Hal Varian Is Smart

Hal Varian writes on affordable housing. There's a bubble element, yes. There's a congestion-because-of-the-filling-up-of-America (or at least of much of its coasts), yes. There's a richer country able to pay more for location, yes. In, California, there's yet another unpleasant legacy of Howard Jarvis--the fact that California levies a uniquely large "tax on moving" that makes lots of empty-nesters very slow to downsize. And there's also the transformation of America's local governments from cabals to enrich real estate developers to cabals to preserve and augment the values of voters' single-family homes.

Is Affordable Housing Becoming an Oxymoron? - New York Times: In the short run, the supply of housing in most areas is more or less fixed. Hence the price of housing is determined primarily by the demand side of the market - by how much people are willing to pay for housing. In the last few years, we have seen historically low mortgage rates, which feed directly into housing demand. In several locations, particularly on the East and West Coasts, where land-use restrictions make it difficult to increase the supply of housing, prices have been pushed up to unprecedented levels.

Whether these low mortgage rates have created a housing price bubble has been a matter of debate... the idea is that a significant part of the demand for housing is based on an expectation of future appreciation. The more prices go up, the more people want to buy so as to reap the gains from expected future price appreciation, pushing prices up even more. It is quite possible that there is some "froth" in the market, to use Alan Greenspan's term, particularly on the coasts. But even when the froth subsides, housing will remain quite expensive in those areas. Can anything be done?

Some municipalities have started subsidized housing programs that provide various types of assistance to new homeowners. Unfortunately, such programs just increase demand even more, pushing prices up. In fact, in an ideal market with a constant supply of housing, a 10 percent subsidy offered to a broad segment of the market would simply push housing prices up by 10 percent....

In California, tax policy has played a significant role in housing price dynamics. Proposition 13, passed in 1978, limited property tax increases to 2 percent a year for owner-occupied homes. But when the house is sold, the property tax assessment is based on the sale price. This means the new owner typically faces a significantly higher property tax bill than the old owner. Proposition 13 has been called a "tax on moving." Indeed it is, since a homeowner in California is much better off remodeling than moving. It is a lot cheaper to add a bedroom to a three-bedroom house than to buy a similar four-bedroom house because of the tax treatment of renovations as compared with new sales. For the same reason, empty-nesters have strong tax incentives to keep their houses, regardless of whether they need all that space. The result is that fewer houses come on the market than would otherwise be the case, pushing prices up even more for the limited stock of housing that is available....

So what is the answer to high home prices? Basic economics tells us that for housing prices to fall we have to see a reduction in demand or an increase in the supply of housing.... Ultimately, the only reliable way to make housing more affordable is to increase the supply. But a new house requires land zoned for housing. We cannot make more land, so we either have to use the land we have more intensively or we have to build houses farther from jobs. Both of these options are unattractive.

In urban California, traffic has become increasingly congested, putting a limit on how far away from their jobs people can live. Land use restrictions are tight in many desirable residential areas, and political forces are aligned against relaxing these restrictions. Imagine someone who scrimps and saves to buy his dream house in an area zoned for one-acre lots. The last thing he wants to see is his neighbor's lot being subdivided to build two or three new houses. Not only would it affect his quality of life, but, even more important, it would also affect the value of his house.

Zoning laws and land use restrictions are unpopular among those seeking less-costly housing since they push up the price. But by the same token, once a searcher becomes an owner, he often becomes a fervent supporter of such restrictions. As Pogo put it, "We have met the enemy and he is us."

Comments

[Altoid]

Where is Henry George when we really need him?

[Cranky Observer]

> In urban California, traffic has become
> increasingly congested, putting a limit on
> how far away from their jobs people can
> live.

Man, I really don't like that Lakoff guy, yet here again we see the frame controlling the discussion. Note absolutely no mention of the Portland model, which is basically a modern reinterpretation of the 1880-1920 railroad suburb. I grew up in such; everyone did have a reasonable-sized house and a yard (believe it or not); most of the houses had garages (1920s) although we had to use the (gasp) otherwise unused streets for parking; parks were generous and close enough to walk to; and the population density was easily 5x that of the typical cornfield subdivision in Naperville.

The idea that the 3-car-based cornfield exurb is the only way to live may be so deeply ingrained at this point that the US rides it to its death at peak oil.

