Sharon Simonson in the Silicon Valley Business Journal reports on a newly done study showing that someone’s finally discovered the obvious: the fiscal zoning that has most California municipalities afraid to build any housing has little basis in reality.
“Generally speaking, if a home is of high-enough value and it houses a higher-income family in it, there is a tipping point at which” it becomes a financial benefit to the city to allow it to be built, Mr. [Darin] Smith [of Economic & Planning Systems] says. He does not know what exactly that price point is, he says.
Since Proposition 13 exempts new property sales, cities get to claim full property tax revenue from any new housing. Back in Cary (ten years ago, albeit with pretty rich services), I remember hearing that houses worth over $250,000 or so paid enough in property taxes to more than pay for the city services they demanded. Any new housing in California almost certainly will sell for multiples of that break-even figure — which makes cities like San Jose look stupid when they reject new housing in favor of even more auto malls or office parks, just to boost the jobs-per-household figure (and presumably download the households onto some other poor schmuck.)
Incidentally, the study was done to advocate a faster development timetable at Coyote Valley; a scheme for developing the valley with offices and housing won a CNU Charter Award this year.