4 ms·

Housing in SF is an incredibly powerful illustration of the danger of letting things get so bad that the usual remedies no longer apply. Basically: - Traditio

by Fede_V 11y ago

Housing in SF is an incredibly powerful illustration of the danger of letting things get so bad that the usual remedies no longer apply. Basically: - Traditionally, the proper fix for a shortage of housing is to build more houses. Just lift the existing regulations, and let the free market do what it does best: take care of the demand at an efficient price. - However, after years and years of very slow building, the amount of pent up demand is such that even if builders were allowed to construct houses, the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. - People that are in rent regulated apartments have absolutely nothing to gain from more construction. However, even poor people that have no stable housing also have almost nothing to gain from new construction because their only realistic chance of having affordable rent is through subsidies or semi-public housing in the medium term. - The people that have the most to gain are the moderately well off who can afford SF rents, but cannot find housing at the existing market rate. Basically - politicians and residents let the situation with housing in SF get so absolutely bad that free-market based solutions would take a crazy amount of time to create affordable housing for poor people. At this point, I'm not sure there even are good solutions, especially if you limit yourself to what is politically feasable. The lesson to draw from this is that you should never let the situation get so bad that people at the bottom stop caring completely about improving policy. In this case, the right policy (build A LOT more houses) would barely help poor people because the supply/demand curve is so out of wack. The very people that should benefit the most from improving the housing situation are instead opposing it - for fairly rational reasons.

golergka 11y ago
It sounds like you think that only the poor people problems with housing should be solved, and if someone is better off and can't find an apartment due to crazy demand, his problems don't concern you and solving his problems counts for nothing.
- dionidium 11y ago
  I'll just say that it doesn't sound like that to me at all
beachstartup 11y ago
this problem is exacerbated by the fact that everyone that lives there (i.e. all the powerful people running the place) is getting richer and richer by letting it continue. the only solution is to simply not live there, in my opinion.
BurningFrog 11y ago
...the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. This is a common mistake. In reality, all added supply brings down price levels across the board.
- wernercd 11y ago
  But you completely ignore the "time and amount of houses it would take" aspect. If you can only build 10 houses, and make 10% commission... are you going to build a shack? or are you going to build mansion? The houses that get built, if the gates were to open wide, would all start off on the high end... while that would start a downward pressure, it would still be a very long time before those who can afford $200k for a house see anything in their range built.
  - BurningFrog 11y ago
    Well, a mansion should be able to house more people than a shack, so it would increase supply more, and pressure prices down more. New housing would start off being expensive because all housing in SF is expensive. Not the other way around. Maybe the root of this fallacy is that it assumes prices are constant. If you build something today and charge $5k/month for it, that's how it will somehow remain forever. But in reality prices are set by supply and demand, for both new and old housing.
  - slyall 11y ago
    You are missing the point. Houses for poor people are almost never built, instead poor people live in 50 year old places that were built for the rich or middle class. What happens is that 10 people move into those new places and 10 people move into their old one and the vacancy works it's way down the line. Eventually some guy down the bottom gets slightly cheaper rent or a better place. Imagine that instead 100,000 high-end apartments were built in the Bay Area. None of them will have poor people move into them but instead places like (to quote elsewhere in the thread) "downtown PA (university Ave) its right around $2800-3000 for a 1 bedroom, for places with 20 year old appliances and no upgrades." might now be $1000/month cheaper and affordable by somebody on a lot lower income.
ThrustVectoring 11y ago
>However, after years and years of very slow building, the amount of pent up demand is such that even if builders were allowed to construct houses, the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. I hate the term "affordable housing". All dense housing construction helps make housing more affordable - after all, you'll be convincing people who can afford it to move out of "bad" housing into the nice stuff you're building.
lazaroclapp 11y ago
> the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. Actually, if demand is so high, why would anyone bother with building a house for a single family, willing to pay say $10,000,000, when they can build a 120 floor building of small apartments for 25,000 people, each willing to pay $200,000 (on average)?
- ryanwaggoner 11y ago
  I see the point you're trying to make, but this is such a lopsided comparison as to be bizarre. A $10mm house in SF could easily be under 5000 sq ft, while a 120 story residential tower with 25,000 units would easily be one of the biggest and tallest buildings in North America, and would cost billions to develop. A much better comparison would be a 6 bedroom mansion for $10mm, or a small building with ten 1-bedroom units. And if you look at high end real estate, the per square foot price is often multiples above the median, which is why it's more profitable to build those than lots of small units.
chipsy 11y ago
Hong Kong faced this conundrum in the mid-20th century: Lots of refugee immigration, plus a major fire, causing an urgent housing crisis at the bottom end of the market. The city built massive, tenement-style public housing blocks, and never stopped building. Almost half of the population of Hong Kong today lives in public housing. https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong
- Decade 11y ago
  Wouldn’t work here. I’ve been to the housing meetings. Basically, if San Francisco tried that, then the entire affordable housing budget would be taken up just buying enough land. As it is, the mayor’s office of housing and community development is going to spend hundreds of millions of dollars on maybe a few thousand units. Not very efficient, and not nearly enough to make a major impact on the housing crisis. Streamline the process, and you get branded as a traitor to the people and undoubtedly a peon of the greedy and corrupt developers.

