Thomas Sowell

They say time is money but a lot depends on whose time and whose money. For example, in California the San Mateo County Planning Commission has spent five years deciding what can and cannot be done with the site of an old racetrack that is no longer economically viable.

 That is more time than it took to build the Empire State Building, the Golden Gate Bridge or the Manhattan Project that produced the first atomic bomb.

 None of this delay has cost the members of the Planning Commission a dime.  That is why the delay is still continuing. But whatever is finally done with the racetrack site will be vastly more expensive because five years of delay are not cheap.

 Such delays are not uncommon in the more politically correct parts of California. Permission to build an apartment complex near San Francisco has taken even longer. Whoever ends up living in those apartments will have to pay far higher rents as a result.

 A recent study indicates that one-fifth of new home-buyers in California pay at least half of their income for housing. So do nearly one-fourth of California renters. When it costs half of what you make just to put a roof over your head, that is a big restriction on what else you can afford to do.

 How did this situation come about and why does it continue?

 Part of the reason is that it is newcomers who have to pay outrageous prices for houses, while it is existing homeowners who vote for laws and policies that drive up housing costs by obstructing the building of new homes.

 Those who already own their own homes are not hurt by soaring housing prices. In fact, they benefit when the value of their homes becomes several times what they originally paid for them.

 Given this situation and these incentives, it is easy to understand why such things as planning commissions, "open space" laws and "historical preservation" policies proliferate. These road-blocks to building are essentially idealistic-sounding ways of being completely selfish.

 Despite much liberal rhetoric about compassion for the poor, it is precisely in such overwhelmingly liberal enclaves as those in California where high housing costs resulting from restrictive laws have imposed the heaviest burden on lower income people.

 Nearly half of those California renters who earn $30,000 a year or less pay half or more of their incomes for rent. Among those in this income bracket who have bought a home within the past two years, 72 percent are spending at least half of their income on monthly mortgage payments.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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