21 ms·
Housing in the Bay Area
- godzillabrennus 10y agoI'd be happy to extend a beta license for a brand new grassroots lobbying platform to the folks at YC for them to be more efficient and effective while managing this effort. Heck, if anyone on HN is part of any lobbying effort in California and would like a beta experience of a new platform email me lane (at) fastAdvocate (dot com) Warning you in advance, the website up today is horrible and not representative of the beta product. The homepage is about to be replaced. We focused on the product first.
- stale2002 10y agoIf you are passionate about the housing crisis in The Bay Area, you should check out The San Francisco Bay Area Rentors Federation. They are one of the groups doing the most activism on this issue.
- akanet 10y agoYup! If you're interested in a low-effort way to influence the local market, please consider voting by June 7th: http://www.sfyimby.org http://www.sfyimby.org. Fun fact: some of you may have seen us canvassing at tech bus stops in SF.
- JimboOmega 10y agoI tried to read the bill, but don't know how the old text read, and am far from a development lawyer. Will this have the impacts Mr. Altman suggests they will? Specifically - significantly more development of multi unit dwellings?
- weisser 10y agoCannot believe I'm posting here but relevant: I have a room in my house in the Sunset opening next month. $900. It's month-to-month rent. Looking to house a founder/hacker/designer/etc currently struggling with SF rent (or someone who wants to move to SF but didn't think they could afford to live in SF) My email is in my bio.
- vhiremath4 10y agoThis is pretty chill of you man.
- weisser 10y agoI'm new to the Bay Area (moved here officially at the beginning of the year) so definitely interested in meeting more people / assembling a space for hackers/founders who want to live with others who are building things. May have an additional room opening in July as well for a similar price. I'd also like to host as many smart/driven folks as possible via couchsurfing.
- johansch 10y agoHello Erlich Bachman? Sorry, couldn't resist.
- weisser 10y agoha I had to Google that.
- phamilton 10y agoThat's cool and all, but sort of counter to the point being made. Subsidizing housing for those already on top doesn't really help with wealth inequality.
- weisser 10y agoCouldn't be further from my intent. I'm not looking to give housing to people who are "already on top" - those people would not want to live in an old house in the Sunset ;)
- phamilton 10y agoDesigners and hackers are pretty much on top, relative to the majority of the bay area inhabitants.
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- powera 10y ago"The bill is currently being debated in California's Congress as part of the upcoming annual budget" - it's called the Legislature. I mean, yes, I knew what he meant, but it doesn't give me confidence that he understands how to influence the political system.
- sama 10y agoSorry, fixed. Very busy day.
- noahlt 10y agoI think it was written to be accessible to a very broad audience.
- dragonwriter 10y agoThat's not really an excuse for the error. The general term for the thing in question is a legislature (which is also California's specific term.) Being wrong and calling it California's Congress doesn't make it more accessible, nor does calling state legislators "Congress members"just, it just makes it look like you don't know what you are talking about to anyone with even a passing familiarity with California government. And if you can't get that kind of basic thing right, why would people trust you on the substance, which takes a lot more understanding of government to interpret correctly.
- msane 10y agoIt's specifically about California. This level of government is the "Legislature" in all states. "State Legislature": - "State Senate" - "State Assembly"
- erispoe 10y agoNebraska has only chamber, but it's still called the Nebraska Legislature.
- foobarqux 10y agoApparently not all economists agree that increasing housing supply would make rents cheaper.
- sinak 10y agoSource?
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- TJTorola 10y agoI can't say for sure if this is what Foobarqux was referring to but this article https://news.ycombinator.com/item?id=11708873 https://news.ycombinator.com/item?id=11708873 came up a couple weeks ago which states > Tim Redmond of 48 Hills has argued that building more housing would make the problem [high housing costs] worse because the people who would move into it are likely to be wealthy newcomers whose demand for services will increase low-income employment, putting further pressure on older, lower-cost housing.
- foobarqux 10y agoYes, there are a number of similar arguments.
