Market Report: December 2007

The Sink in the Bedroom

The October fires are a reminder we live in an era of global scarcity. Drivers in Bombay will keep gas above three dollars and the Chinese will make sure concrete remains expensive. There are simply too many of us in the village and too few natural resources. This includes suitable land that can be developed into housing for our growing population. The twin conflagrations of the past four years illustrate that our land bank account is overdrawn. Or if you prefer, it is the result of our ill-conceived land use decisions over the past fifty years.

There were only 120,000 people in the city when Hitler invaded Poland. Shortly thereafter San Diego started to fill up with defense workers and military personnel. Since the Depression had limited the production of new homes and apartments housing shortages were the norm. After the war many temporary denizens decided to remain in these balmy climes. You can still occasionally see an incongruous lone sink in a bedroom in older homes, an archeological artifact from the chronic housing shortages of the forties.

After 1945, developers responded to the growing demand of the new post-war middle class by covering North Park with apartments and creating new communities such Allied Gardens. Good land was readily available close to the then vibrant urban core. Eventually merchant builders left the city because of urban land scarcity and changing consumer tastes. Cheap gas, job growth and new Interstates enabled our collective drive to the suburbs. These new freeway towns, because of either topography or distance, also became poster children for the law of unintended consequences.

Good suburban land was rapidly built out. By necessity homes were eventually constructed in areas that came with above average natural risks. Even certain infill projects were allowed on questionable land, such as in geologically unstable areas around Mount Soledad and Del Cerro. We are not alone here; how many times do we need to read about eastern coastal communities being flooded or destroyed by hurricanes? Or watching people being snatched off of their roofs as the angry Mississippi overflows its banks?

Business As Usual

Three million and more coming. Land developers, already hamstrung with the rising costs of land, labor and materials are not capable of housing the huddled masses that continue to show up at our doorstep. Inevitable growth means we need to either continue building in places that may incur nature's wrath or start allowing increased urban density.

We have lost our sense of community good when it comes to housing. Our grandparents, tempered by the Depression, easily accepted smaller living spaces, public transportation and urban density. Boomers and their progeny are not wired that way. There are no new tracts of affordable land, free from naturally reoccurring floods and fires, to develop in the foreseeable future and provide affordable housing for the coming generations. Density is the only sane choice.

Our elected leaders at all levels are loath to ask us to compromise our lifestyles for any purpose, no matter how noble. Requiring personal sacrifice is a sure ticket to political oblivion. Housing newcomers will demand uncommon dedication to our community good. In a certain sense, the recent geological failures and fires are the first shots of a looming debate over who gets to live here. I suspect the body politic will stay the course and accept the risk of disasters and endure poor air quality produced by all of those commuters. Political courage is in short supply but that is the direct fault of the voters. As I tell my kids, you get what you vote for.

Living on the Fault Line

Living in the west with all of our pioneer lore engenders a certain insouciance toward natural disaster. Westerners are great problem solvers and are collectively unafraid of a challenge. What could have been more frightening than crossing the Humboldt Sink in a wagon? Economics, on the other hand, is a cruel science that little values emotion or even history. Scarcity of land and raw materials will have to become part of our cultural fabric and consciousness. The west was built on ideal of the abundant frontier. Once we abandon the myth of plenty the politics will have to follow.

There is a commonality of $100 oil and the two recent fires. There will be an increase in demand for housing that reduces transportation expenses and that is well located in relation to potential natural disasters. I am betting the demand for close-in properties will drive up prices faster in the Metro area than in the outer reaches. But this begs the original question; how to house the next million people that come to this County? Therein lies the sacrifice part--those of us fortunate enough to live in the older parts of town must either rethink our ideas of density or soldier on and accept the inevitable fallout.

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