Cranky

[Gavin]

I wonder why everyone seems to believe that the main reason for high prices "this time" in San Francisco is because of the increasing restrictions put on building or as Brad puts it "the transformation of America's local governments from cabals to enrich real estate developers to cabals to preserve and augment the values of voters' single-family homes".

Houses in San Franciso have been as "unaffordable" atleast twice before in the last 30 years. In between those years, homes became a lot easier for the middle class to buy. Did the builders get an upper hand during periods of improving affordability?

See my web site for more details about San Francisco

http://www.crimsonbee.com/house_graphs/sf_house_prices.html

[don majors]

The answer is to relocate the institutional, governmental and financial power centers to spacious, accomodative, defensible Brazilia ND (or another centralized location).

[Slocum]

"We cannot make more land, so we either have to use the land we have more intensively or we have to build houses farther from jobs. Both of these options are unattractive."

But the questionable unstated assumption here is that jobs are now and forever fixed in particular locations and the only question is how to arrange people around these fixed 'job nodes'. But, of course, the attractiveness of an area to employers looking to establish or expand facilities is also a function of congestion and housing prices. You have to pay an employees a lot more who live in such areas because more is needed to maintain the same lifestyle.

If jobs were forever tied to fixed locations, all the cars in the country would be made in Michigan by workers earning the same UAW-level wages. There would be no auto plants in Kentucky, Tennessee, Alabama, South Carolina, and Delphi wouldn't be in Chapter 11.

Affordability and congestion problems will resolve themselves as, in time, enough jobs (and therefore people) and people (and therefore jobs) leave for, literally, greener pastures.

[Julian Elson]

Oh great, Altoid. As if liberal needed any more provocation on this subject :^).

One thing I think Hal Varian failed to mention in his excellent example of the one-acre house is that the one acre minimum lot zoning ordinance doesn't make houses universally more expensive. It makes most houses more expensive, but it makes actual big houses on one acre lots cheaper, because a large swath of land has been reserved for them without any competition. As far as I know, there are few zoning ordinances which mandate lots have a maximum size: as far as I know, they dictate a minimum, so the bigger the house, the more options, providing a de facto subsidy for larger houses.

[Jonathan King]

Slocum writes:
>
> Affordability and congestion problems will resolve themselves
> as, in time, enough jobs (and therefore people) and people
> (and therefore jobs) leave for, literally, greener pastures.

...and in the long run, we're all dead. I don't think anybody doubts that, given enough time, there will be some re-alignment of housing supply and demand and that some of it will involve building suburbs somewhere else. But there are some real problems.

1) Congestion does *not* tend to resolve itself. Once people have decided to tolerate a given level of congestion, that's basically what you will be living with barring some major change in commuting patterns or technology. Average commutes basically never become shorter on average in any developed metro area, as far as I know.

2) Similarly, how could any area, absent the popping of a major price bubble, become more affordable? I agree you can probably get situations where housing cost changes eventually track inflation. But the only housing markets I can think of that get much cheaper are just the ones that become much less desirable, and I don't think you want to equate "affordable" with "undesirable". I happen to think that Pittsburgh is a fabulous place, but the decimiation of the steel industry has shredded the economic base, caused chronic population declines, and, with that, declines in real housing prices.

3) Right now, chasing affordability probably means foregoing gains in housing prices, and possibly foregoing the opportunity of easily moving to a place where housing has gotten very expensive. I moved out of San Diego in 1998, and, whatever positive aspects there may be to life in Columbia, MO (affordable housing for sure), it would be really really tough to move back because the price of my house hasn't tracked the price of SD real estate _at all_. There may now be downwards pressure on housing prices in SD now, but that's surely bubble-related. I think Brad DeLong is right, and that there's not much hope for places on the coasts ever becoming "affordable" again unless you've got a house there already to trade with.

4) Part of the problem with "greener pastures" is that they now tend to be located in places that are very different from the unaffordable, much-sought-after places on the coasts. They are not only less desirable climates and topography, in many cases they are completely different social systems. People like to live near people like them, and I can assure you that, for somebody from the Bay area, most places in the Midwest would be a big shock. (And, of course, vice versa.) You can put as much affordable housing as you like in suburban Kansas City, but there won't generally be people in California eager to make the switch at almost any price. This could end up being a real problem.

