January 30, 2017 by Omar Passons
In the first part of Step 2 (here) I wrote about the importance of understanding appropriate uses for a property. The largest takeaway was that we have rules about how to use a property that have impacts both on the ultimate cost of buying or renting a home and on neighborhoods. If you want to circle back for the big picture overview of the series, click here. For this post, I want to spend just a little time helping people understand how rules about what can be built impact housing.I think a reasonable starting place for this conversation is understanding that rules, while frustrating at times, serve several useful purposes in home construction. First, from a pure safety perspective, building codes make sure a home will stay upright in earthquakes or that the foundation is stable, that the wiring is safe so your house doesn’t catch fire, and things like that. Most people understand that we need some basic rules to protect us in our homes and give us comfort about how sturdy a place is, but there are a few other types of rules that have significant impacts on the price of homes.
The size of our homes
One part of the City’s Land Development Code (see this manual) that impacts the cost of homes is the size restrictions both related to your land and to the homes that can be built on that land. San Diego, like most cities and the County of San Diego, has rules related to how big the homes on certain size lots can be. If you live in a single family residential neighborhood like North Park where I live, the minimum size of the lots is 5,000 square feet. But several things in the Municipal Code limit how much house you can build and it is helpful to mention a few of them here:
- A setback is the amount of feet away from your property line you must build. The exact amount varies by up to a few feet, but the point is that just because you have 5,000 square feet doesn’t mean you can build on every inch of that land.
- The density is the number of homes that can be built on a given piece of land. All areas zoned for multifamily homes have a cap on how many homes per acre can be built. There are reasons for this, some good and some not so good, but the point is that the number of apartment homes, for example, that you can build on one property impacts the cost of building. I’ll explain alot more about this in a separate post.
- The floor area ratio (F.A.R.) is the relationship between the amount of your land that can be covered with a home or apartment and the size of your land. A 1.0 ratio for a 5,000 square foot lot would be 5,000 square feet of ‘floor.’ A 2.0 ratio would be 10,000 square feet of ‘floor.’ If you are wondering how 5,000 square foot lot can have 10,000 square feet of building, it’s a reasonable question. The answer is that the floors can be on multiple stories. So a five story apartment on a 5,000 square foot lot might only have 2,000 square feet on each story, but when you add them up you get to 10,000 total.
Many other elements, like height restrictions and open space requirements (preserving portions of larger projects for park space, for example), can also impact how many homes can be built on a given property. The above list isn’t a complete one, it just provides some examples to make the point that development rules can impact pricing.
Our homes and the environment
Building homes always has some impact on the environment, both during and after construction. Deciding what level of impact we want to allow is something our city, county, state, and even federal governments spend a considerable time addressing. It may not seem like a complex area at first, but there are at least three distinct ways that we have to think about the environment in home construction.
i. the actual construction
To build homes you need lumber and nails and trash and water and lots of other resources. As a society, we accept that we need to use these types of resources to build homes. We can protect the environment by either encouraging or requiring certain types of building practices. For example, using recycled materials from other homes that have been demolished instead of newly made materials can decrease the impact on the environment of the construction. The trade-off, however, can be that regulations may add up front costs that make homes more expensive to the ultimate buyer or tenant.
ii. the homes after they are built
Think of this as the finished product. If we require double pane windows or a certain level of UV rating on glass, the costs to heat the home may go down and the amount of fossil fuel (e.g. gas) consumed decreases. Similarly, homes with solar panels are more friendly to the environment than those without. Even requiring a certain type and thickness of insulation can have environmental benefits and costs. These types of regulations exist to varying degrees and they have impacts on cost that are important to know even as we acknowledge the importance of protecting our environment.
iii. the region around the homes
This aspect of environmental regulation can be the hardest for people to think about because no single home or apartment complex is the sole cause of the environmental concern. On top of that, some of the environmental impacts aren’t directly connected to the home itself, so those impacts aren’t the ones we think of first. This area tends to be the one that most directly involves the California Environmental Quality Act (CEQA – pronounced SEE-kwuh), which is a state law that requires certain projects to evaluate and mitigate their impacts on the environment. A couple examples might be helpful. Building any one apartment complex or set of townhomes isn’t likely to measurably increase greenhouse gases or make the air dirtier, so it can be hard for one family to realize that their home is part of a larger issue that requires some level of environmental protection. Similarly, the distance from your potential new home to your job and the availability of public transportation may impact where you decide to live, but it isn’t the type of thing most people immediately think about in terms of the impact on the environment. Stop for a moment and picture the 805 North in San Diego at 8AM during the week. It’s basically a parking lot, but all the cars and trucks and such are burning gas that whole time and sending pollution into the air. Part of the reason for this is that we have not built enough homes close enough to where people work nor taken care to make sure both the engineer and the person cleaning the engineer’s office have the opportunity to live close to work. These are the type of environmental considerations that can impact cost because often putting homes close to the job centers is more expensive (because of the cost of land) than putting them far away.
It isn’t possible to paint a full picture of every development rule that impacts the cost of building homes, but this post was meant to provide an overview of some key areas that are not always obvious but have impacts on cost. Beginning to understand the cost of building homes and where it comes from will help as we get farther down the road to understanding the full picture of how homes get built. You can return to the index here or go on to read Development Step 3 here.