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Can Portland Avoid Repeating San Francisco’s Mistakes?
- joshAg 10y agoprobably not. The only real solutions are discouraging enough people from moving that population remains static over years, or making it super easy to build as many units as needed to cover the influx of new residents. Anything else will just result in downtown portland and the nearby areas becoming unaffordable for anyone who isn't rich.
- jdminhbg 10y agoA truly odd article. The posited question is whether Portland can avoid making SF's mistakes, but then it goes on to lament that Portland isn't committed to the same "progressive" housing policies that SF is (rent control, "affordable housing" minimums, stronger lease termination regulation). In fact, I don't see anywhere that SF's mistakes are even enumerated, so maybe the headline was just written by editor who wished that the writer had explored them.
- readams 10y agoIt almost leads you to suspect that these policies have been an utter failure in San Francisco. A rational person might suppose that to avoid the fate of San Francisco, that Portland should try something different. Perhaps something that recognizes that supply and demand are real, and that setting price controls at a level below the market-clearing price will lead to shortages.
- narrator 10y agoThey have low housing prices in Detroit. Maybe they should emulate Detroit. Seriously, high housing prices might be a sign that people really want to live somewhere. If you make more places like San Francisco, where people actually want to live, maybe prices in San Francisco would fall a little since it wouldn't be so special of a place anymore.
- dietrichepp 10y ago…what? They call it "supply and demand" for a reason, because prices are affected not only by desirability but also by availability. Maybe prices are high because San Francisco is just doing a really terrible job at building enough units to keep up with demand. Maybe it's because many people want to live there. Or… if we want to be really crazy… we could say it's a combination of both factors.
- narrator 10y agoSo you want to increase availability and drive down price? Recreate what makes San Francisco so great somewhere else and have everyone who wants to live in San Francisco move there. Heck, you could start with Oakland.
- dietrichepp 10y agoThe comment seems disingenuous. But many of the things people like about SF are difficult to copy. Perhaps it would be easier to build more units in SF.
- narrator 10y agoSorry about the snarky tone, but I am a little annoyed at the build more housing crowd because they are uncreative. It's kind of like the people who think education and health care will be better if we just spent more money on them. The people who, before Elon Musk, who wanted to get humans to Mars by just increasing NASA's budget and buying more 100 million dollar disposable rockets from ULA. The problem is is that no one wants to get to the heart of the matter because it's just too hard or maybe even counter-intuitive. More money being spent on development, rising land prices and so forth is something that fills everyone's pocket and ignores whatever actual underlying problem exists in the larger system. It's a process where every additional dollar just leads to diminishing marginal returns and eventually negative marginal returns once the city gets so full that everyone's quality of life is damaged.
- intopieces 10y agoNobody believes or has claimed that supply and demand are "not real" and reducing the housing crisis to "Econ 101" is highly disingenuous. It ignores non-economic factors (environmental, cultural) that are contributory. Everyone wants to wave a magic wand and fix housing, but until we acknowledge that such a wand does not exist (and that the situation far exceeds Econ 101) we will continue having the same unproductive conversations.
- twblalock 10y agoIt's very obvious that many of the people and organizations active in San Francisco politics do not understand economics 101. They say some really stupid things, and voters believe them. There are certainly productive conversations to be had within a rational economic paradigm, but too many of the participants reject the paradigm, and therefore no productive conversation with them can occur. For example, here is one opinion piece from the Examiner, in which the author writes, "But supply and demand does not apply to housing": http://www.sfexaminer.com/nato-green-do-the-math-you-cant-buy-a-home-in-sf/ http://www.sfexaminer.com/nato-green-do-the-math-you-cant-bu... Here is another paper, by the founder of the Coalition of San Francisco Neighborhoods and the Council of Community Housing Organizations, which denies that supply and demand operate in the San Francisco housing market: http://www.sfhac.org/wp-content/uploads/2014/07/calvin-welch-paper.pdf http://www.sfhac.org/wp-content/uploads/2014/07/calvin-welch...
- intopieces 10y agoIt's incredible what you can conclude when you take pieces out of context. The first article says suppy and demand is not enough to explain the complexity of housing vis-a-vis the demographics that demand it. The paper you linked expands on this. It's clear that you want a solution. We all want a solution. But there isn't one solution. There are competing interests at play, and smugly declaring that anyone who denies your oversimplification is saying something "stupid" or "irrational" only highlights what little information you have to add to the discussion. I'd much rather see a point by point rebuttal to the studies done rather a simple, "it's not confirming my belief about economics so must be utter bullshit." Yawn.
- btilly 10y agoThere is almost no evidence that rent control is the primary, secondary or even tertiary cause of San Francisco's woes. As https://medium.com/newco/a-guy-just-transcribed-30-years-of-for-rent-ads-heres-what-it-taught-us-about-sf-housing-prices-bd61fd0e4ef9#.r7qldtd56 https://medium.com/newco/a-guy-just-transcribed-30-years-of-... shows, the long-term price curves barely change in 1979 when rent control came into existence. The three things that matter are the amount of housing, the number of jobs there are, and the total salary paid for those jobs. See the article for the formula. I am sure that a similar formula applies in San Francisco. The result is that having or not having rent control is immaterial. Being unwilling to build housing is a problem.
