Del Mar housing demand determines property values
The cadre of development foes erroneously credit land-use restrictions for Del Mar’s increased property values by confusing correlation with causality. No causal relation exists between Del Mar’s increased property values and Del Mar’s severe land-use restrictions. Any correlation explains nothing.
Land-use restrictions usually raise property values by prohibiting development on undeveloped land or by instituting minimum parcel sizes. Both restrictions raise property values by reducing housing supply. Neither restriction applies in Del Mar since minimum parcel size already constrains subdivision and since undeveloped land terrain inhibits development. With essentially fixed housing supply, Del Mar housing demand determines property values.
Del Mar’s land-use restrictions only reduce demand by creating long approval times, multiple architectural revisions, prolonged carrying costs, exceptional public benefits, and neighborhood intrusions. Facing potentially evanescent demand for beach property, current restrictions restrain increased property values. Relaxing those restrictions increases demand and property values.
Perennial cadre objectives of restricted lot mergers and historic preservation promise adverse or asymmetrical property value effects. Restricting lot mergers diminishes housing-supply reductions and property value increases. Preserving putatively historic properties reduces preserved property values and initially increases unpreserved property values. These unpreserved properties eventually sustain diminished or negative value gains as preserved properties inhibit renovation, blight neighborhoods, and reduce demand.