March 4, 2008

Why did the housing bubble inflate the most in California?

Why did the housing bubble reach the most ridiculous heights in California? Here are several theories and I'd like to hear your ideas:

1. Californians are too lazy and/or stupid to do some arithmetic before signing gigantic contracts for many hundreds of thousands of dollars. (As a native-born Californian, I'd have to say that this sounds plausible to me.)

2. Immigration raises demand for housing and drives down wages, while stressing out public goods like schools and freeways.

3. Momentum -- Housing prices had been rising in California most years since 1975, so they just had to continue. They had to.

4. Lack of land -- California! is essentially the Mediterranean climate zone, a strip 500 miles long and about 20 miles wide, running from the beach to the first line of mountains in Southern California and the first valley in from the foggy beach north of Santa Cruz. The rest of California is either beautiful but too vertical to be habitable, or is Odessa (TX) West, but with lousier high school football teams. Lots of people bought houses in Bakersfield figuring they had to go up up up because ... they're in California! No, they're in Bakersfield. If you saw "There Will Be Blood," you'll see the sharp difference between the miserable oil town near Bakersfield and the exquisite coast where Daniel Day-Lewis's pipeline winds up. The oil town was actually filmed in West Texas, but it looks a lot like the Central Valley anyway.

5. Zoning / Environmentalism (which are pretty much the same thing in California) -- The land everybody wants is controlled by the California Coastal Commission, so much of it, especially the prime turf between Santa Barbara and Hearst Castle, is unoccupied except by cows.

6. What's your theory?

My published articles are archived at -- Steve Sailer


Anonymous said...

Is there a map of California real estate prices and/or their peaks and declines? Basing a theory on geography demands a map of real estate prices.

Did California limit property taxes? This created a disincentive to buy appreciated homes and an incentive to buy new housing.

Anonymous said...

Essentially #2.

Inelasticity of supply combined with insatiable demand. California has the triple threat of the hipness factor, great weather, and of being the economic center of so many key industries, from high tech (Silicon Valley), to culture (San Francisco & Hollywood), to biotech (San Diego).

I still happen to think that even at the pre-crash prices California real estate wasn't a horrible buy - it'll get back up there in another few years, if California's diversity and budget woes don't kill it for good.

The fact is that immigration is driving up real estate in the really desireable places to a permanently high level, because there's only so much land in these places around. Land next to a nice lake, in mountain resort towns, on the beach, or in the big city runs out fast in a nation quickly adding its next 100 million people.

What I do wonder is if all the industries that are centered in these areas can continue to survive when locating there is so incredibly expensive. I can see hard to duplicate industries, like Hollywood, staying where they are. But can Silicon Valley long remain the center of American high tech when competing companies in India and China don't have to pay key employees nearly as much? Not unless there's a sharp drop in the dollar, and that hasn't been happening, has it?

Antioco Dascalon said...

I vote for 4 and 5. My dad often points out that California is the most rural state. The vast majority of the state is uninhabited. I assume that the bubble hit urban, suburban and exurban areas hardest, not rural.
I grew up in Marin County, where it is nearly impossible to develop new land for housing. The residents like it how it is and refuse to permit any more growth. I think you had some genuinely great investment homes and people saw how these homes in fabulous locations increased in value, not realizing that it is mainly due to zoning and decided to buy in nearby areas where there wasn't the zoning. So these places simultaneously overdeveloped and were bid up in price, not because of any actual underlying shortage due to zoning but just because it was somewhat comparable to places like Marin, Santa Monica, La Jolla, etc. My parents home in Mill Valley might lose 10% of its value now but in ten years it will be well above its previous height simply because you can't build houses in Mill Valley.

Anonymous said...

Oh, and just maybe Calfornia has a higher per capita preponderence of people like those hairy, gold chain-wearing Middle Eastern men always on the take trying to make a quick buck via speculation.

Just hazarding a guess.

Anonymous said...

I believe it is because of Californians' strong desire to keep up with the latest trends.

I was at a party a few years ago and some guy from California really looked down at me when he learned that I had a fixed rate mortgage with equity left in the house. Boy did I he make me feel dumb!

Anonymous said...

"5. Zoning / Environmentalism" is a big part of the answer. Compare the trajectories of housing prices in California (very "green") and Texas (not very "green"). Texas, like California, even has a coastline (as you point out) -- a lot less of a coastline, that is. Waterfront property in Texas is more scarce, yet prices in California are higher.