- dragonwriter 10y agoThe affordable housing requirements to qualify for the streamlined process should mitigate this effect, to the extent that it's real in the first place.
- justizin 10y agothis is a reduction of current affordable housing restrictions, and "affordable" / Below-Market Rate housing is currently awarded by a lottery which is harder to win than the actual lotto.
- sytelus 10y agoI highly doubt this bill would pass without severe modifications. The problem is that we have two groups in population: One who own houses and other who don't. First group don't want new houses and dilute value of their property. Politicans very well knows that making this group unhappy will end their careers. The second group is often in minority outside large cities. This is why its very hard to pass laws that would allow build new houses. It's great that SamA is taking interest in this. If enough valley billionaires can pay for lobbing then politicians can finally ignore their majority constituents and do the "right thing" :).
- natrius 10y agoThis is exactly what is happening. Those who own homes don't care what the consequences of preventing new housing nearby are. The consequence is income segregation, especially in areas zoned for single family homes. Single family zoning is inherently segregationist—you can only live in those neighborhoods if you can afford the most expensive type of housing. Our homeowner-run local governments feign concern about housing costs while it's literally illegal to build cheaper homes on less land in so many neighborhoods. To repeal segregation laws that are supported by the public, you're going to need a desegregation movement. Here's one: https://www.facebook.com/DesegregateATX/ https://www.facebook.com/DesegregateATX/
- imgabe 10y agoWould it really affect homeowners outside major cities that much? Nobody is going to rush out to the middle of nowhere to build apartment buildings.
- TelAviv_1 10y agoI own a house in Silicon Valley. And I'm all for building more.
- rconti 10y agoI'm a lowly wage slave homeowner, but I support this.
- realkitkat 10y ago
- akanet 10y agoPeople should actually call in! Over at the SFBARF, we have a thread of people reporting on how long it took to call their representatives: https://groups.google.com/forum/#!topic/sfbarentersfed/7G4KrGBAB_8 https://groups.google.com/forum/#!topic/sfbarentersfed/7G4Kr.... I managed to talk to someone at both of my representatives' offices within a minute, without any sort of delay. It's very easy, please do call in if you support this measure! Also, when you do call in, post here afterwards with how long it took you. A lot of people don't bother because they think it'll be a hassle, but it's about a 100 times easier than calling to book a restaurant reservation.
- jevinskie 10y agoThank you for this post. I am now very encouraged to contact my state legislators. I might even muster up the courage to call my federal representatives!
- studentrob 10y agohttp://tryvoices.com/ http://tryvoices.com/ - great app for calling representatives
- raldi 10y agoMy call to my assembly rep's office lasted 22 seconds; my call to my state senator took just 17.
- akanet 10y agoNice!
- branchless 10y agoWon't work. Imagine supply is met, housing is cheap. People then want to live there more. Eventually the point of equilibrium is restored which is that banks keep on creating fiat money until land prices reach a point where you can just about eat and afford the interest repayments. Land value tax is the answer for all those who don't simply want a quick in so they can get on the gravy train and actually want their kids to grow up in a society where wealth creation, not money creation, makes you richer.
- cylinder 10y agoYeah, it's always going to be a function of income in the area. People value housing enough to pay up to 50% of their income towards it in desirable cities. If more inventory is available more people will elect to live in SF and rents will find equilibrium at around the 50% of incomes
- branchless 10y agoIn large part because many people own/mortgage multiple homes because it's a one-way bet under the current system where all productivity gains flow to land.
- xyzzy_plugh 10y agoI tend to agree with you, but you've got it all wrong. People already want to live there like crazy. The demand keeps piling on and supply has not risen to meet it. I agree that land value tax is a big part of the problem, but new, high-density development is the only solution. And even then, housing won't be cheap. You just might be able to get a reasonable mortgage on a place built in the last 50 years.
- branchless 10y agoWe've seen what happens when you meet supply in a speculative bubble. The USA, Ireland, Portugal and Spain all had big supply and banks kept on lending into it because it costs them zero to create fiat money to rent out against land. Then you get a massive crash again. How would demand be if you force a big wedge of people who own/mortgaged more than one home to sell up? I think it would ease considerably. How many SF tech "entrepreneurs" are leveraged on housing? Flush 'em out with land value tax.
