Building permit auction

From HousingWiki

Regarding RHNA, we should just have cities auction off building permits equal in number to their mandated 8-year housing production goals, then let the owners of those permits build wherever they want in the city (with reasonable restrictions & protections).

Instead of a bunch of money going to carrying costs, entitlement, and various other costs of delay, it'd just go straight to the city. Our housing shortage wouldn't be as severe and we'd have exponentially more money to spend on affordable housing and other community priorities.

Interesting wrinkle to this idea: for moderate income, low income, and very low income units, you could actually sell/auction them off at negative prices, i.e. the city actually pays people to take them. They could issue an IOU and pay the developer when the unit's complete.

If the City of LA sold 100,000 market-rate building permits for an average of $300,000 each they'd generate $3 billion, enough to subsidize a few tens of thousands of income-restricted units. Plus we'd get a bunch of market-rate housing that we need too.

Whoops, meant to type $30,000 each. If they sold for $300,000 something would be very very wrong with our housing market.

> Isn’t this a huge red flag re: Fair Housing? Paying communities off to build your share of low-income housing?

You might be misinterpreting what I'm saying. I'm just talking about creating a system where the subsidy needed to build affordable housing (which we're already paying) is determined by the lowest bidder.

And I'm not saying that you could have other cities take your share of any housing income category; the auctions/sales would all be completely self-contained within each city.

And of course none of this is really realistic, at least in the next few decades. Just throwing it out there as a fanciful idea to compare against the totally wasteful system we have in place today.



This is a constant debate. People talk about housing cap and trade systems and things like that. Difficult fair housing issues always come up. Last year @laurafriedman43 had an idea in this space…