Anonymous said...

It's population centered around Jobs location.

In say, LA City area there are a lot of jobs, well paying ones, in and around the studios on the Westside and in the Valley. Fox, Sony-MGM, Paramount etc. on the Westside, and Universal, WB in the Valley. On the Westside in Santa Monica, Marina Del Rey, Venice etc. you'll still have some internet and game companies, various suppliers (effects houses, publicists, etc.) to the studios.

People who work there have to live somewhere, and so they either commute out to very far places (Simi Valley, etc.) to escape crime (and Black/Latino gangs) and bid up prices there, or bid up prices in places that are closer (Culver City, Mar Vista, Playa del Rey) and unlikely to be gang-crime infested.

What happened was IMHO, people overestimated the likelihood of more jobs and thus people wanting middle class areas. Overestimated gentrification in places like Echo Park. Overestimated the economic expansion in the LA area from say 1995-2005.

And that process writ large explains the housing bubble. Even in San Diego, land is constrained by large patches of gang-infested neighborhoods where middle class people won't live. Nobody likes crime and if you can afford not to live there you will move elsewhere.

Anonymous said...

The coast of Texas is unbearably hot and humid. Not at all like CA.

Anonymous said...

At least here in San Diego, it's pretty much a boundary issue. West bounded by ocean, east by the mountains, south by Mexico... north pretty much only by your tolerance for driving horribly clogged roads over a distance (since the I-5 and the I-15 get pretty messy at any given hour).

Interestingly enough, one of the areas holding appreciable value fairly well is Eastlake (east Chula Vista). It's not far from the physical border (a lot of border crossers live there) and property rates stay high... mainly because Mexicans who can affort it will pay any price NOT to live in Tijuana. Go figure.

Anonymous said...

"The coast of Texas is unbearably hot and humid. Not at all like CA."

You mean like Florida?

Anonymous said...

7/ all those get rich quick ads (especially get rich quick in real estate) seem to be filmed in California

8/ Once your good looks fail to make you a star in Hollywoood, there's always real estate sales.

9/ Everyone's seen Chinatown so the fact that you're living in a place with no water shouldn't make you think that you're not living in the next San Fernando Valley.

10/ Those million dollar places in SF are located in the city which experienced the worst earthquake in American history. Why can't your place be worth the same?

Anonymous said...

I don't have the statistics at hand, but Florida on a %-wise basis inflated as much as California, especially the Miami area and Naples.

I can't really explain that one. Ultimately, bubbles are not rational.

Anonymous said...

I read somewhere that California mortgages are generally non-recourse, meaning that, in the event of foreclosure, the owner has no personal liability for any deficiency. This would seem to have the effect of fueling speculation, as buyers can buy as much house as they want and never have to worry about being driven into bankruptcy as a result of foreclosure.

Anonymous said...

I'm intereseted in where, exactly, that pipeline did hit the coast in "Blood."

The sparcely treed golden hills against the blues of the ocean and sky was breathtaking. (Of course, the beauty was heightened due to the contrast of the preceeding two hours of "Odessa," but still...).

I looked at it and wondered if it wasn't a park, that there couldn't be something that pretty still undeveloped.

Anonymous said...

"1. Californians are too lazy and/or stupid to do some arithmetic before signing gigantic contracts for many hundreds of thousands of dollars. (As a native-born Californian, I'd have to say that this sounds plausible to me.)"

This is the wrong way to look at it. The real idiots were the people lending the money. Consider this loan history .

"These owners will probably just walk away. I doubt they have any assets. They never put any money into the deal, they pulled out $333,000 in cash, and they got to live in Turtle Ridge for 3 years. Not a bad deal — for them."

Anonymous said...

Prop 13 means property taxes are insanely low compared with other states. There are people paying $500 a year on their $500,000 house, whereas most of the country you pay $10,000 to $20,000 a year.

If you want the value of something to increase, subsidizing it by making it close to tax-free is a good method.

Anonymous said...

Regrettably, California's "hipness factor" is pretty much defunct.

When I was a mere sprat, California had the first or second best schools in the nation.

It seems like half of my classmates were leaving either to California or New Mexico.