[Bruce Webb]

"As far as I know, there are few zoning ordinances which mandate lots have a maximum size: as far as I know, they dictate a minimum, so the bigger the house, the more options, providing a de facto subsidy for larger houses."

Well we have one. In Snohomish County (north of Seattle) and building houses like crazy there is a requirment to build in urban areas at a minimum of four houses per acre. This has the effect of capping the top sized lot in an urban area at around 10,000 sf. (Most developers are pushing for density anyway). And you could not create a straight one-acre lot if you want. Outside Urban areas the starting point for lot yield is one lot for every 4.6 acres. There are development options that can get you up to twice that yield, but there is absolutely no way to take five acres and split it into 4 1.25 ac lots.

Washington State has a pretty stringent Growth Management Act that is being implemented with very varying degrees of acceptance by counties. But the Pacific Northwest is making significant efforts to control sprawl, even as my County is projected to add 250,000 more people in the next ten years.

[Joe O]

Gavin's web page on san francisco house prices is very interesting if you live in the area.

http://www.crimsonbee.com/house_graphs/sf_house_prices.html

[trotsky]

Is there any actual hard evidence that fewer houses go on the market in California than elsewhere? Certainly some longtime homeowners get a nice tax break (as do their heirs -- their heirs!!!! -- which astounds me and does not seem sustainable in the long run), but my father, a real estate agent, says the average home in California turns over every seven years, on track with the national average. Is he wrong?

[dsquared]

Hmmmm, he writes a good textbook but I am not very impressed by an article that completely ignores the existence of a speculative demand for housing. (I also wish economists would forswear the phrase "basic economics tells us", as it is almost always used to introduce a dangerously simplistic idea given spurious plausibility by a superficial resemblance to a Marshallian textbook example).

[Saheli]

"Ultimately, the only reliable way to make housing more affordable is to increase the supply. But a new house requires land zoned for housing. We cannot make more land, so we either have to use the land we have more intensively or we have to build houses farther from jobs. Both of these options are unattractive."

I too disagree. Both of these options are not equally unattractive, and they do not deserve to be dismissed in hand together. The latter is much worse than the former---it makes for less leisure, more pollution, more sprawl, and less connectivity. It also makes people's lives much more inflexible.

Well constructed density---and a willingness to let things stay open later---can make for more leisure, less sprawl, and more connectivity. It can open up a host of options--educational, occupational, social, artistic--for people.

Frankly, I feel it can be safer, if persued properly. Devoted Yay Arean that I am, I feel much, much safer in Manhattan late at night than in San Francisco or Oakland, and my understanding of the crime statistics is that my intuition is correct. If there was more, reliable, later running public transporation; if shops and cafes stayed open slightly later; and if certain neighborhoods were denser and more mixed use, I think it could only pump up the local Economy. We have some unique geographic and geological constraints here, and for physically freer metropolitan areas, like Denver or Las Vegas, such a strategy could work really well.

[wkwillis]

There are lots of people in California who would love to move to someplace with more culturally conservative neighbors, if they didn't have to take the pay cut. These people have been moving out of California for the last thirty years, basically.
There are also lots of people, more in fact, who don't care about California's lifestyle and are just making a living here and will cheerfully move someplace else if the pay their was better. The difference from the first group is that they don't care and the first group does care.
There is a third group that will move when the critical mass of Californians has moved already to make a more comfortable social set for them in the flyover. These are both Anglo and immigrant types.
And when the balance of payments renormalizes, and the real estate boom renormalizes, and I get my pony, there are a lot of people in the flyover who will finally be able to buy a house in California and move here for the lifestyle.

[spencer]

I keep hearing about one acre lots.

I would love to see some data on how
important it is.

In Boston there are some communities outside of 128-- roughly a 10 mile radius from downtown -- but I know of no communities inside that area where one acre zoning is the norm. That is also the norm in the D.C. area and in the southeast coast of Florida. Where in the US is land zoned for one acre lots a significant share of the real estate market?

I am familiar with many desirable close in surburbs where the lots are very small and the communities were essentially fully developed in the 1950s and 1960s. Now, you see teardowns as these homes come on the market. But no national developer like Toll is interested in buying one 1950s quarter acre lot on this street and another on the next street. But the tear-downs are soaring in value and are replaced with McMansions. But it has little to do with zoning and especially recent zoning changes.

