This is the second in a two-part series intended to provide ammunition for building executives to promote their cause in local governments around the country. (Click here to read Part 1.) Many local officials “get it,” but many officials (and certainly the vocal NIMBYs) do not.

Accepting Reality

Let’s face it. None of us wants to see more traffic or overcrowded schools in our neighborhood. We all love open space. However, I cannot think of an area in the country where people are not allowed to have children, or where fences are erected so people from other areas cannot move into the area. The reality is this:

We need to accept the fact that our population is growing, and we need to accept that it is going to occur in our neighborhoods, whether we plan for it or not. If we don’t, the growth will come anyway and we won’t be prepared to handle it.

An analogy might be retirement. I don’t like the fact that I’m going to get older, but I plan for it. Every year, I put the maximum in my 401(k) for the inevitable. Every year, we need to build homes for the growth that is occurring.

Again, we shouldn’t blame those on the left in the photos above for wanting to protect the environment of where they live. I just would like to see them balance the housing needs of those on the right with the desire to maintain their neighborhood.

Destroying Families

There are many homeowners in expensive markets who have been opposing home construction, and then wonder why their children move to Phoenix or Florida. What is most amusing about this, however, is that we have found that many of these homeowners then end up moving to Phoenix or Florida to be near their grandchildren. The questions we need to ask homeowners and their government officials are:

  • Would we rather leave our children a $1 million home when we die, or see them while we are alive?

  • We plan for our children’s education. We plan for our retirement. Why don’t we plan for our children and grandchildren’s housing needs?

If we think other people’s children won’t move to our neighborhood, we are wrong. If we expect the city next door to solve our housing needs, we are also mistaken. We all need to support more housing in our city and more infrastructure regionally, or we are going to be spending the next few decades in traffic and our grandchildren won’t know who we are.

Strategic Planning for the Future

The best way to solve for rapidly appreciating home prices is to provide more housing close to the employment centers, and build the infrastructure needed for that housing. The housing can be luxury housing. It does not need to be government-subsidized. We can solve the problem by building luxury homes because the people who move into luxury homes sell their existing home to someone else, who later sells that home to someone else, and so on. Thus, an entry-level home-ownership opportunity is created.

A luxury home can also be in a high-density environment. Luxury buyers don’t necessarily want big homes with big yards. Consider the following:

  • More than half of today’s home buyers do not have children.

  • Many older, affluent buyers do not want or need a yard.

  • Time is a precious commodity and commuting is a waste of time.

  • Commuting clogs the roads and requires more government dollars to pay for the roads and other infrastructure.

When those who want to preserve the quality of their neighborhoods accept the fact that they need to provide housing, everybody wins. 

John Burns is the founder of Real Estate Consulting in Irvine, Calif., which monitors changes in real estate market conditions and provides consulting services, including strategic planning, market research and financial analysis.


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