Now there are educational columnists like Tsing Loh (sp?) in the LA papers peddling diversity secrets to keep your children from winding up in a typical California hellhole.

I understand California schools are third from the bottom, slightly above Mississippi and Arkansas.

Anonymous said...

I think it was a combination of the factors listed, but the most important is that unchecked illegal immigration creates a serious push for those who can afford to live in a zip code with “good” schools.

You can get the demographics and median home price for any city in the US:

I think the results are fairly consistent. A zip code with >90% white + asian (alternatively <5% Hispanic + black) will have likely seen substantial real estate appreciation. Sad but true.

A social scientist should be able to crunch this with home price appreciation by zip code (perhaps from and produce an analysis with another staggeringly high r-squared value.

Anonymous said...

1. Orange County, CA invented the "liar loan" and the subprime industry. You can look it up.

2. If you understand the logic of business cycles, you know that interest rates change the structure of production -- California is a tech state highly sensitive to interest rate fluctuations.

3. A bigger percentage of disposable income is spent on housing in SoCal and the Bay Area, because of natural and regulatory limits on the housing stock. Once again, the logic of the business cycle predicts that interest rates swings will have stronger effects in California than elsewhere because housing is an interest rate sensitive capital good.

4. There's huge wealth in California, and a way to make more wealth is to ride up a housing bubble. Get lucky, and time in right and you've made a killing. Many tried, either in their own living place, or in investment homes. There is an unusually high volume of home purchases not for residence but for investment in California.

Well, those are some solid leads.

Anonymous said...

To expand on point 5 (zoning/environmentalism), in course of my legal work here on the East Coast, I learned something astonishing yesterday-- California requires environmental reports for every building permit.

That's astounding for anyone who's developed property in the Midwest or South. Usually, only federal building projects require environmental reviews (they take months, costs tens of thousands of dollars and leave you open to activist lawsuits), but California requires it for everyone. Here's an example of the info you must provide before you can file for a building permit.

If you look at the information the application requires, it looks like California is a good place to be a horticulturist or an archaeologist. Not such a hot place to be a real estate developer.

Anonymous said...

Here you go Steve,

There is also an economist who was written up in the last year or so in the NYT who is doing research in this area. Sorry, but I lost the link.

Anonymous said...

Its 5. Zoning / Environmentalism

Zoning / Environmentalism are increasing in importance, especially in California's Sierra since the 'Coast' has become expensive. Developers have grown more astute of the states demographics and design mini-estate redoubts near trout stocked lakes, golf courses, and public parks with riding and hiking trails. Mariposa, Tuolumne, Mono and eastern Placer and Madera counties come to mind. Elevation matters. The foothills are dry and hot in Summer, however the higher forests are dry and temperate. Yet, there are few other places in the US where one can enjoy a sparkling clear Groundhog Day with temperatures in the 70s and relative humidity in the 40s.

Anonymous said...

Californian loans being "non-recourse" is perhaps just a special case of California being loopy.

Anonymous said...

The major ass kickings are taking place in California and Florida, both of what I've always considered what I call "Grifter States."
For whatever reason, all the fast buck artists, or people with that mentality seem to gravitate to one or the other.
I think illegal immigration definitely helped create the bubble, especially when Wells Fargo started accepting loan applications with tax numbers, rather than social security numbers, to appease/exploit the illegals.
They're getting hit hard now.
I recall a story I read in the news of two illegal immigrant families. Both worked in the fields picking onions. A mortgage company qualified them for a loan for a house going for 700K!
They made $1,400 a month between them, put no money down, and somehow STILL got the ARM loan. They had the house seven months before their ARM went up, and now are in foreclosure. None of them spoke english!
So that's a house, because of a bunch of bs, that's off the market for at least a year, and a loss incurred by whomever was stupid enough to buy the loan (derivatives) from the original mortgage company.
It makes me wonder how many others some of these mortgage "dealers" tricked into signing up to DOA mortgages, tying up product.
I'm willing to bet it was enough to heavily contribute to the mess we have now.
Bottom line, there's a lot of houses that are tied up by people going through the foreclosure ritual who never should have stepped foot in the house in the first place.
There's another BIG problem right now. These "financial instruments" called 'derivatives" are running in the trillions of dollars, and they are "off the books."
Only the banks know how bad it is, and they aren't talking, so everyone is VERY paranoid at the moment.
However, the Saudi banks just called bullshit on Citibank for a bailout yesterday, so that's a strong indication that we are in some trouble, and Citibank might actually go belly up.
Just make sure you have no more than 100k in any one bank account anywhere.