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- Tiktaalik 10y agoEven if this bill passes and substantially more multi-family housing starts getting built, do not be surprised if house prices remain extremely high. Vancouver doesn't have the same anti-development issues that SF has, and has been building multi-unit condos and apartments all over the region for decades. Multi-unit housing starts are about at its highest level ever. The average price of a detached house however is C$1.3 million (~US$998k thanks to the weak Canadian dollar) and rising. Low interest rates, "fear of missing out," incredible amounts of real estate speculation and a dash of foreign investment can go a long way. It's likely that the strongest benefits to increased supply in SF will manifest itself in lower rents and/or lower rate of rent increases.
- rconti 10y agoNobody's expecting housing prices to drop by half overnight. It's just the best thing we can do to limit future growth and make it SOMEWHAT affordable. (and, frankly, as a homeowner, I don't WANT my housing prices to drop in half overnight, but I DO what the region to be affordable to more people, and hence I support this even though it's against my own personal interest).
- pedalpete 10y agoVancouver is a bit of an anomaly, and much of the housing pricing there is being driven by foreign investment rather than occupation rates. I moved out of the sea-to-sky about 6 years ago (I'm from Whistler) but I seem to recall huge amounts of apartment vacancy in Yaletown and even Coal Harbour areas. From what I've been reading in Canadian news, it seems that many of these properties remain empty and are not in the rental pool as the act as a shell game for foreigners to move money our of other contries (mostly China, but others too I'm sure). SF is a very small city, even compared to Vancouver, and from what I understand, vacancies are almost nil.
- shalmanese 10y agoThe official vacancy rate is low but the unofficial vacancy rate is much higher. Many empty units are kept off the rental market due to how tilted the rights are in favor of tenants. 39 percent of the landlords surveyed in 2003 said they kept vacant apartments off the market because of regulations. [1] http://missionlocal.org/2015/06/a-closer-look-at-airbnbs-innocence-in-sfs-housing-shortage/ http://missionlocal.org/2015/06/a-closer-look-at-airbnbs-inn...
- johncbogil 10y agoI made an app that uses your GPS location to show you who your elected representatives are, lets you call, tweet, email them. TryVoices.com (iOS + Android)
- zump 10y agoThis guy has never worked a day in his life.
- aaronbrethorst 10y agotypo: "legislative aides," not "legislative aids"
- s3r3nity 10y agoThis is one of the top factors preventing me from moving back to the Bay Area. It's good to know there's at least SOME serious attempt at a solution (even if folks around here are mostly pessimistic.) It still surprises me that an industry that's all about connecting the world through the internet and allowing anyone to work with anyone else on anything says "yeah but you need to work in this small area of the country to do it." The armchair economist in me says that high housing prices in the Bay Area will cause a market "correction" of sorts with other cities exploding as tech sectors -- see NY, Boston, Chicago, Austin, Las Vegas -- as those cities can get away with much better housing for cheap, even if the opportunities aren't as plentiful (yet.) <conspiracy theory> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity ("you can have my funding if you live in SF" or "we don't allow remote workers"), as they all probably own houses in the area; the incentives for them would be to have housing prices keep rising, NOT fall, as they would lose significant real-estate equity. </conspiracy theory>
- brc 10y agoIt's a good theory but I think the investors are pretty straight-up about wanting their companies on a short leash. The key will be those other cities/hubs having their own successes, bringing in the capital and expertise to nurture new talent. It's likely that the number of successful hubs that can be supported is pretty low. I happen to believe that the amount of (awful word) synergy needed to flip a few percent of startups from fail/borderline to success is pretty high. In other words, all those know-a-guy-who-can-help connections have to have a high concentration before it starts to pay off. But then mine is just a theory as well and has a high chance of being wrong.
