5 ms·

As a liberal, I agree. One problem, foreign money. It is mentioned in passing in the article but Vancouver (even with more sensible building laws) is still get

by pj_mukh 11y ago

As a liberal, I agree. One problem, foreign money. It is mentioned in passing in the article but Vancouver (even with more sensible building laws) is still getting screwed because foreign money keeps pouring in.

jly 11y ago
This is a huge point. The same thing is happening in other attractive pacific rim cities. In Auckland, they are experiencing the same problem as SF and Vancouver but the government is very active in encouraging new housing development. Because of the foreign investment, it's not enough.
hodwik2 11y ago
Could you please explain why the foreign investment is a problem? Every time I've heard this discussed, it's mostly been people saying "The CHINESE are buying up houses" with a racist glint in their eyes. I don't get the impression these people would be as worried if the foreign investors were of French or Irish parentage. If I've misunderstood the issue, people correct me.
- stcredzero 11y ago
  There was a time when people would've been just as worried.
- pj_mukh 11y ago
  Well given that I'm South Asian, I don't think their race is an issue to me personally, and people in Vancouver who've brought this problem up are the most racially progressive bunch there is (including a huge native Chinese population that has been there for decades). Chinese money is flooding in because of issues in the Chinese investment market and they are increasing their investment in the SF market too now. The by-product is that the demand side is doubled up! Protectionism doesn't work, so what do we do? I'm firmly in the 'Build More' category but this one problem, I'm not sure how to solve.
  - thaumasiotes 11y ago
    > Well given that I'm South Asian, I don't think their race is an issue to me personally First I've heard of some sort of racial friendship between Chinese and Indians. I can assure you it's not reciprocated by the Chinese.
- namlem 11y ago
  The Chinese people who are buying up houses aren't buying them to live in, they're buying them just to speculate. The owners stay in China. It would be just as bad if they were from another country, it's just that they happen to be Chinese.
- jbapple 11y ago
  > Could you please explain why the foreign investment is a problem? I'm not sure, but I get the impression that the concern is partly about non-resident populations. Non-residents buying homes as investments or as a hedge against corruption driving them out of their home countries uncaps demand. More demand might end up causing wealth transfer from the renter class to the owner class.
- mc32 11y ago
  It's not because the buyers are Chinese it's mostly due to the volume of purchases affecting the market so directly. They could be "Newfies" if you had as many driving up prices so dramatically, you'd get an outcry. It happens in the US in Portland you'll occasionally see signs about No Californians. It doesn't help that many of those are not "regular" Chinese but people with money and connected, the Chinese .1%ers, so to speak, who are buying properties as a pied de terre in the event things go bad in the homeland and they need to hightail it as well as a place to park their connected money.
  - tamana 11y ago
    They aren't buying houses becuase they might need to live in them. They could rent anywhere easily. They are buying them as investments.
    - jessaustin 11y ago
      In many cases the younger generation changes citizenship. The whole family could leverage that in a pinch.
    - mc32 11y ago
      The idea of ownership is more important in Chinese culture so renting is not as attractive, plus ownership affords them a place to park their money away from central govt control.
- gech 11y ago
  Housing should be utilized. I could also say everytime this comes up someone is quick to start saying racist. I don't care the origin, I just care that this product could actually be used by locals.
  - deleted 11y ago
    [deleted]
- tamana 11y ago
  We could test your idea if there were any French or Irish investors. Or even American investors.
  - hodwik2 11y ago
    There are, but they're harder to count. In most studies the Chinese investors are counted by their foreign names. There is no public data on nationality of real estate owners.
    - throwaway2048 11y ago
      Because local governments do everything they can to avoid collecting specific data in vancouver.
- crdoconnor 11y ago