Anonymous said...

"Citibank might actually go belly up."

That would be a laugh, consdering their aggressive posture here in Germany. Traditional German money houses are very solid (by law), but Citibank managed to lure some of the more americanised Germans into taking out loans over their heads. I would not cry to see Citibank dissapear.

Anonymous said...

Steve Sailer: 4. Lack of land... 5. Zoning / Environmentalism

These are essentially the same thing.

Google e.g. the "Land Conservation Act of 1965", aka "The Williamson Act":

GOOGLE - Land Conservation Act of 1965
GOOGLE - Williamson Act

Note that this has been exacerbated by all sorts of further nonsense, like the Desert Protection Act of 1994.

Anyway, it's almost impossible to develop land anymore in California, because the landed gentry [pretty much indistinguishable from the environmental elitists] have successfully capped the supply of land available for development in California [thereby driving the value of their own holdings into the stratosphere].

By the way, that's why, if you investigate land for sale in California, then you will find plenty of 1000+ acre ranches selling for no more than about $3 million [i.e. no more than about $3,000 per acre, and sometimes as little as $1,000 per acre], whereas tiny 1/4 acre lots within a city limits can easily cost $250,000 per quarter acre: Because of Williamson & friends, the old ranches can't be re-zoned and subdivided into housing lots.

You can see this contrast quite starkly if you head "north" of Santa Barbara on the 101 - after you get just a few miles outside of Goleta, suddenly you are surrounded by miles and miles of nothing but strawberry patches:


And you think to yourself, "Okay, strawberries are nice, but there's no way in Hades that an acre of strawberries could ever provide a return on investment like an acre of residential land in Santa Barbara" [which has some of the highest real estate prices in the world].

And, sure enough, because of Williamson & friends, development simply stops right there in the strawberry fields, and thousands of acres of land are declared off-limits for habitation by human beings.

Furthermore, the ban on subdividing the old ranches also helps to keep out the competition in the wine industry - you could probably earn a comfortable living with as few as five acres of good vineyard land [in e.g. the Paso Robles pinot noir district], and, at least in theory, five acres shouldn't cost much more than a few tens of thousands of dollars, but because the old ranches can't be subdivided, you have to come up with millions of dollars to purchase one of the old ranches in toto.

Ergo the landed gentry benefit again - they get to keep a [virtual] monopoly on the supply of grapes because most newcomers can't come up with the funds to purchase an old ranch in its entirety.

Anonymous said...

Reason no 1 in Steve´s list looks like what someone angling for the title of whitest-person-ever might come up with. So clearly Steve has to confess a preference for it :-)
Reasons 2-5 are perfectly true. Proposition 13 constitutes no 6.
There will, of course, be people who say that immigration and zoning are mutually exclusive explanations. That´s patently untrue.

Anonymous said...

Not to state the obvious, but the absolute number of bad loans is likely to be the highest in California simply because it's such a huge state.

I've heard that Phoenix and Las Vegas are worse on a percentage basis.

Anonymous said...

Anonymous wrote: "Even in San Diego, land is constrained by large patches of gang-infested neighborhoods where middle class people won't live. Nobody likes crime and if you can afford not to live there you will move elsewhere."

That's a big element in the housing shortage. I've lived in many US cities but never in one in which there are such immense swaths of neighborhoods where no one with Anglo-American quality-of-life expectations could possibly even *consider* residing. I've been in some bad neighborhoods in other cities, and didn't particularly want to put down roots there, but I never felt like I had left my country, my culture, and language behind. So you have huge areas of housing which, though they look inhabitable from high-altitude photos, are for all purposes off-limits to American citizens.

Anonymous said...

A depression-era statute requires all mortgages (at least on homesteads) to be non-recourse. You can get loan, if it gets upside down, you can just send "jingle mail" to the note-holder and walk away. There is no unsecured obligation or major credit impact, as there is everywhere else.

This is the number one reason, bar none.

Anonymous said...

However, the Saudi banks just called bullshit on Citibank for a bailout yesterday, so that's a strong indication that we are in some trouble, and Citibank might actually go belly up.