- pm90 10y agoIts true but its not limited to SF/Bay Area. I had the impression the other day that city-specific industries are much like Universities; so you see that MIT, Berkeley etc. that had CS dept's early on now have the best programs in CS. So it is with cities: the tech industry was born in Silicon Valley so of course there are a lot of Software/EE engineers out there.
- honkhonkpants 10y agoWhen I look at this bill I have to wonder if it will really help. Outside of the city of San Francisco itself, almost nothing is being built, because the construction costs are too high. Not the permitting and planning costs, but the actual guys-with-hammers-and-saws costs. For example in Oakland there are number of properties that are fully entitled to build and have been sitting that way for years. So how does Brown's bill help?
- arebop 10y agoIf construction costs explain the high price of bay area housing, how is it possible that houses in the midwest are produced at less than 1/5 the price? Are the Kansas guys with hammers really making 1/5 the wages of the California hammer swingers?
- woah 10y agoMaybe the California hammer swingers have to pay higher rent.
- honkhonkpants 10y agoConstruction costs do not explain housing prices, but construction costs do explain which developments are undertaken and which are not. Consider that construction costs are basically the same in Oakland and San Francisco, but prices are higher in San Francisco, it makes little sense to develop in Oakland. The profits are simply not there.
- mkhpalm 10y agoIts almost 1/3rd last I checked. But thats not everything you pay a difference on when you build something. The high cost of living and many other things in the bay area factor into everything.
- bduerst 10y agoHave you really been looking outside of SF? Redwood city, about 30-40 min south of SF, has been booming with building growth. Developers are building, but can't get approvals with local governments fast enough.
- sakopov 10y agoIsn't housing just a painful side effect of an astronomical influx of people moving to one city? IMHO, the problem is the tech industry being too centralized.
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- iamleppert 10y agoI'm currently renting out my upstairs walk-in closet. I live in Potrero, near 26th & Rhode Island. The closet is pretty big and can easily fit a double bed and dresser. $900 + utilities, but we might be able to work something out. edit: this is a serious post
- blantonl 10y agoThis boggles this mind. And is unsustainable.
- iamleppert 10y agoHow is it unsustainable? I have a room for rent, that's more than a lot of people.
- DrScump 10y agoSomebody take him up on this, stay 32 days, and then stop paying. It will take months to evict you, and you can stay rent-free in the meantime.
- carapace 10y agoI'm in favor of how "building in the Bay Area is approved by discretion", I call it having some power over what gets built. "Democracy" y'know? I'm from SF. I grew up here. I'm also a computer nerd. To me, the tech "industry" has been ruining the city I love since the Dot-Com boom. To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed. The saddest part is, this city kinda sucks. It's not even a good place to locate a business. The city gov is soft-corrupt. The weather NEVER gets better. We're on a damned peninsula. If I were starting a company I'd go to Davis CA! People aren't coming here because it makes sense. This is just where the game is being played. They are drawn here like aspiring actors are drawn to Hollywood, but the prospects are just as glamorous and illusory. A few will strike gold, the rest will toil and vanish. This is a town for freaks and weirdos. If you don't believe me, visit Civic Center. ;-) It is said "The people who are too strange for the rest of the country move to California, and the people to weird for California move to San Francisco." (If you are still too weird you go to Berkeley.) What concerns me the most is that the newcomers might lack the environmental commitment, and tip the scales from valuing conservation to valuing rampant development. San Francisco is the largist metropolitan area with the most wilderness/open space around it in the world. The last thing we need is more lux condos and freeways. I'm going to be calling those numbers, you can bet, but it will be to urge "con" on this abrogation of the weirdo-freaks ability to stonewall development. This is a good thing. Y'all "young gods" will just have to figure out some other place to hatch the singularity. Move away. Build a floating "Seastead". Just please stop trying to cram a million more people into the Bay Area. It's not actually a good idea! Also, I hear Portland is nice.
- bobdole1234 10y agoPortland is ok, but I'd rather price you out of the market.