Most economitric models that are quoted on the adverse impact of zoning use housing density as a proxy for zoning. But I have very serious doubts that this proxy is really just capturing the impact of zoning and not the impact of other natural economic forces. Isn't all they are capturing is that is is more expensive to build in old desirable communities 5 miles from downtown then in new communities 25 miles from downtown-- and this is largely because there is no economy of scale close in?

[Joe O]

There isn't very much housing speculation in the bay area in the sense of people buying houses to flip them to make a quick profit. Some contractors buy a place to renovate it and then sell it. But hardly anybody is buying condos to speculate on housing price inceases like they are doing in the miami area. Part of the issue is that the housing prices are just too high in the bay area. Not too many people have the down payment money to invest. This isn't to say that housing costs are not way out of line out here.

[Lord]

The problem is not the price of housing but the inadequate incomes of those who want to buy. Of course higher incomes would just translate to higher prices, but that is desireable. One has to spend money on something, and there are few things better to spend it on than housing.

[Cranky Observer]

> Affordability and congestion problems will
> resolve themselves as, in time, enough jobs
> (and therefore people) and people (and
> therefore jobs) leave for, literally,
> greener pastures.

Assuming that gasoline prices stay around $2.00/gal in 2004 dollars. At $5.00 I don't think those pastures are going to look quite so green.

Cranky

[Slocum]

"..and in the long run, we're all dead. I don't think anybody doubts that, given enough time, there will be some re-alignment of housing supply and demand and that some of it will involve building suburbs somewhere else."

The fortunes and character of cities and regions change on a much shorter time scale than the human lifespan. There was no such thing as 'Silicon Valley' even when the 'Gen-Xers' were born. In another 30 years, maybe it'll be Las Vegas and Phoenix that are shrinking as St Louis and Cleveland and Detroit have in the past 30.

"Similarly, how could any area, absent the popping of a major price bubble, become more affordable?"

Look at the change is average house size and, even more dramatically, the change in square feet per person since, say, 1960. My family (of 6) was solidly middle class in the 60's and lived in 1300 sq ft ranch on a quarter acre lot with a single bathroom. Imagine! I don't think agencies would even let you now adopt children into such 'squalid' conditions. Housing has become dramatically more affordable almost everywhere in recent generations judging by just how much more housing average Americans manage to afford.

"Right now, chasing affordability probably means foregoing gains in housing prices, and possibly foregoing the opportunity of easily moving to a place where housing has gotten very expensive."

Perhaps, but it also means avoiding the risk of being financially devastated and left unable to trade up, down, or sideways by bursting bubbles (as happened to a lot people in S Calif not all that long ago).

"Part of the problem with "greener pastures" is that they now tend to be located in places that are very different from the unaffordable, much-sought-after places on the coasts. They are not only less desirable climates and topography, in many cases they are completely different social systems."

Social systems of cities are no more permanently fixed than economies or populations. I've read stories from time to time about the outflow of Californians 'cashing out' their equities being credited (or rather blamed) with changing the character of various western cities (Portland, Phoenix...hell, even Boise and Missoula). There are little metastizing colonies of ex-coastal residents all over the damn place.

[Gavin]

Here is more direct evidence that the "lack of supply" is not responsible for the rising prices in the San Francisco Bay Area

UCLA has a good look at housing in the following report
http://www.edab.org/Newsletter/Quarterly/EastBayQuarterlyForecastJuly2005.pdf

On page 22 of the report here are figures for employment and housing

Bay Area Housing and Employment
1995-2005
Region "New Units" "New Workers" Ratio
East Bay 93,105 146,000 0.6
San Francisco 41,519 40,150 1.0
San Jose 64,857 -28,800 n.a.
Total 199,481 157,350 1.3

[linnen]

The first sentence contains a big assumption that throws serious doubt, IMO, on the rest of the essay.

"In the short run, the supply of housing in most areas is more or less fixed."
One can ignore the 'more or less' qualifier as it means, - more or less -, what ever you want it to mean. It is the other two qualifiers that are important.

The basic statement, 'the supply of housing is fixed', is essentially false simply on the grounds of population growth, if not thru birth then thru immigration. Thus 'in the short run' and 'in most areas' are needed.