I closed our Citibank checking and saving accounts in 2006 once I learned Citibank began opening accounts to illegals and providing them mortgages. Its my understanding Dennis Miller did the same when he learned his bank provided credit cards to the undocumented. While shopping for a new financial institution I required a written response that the business respect immigration law. A local credit union emailed me the following:

"... Credit Union offers financing only to eligible members and subject to proper documentation from U.S. Immigration status of the applicant."

Needless to say, I am now a happy member of this credit union.

Anonymous said...

One family owned/owns a huge swath of Orange County, and they have developed it piece by piece over the years. By doing this, they were always able to keep supply below demand, which kept prices high.

In contrast, in Texas enormous areas of land are developed at a time, and little bitty towns turn into enormous suburban communities within a five to ten year period.

Anonymous said...

James, here's a post from that website:

"Please do not let this mulit gen stuff be a trend. My parents live in a nice neighborhood in north OC. The people down the street from them turned their garage into a kitchen & they have a tv, couch & dining room set there. There are so many adults that live in that house & kids too. The city won’t do anything about it despite the fact that it seems like a fire hazard. The people are foreigners & not that there is anything wrong with foreigners but in the 20+ years my parents have lived in their home nothing like this has ever happened. My 70 year old mom now wants to move because when anyone comes over they have to drive by this house & it looks like the entire multi gen family hangs out & eats in the garage all day. My parents best friends live next door to these people & the smell of the food they eat (which stinks) permeates to their yard & they have to close their windows all the time. For some reason I thought it was against the law for more than one family to live in a residence. If not it should be."

I think illegals pooling resources to get into a house, and the following flight of white helped out a lot in this mess.

Anonymous said...

I think illegal immigration definitely helped create the bubble, especially when Wells Fargo started accepting loan applications with tax numbers, rather than social security numbers, to appease/exploit the illegals.

I remember a columnist (The Derb?) remarking on those lending practices when they first started happening, and the settled theory was that it was no big deal because when the borrower got deported the banks would wind up with a house, with payments made, worth more than what they loaned on it.

No one took interest-free loans into consideration; and no one had any clue how big the bubble truly was. Banks like Wells Fargo and WaMu (remember their racist commercials?) got smoked, and I pretty much don't give a damn. Because you always hope that businesses like that get their comeuppance, but these days you never really expect it, and certainly not so soon, and in such grand fashion.

Once your good looks fail to make you a star in Hollywoood, there's always real estate sales.

So true. A friend of mine ran into the black bartender from The Loveboat while purchasing a home in CA.

Anonymous said...

In addition to California and Florida, there was another area that had a huge real estate bubble: Phoenix. It seems that one thing all these areas have in common is a deceptively large amount of land. Phoenix's exurbs go on and on, California has plenty of undeveloped land east of the Mediterranean climate zone Steve describes, and Florida also has plenty of undeveloped land.

During the boom, speculators seem to have been too zealous in extrapolating: from Los Angeles county to areas like the Inland Empire; from Miami and Palm Beach to the inland swamps; and from the outskirts of Phoenix to points further out. Speculators assumed that the wave of price appreciation would flow inexorably outward and they just needed to buy property before the wave hit.

- Fred

Anonymous said...

Yeah, I would hesitate to call it stupid. The housing speculation was heads I win, tails you lose.

Somebody puts essentially 0 down on an interest only mortgage with a below-market teaser rate, waits one or two years then flips it for $50-100k in tax-free profit. If the market goes south, no biggie, just mail the keys back to the bank.

While technically legal (um, like Micheal Milkin in the beginning?), before present times that-just-wasn't-done.

As for why Cali? It wasn't just Cali. It was Las Vegas, Florida, Phoenix, and S. Cali. What do those have in common? Rootless immigrants (not necessarily illegal or even foreign-born) willing to bet it all on "red".

Finaly, the dynamics there were completely different from the "sub-prime" fiasco we're seeing in the rust-belt. While the former was speculation, the latter was issuing debt to people that had no business taking on debt. What they had in common was incredibly loose underwriting by banks looking to resell the loans to Wall Street; who in turn re-sold them to suckers (pension plans and basically anyone else running other-people's-money) around the world.

Anonymous said...

