Tuesday, September 19, 2023

Starter Homes/Downsizing Homes

California's property tax structure (longtime owners pay almost nothing), combined with lack of new housing for many years in the most desirable places, has likely exacerbated the effects of similar trends most places. Basically, millennials (a very large generation) hit their "starter home" ages during a period when no new starter homes were built, and all of the incentives push against older Californians downsizing after their kids move out (including the lack of appropriate smaller dwellings).
Between 2009 and 2014, a very large cohort of millennials was in their 20s, a prime time for renting your first apartment, Myers’ research shows. In the years since, those millennials have increasingly entered their 30s, when many people in California buy a home for the first time.

The nation’s economy further amplified the millennial effect, Myers said.

The Great Recession not only hammered housing construction but also delayed many millennials from striking out on their own. When job prospects improved, those people jumped into the rental market, and later the for-sale market, at the same time as younger millennials who could afford to follow a more traditional timeline.
One doesn't have to be an extreme YIMBY to see that in Los Angeles itself there are plenty of places where housing infill is perfectly appropriate.