Strictly speaking, 'in most areas' the supply of housing is stable or 'fixed'. But this is misleading via statistics. Think of 10 guys, each making 10USD per hr., in a bar and Bill Gate walks in. One can still say that MOST of the guys at that bar are making 10 bucks an hour.
I have yet read anyone willing to argue that there is a housing bubble for the nation as a whole. All the articles point to specific regions and cities before making claims about a bubble.

As for the 'short run', what time frame is he using? a week? a month? The shortest time frame that I have read on housing construction uses 3 month quarters. And in some areas, housing is being supplied at high rates.

So, color me unassured.

[Barkley Rosser]

Regarding the one acre lot minimum size zoning, Julian Elson is right that it lowers the value of the one acre real estate, although there is another factor. It is simply a fact that a piece of property on which one can put four houses will sell more than one on which one can put only one house. This is why these folks need the zoning to preserve their "quality of life," that is to keep themselves surrounded by higher income (and probably whiter) neighbors.

Another factor in all this is whether or not there is a sewer interceptor nearby, given the nearly universal restrictions around the country on building too densely in areas served only by septic tanks. Thus, fights over extending sewer interceptors into these minimum lot size zoned areas can become very nasty and racially tinged. Such fights are currently going on in the Maryland exurbs southeast of Washington.

[anne]

Barkley Rosser:

Another factor in all this is whether or not there is a sewer interceptor nearby, given the nearly universal restrictions around the country on building too densely in areas served only by septic tanks. Thus, fights over extending sewer interceptors into these minimum lot size zoned areas can become very nasty and racially tinged. Such fights are currently going on in the Maryland exurbs southeast of Washington.

Please explain your interesting comment further....

[Lord]

There is no equilibrium in real estate, or, more accurately, the equilibrium in real estate is towards maintaining disparities based on the utility of the population. Congestion and affordability don't level out across the country but move in accordance with the desireability of the location. Jobs and employees that can't pay the freight on the coasts move inland; ones that can move to the coast to satisfy their employees. This establishes and maintains the difference between locations.

[JRossi]

As I ex-Californian who nows lives in an undisclosed location in the rural Northwest, I would like to encourage all Californians to stay in Calfornia. It's hell here. Weather is 60 below in the winter, summer has daily tornados, all the men in the town are hate-filled virulent racists with tobacco-stained teeth (the women are, too, come to think of it), fundy church services are mandatory for all town residents and the average level of schooling is 6th grade. So please, if you know what's good for you, stay in California. And if you live in Seattle, stay there.

[Barkley Rosser]

anne

In particular this is going on in Calvert County, MD, which is very rapidly growing and is east of southeast Washington, which is the black ghetto. Hence, African-Americans are moving out into the suburbs in that direction. There is a proposed extension of a sewer interceptor into Calvert County, and it is opposed by many homeowners, and minimum lot size zoning is in place. They see dense subdivisions popping up with all kinds of "wrong sorts of people" moving in if the interceptor comes in.

Similar fights have occurred in recent years in some of the exurban areas in Northern Virginia, some of which are where very large hunt country estates for the very wealthy are located. Same issues.

A former mayor of Madison, Wisconsin whom I know, Paul Soglin, once declared, "He who controls the sewers, controls the city." Sewers are actually the least talked about but most important piece of infrastructure in urban real estate.

[Slocum]

"ones that can move to the coast to satisfy their employees."

You might be suprised to find that there are rather a lot of employees who really aren't all that eager to live a life of slow commutes on congested freeways and 3-bedroom ranches priced like small mansions (not to mention the occasional mudslide, wildfire, and/or earthquake).

[anne]

http://www.nytimes.com/2005/06/07/national/07pinehurst.html?ex=1275796800&en=7e7a61e2a5b009b6&ei=5090&partner=rssuserland&emc=rss

June 7, 2005

In County Made Rich by Golf, Some Enclaves Are Left Behind
By SHAILA DEWAN

PINEHURST, N.C. - Golf has made Moore County rich. There are spas, country clubs and new $2 million homes. The United States Open, to be held later this month on the most famous of the county's 43 golf courses, is expected to bring $124 million to the state.

But as developers rush to provide "resort quality" amenities in the newest subdivisions, some neighborhoods have been left behind - without sewers, police service, garbage pickup or even, in some cases, piped water.

These enclaves, Jackson Hamlet, Midway and Waynor Road, are virtually all black. They butt up against, or are even completely surrounded by, affluent towns that are mostly white: Pinehurst, Aberdeen and Southern Pines.