- studentrob 10y agoHonest question, are your local friends mostly software engineers or do they work in other positions? Edit: cool I see the down votes. Is this an unfriendly question? Just wondering what the diversity is like in SF and if people care
- abalone 10y agoThis is a contentious issue and in case you are not from SF and wondering why Y Combinator is taking a stand on it, it has to do with the politics of the tech boom. The plain truth is that the housing crisis is a combination of too much sudden demand fueled by the tech boom and too little supply. The tech community likes to deflect criticism of their sudden influx of relatively high-income workers and say "don't blame us, it's a supply problem." This bill focuses mainly on juicing supply by removing restrictions on builders. But part of that is weakening the affordable housing restrictions on them.[1] The problem with that is, increasing market-rate housing alone may not make an appreciable difference in prices where it matters most from a macroeconomic perspective: for low-to-mid income residents. Cities need teachers, service industry workers, artists, etc. Already the restaurant industry is facing a major worker shortage.[2] Let's not even get into the cultural effects of long-term residents getting displaced en masse. So if market-rate supply alone can't solve this, then you need affordable housing regulations to set aside spots. Sam has offered a rather simplistic statement on the law of supply and demand on this. But that masks the real question: whether weakening affordable housing demands as this bill does is a smart move. Will juicing mostly market-rate housing be enough? [1] http://48hills.org/2016/05/22/a-terrible-housing-bill-looms-in-sacramento/ http://48hills.org/2016/05/22/a-terrible-housing-bill-looms-... [2] http://www.bizjournals.com/sanfrancisco/print-edition/2016/02/12/restaurant-labor-shortage-sf-business-costs-bubble.html http://www.bizjournals.com/sanfrancisco/print-edition/2016/0...
- pj_mukh 10y agoHow does the bill weaken affordable housing demands? And doesn't building more "luxury" condo open more affordable housing stock. This is such a confusing issue, everyone seems to be making sense.
- abalone 10y agoMy understanding is the bill has weaker requirements (as little as 5%) on affordable housing than alternatives. Think of cities and negotiating with developers over affordability, and this is a more developer-friendly offer.
- joe_the_user 10y ago"His bill would make it so multi-family buildings are automatically approved by right as long as they comply with local zoning, and have 5-20% affordable units--the percentage depending on location and subsidy offered." The problem here is that this leaving height limits in place and could create a rush to impose even more stringent zoning restrictions. What would be necessary would be legislation that pre-empts both local zoning and other mechanism for a relatively small area to allow the construction of a few high rises without the destruction of existing housing stock. The ideal of Nimbys seems to be no development and the ideal of developers seems to be building a limited number of ultra-high-priced units in the super desirable places like the Mission. The sane approach would be to allow a series of high rises in Potrero Hill and along the Bay. This approach sounds like it would simply push-through development according to the developer ideal, which would serve the Nimbys right but also destroy whatever remains of the character of the mission.
- mickrussom 10y agoToo little too late. Middle class is gone.
- la6470 10y agoThe fact is that the valley is not the only place with high real estate prices . Hosing prices are high in places like Hong Kong or New York or for that matter even Mumbai in India. And those places have much more apartments than the valley has ! High real estate price in the valley is not an exception it is just a reflection of what happens when people from all over migrate to one place for a livelihood.
- tomjacobs 10y ago12,000 people moved to San Francisco in 2014. 4,000 homes were built. What's the problem? https://medium.com/@TomPJacobs/what-housing-crisis-3c0568a5dd44#.w021ouwnc https://medium.com/@TomPJacobs/what-housing-crisis-3c0568a5d...
- epicureanideal 10y agoThis is good, except that I oppose subsidies for "below market rate housing". If workers are needed in an area, businesses will eventually need to pay them more. Subsidizing their housing is a backdoor subsidy to the business owners who don't need to pay their workers enough to deal with living in the Bay Area.