William Said "California has the triple threat of the hipness factor, great weather, and of being the economic center of so many key industries, from high tech (Silicon Valley), to culture (San Francisco & Hollywood), to biotech (San Diego)"

California also has the threat of narcissism. None of the industries that you mentioned hire that many people. Hi-Tech has largely moved overseas, Bio-Tech isn't exactly manufacturing anything in a large quantity to hire all that many people and the "culture" of Hollywood doesn't employ that many either. Also, I do not know anybody that lives outside California that finds it "hip." Most people know it as the place that their aunt or somebody like that lives. Those who do find it hip are dolts who watch The OC or other such shows. The weather may be fine if you can stand all of the fires, earthquakes and such but the weather is fine in many places, such as Guatamala or El Salvador, but I wouldn't want to live there!

Anonymous said...

californians tolerate illegal immigration because they like their produce as cheap as possible so they can afford their mortgage payments. of course, they can't be linked, can they?

GMR said...

Proposition 13 contributes to there being lower than normal supply.

In California, property taxes can be 1% of assessed value. When you buy your house, the assessed value is what you paid for it. However, that assessed value can rise only 2% per year. So if property values increase say 5% or 10%, then your assessment will be considerably lower than market rates after a few years. Proposition 13 has been in place since the late 1970s, so people that have the same house as they did then are paying very low property taxes. However, newer homeowners are paying considerably more. In California, you can have a situation where you've got two identical houses next door to each other, but one might pay several times as much in property taxes as the other, depending on how long the residents of each house have been there.

This effectively makes it uneconomical for people to move. Normally, people might downsize after the kids go to college, or they might move if their new job were a bit of a long commute. However, in California, moving to a smaller house can result in a considerably higher tax bill if you've occupied your current house for a number of years. And moving to a new house closer to your new job might also normally be sensible, unless that results in a substantial increase in your property taxes.

So some people have an inclination to stay in their houses longer than they normally would. This lowers supply, which increases prices.

Anonymous said...

The commenter who said "the number one reason, bar none" was the possibility to get out of a mortgage by just sending "jingle mail" got it exactly backwards. Once the market turns, people who avail themselves of this cause an increase of supply by returning to being renters. If everybody who is underwater just walked away, market equilibrium (at a lower price level, obviously) would be restored in next to no time at all, rather than the months or years that the process is likely to actually take.
I have previously protested against Steve´s suggestion that his fellow whiterpeople might just be idiots, but - assuming that the "jinglemail" comment came from a Californian - I´d have to concede "no cigar" there.

Anonymous said...

6. What's your theory?

After watching the CSPAN California State Supreme Court debate tonight on whether gays can be legally married or not, my theory is that the subprime mess is only a symptom and that California is inevitably going to implode/disintegrate within 20-40 years. The reason is because - in the final analysis - the modern culture of liberalism considers any and all traditions to be "oppressive" and therefore subject to Marxist deconstruction.

Anonymous said...

All of the above, but #5 is a much bigger reason than most people realize, including Californians themselves. Fire up Google Earth and check out coastal California anywhere but the Los Angeles area. There's lots of open space. You just can't build on it.

Anonymous said...

gmr said:

"So some people have an inclination to stay in their houses longer than they normally would. This lowers supply, which increases prices."

The flip side of the coin might be that because of prop 13, there's less white flight from decaying neighborhoods.

I know of one quiet block in our neighborhood that got a small surge of HUD housing development, quickly turned into a war zone, and the white homeowners there, who are now in major distress, have told me they can't afford to move because of the property tax issues.

Incidentally, I'm simply amazed how just a few HUD apartment houses can make a formerly serene neighborhood go absolutely apeshit.

My heart goes out to those who had bought homes there before the surge. A real tragedy. The middle-class often have to bear the brunt of the abstract ideas of the rich.

I'd love to see some HUD apartments go up in Beverly Hills. that's my crazy dream.

Anonymous said...

"Fire up Google Earth and check out coastal California anywhere but the Los Angeles area. There's lots of open space. You just can't build on it."

Fire up Google Earth and check out the water reserves in California. Orange County is now recycling waste water for their taps.

You didn't hear it from me but... Soylent Green is people.

Anonymous said...

And from the evil eye of the firestorm, a small flock of birds sing a song of defiance. A song... of hope:

JWO said...

Number 5

Not number 2 because immigrants both consume and create housing. Also there is plenty of land for people to build on. Buildable land is created by building roads.