The Faustian Bargain of Slow Growth

The Faustian Bargain of Slow Growth

It’s tempting to look at the market’s lack of listings and now-chronic state of ultra-low inventory and simply see it all as a predictable result of not having built enough homes over the last 30+ years.

All those no/slow growth policies made construction more expensive and time-consuming. And few would disagree that the mind-boggling process of trying to plan or build anything in Santa Cruz County has done its part to inhibit development since the late 1980s.

That’s part of the story, but not all of it… and ironically Santa Cruz would be a far-less desirable place to live in now, if that Faustian bargain with slow growth politics and policies had never been made. Over time, we’ve settled into an uncomfortable relationship with the trade offs even as we’ve tried to kick the real price of slow growth down the road.

On the plus side, for those of us who’ve been here a while and own our homes: the weather is world class, the bay and the beaches are beautiful, neighborhoods are surrounded by open space and parkland and there’s still a unique sense of place here despite all that money trying to encroach from outside our borders.

Those homes we purchased 30-40 years ago have gone way up in value and given us plenty of opportunities to leverage appreciating assets through bank loans, income tax deductions and capital gain exemptions all while paying lower property taxes than our more recent neighbors. Along the way we’ve refinanced to lower rates and paid for our kids’ college educations and now that those loans are paid off, we still have sizable nest eggs for retirement and lots more security for old age.

On the flip side, traffic on Hwy 1 is terrible, rents are the highest in the nation, young people who grew up here can’t afford to stay, the population of school age kids has shrunk, most of our local workers commute from further South, a median priced home tips the scales at $1,300,000 and aging baby boomers can’t figure out how to downsize and continue to live here.

All of those pluses and minuses are connected to our state of low inventory which also qualifies as one aspect of the many-headed hydra that we call the “housing crisis.” Depending on which lens you choose, “housing crisis” can mean: high rents, high prices, lack of affordability, lack of availability, lack of workforce housing, lack of tax revenue for infrastructure/social services, lack of shelter for the homeless.

And of course, if you are comfortably ensconced in your own home then a “housing crisis” may also occur when a neighbor applies to build a duplex on the other side of the back fence.