- abalone 10y agoThat's not an unreasonable perspective but you didn't go far enough. If business owners were to pay workers enough to live at market rates in San Francisco, what would the effect on prices be? How much would a restaurant meal cost? Then, once prices resettle at $50/entree, how appealing a city would SF be? Note: Paul Graham recently spoke on how important affordable restaurants are to creating startup hubs![1] That's macroeconomics for you. [1] http://paulgraham.com/pgh.html http://paulgraham.com/pgh.html
- bbcbasic 10y ago> If workers are needed in an area, businesses will eventually need to pay them more. To me this is a sensible solution. Let the city start to suck a bit (expensive or closed restaurants for example) and then other cities can share the burden of being go-to places to live. > Subsidizing their housing is a backdoor subsidy to the business owners who don't need to pay their workers enough to deal with living in the Bay Area. Not to mention subsidizing the property investors, and driving up demand.
- jevinskie 10y agoThere is so much pressure, career-wise, to move to either the Bay Area, the West Coast in general, or a major urban hub. I honestly like living in a semi-rural part of the Midwest. I like seeing fields and forests while driving to work. If I want to get out to some wilderness, I can do so in 15-30 minutes. I travel in a car that, I feel, offers me freedom. To boot, I have a nice, reserved spot in the garage below my apartment. I live downtown and I still feel great freedom/"space". I cant imagine being able to do anything like this in a place like SF or even Chicago. My cost of living is very cheap. My commute is 15 minutes. I live close to my family. Why should I want to leave?
- morgante 10y ago> My cost of living is very cheap. My commute is 15 minutes. I live close to my family. Why should I want to leave? You shouldn't. If you have a good job in such a location and are happy with the opportunities available, enjoy! The problem is that markets naturally congregate in distinct locations so anyone who is looking to advance their career needs to make their way to a hub.
- jevinskie 10y agoI am enjoying my time here. :) I just am a bit anxious because my speciality means there is just one player in the area. Outside of that speciality, there are other attractive, but not my calling, opportunities. This also complicates my conundrum about whether to continue to rent vs purchasing some property to start some real roots.
- sseal 10y agoAnd now HN has started to push a political agenda...
- Apocryphon 10y agoIt's about time. Tech companies, both startup incubators and the big software megacorps, should have been lobbying Bay Area gov'ts for more housing and transport infrastructure for the last five years. What's the point of all that wealth and power if they're not going to use it to enrich their local communities?
- 1945 10y agoCan we scale the schools, transportation, etc. to support this legislature? If so, I'm all for it. But the way things stand currently, it's already pushed to the limits.
- gorkemyurt 10y agoturns out its easier/cheaper to do all these things, if people actually live in a dense city rather than spread out suburbs
- 1945 10y agoThat's not the current environment.
- blazespin 10y agoGreat, I'm sure the 101 will just be a blast to drive now! Maybe they should solve the transportation grid lock first..
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- pfarnsworth 10y agoCompanies that extract advertising and other revenue from around the world, like Google, Facebook, LinkedIn, etc, should create job centers outside of the Bay Area. This is the only way that house prices will moderate, is if these globally significant companies spread their distribution of money around the country/world. There's too much concentration of money flowing into the Bay Area in terms of revenues, and that is creating this hyper-inflation that we see here. My house value when up by 60% in 2 years. I can sell it for almost $2 million if I wanted to, which I don't. I keep thinking it's not sustainable, until I hear the offers that people get from these companies. Google offered one of my friend $160k + 400k in RSUs, and Facebook offered another one $180k and $500k in RSUs. That's well over $1M over 4 years for both. Of course salaries like this will cause hyper-inflation in this area.
- muzz 10y agoIf it made economic sense for them to create job centers outside of the Bay Area, they would. This gives one an idea of just how great the economic advantage of locating in the Bay Area is.
- rajacombinator 10y agoA benevolent dictator could bulldoze easily upwards of 50% of housing in areas like the sunset, entire peninsula, and Oakland, and replace it with high quality, high density condos that would increase quality of living by at least 10x, while reducing costs by 50%. But, alas, we got kleptocrats.
- pfarnsworth 10y agoWhy only 50%? Why not 100%?
