How state and local gov't policies jack up SV housing prices
In a cornerstone Medium essay, President of the United Housing Alliance, Irene Smith, JD, PhD contends that perhaps the most significant factors driving unaffordability emanate from City Halls all around Silicon Valley and the State. These include a spiderweb of often unnecessary and complicated regulations that drive up costs to providers and renters alike. Below, Smith lists her perspective on the Top 10 cost increases to housing providers that drive unaffordability.
Top 10 percentage increase in annual yearly costs and reserves for local housing providers, 2020 to 2026
Ongoing Operating Costs
Insurance - 940% increase (Fair Plan fire only plus add-ons). Administration - 150% increase (management of rent registry, rent control inspections, highly legalized responses to tenants, Tenant protection compliance audits, Fair Housing audits and compliance, stay legal, manage risk, manage documentation, attend hearings).
Regulatory permits - 44% increase (repairs, lead paint certified personnel).
Rent control compliance fees - 40% increase.
Utilities - 32% increase (SJ requires HP to pay for utilities).
Property Taxes - 20% increase (add on measures from school/water districts, special assessments).
Reserves for future
Gas conversion - went from zero in 2020 to $67K per apartment for 2031- you do the math.
Eviction moratorium - went from zero to needing $25K in reserves every five years as buffer.
Fair Housing defense fund - 150% increase. (Tenants regularly file lengthy complaints; when HP wins it's still on their record permanently and losing means 100's of thousands of dollars)
Capital repairs - 63% increase (high labor costs in Bay Area, permit delays, construction materials.)
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