The 500 residents of these unincorporated enclaves are close enough to point out sewer lines that run past their properties en route to new developments, or to watch garbage trucks trundle past without stopping.

Though the towns have not annexed these hamlets about 60 miles southwest of Raleigh, and their residents cannot vote in municipal elections, they are subject to the towns' land use and zoning rules under what is called extraterritorial jurisdiction.

When asked about extending basic services, the towns' officials say they must take care of those within their existing boundaries before taking on new neighborhoods. The county, on the other hand, says that many of its rural constituents do not have the services the enclaves are requesting, and that the problems of these more densely populated areas can be better addressed by towns.

Excluding heavily minority areas from town boundaries is a common but little examined practice, particularly in small towns in the South, civil rights advocates and geographers say. With the U.S. Open beginning on June 16 on the Pinehurst No. 2 golf course, residents of the three black neighborhoods and their advocates are making a concerted effort for the first time to win more services, holding news conferences and giving tours.

Historically, they are the very people who provided much of the labor that built the hotels in the Sandhills, as the area is known, tended the greens at the golf courses or worked on the all-black crew of caddies, long since replaced by electric carts.

Ida Mae Murchison lives in Jackson Hamlet, a shady neighborhood of dirt roads hemmed in by Aberdeen and Pinehurst but claimed by neither. On one corner, a new apartment complex juts in; it was annexed by Pinehurst, which often expands to include areas where a developer has already paid for the infrastructure. At the rear, a place once called Buckety Ford, where Jackson Hamlet children fetched water, has been dammed to create a 200-acre lake surrounded by houses, also part of Pinehurst.

"I get the feeling that we're just forgotten, put on the shelf or the back burner or something," Ms. Murchison said. "But like I say, I don't want to offend anyone. I don't want to cause trouble."

Ms. Murchison was the first black chambermaid at the Carolina Inn, the gracious centerpiece of the 110-year-old Pinehurst resort, where she worked for nearly 50 years. Now 84 and retired, she lives alone, worrying because there are no police officers for her to call in case of trouble. Despite two nearby municipal police forces, her neighborhood is the responsibility of the county sheriff - whose deputies, she says, take at least 10 minutes to appear....

[anne]

Barkley,

The comments you made are quite important :)

[anne]

Barkley,

There is much more to be added here. I am going to talk to some real estate specialists about the issue you raised.

[liberal]

Altoid wrote, "Where is Henry George when we really need him?"

No kidding.

[liberal]

The solution to housing shortages is obvious:
(1) Stop taxing buildings and other improvements;
(2) Increase the tax on land;
(3) Make zoning laws less restrictive.

It's really as simple as that.

[anne]

Agreed!

[save_the_rustbelt]

The housing prices are great in Ohio, but you sissies can't take winter.

We do have plenty of water, no earthquakes, no forest fires and no hurricanes. The occasional tornado is a trifling thing.

Just don't show up looking for a manufacturing job.

[liberal]

save the rustbelt wrote, "The housing prices are great in Ohio, but you sissies can't take winter."

Doubtful, given I lived in Iowa until I was 17, which is colder than OH in the winter.

The real question is:
* are there jobs, and
* are there decent schools systems?

[Barkley Rosser]

anne,

The tale you tell about African-American enclaves lacking infrastructure, including sewers, in much of the South has long been true. When I first moved to Virginia, I looked at a sewer map of Stauton, VA, where I first lived in the late 1970s. There were these curious pockets where there were no sewers. I quickly realized that these were pockets populated predominantly by blacks, and this was all inside a city! I think in that case the situation has since been resolved, however.

[edje]

Affordability and congestion will resolve themselves in time -- once the avaian flu hits!

[anne]

Agreed Barkley, there are community inroads being made in gaining access to public facilities for African American households in Maryland as well as Virginia and North Carolina, but change has come community to community and I am rather worried about a decided national tendency to "increase" the degree of school segregation.

[goodgerman]

I agree with Liberal that one solution is to increase property tax on land. Pre-Prop 13, land value increases upped property taxes and forced land owners to either develop or sell to someone who would. Prop 13 rolled back their taxes and allowed them to hold it empty for appreciation. At least in SoCal, there is still considerable bare land bypassed by the sprawl that a speculative runup would force into the market by tax increases.