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- aorloff 10y agoRent control helps the well connected, not necessarily those who need it : http://www.wsj.com/articles/SB122126309241530485 http://www.wsj.com/articles/SB122126309241530485 and ties up existing inventory. I know people here in SF who have an apartment, and own a house or two outside the city, but will never give up their apartment because its just so cheap. Rent control definitely ties up supply.
- btilly 10y agoIn theory, absolutely! In practice the effects seem to be small.
- dietrichepp 10y agoThe evidence presented in the article you linked is really not strong enough to support your conclusion with reasonable certainty. It's using a massive "post hoc ergo proper hoc" fallacy to prop up a weak argument. "Ties up supply" is also a statement that is not necessarily connected to "increases price". I'm not entirely clear on the economic theories behind rent control, but from what I understand, it affects availability more than it affects price.
- megablast 10y agoYou can blame those policies all you want, but they were bought in for a reason. San Francisco's problem was that it grew too fast, and that is difficult for any city to handle.
- cvwright 10y agoPortland resident here. Ballots are due today for our local elections. Almost every single candidate for local office is making vague promises that sound a lot like the San Francisco approach. It will be interesting to see how it all plays out.
- jchrisa 10y agoWe have zoning restrictions that mean there aren't enough multi family and apartment buildings, and now the old bungalows are starting to get replaced with larger "modern" houses. Sometimes I think about how much better the city would be, if the leaders over the 20th century hadn't been so racist. It turns out the old redlined areas are where all the big apartment buildings are going in. This has contributed to backlash against development, as has the pace of change along main streets in other parts of town. As a result, rents have been rising faster than income for a while here. And a lot of folks on the ground blame the new development for the rising rents. In my book if we had been developing for decades at a steady pace all along, and hadnt engaged in racist redlining and relocating policies, Portland would not be seeing the price shocks we're seeing now, and we would have a more vibrant community. Also there is a macro thing here where Portland has joined the west coast real estate market, so long time low prices have a higher new normal in the last three years.
- tn13 10y agoI really cant understand these journalists.
- santaclaus 10y ago> It’s all the newcomers, some say. They’re driving prices up and they’re pushing long-time residents out. Well, there has been a massive influx of investment [1] in the Portland housing market, driving up overall prices. While this wouldn't be happening if people didn't want to move to Portland, simply blaming it on 'Californians' seems to be a bit naive. [1] http://invw.org/2015/04/17/portland-cash-housing/ http://invw.org/2015/04/17/portland-cash-housing/
- erispoe 10y agoThe fundamentals that create an opportunity for speculative investment is a lack of supply and an excess of demand. It's very rare that investment itself, in a vacuum of demand, will result in a price surge. Sure, it can happen, but the basics is that Portland is attractive and, like San Francisco, does not build enough to support the new demand.
- skybrian 10y agoIt sounds like you're saying that investment alone doesn't make a bubble. But investment (or speculation) is another kind of demand, and it's well known that speculation can create bubbles when investors predict future demand that turns out not to exist. So I'm not really sure what you're getting at?
- erispoe 10y agoReal demand for housing is here in Portland and in San Francisco. It's not created by real estate speculation. Real people, by the thousands, come to these metro areas, faster than the housing stock grows to accommodate them. Before asking ourselves if price surges are created by the smokes and mirrors of speculation, a second-degree hypothesis, we ought to look at the simpler hypothesis first: is there a real demand for housing? Yes, there is. Is the housing stock growing fast enough to satisfy that demand? No, it is not.
- inmyway 10y agoThe cash buyers from SF to Cupertino to Pleasanton are coming from China. Same in Vancouver, for example. Why not do what the new Muslim mayor of London is proposing -- stop the foreign investment property buyers. They're the biggest reason the local population can't afford housing in both the Bay Area and London, even for households with two adults making tech salaries.
- api 10y ago"But there has been pushback on these efforts, too. Many Portlanders say they don’t want more density in their neighborhoods, that they oppose big housing complexes and in-law units in neighbors’ backyards. (There is a similar attitude evident in some San Francisco residents’ responses to that city’s housing crisis.) Some neighborhoods are actually trying to downzone to decrease density." Good economy, affordable housing, NIMBYism: pick two.
- ck2 10y agoNot right to be squeezed out of a city you call your home but "weird people" will find/build new places hopefully. I am sure there are up and rising places similar to the previous forms of SF and Portland that are kept off the radar?
- dublinben 10y agoSure. Places like Detroit are very affordable for "weird people" looking for a challenge. It's a shame that cities like San Francisco have decided to raise the drawbridge on future inhabitants and set their current density rate in stone.
- pessimizer 10y agoThe shame is that they waited so long to do it. There's very little San Francisco left.
- TulliusCicero 10y agoSan Francisco is more in its people than its buildings. By constricting the supply of housing, they've inadvertently pushed out the very 'weirdos' they were trying to keep; it's pretty easy for the rich to outbid the poor.
