Current Events > Huntington Beach suing the state of California for, uh, well,

(+) Yeah! (+)

Ohioguy1980 posted...

What is funny is that whenever people against these projects propose to build the housing in the rich areas where the politicians live, the politicians become adamantly against it.

I'm sure all the Republicans will welcome them with open arms.

[LFAQs-redacted-quote]


In Wickard, the Supreme Court ruled that a man growing wheat for himself on his own property was interstate commerce because if he didn't grow the wheat himself, he would have had to buy it on the open market instead. Basically, anything can be ruled as interstate commerce because of Wickard. It is one of the most ridiculous Supreme Court decisions ever.

Hot take; being a landlord isn't inherently evil. Not everyone can afford a home. Keeping a place repaired is expensive. But your goal should be to facilitate people being able to rent, to work with your customers to provide a service; if you're deliberately keeping prices too high or not renting out all your places because your only goal is profit, you're doing it evil.

The hard ban on accessory dwelling units is utter bullshit, though.
The town is behaving like a super-turbo HOA here.

Huntington Beach is an right wing shit hole of a city so it fits

Bio1590 posted...

Reminder that Huntington Beach is the place full of Nazis

HB is California's Florida.

Quezovercoatl posted...

Hot take; being a landlord isn't inherently evil. Not everyone can afford a home. Keeping a place repaired is expensive. But your goal should be to facilitate people being able to rent, to work with your customers to provide a service; if you're deliberately keeping prices too high or not renting out all your places because your only goal is profit, you're doing it evil.

Almost every landlords entire goal is to profit. Why else would they be doing it? They are parasitic in nature.

It could be because you have the money to buy multiple units and you're aware not everyone has the money to buy one, so you decided to provide a service by renting them at prices that allow people to get a home and you to make a living. A good landlord would also then consider it their duty to maintain the residence and it's utilities so their occupants can live in comfort.

If you're saying the way the industry is actually run is parasitic or predatory, yes. But it doesn't have to be.

The overall housing affordability issue is more on zoning and construction requirements than on landlords.

In Huntington Beach particularly, the weather is too good and the location is too convenient to LA for it to be inexpensive. Just way too many people want to live on the California coast compared to the space available.

There are currently 5 pieces of land for sale on Zillow in Huntington Beach. The cheapest is $431k for 7405 square feet. They don't provide any zoning, any dimensions of the lot, any restrictions or anything like that. No idea if it is buildable, so I am ignoring that one. I suspect it is probably buildable, single family zoning (which to my understanding now means it can build a duplex there or a SFH + ADU), but who knows, it could be light industrial and not allow residential buildings.

Next cheapest is 1.75M for under 3500 square feet of dirt that is buildable, though it is also on a canal which increases the price a good deal. That one is zoned for mix use or multi-family. There are normally height limits of 3 to 5 stories. There will likely be 20' setbacks from the front of the property, 5'+ set backs from the sides. So you could probably get 6-10 housing units in that space.

Building costs, expect $200-300/square foot. So if you build 8 housing units, 8 indoor parking spots, 8 outdoor parking spots, 700 square feet per housing unit, thats 5600 square feet in living space which will be $1.1M to $1.7M for the construction only. The garage under the housing will be another $200k or so, much cheaper to build that.

And while not significant compared to those costs, expect $50-100k in expenses for permits, inspections, and fees,

All told you are looking at $3.1M for 8 housing units.

Your annual maintenance costs will average 1-3% of the value of the structure, so if you assume 2% that is $26k annually or $3250/unit, $270/month.

If the assessed value is $3M, annual taxes would be $24k annually, or $3k/unit, $250/month.

If this builder was able to get away with only 20% down, they have a loan of $2.5M which would be ~19k monthly payment, or $2,375

So if you find a builder/investor that is for some reason willing to make no profit to start, they would need to be charging $2,895/month just to break even.

There are ways that could be cheaper. Get rid of the parking requirements and you could fit another 2 units in there. Allow buildings to be taller and you could get more in there. Get rid of 20' setbacks from the front and you could add another unit per floor.

If you let someone build what makes sense there, they could probably get it down closer to $2000 a month. Shit, they could probably put 10 tiny houses with a 250 square foot footprint (maybe 400-500 square feet total with 2 floors or a loft). Allow those tiny houses to only have inspections for electrical, have a centralized bath house. But that sort of development is basically not allowed anywhere.

bigblu89 posted...

OK. I get it now. So it's basically the fact that they own so much property that they can turn a profit even when they keep a lot of their "stock" off the market, causing an artificial demand.

Thank you for explaining it. I really wasn't trying to be difficult, it's just not a topic I really ever took the time to look into and learn about.

The neat part is that they also have great lawyers who let them write it off as some sort of business expense and since it is vacant, they can use it on their taxes to pay less because it is a loss.