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Richard Rider

When it comes to homes, CA politicians act like white supremacists

Periodically we Californians hear friends and allies complaining that investors and “foreign speculators” are driving up the price of California homes. But consider this question: Why aren’t all these supposedly-evil investors buying in Houston? Or in most other areas of the country?

Houston has much stronger demand for houses than CA. In the last decade, in several years the CITY of Houston issued more home building permits than the entire STATE of California. Yet the Houston houses sell for far less than CA, and the prices rise much slower. Oddly enough, the median price of a home in 27 states is lower than the low Texas home prices!

Here’s my answer to the above question (speaking as a long time real estate investor and stockbroker): Never invest your R.E. money in a free market, where competitors (in this case, builders) find it easy to construct new homes and apartments. In the 70’s I foolishly bought interest in some Houston properties. The demand for homes boomed, but so did the supply of houses and apartments. I SHOULD have invested in CA properties where the state and local governments self-righteously collude to restrict housing supply, while tacking on huge fees for any new construction.

A free market is great for CONSUMERS, but not so much for investors. Investors should try to invest where there is NOT adequate competition to meet demand — or (in the tech fields) where vendors are protected by intellectual property laws (copyright and patent laws) that limit competition with their products or services.

Blaming investors for high R.E. prices lets the REAL culprits off the hook — our CA state and local politicians.

The irony is that these anti-housing policies imposed by our smug CA “social justice warriors” most benefit us old, predominantly white homeowners. And it’s the frustrated young families (primarily minority families in CA) who are harmed most by the high prices — and high rents.

Progressive politicians, I thank you for my white family’s huge home value windfall. But I’m curious — are you incumbents secretly white supremacists?