I’d like to make my prediction of the unintended consequences of #SB423:
Cities infected by SB423 will all follow a similar pattern:
- There will be a hot zone in the city about 10 blocks square or so where mandatory approval will be the most lucrative and every developer will focus on that zone. I don’t know where this will be in any given city, but I bet #ScottWiener ‘s staff does.
- A blockbusting like effect will happen in the hot zone. As the first set of redevelopment happens existing land owners will see the writing on the wall and sell out to the developers. Up to 90% of the area will become multistory rental housing in 24 months.
- Initially this housing supply will bring lots of housing to the area, and the developers, having done their math correctly, will make significant profits in the first 5 years. However the area will over-saturate and any property not developed in the landrush will become devalued.
- City services in the area will be overwhelmed. The city government will be forced to spend a substantial amount to avoid catastrophic collapse of basic service in the area. There will be one ore two high profile failures, and a lot of smaller struggles.
- 5 - 7 years later, the developers will have cashed out and the regional and national property management firms will take over the buildings. A new hot spot will develop some ways away which will put downward pressure on rent. The buildings - built to code but not built to last - will start to see the first set of capital repairs set in just as the rental market softens.
- 10-15 years after the boom, the slumlords start buying out the more reputable property management companies in the 20% of buildings with the worst maintenance issues. While most places are still okay, the existence of notoriously shaudy buildings in the area effects the whole community and buildings start to get abandoned or neglected. The area experiences a classic urban blight as all the buildings in the area age out at the same time.
- In 25 years cities will be pock marked with SB423 neighborhoods and historians will begin comparing them to the Towers in the Park of the 1960s and 1970s.
#IHopeIAMWrong
#housing #affordableHousing #housingCrisis, #CALeg
