Streisand, David Geffen and presumed gubenatorial candidate Rob "Meathead" Reiner (lets not get started on his tax scheme he plans to run) probably won't give up their Malibu digs to re-located to Mesa, Arizona, so I guess they will get stuck with the bill.