Urban land reform
The San Francisco Bay Area is undergoing a housing affordability
crisis. Median prices per square foot of living area in the Mountain
View, Sunnyvale, Palo Alto, Los Altos area range from $700-1,200 per
square foot, placing a modest 1,500 sq ft home at $1.1m-1.8m. This
makes homes unaffordable for the vast majority of people, and forces
people to leave the area.
All of these cities have restrictive building codes, limiting the
area on which can be built, and the height of buildings to one or
occasionally two stories. For instance:
- Palo Alto limits residential building to 45% of the lot size, or
30% of any lot size in excess of 5,000 square feet
- Los Altos limits residential buildings to covering 35% of the lot
size, or 10% of any lot size in excess of 11,000 square feet
Zoning reforms to allow higher density housing, along with improved
public transit options would make housing more affordability to the
majority of potential residents.
GiveWell maintains a page
on land
use reform. They report the "zoning tax" on rents is 47% and 53%
for San Jose and San Francisco respectively.
Leverage Factor
California ballot initiative spending can be as high
as $73m
per initiative, or close to $2 per voter. We are not suggesting a
state wide ballot initiative, but merely using it as a guide to the
costs involved per voter. Instead we would suggest it is worth doing
more research on this issue, engaging in local activism, holding focus
groups, and testing how well the issue polls (at the local level
first).
Home ownership rates for Mountain View and Sunnyvale are both below
50%, suggesting the issue may resonate more strongly there.
| Project
| Cost
| Real world outcome
| Outcome estimates
| Economic value in Western terms
|
| Prototypical Silicon Valley city land reform
| $80k
| cheaper denser housing
| Consider a hypothetical city with 50,000 residents, 40,000
voters, and 20,000 housing units valued at $1m each; suppose a
successful city wide ballot initiative costs $2 per voter in education
costs; suppose urban land use reform unlocks an additional $50-200k in
economic value per existing housing unit (this is a guess; GiveWell
attempts a
more precise methodology which for the Silicon Valley area would
appear to result in (0.5^-0.4 - 1) x 0.5 / 2 x $1m = $80k).
| $1b-4b
|
Leverage Factor
13,000 - 50,000