  >Could you please explain why the foreign investment is a problem? Every time I've heard this discussed, it's mostly been people saying "The CHINESE are buying up houses" with a racist glint in their eyes. It's pretty much any major world city oligarchs have decided to throw their ill gotten gains at. In London it's Russians and Arabs with oil wealth. In Vancouver and SF it's Chinese. These oligarch investments physically occupy a massive amount of premium space, pushing the poorer residents further and further out of the city. In a lot of cases these people are pretty much criminals. It's rare to earn a lot of money in Russia, China or the Middle East honestly. Hence the desire for a foreign bolthole and an investment the host country can't touch. But sure. Racist glint or whatever.
  - hodwik2 11y ago
    In London they currently have 230 buildings 20 stories or more being developed, or planned for development. It looks like the investment capital is doing wonders there.
nickff 11y ago
This is a common intuitive argument, but the question that follows is why? Why must all housing be used? Could we not simply build more? Instead of looking at foreign purchases of homes as taking away an opportunity, it should be viewed as a stimulus program. The real problem seems to be that city planners are restricting new construction (to keep up home values, and allow them to 'shape' the city), and thus forcing foreign and domestic purchasers to compete instead of collaborate.
- hodwik2 11y ago
  The irony being that Vancouver real estate is only a great investment vehicle because they've had such strict building regulations, with the view corridors law. Other cities are not such a sure investment, a spike in supply could destroy your capital overnight.
- pj_mukh 11y ago
  How would they "collaborate" if the supply was higher? I think the point of the activist was that the demand is far too high (almost double what would be caused by normal incoming techies). My worry is that this investment is "flight-y" (they are not actually residents) if we double up supply and this investment leaves, SF becomes a Detroit that looks like Manhattan? P.S: Obviously, increasing supply to meet actual renters'/new residents' demand is a no-brainer.
- 0xcde4c3db 11y ago
  Vacant houses tend to be vandalized, infested by pests, and otherwise fall into disrepair (e.g. there's no one there to notice a plumbing leak). This is less of an issue for individual vacant units in multi-tenant buildings.
  - enraged_camel 11y ago
    I'm not sure this is a problem for the types of housing purchased by foreign money. When foreigners invest in US housing, they tend to also hire property management firms that look after the property during vacancies.
- 11y ago
schwarrrtz 11y ago
Yup. One possible solution we're considering in Vancouver is some kind of residency requirement - for example, if you don't live in your property (or rent it out) for more than x% of the year, you get penalized on your property taxes or something.
BurningFrog 11y ago
But the reason foreign money is pouring in to SF real estate rather than a zillion alternatives is that it's a good investment. And the reason for that is precisely the very restrictive policies designed to maximize real estate value. So if you legalize housing construction, the foreign money problem will disappear as well.
- wwweston 11y ago
  For a few years, I've been challenging people when this discussion comes up to give examples of situations where increasing housing supply resulted in falling prices. As far as I can tell, without a fundamental demand drop, this rarely if ever happens. And you've hit on one of the reasons: the investors who want in want into a market where real estate commands the prices it does.
  - repsilat 11y ago
    Downtown Auckland, 2005/6. There was a big increase in the number of small apartments available. Prices did fall, and people I know "lost money" because of it. It was still a great thing for the city. Auckland itself is growing quickly, and the price of houses is (like in many other places) outrageous. Apartment rents are still relatively sane, though.
  - cynicalkane 11y ago
    Generally, people don't build housing supply with the intent of oversaturating the market and losing money!
    - SonjaKT 11y ago
      no but who said everything that happens is what was intended
  - Decade 11y ago
    Well, from the last discussion where Sonja participated: Philadelphia, additional housing, plus market crash. It doesn’t say that prices on existing housing went down, but the new “luxury” housing did not sell for close to the expected luxury prices. https://news.ycombinator.com/item?id=10370964 https://news.ycombinator.com/item?id=10370964 http://grist.org/cities/urban-activists-set-out-to-sue-san-franciscos-suburbs/ http://grist.org/cities/urban-activists-set-out-to-sue-san-f...
gorkemyurt 11y ago
No foreign money is good! They are not sending their kids to local schools, or driving down on 101 every day to cause traffic. They also pay way way more property tax compared to someone bought a house 20 years ago..