- muzz 10y agoYes, property rights are a pesky thing
- youngButEager 10y agoSome landlords (such as our firm) are liquidating our rental assets due to the increasing risk of 1979-1995 properties being pulled into rent control regimes. Cities like San Jose, Richmond, San Mateo, just this year either debated increasing or actually increased control over rental properties. The population is rising; the supply of rental units is too low; cities want to stop landlords from raising prices; so they are just this year increasing rent control (San Jose just did this). Anything built before 1995 (that's a California State statute) can be (will be) rent controlled (unless population drops dramatically in cities near the coast). The State passed a law (the "Costa-Hawkins Rental Housing Act") that prevents California cities from pulling in any property built after 1995 into a rent control regime. But Costa-Hawkins does not protect rental properties built between 1979-1995. Right now, properties built before 1979 are rent-controlled in California cities (San Francisco, San Jose, etc.) But at the drop of a gavel, a municipality can pull in all properties built between 1979 and 1995 into rent control -- the Costa-Hawkins is the only thing stopping municipalities at the year 1995 (they'd like to be able to rent control every property necessary to accommodate their increasing population over time). The citizens of a municipality in Southern California -- Santa Monica I believe -- narrowly defeated a rent control change designed to extend rent control to apartments built up to 1995. That does not help supply. Jerry Brown trying to 'fast track' development does not remove the risk that newer properties will be rent controlled in the future. A new developer sees partial-confiscation of their asset being a possibility, because the California legislature could modify Costa-Hawkins and remove 1995 as the limit year for rent control. Once a city/state has demonstrated a commitment to seizure of: - a restaurant's right to increase prices - a dentist's right to increase prices - a doctor's right to increase prices - a private school's right to increase prices - a rental property's right to increase prices Those restrictions lead to: - fewer restaurants - fewer dentists - fewer doctors - fewer private schools - fewer apartments Businesses must have freedom to operate or no one will start businesses (supply of businesses will drop). Once a city/state has demonstrated a commitment to partial seizure of personal assets (restaurant, dental practice, apartment property, etc.) of a person, or a business, there is a very strong likelihood that 'seizure/state control' tendency will never stop. So the governor of California can wave his hands all he wants with this kind of "fast track" proposal to building real estate assets in California. Until the state makes it clear that they will stop the partial or "legislative seizure" of rental properties, very few developers are stupid enough to risk a change/nullification of Costa-Hawkins.
- WWKong 10y agoHow does this benefit/harm the folks who already recently bought a house at exorbitant price, burning all their savings, calculating their returns based on how bay area prices have behaved over the last couple decades? Will they be screwed?
- DrScump 10y agoWhen this bubble bursts, absolutely.
- brudgers 10y agoI suspect this might have an impact. The timeline though will be ten to twenty years, optimistically. 1. Eligible property will have to change hands and land in the right hands to make the projects happen. That's the nature of redevelopment, someone has to be willing to knock down a profitable building in hopes of building something more profitable. 2. The rate at which property will change hands will correlate to the legal certainty it can be redeveloped. Until new legislation successfully survives court challenges, the uncertainty will swirl around its "by right" provisions. 3. The trades base will affect the cost of construction and hence the viability of projects. Imagine there is some number /n/ of plumbers in the Bay area. At some threshold amount of construction, these plumbers are all in demand, and so the price of plumbing rises. This happens across several trades and formerly viable pro forma's pencil out poorly with the new cost structure. 4. People sitting on the land now are already in a wait and see mode. As land becomes more desirable to developers, prices go up. Rising prices attract speculators hoping to sell on. The rate at which developable land flows to competent developers remains moderate. 5. Five years from identification of a feasible redevelopment site for multifamily housing to full occupancy would be pretty quick even in a relatively development friendly culture. Research, options, due diligence, financing, entitlement, design, bidding, construction and leasing...any one [or several] can run out over a year. Throw in the normal rate economic and financial cycling and the sorts of effects experience indicates these have on the construction and housing sectors, and even in the next ten years, there will likely be a period where half of all projects in the pipeline die. There's no silver bullet.
