If You Don’t Like Growth Boundaries, Move

Palo Alto may be the most expensive housing market in America. The American Community Survey says the home of Stanford is the only city whose median home price was more than $2 million in 2014; the survey numbers don’t go higher than $2 million so we don’t know how much more.

Coldwell Banker’s 2015 report on average prices of a four-bedroom, two-bath home found that Palo Alto’s was $2.1 million; only Newport Beach, at $2.3 million, was higher–but the American Community Survey says a median home in Newport Beach was “only” $1.7 million. (Coldwell Banker’s 2016 numbers don’t include Palo Alto.)

Palo Alto residents earn more than the national average, but not enough to make up for the high housing prices. The median family income was $176,000 in 2014. That happens to also be the nation’s highest, but value-to-income ratios are still more than 11 when they should be under 3.

A member of the Palo Alto planning commission recently resigned saying she can no longer afford to live in that city. This shows, Slate argues, that “no one who wants to make it cheaper can afford to live there.” What it really shows is that Palo Alto planners don’t understand the problem, since they seem to think the solution is to build denser housing.


Scroll down to see all of the undeveloped land in the San Mateo Hills south and west of Palo Alto.
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The real problem is that more than two-thirds of San Mateo County, including huge areas of land next to and, in some cases, inside the Palo Alto city limits, have been set aside as “preserves” or are otherwise outside of urban-growth boundaries. The Monte Bello Open Space Preserve, Pearson-Arastradero Open Space Preserve, and Foothills Park are just some of the large open spaces in the Palo Alto city limits.

The preserves are public land, but there is plenty of private land in the San Mateo Hills that has been closed to development by urban-growth boundaries. Allowing development there would do much more to improve Palo Alto’s housing affordability than building a few dense developments in the already-developed part of the city.

Meanwhile, people who can’t afford to live in the San Francisco Bay Area are doing the logical thing: moving to Texas or another state that doesn’t try to put all undeveloped land off limits to new housing. Data show that, for every two people who moved to California and bought a house, five Californians sold their homes and moved elsewhere.

Texas beaches may not compare with California beaches, said one recent migrant, “But when you have enough leftover money” after selling a California house and buying one in Texas, “you can go travel there once a month.”

Of course, homeowners aren’t the only ones leaving California. Between 2013 and 2014, Texas gained nearly 230,000 domestic migrants while California lost 60,000. New York and Illinois lost even more. Oregon and Washington gained, mainly due to their proximity to California.

Fifty years ago, California was not significantly less affordable than Texas or anywhere else. Land-use regulations since then have created a huge split between the states: a dozen or so states are over regulated while most of the rest are still affordable. Denser housing won’t solve California’s problem; getting rid of urban-growth boundaries and other restrictions will.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

3 Responses to If You Don’t Like Growth Boundaries, Move

  1. prk166 says:

    Silicon Valley could be the next Detroit in it’s own special way. In their case, it won’t be the loss of manufacturing jobs, but peak Venture Capital that could do it in combined with the insane real estate.

  2. Ohai says:

    Most of Palo Alto’s open space west of Foothill Expressway consists of extremely steep, landslide and fire-prone terrain. It would be very difficult to build any kind of housing on let alone provide necessary roads, water, and sewer services. Even if developers and the voters of Palo Alto wanted to build up into the mountains they’d likely have to find a new source of water. Palo Alto depends on San Francisco’s Hetch Hetchy aqueduct for a limited water allotment and as such it doesn’t have any wiggle room for hundreds of acres of more thirsty lawns and swimming pools.

  3. Drew says:

    I’ve visited Palo Alto a few times. The traffic there is consistently bad due to lack of capacity on main artery roads during peak times.

    I would like to see more development everywhere, but I suspect if the growth boundary were removed in a place like Palo Alto, there would be more housing built but the main arteries still would not be expanded…making the transportation situation even worse. If I were a resident there I would vote to restrict development for the fear of even worse traffic. Until self-driving cars are ready, I’m not sure if it’s a good idea to add more housing in Palo Alto.

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