by pj_mukh 11y ago

jly 11y ago

This is a huge point. The same thing is happening in other attractive pacific rim cities. In Auckland, they are experiencing the same problem as SF and Vancouver but the government is very active in encouraging new housing development. Because of the foreign investment, it's not enough.

hodwik2 11y ago

Could you please explain why the foreign investment is a problem? Every time I've heard this discussed, it's mostly been people saying "The CHINESE are buying up houses" with a racist glint in their eyes. I don't get the impression these people would be as worried if the foreign investors were of French or Irish parentage. If I've misunderstood the issue, people correct me.

stcredzero 11y ago
There was a time when people would've been just as worried.
pj_mukh 11y ago
Well given that I'm South Asian, I don't think their race is an issue to me personally, and people in Vancouver who've brought this problem up are the most racially progressive bunch there is (including a huge native Chinese population that has been there for decades). Chinese money is flooding in because of issues in the Chinese investment market and they are increasing their investment in the SF market too now. The by-product is that the demand side is doubled up! Protectionism doesn't work, so what do we do? I'm firmly in the 'Build More' category but this one problem, I'm not sure how to solve.
- thaumasiotes 11y ago
  > Well given that I'm South Asian, I don't think their race is an issue to me personally First I've heard of some sort of racial friendship between Chinese and Indians. I can assure you it's not reciprocated by the Chinese.
namlem 11y ago
The Chinese people who are buying up houses aren't buying them to live in, they're buying them just to speculate. The owners stay in China. It would be just as bad if they were from another country, it's just that they happen to be Chinese.
jbapple 11y ago
> Could you please explain why the foreign investment is a problem? I'm not sure, but I get the impression that the concern is partly about non-resident populations. Non-residents buying homes as investments or as a hedge against corruption driving them out of their home countries uncaps demand. More demand might end up causing wealth transfer from the renter class to the owner class.
mc32 11y ago
It's not because the buyers are Chinese it's mostly due to the volume of purchases affecting the market so directly. They could be "Newfies" if you had as many driving up prices so dramatically, you'd get an outcry. It happens in the US in Portland you'll occasionally see signs about No Californians. It doesn't help that many of those are not "regular" Chinese but people with money and connected, the Chinese .1%ers, so to speak, who are buying properties as a pied de terre in the event things go bad in the homeland and they need to hightail it as well as a place to park their connected money.
- tamana 11y ago
  They aren't buying houses becuase they might need to live in them. They could rent anywhere easily. They are buying them as investments.
  - jessaustin 11y ago
    In many cases the younger generation changes citizenship. The whole family could leverage that in a pinch.
  - mc32 11y ago
    The idea of ownership is more important in Chinese culture so renting is not as attractive, plus ownership affords them a place to park their money away from central govt control.
gech 11y ago
Housing should be utilized. I could also say everytime this comes up someone is quick to start saying racist. I don't care the origin, I just care that this product could actually be used by locals.
- deleted 11y ago
  [deleted]
tamana 11y ago
We could test your idea if there were any French or Irish investors. Or even American investors.
- hodwik2 11y ago
  There are, but they're harder to count. In most studies the Chinese investors are counted by their foreign names. There is no public data on nationality of real estate owners.
  - throwaway2048 11y ago
    Because local governments do everything they can to avoid collecting specific data in vancouver.
crdoconnor 11y ago
>Could you please explain why the foreign investment is a problem? Every time I've heard this discussed, it's mostly been people saying "The CHINESE are buying up houses" with a racist glint in their eyes. It's pretty much any major world city oligarchs have decided to throw their ill gotten gains at. In London it's Russians and Arabs with oil wealth. In Vancouver and SF it's Chinese. These oligarch investments physically occupy a massive amount of premium space, pushing the poorer residents further and further out of the city. In a lot of cases these people are pretty much criminals. It's rare to earn a lot of money in Russia, China or the Middle East honestly. Hence the desire for a foreign bolthole and an investment the host country can't touch. But sure. Racist glint or whatever.
- hodwik2 11y ago
  In London they currently have 230 buildings 20 stories or more being developed, or planned for development. It looks like the investment capital is doing wonders there.