- jeffdavis 10y agoI've wondered for a while weather housing exclusivity can improve economies in some respects. Do the high housing costs create a strong selection bias to bring in only the most determined to take part in the SV culture? Obviously, lower housing costs would cause a higher absolute density of people. But maybe the presence of people with other unrelated interests would somehow dampen the tech economy, even if the absolute density of tech people remained the same. Let me be clear that I support more residential construction on the peninsula, so I am not saying this as part of a weird socio-political agenda. It's purely out of curiosity.
- muzz 10y agoI've wondered this myself too. It makes sense that the high housing costs do cause a self-selection for the most determined.
- Xcelerate 10y agoYeah, I've also wondered this. SF is easily the best place on earth for technology, but the price to access it is steep. My friends poke fun at me for wanting to move to an area where you pay $3,000 a month to live in a box. "Isn't Atlanta almost as good? You can get a whole house for that price!"
- eru 10y agoThe long term solution was proposed more than a century ago ironically enough by an economist from San Francisco. http://qz.com/169767/the-century-old-solution-to-end-san-franciscos-class-warfare/ http://qz.com/169767/the-century-old-solution-to-end-san-fra...
- pjc50 10y agoThe most likely "correction" of this is going to be the next big earthquake. :(
- puppetmaster3 10y agoDoes anyone see a problem w/: 'legislation that would allow a lot more housing to be built'? I stopped reading after that, as I was satisfied as to what the problem and solution is.
- Pica_soO 10y agoThis being California- when can we expect housing on the ocean floor of the bay?
- spoonie 10y agoIt's probably a marginal issue, but would decreased living costs reduce salaries? Presumably if living costs were lower companies could pay less while still offering a higher net-income than other areas. I guess what I'm asking is how connected are the high salaries in the bay area with the cost or living there?
- simonebrunozzi 10y agoThis is one of the worst piece of advice, IMHO. Here's why. 1) You can't add housing without adding proper infrastructure (transportation, sewage, power, etc). Adding infrastructure is expensive and takes a very long time. There will be no budget for proper infrastructure increase if the population keeps rising - remember that hundreds of thousands of people work for companies that offshore their taxes. 2) Most people need financial advice on what real estate investment means. If there's another bubble burst, a lot of average income people will have their life ruined. They would have bought an apartment for, say, $1M, with 200k down, only to see its value decrease by 30-35%, essentially wiping out their savings and forcing them into unsustainable debt. 3) I wish there was an easy way to fix the housing problem in SF. There isn't. Let's be realistic about it. Please don't downvote me just because you disagree with me. Instead, tell me why.
- cynicalkane 10y ago> Please don't downvote me just because you disagree with me. Instead, tell me why. I'll do both, because you are acting like an informed person but wrong about very basic things. > 1) You can't add housing without adding proper infrastructure (transportation, sewage, power, etc). Adding infrastructure is expensive and takes a very long time. There will be no budget for proper infrastructure increase if the population keeps rising - remember that hundreds of thousands of people work for companies that offshore their taxes. One, you don't "offshore taxes", you offshore profits. Two, corporations don't pay local taxes based on profits, so I'm not sure what you're on about. Tech workers? They pay quite a lot in local taxes. > 2) Most people need financial advice on what real estate investment means. If there's another bubble burst, a lot of average income people will have their life ruined. They would have bought an apartment for, say, $1M, with 200k down, only to see its value decrease by 30-35%, essentially wiping out their savings and forcing them into unsustainable debt. It is not the purpose of an economy to coddle wealthy people with artificial market restrictions, so I don't have any sympathy here. Also, mortgage debt isn't like college debt or credit card debt; it's secured by your house alone. Banks can't go after you for it. All they can do is give you a bad credit score for seven years. Which is bad, but I'm sure people who can afford million-dollar homes can afford to face the consequences of their actions. > 3) I wish there was an easy way to fix the housing problem in SF. There isn't. Let's be realistic about it. This isn't saying anything.
- tryitnow 10y agoI love this, but why does he list just those specific members?