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> That's fine, but it doesn't change the fact that new construction doesn't help anyone but wealthy people in SF, today. If you build more luxury housing it lo
by harryh 10y ago
> That's fine, but it doesn't change the fact that new construction doesn't help anyone but wealthy people in SF, today.
If you build more luxury housing it lowers the price of luxury housing so that a marginally less rich person can move to that tier.
That marginal move reduces the demand on the next lower tier of housing which should reduce the price at that level.
And so on, and so on...
- timr 10y agoThis was addressed by the source article. It happens a bit, but it isn't magic: one of the author's models found that for every 1% increase in housing, rents dropped by 1.7%. Lowering rents enough to make SF affordable for poor people requires construction on a scale that isn't just impractical -- it's economically impossible. No developer would choose to build into such a market with fixed construction costs at hundreds of dollars per square foot.
- harryh 10y agoIndeed construction costs are far too high! Significant zoning changes are needed to make SF more affordable for large swaths of the economic spectrum. And even then, unfortunately, it will take time. Buildings don't go up overnight. The problems that SF is experiencing today are due to decades of mistakes.
- irq11 10y agoThe costs he is citing are fixed. They don't have anything to do with zoning or past decisions by San Francisco.
- moultano 10y agoJust like hermit crabs when a slightly bigger shell is available. https://www.youtube.com/watch?v=f1dnocPQXDQ#t=1m33s https://www.youtube.com/watch?v=f1dnocPQXDQ#t=1m33s
- harryh 10y agoHa! Yes! Love that analogy!
- gech 10y agoCan you promise that
- eru 10y agoHappens all the time. http://cityobservatory.org/what-filtering-can-and-cant-do/ http://cityobservatory.org/what-filtering-can-and-cant-do/
- tptacek 10y agoOnly in the same sense that you can promise that an apple released from your hand will fall to the earth and not hover in mid-air.
- timr 10y agoOh, come now...if it were that certain, the article wouldn't have gone out of its way to explore the question. There's actually no guarantee at all that the markets for high-end and low-end goods are linked. The price of Lamborghinis doesn't have much to do with the price of Kias.
- tptacek 10y agoWhat a strange analogy. There's no scarcity to Kias at all; the car is built to command a particular price point. There's a huge surplus of drivable cars. That's not the case with SF real estate, even a little bit.