The Ladder is Kaput

    — Published by BiA San Diego, by Borre Winckel, President & CEO, April 19, 2016. Republished by Lilac Hills Ranch, April 19, 2016.


Once upon a time, San Diego offered various housing options that matched our ever changing needs. We called it the housing ladder, and it had several rungs of opportunity. Fast forward. That ladder stands broken with basically two rungs left, one at the very bottom and one on top. It leaves everyone stranded who does not qualify for affordable housing or cannot afford the higher-end housing tiers. The consequences of years of careless regulatory indifference towards the growing adverse impacts on housing, especially housing for the middle class, is now fully evident.

Danger: San Diego’s housing ladder is broken. Climb at your own risk.

Typically, when housing demand exceeded supply, existing homeowners and the housing industry fared well. On the flip side, when supply exceeded demand, someone always benefited from the price and value correction. Yes, many got hurt as well. Ultimately, all housing types would reenter the market at discounted prices. What drove the market was volume. Volume is now the key problem. Volume, i.e. supply, no longer happens. Our friends in government who make and own the rules need to pay close attention to this as all of their revenue models rely on volume.

Today’s market points to a very different dynamic. There is a strong natural demand for housing that simply cannot be supplied. It’s the housing traditionally found in the middle of the housing ladder, the largest segment of the market. Unless remedial action is taken, supply shall be permanently constrained by uber expensive regulations — mostly designed to save, clean and cool the planet. But here’s a good question – how do we gain real results when we can’t build planet-saving new housing? People hoping for relief from a market correction will be disappointed, and even if it happens, oversupply will not have caused it. This all points to one answer – we must regain housing volume by rebuilding the traditional housing ladder. It will drop overall housing costs, create new jobs, keep existing jobs here and save the planet.

To help get this job done:

  • Curtail regulatory growth at the state and local level. We have too many laws already.
  • Prioritize middle-class housing. It’s not even being discussed.
  • Create certainty in the planning process. Years are wasted on red tape.
  • Stop legal abuse and make losers pay.

The Building Industry believes that housing you matters.

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