by Fede_V 11y ago

golergka 11y ago

It sounds like you think that only the poor people problems with housing should be solved, and if someone is better off and can't find an apartment due to crazy demand, his problems don't concern you and solving his problems counts for nothing.

dionidium 11y ago
I'll just say that it doesn't sound like that to me at all

beachstartup 11y ago

this problem is exacerbated by the fact that everyone that lives there (i.e. all the powerful people running the place) is getting richer and richer by letting it continue. the only solution is to simply not live there, in my opinion.

BurningFrog 11y ago

...the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. This is a common mistake. In reality, all added supply brings down price levels across the board.

wernercd 11y ago
But you completely ignore the "time and amount of houses it would take" aspect. If you can only build 10 houses, and make 10% commission... are you going to build a shack? or are you going to build mansion? The houses that get built, if the gates were to open wide, would all start off on the high end... while that would start a downward pressure, it would still be a very long time before those who can afford $200k for a house see anything in their range built.
- BurningFrog 11y ago
  Well, a mansion should be able to house more people than a shack, so it would increase supply more, and pressure prices down more. New housing would start off being expensive because all housing in SF is expensive. Not the other way around. Maybe the root of this fallacy is that it assumes prices are constant. If you build something today and charge $5k/month for it, that's how it will somehow remain forever. But in reality prices are set by supply and demand, for both new and old housing.
- slyall 11y ago
  You are missing the point. Houses for poor people are almost never built, instead poor people live in 50 year old places that were built for the rich or middle class. What happens is that 10 people move into those new places and 10 people move into their old one and the vacancy works it's way down the line. Eventually some guy down the bottom gets slightly cheaper rent or a better place. Imagine that instead 100,000 high-end apartments were built in the Bay Area. None of them will have poor people move into them but instead places like (to quote elsewhere in the thread) "downtown PA (university Ave) its right around $2800-3000 for a 1 bedroom, for places with 20 year old appliances and no upgrades." might now be $1000/month cheaper and affordable by somebody on a lot lower income.

ThrustVectoring 11y ago

>However, after years and years of very slow building, the amount of pent up demand is such that even if builders were allowed to construct houses, the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. I hate the term "affordable housing". All dense housing construction helps make housing more affordable - after all, you'll be convincing people who can afford it to move out of "bad" housing into the nice stuff you're building.

lazaroclapp 11y ago

> the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. Actually, if demand is so high, why would anyone bother with building a house for a single family, willing to pay say $10,000,000, when they can build a 120 floor building of small apartments for 25,000 people, each willing to pay $200,000 (on average)?

ryanwaggoner 11y ago
I see the point you're trying to make, but this is such a lopsided comparison as to be bizarre. A $10mm house in SF could easily be under 5000 sq ft, while a 120 story residential tower with 25,000 units would easily be one of the biggest and tallest buildings in North America, and would cost billions to develop. A much better comparison would be a 6 bedroom mansion for $10mm, or a small building with ten 1-bedroom units. And if you look at high end real estate, the per square foot price is often multiples above the median, which is why it's more profitable to build those than lots of small units.

chipsy 11y ago

Hong Kong faced this conundrum in the mid-20th century: Lots of refugee immigration, plus a major fire, causing an urgent housing crisis at the bottom end of the market. The city built massive, tenement-style public housing blocks, and never stopped building. Almost half of the population of Hong Kong today lives in public housing. https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong

Decade 11y ago
Wouldn’t work here. I’ve been to the housing meetings. Basically, if San Francisco tried that, then the entire affordable housing budget would be taken up just buying enough land. As it is, the mayor’s office of housing and community development is going to spend hundreds of millions of dollars on maybe a few thousand units. Not very efficient, and not nearly enough to make a major impact on the housing crisis. Streamline the process, and you get branded as a traitor to the people and undoubtedly a peon of the greedy and corrupt developers.