nickff 11y ago

This is a common intuitive argument, but the question that follows is why? Why must all housing be used? Could we not simply build more? Instead of looking at foreign purchases of homes as taking away an opportunity, it should be viewed as a stimulus program. The real problem seems to be that city planners are restricting new construction (to keep up home values, and allow them to 'shape' the city), and thus forcing foreign and domestic purchasers to compete instead of collaborate.

hodwik2 11y ago
The irony being that Vancouver real estate is only a great investment vehicle because they've had such strict building regulations, with the view corridors law. Other cities are not such a sure investment, a spike in supply could destroy your capital overnight.
pj_mukh 11y ago
How would they "collaborate" if the supply was higher? I think the point of the activist was that the demand is far too high (almost double what would be caused by normal incoming techies). My worry is that this investment is "flight-y" (they are not actually residents) if we double up supply and this investment leaves, SF becomes a Detroit that looks like Manhattan? P.S: Obviously, increasing supply to meet actual renters'/new residents' demand is a no-brainer.
0xcde4c3db 11y ago
Vacant houses tend to be vandalized, infested by pests, and otherwise fall into disrepair (e.g. there's no one there to notice a plumbing leak). This is less of an issue for individual vacant units in multi-tenant buildings.
- enraged_camel 11y ago
  I'm not sure this is a problem for the types of housing purchased by foreign money. When foreigners invest in US housing, they tend to also hire property management firms that look after the property during vacancies.
11y ago

schwarrrtz 11y ago

Yup. One possible solution we're considering in Vancouver is some kind of residency requirement - for example, if you don't live in your property (or rent it out) for more than x% of the year, you get penalized on your property taxes or something.

BurningFrog 11y ago

But the reason foreign money is pouring in to SF real estate rather than a zillion alternatives is that it's a good investment. And the reason for that is precisely the very restrictive policies designed to maximize real estate value. So if you legalize housing construction, the foreign money problem will disappear as well.

wwweston 11y ago
For a few years, I've been challenging people when this discussion comes up to give examples of situations where increasing housing supply resulted in falling prices. As far as I can tell, without a fundamental demand drop, this rarely if ever happens. And you've hit on one of the reasons: the investors who want in want into a market where real estate commands the prices it does.
- repsilat 11y ago
  Downtown Auckland, 2005/6. There was a big increase in the number of small apartments available. Prices did fall, and people I know "lost money" because of it. It was still a great thing for the city. Auckland itself is growing quickly, and the price of houses is (like in many other places) outrageous. Apartment rents are still relatively sane, though.
- cynicalkane 11y ago
  Generally, people don't build housing supply with the intent of oversaturating the market and losing money!
  - SonjaKT 11y ago
    no but who said everything that happens is what was intended
- Decade 11y ago
  Well, from the last discussion where Sonja participated: Philadelphia, additional housing, plus market crash. It doesn’t say that prices on existing housing went down, but the new “luxury” housing did not sell for close to the expected luxury prices. https://news.ycombinator.com/item?id=10370964 https://news.ycombinator.com/item?id=10370964 http://grist.org/cities/urban-activists-set-out-to-sue-san-franciscos-suburbs/ http://grist.org/cities/urban-activists-set-out-to-sue-san-f...

gorkemyurt 11y ago

No foreign money is good! They are not sending their kids to local schools, or driving down on 101 every day to cause traffic. They also pay way way more property tax compared to someone bought a house 20 years ago..