Foreign Investors
There are some very strange things going on in the world today. California has lost 600,000 people in the last few years. A 2023 headline reads, “California Population Declines Again.” Another headline reads, “Many Californians want to leave due to high costs.” In 2018-2022, California spent $17.5 billion combating homelessness. The state’s homeless population grew.
According to the L.A. Times, rents have eased, and apartments are vacant. Yet millions are priced out of home ownership. California lost 677,000 units renting for $1,000-$1,399 dollars. In other words, the problem does not appear to be housing, it appears to be affordable housing.
One must ask, why are housing prices rising as population declines, and the availability of rentals and vacancies increase? Under supply and demand that should not be happening. Market-rate housing is not affordable housing, and market-rate housing will not provide affordable housing for workers earning low to moderate incomes.
A significant part of the problem may be foreign investment (and possibly domestic as well). Between 2019 and 2020, foreign purchases of U.S. homes reached $11.5 billion dollars, more than one-sixth of the total. The largest foreign investors are the Chinese, followed by Canadians, Mexicans, Indians, and Columbians. Chinese buyers have led the foreign investment in U.S. homes for the past seven years. One half of these homes are used for vacation homes, second homes, or a pied-à-terre (homes they visit occasionally). Canadian investment is largely from snowbirds.
In Seattle, it was found that investment in Chinese neighborhoods — in which most people were born in China — pushed up housing prices in nearby neighborhoods. It is believed that wealthy Chinese are hoping to avoid taxes.
The problem for many of our homeless appears to be that they are being priced out of housing. I’m not opposed to foreigners, I’m opposed to speculators moving housing out of the reach of Americans citizens, no matter where they came from. Foreign speculation in the housing market is something the State of California and the City of Santa Barbara should take a look at.
Generations of Santa Barbara city councilmembers have sought to protect Santa Barbara from inappropriate development. It may be the number one reason people like Santa Barbara. Take a drive through Los Angeles. Is that a place most Santa Barbara residents would want to live? I don’t think so.
If the Santa Barbara City Council does not go to bat for the residents of Santa Barbara, and the future residents of Santa Barbara, then who will? The proposed development at La Cumbre Plaza must conform to Santa Barbara standards. Santa Barbara is worth fighting for.