- m0llusk 10y agoice flows
- randyrand 10y agoIn terms of rights and law - of course it's right. If you don't own your home, then you don't have a legal right to stay there - apart from a few short term eviction restrictions.
- rconti 10y agoThe problem this article (and others) make is assuming that "progressive" policies are good for housing affordability. For example, the "There are limits to urban white liberalism" lament from the Community Alliance of Tenants. He's apparently upset that people don't follow through with their politics, but, as far as I can tell, there's no requirement that, in order to be liberal, you have to support specific housing policies. Maybe some of your liberal friends are in favor of ACTUAL affordability, rather than a litmus test of policies that you need to support to get street cred, but don't actually do anything for housing?
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- Animats 10y agoI'm not worried about SF. The boom will be over soon. After the last dot-com crash, about 40% of the twentysomethings left.
- tsunamifury 10y agoPeople keep saying this and year and year it keeps "booming"
- spc476 10y agoReminds me of a saying: The market can remain irrational longer than you can remain solvent.
- Animats 10y agoWe're getting past that. Look at TWTR stock for the last year.[1] Twitter tried to pull a Myspace - the number of users started dropping [2], so they increased ad density to try to get revenue up. It's not working. Twitter is so highly visible in SF that when they tank, it will shake up the real estate market. [1] https://www.google.com/search?client=ubuntu&channel=fs&q=TWTR&ie=utf-8&oe=utf-8 https://www.google.com/search?client=ubuntu&channel=fs&q=TWT... [2] http://variety.com/2016/digital/news/twitter-declining-monthly-actives-1201702526/ http://variety.com/2016/digital/news/twitter-declining-month...
- underwires 10y agoYou are claiming that there will never be another recession in SF?
- justizin 10y agorents are already slightly trending down, and it's been an icy few months for investment. people keep questioning this year after year but the writing is on the wall.
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- freyir 10y agoI'm probably being dense, but I don't understand what you're saying. Portland offers a luxury apartment at a lower price than Seattle, but you don't expect well-compensated people to move to Portland for that reason?
- svachalek 10y agoHow does this anecdote contradict that Portland is more affordable than Seattle?
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- jrapdx3 10y agoAs a long-time Portland resident I've seen how the city has grown. It's said Portland is a "hot destination", inspiring a continuing influx of new residents. In any case, we knew increased density was inevitable given state-wide stringent constraints on sprawl via urban growth boundaries. A building boom has been going on for some years now with little sign of abating. Despite the construction happening all around, housing prices have been rising, quite a hot topic here now. There's a political problem insofar as many are convinced that elected officials didn't force developers to create the number of lower cost housing units as promised when the building projects were proposed to the city. Furthermore many citizens believe that overall the governing bodies have also not looked after the interests of the community, for one thing, allowing real estate developers to do what they want regardless of effects on neighborhoods. There is also dissatisfaction with deterioration of infrastructure, massive increase in traffic congestion, demolition of historic structures, loss of small businesses and overall reduced quality of life. Whether this replicates San Francisco or Seattle or not, when growth-related problems are greater than necessary there's something wrong with the process. FWIW it is an election year, I suspect the views of the electorate will be clearly rendered and overdue changes made. Edit: grammar
- HillaryBriss 10y agoThe theory I keep hearing from thought leaders is: "More people equals economic growth. Economic growth solves all the problems. Bring more people. More people equals good."
- apsec112 10y ago"Despite the construction happening all around" How much construction is there, really? Politicians in SF talk about a "big construction boom", but 2014 was the first year since the 1960s that SF construction even kept up with the US's baseline population growth (~1% per year). So it's "booming", but only in the sense of returning to normal after a decades-long depression. "allowing real estate developers to do what they want regardless of effects on neighborhoods" This might not bear any relationship to reality. Many people believe this in San Francisco, even though SF is the #1 most development-hostile major city in the world.
- sien 10y agoSurely Portland won't wind up like SF. First, look at a map. SF has Vancouver WA across the river. Portland itself can also expand more easily. SF is a Peninsula and so it's much harder to expand around the place. Secondly, Silicon Valley is a well known global hotspot for IT. Everything else is miles behind. The pressure of all that money in the Bay Area is huge. It's worth noting that these problems were not nearly as bad during the 1980s or 1990s boom. It's only been after multiple booms that the SF real estate market broke. Portland isn't as likely to have multiple booms to the same degree. Portland and Austin are certainly seeing the price of real estate going up substantially. But surely it's a sign of success and is largely a good thing, unlike the super pricey real estate of SF or Sydney of Melbourne AU, NYC or London.
- shas3 10y agoYeah, I don't understand how Portland will be the next SF or even the next Seattle. SF and Seattle are years ahead in economic growth. Further, SF and Seattle have solid schools and universities. Portland is quite mediocre in that respect. The local universities in Portland and in wider Oregon are eminently mediocre.
- realitycheckxxx 10y agoIt is just me or do these startup hubs also happen to be hipster hubs as well? San Francisco, Portland, Austin, Seattle etc.