City as Lab Rat

Last Thursday’s forum, “Priced Out: Santa Barbara’s Housing Crisis,” was as interesting for what was not discussed as what was. For example, there was little reference to the obvious root cause of the housing shortage: Santa Barbara’s desirability. Housing shortages are inevitable in such attractive places.

We who are civic minded are loath to dismiss a problem as insoluble. As a result, we are often attracted to schemes that have intuitive appeal, whether or not supported by empirical evidence.

Much discussed was our recently adopted AUD (Average Unit-size Density) program, that proposes to provide shelter for our workforce by way of tiny “affordable by design” rental units. What was little mentioned was that, given the demand, even diminutive units are quite likely to be bid up beyond the means of local workers.

The forum’s moderator asked a poignant question: How many units would we have to build before there would be some effect on price levels? I didn’t hear an answer, but any candid economist will tell you: A whole hell of a lot.

It is shocking that our leaders would subject this rare gem of a city to transformative experiments whose outcomes are as likely to be negative as positive.

I would love to have our workforce living within the city. However, after 40-plus years of slow growth efforts — to which we can credit our retaining our character, instead of becoming some crowded Florida-style city — I am skeptical of open-ended, untested construction “incentivization” schemes, which could turn us into something very different.

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