Deroy Murdock: Why is housing so expensive? Red tape, bureaucrats and politicians

Julian, Calif. — Right outside the comfortable and delicious Jeremy’s on the Hill Restaurant in this scenic former gold-mining town northeast of San Diego, Jack Green offers a glimpse of why homes too often are so expensive. The real-estate developer stands near the patio of a Cordon Bleu–trained chef’s mountainside eatery and gets indigestion just thinking about what a mess homebuilding has become.

“I have to spend $80,000 before I can drive one nail into a piece of wood,” Green says. Just preparing to manufacture a house can take four to five months. This includes permits, land-use studies, appealing to various boards, and pleading with politicians. How long did he wait to reach this starting line when he began in this business in the late 1990s? “Three to four weeks.” Thus, he has seen a five- to seven-fold increase in the time needed to launch projects in just two decades.

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In fact, "Jack Green" is a pseudonym by which to shield this gentleman’s identity, as he requests, "since I still deal with these people."

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Green once aspired to create 60 homes on land that he purchased. By the time officials finished with him, he actually wound up creating only 13 homes, a 78 percent decrease in planned housing stock. Since he had fewer homes to sell, his asking price per dwelling soared 233 percent — from roughly $300,000 to $700,000. “And you wonder why homes have become unaffordable?” he asks.

Green recollects another project in which he got his paperwork in order, and all systems were go. “At the last minute, an official told me, ‘We need a streetlight at a certain corner,’” Green recalls. “I said, ‘That’s nice. But I don’t see that in any of the approvals, plans, or anything else.’”

Basically, the functionary told Green that the city wanted that streetlight installed, and Green had to pay for it. He threatened to sue. “‘No, you won’t,’” Green says the official told him. “‘You want to build this project, and you need our final approval. And you won’t get it until that streetlight gets built.’” Green replied: “That’s extortion.” According to the builder, the bureaucrat said:

“Yes, it is.”

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