This article was posted on Wednesday, Mar 01, 2023
housing market

Frequent commentator and housing provider Dean Hotop shares his tongue-in-cheek “wish” for the SJCC to pass [Community Opportunity to Purchase Act] COPA in the new year — highlighting how the initiative will weaken the free market, drive up housing stock costs, and disempower local homebuyers.

What’s Your One Big Wish for Local Government for 2023?

My one big wish is for SJCC to pass COPA in 2023! If the council passes COPA and the Housing Department achieves its objective of removing 380 units/year from the free market, that works out to 1% per year of the Class C rent controlled apartments in San Jose. A 1%/year reduction in market rate units will exacerbate the housing shortage and drive rents/profits higher for the incumbent property owners.

In 20 years, that’s 20% of the market rate units removed from access to middle-class renters. Today’s housing shortage crisis is tomorrow’s … I’m at a loss to find the words to accurately describe that pending, self-created socio-economic disaster.

And another “benefit” of COPA will be the dramatic loss of property tax income. By my calculations, at the 20-year mark (assuming the 380 units/year), there will be an annual property tax loss of $45M per year, which grows exponentially from there. Thousands of public sector employees will have to be cut from payrolls and SEIU union fees will shrink accordingly, thereby reducing labor’s influence in local politics. Awesome stuff in the world of unintended consequences!

What’s Your Biggest Apprehension?

My biggest apprehension is that the SJCC suddenly realizes how deep the housing hole they’ve dug themselves into is, and stops digging. If they suddenly did a policy 180 and started enacting legislation that actually encourages private investors to develop new housing units, we’d have a glut of housing, and rents/profits would decline for the rest of us. So, dear leaders — keep up the good work and keep creating more housing-killing legislation; our profits depend on you!

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