4 ms·

There is no free market in housing. Supply is very tightly constrained by the city via a system of very stringent zoning (3 stories max most of the city, only 3

There is no free market in housing. Supply is very tightly constrained by the city via a system of very stringent zoning (3 stories max most of the city, only 3% of the city is even zone for multifamily housing) and taxes. What you see happening in the Bay Area isn't the result of the laws of supply and demand, it's the result of the laws passed by city councils. There's no developer in the world who wouldn't love to build more housing in one of the most booming places in the country. They're not not doing it because it doesn't make financial sense or because there's no demand there. They're not doing it because the housing market in the Bay Area has been regulated to death.

youngButEager 10y ago
It does not matter, the 'supply being constrained' point. Let's say that Palo Alto allows high-density housing. Will that solve the housing supply issue? No. You missed the point about the east coast having been settled first in the USA. And the point about LA. Both of those regions allow high density housing. Would Palo Alto housing drop in price? NO. The only way to solve Palo Alto's housing problem is -- MAKE IT NO LONGER A DESTINATION. Turn it into a non-destination locale, like -- say -- Stockton. Or Vallejo. Or Compton. Or Watts. Or Detroit. The desire to live in 'destination cities' like back east, or LA, or Palo Alto is UNQUENCHABLE. It doesn't matter how much supply there is -- IT'S A DESTINATION. People shun Stockton -- at least compared to Palo Alto. Stockton has cheap housing. Many fewer people want to live there. If Palo Alto could suddenly pop up a few skyscrapers of apartments and condos, that supply would be taken up quickly. The same is true for San Francisco. The desire to live in a destination city is like the desire to date a hot young gal. Unquenchable. If one hot young gal moved to Man Jose, the sausage fest of the South Bay, and ran a short TV ad, "I'm ready for dates and I won't be picky, just be nice" guys would come from outside San Jose to get access to that 'destination.' Stockton is a plain, unattractive object of desire. Palo Alto is a gorgeous, extremely attractive object of desire. Adding more housing to beautiful Palo Alto will increase the number of eligible suitors dramatically -- and the added supply will not save this crybaby lawyer at all. >"There is no free market in housing." Not true. Go visit large geographic areas that are not 'destination cities' like Stockton; Modesto; Vallejo. The entire state of Wyoming has a total population of only 564,000 people. Wyoming has an extremely free market in housing. And there are free markets in housing in Destination Cities too. The City leadership is smart enough to know that a 'Destination City' has an unquenchable demand and faces a choice of: - median home price of $2,700,000 with current population - median home price of $2,700,000 with (current population + all those new arrivals who will quickly buy any new housing) City leadership knows that adding supply will NOT lower housing prices. It will just make Palo Alto more crowded and grouchy.
- bufordsharkley 10y ago
  > If Palo Alto could suddenly pop up a few skyscrapers of apartments and condos, that supply would be taken up quickly. The same is true for San Francisco. This is a sign that a few skyscrapers of apartments and condos is not enough to match demand. But (there's a little law out there called "Supply and Demand", if I'm remembering right), there's a correct amount to build that would. Saying that the necessary supply to meet demand is infinite is quite silly. > >"There is no free market in housing." Not true. Go visit large geographic areas that are not 'destination cities' like Stockton; Modesto; Vallejo. What you're seeing here is that we have land-use policy that allows us to sanely build cities up until a point, whereupon speculation over land value will make new development economically and politically infeasible. Nobody wants the extra land in Stockton very much, but everybody wants Palo Alto land. The problem is that the land is held for very little cost by people who don't want to actually use it. (The market is giving a very strong signal, via price, that is should be developed for housing with much higher density.)
  - youngButEager 10y ago
    You underestimate things. Is Tokyo a destination city? Yes. Total urban population? 38 million people. I don't think you realize how attractive a beautiful city really is to the people of our planet. While I'd agree that 38 million people is not 'infinite' -- it's a lot of people. Palo Alto is at 66,000 people right now. Did Tokyo's decision to allow high density housing solve their 'housing is too expensive in Tokyo' problem? NO. Tokyo is one of the most expensive cities on the planet to reside in. Again, adding supply to a Destination City will NOT bring down housing costs. The crybaby lawyer failed to factor in the difference between Palo Alto and Stockton. And it will be a big surprise to her -- Santa Cruz is very pricey. And won't be getting any cheaper.
    - bufordsharkley 10y ago
      Will it reach 38 million people in Palo Alto? Maybe, maybe not. (My money is on "not.") In any case, the solution is to build. I don't see a good argument in your posts that it's preferable to stop building.

youngButEager 10y ago

It does not matter, the 'supply being constrained' point. Let's say that Palo Alto allows high-density housing. Will that solve the housing supply issue? No. You missed the point about the east coast having been settled first in the USA. And the point about LA. Both of those regions allow high density housing. Would Palo Alto housing drop in price? NO. The only way to solve Palo Alto's housing problem is -- MAKE IT NO LONGER A DESTINATION. Turn it into a non-destination locale, like -- say -- Stockton. Or Vallejo. Or Compton. Or Watts. Or Detroit. The desire to live in 'destination cities' like back east, or LA, or Palo Alto is UNQUENCHABLE. It doesn't matter how much supply there is -- IT'S A DESTINATION. People shun Stockton -- at least compared to Palo Alto. Stockton has cheap housing. Many fewer people want to live there. If Palo Alto could suddenly pop up a few skyscrapers of apartments and condos, that supply would be taken up quickly. The same is true for San Francisco. The desire to live in a destination city is like the desire to date a hot young gal. Unquenchable. If one hot young gal moved to Man Jose, the sausage fest of the South Bay, and ran a short TV ad, "I'm ready for dates and I won't be picky, just be nice" guys would come from outside San Jose to get access to that 'destination.' Stockton is a plain, unattractive object of desire. Palo Alto is a gorgeous, extremely attractive object of desire. Adding more housing to beautiful Palo Alto will increase the number of eligible suitors dramatically -- and the added supply will not save this crybaby lawyer at all. >"There is no free market in housing." Not true. Go visit large geographic areas that are not 'destination cities' like Stockton; Modesto; Vallejo. The entire state of Wyoming has a total population of only 564,000 people. Wyoming has an extremely free market in housing. And there are free markets in housing in Destination Cities too. The City leadership is smart enough to know that a 'Destination City' has an unquenchable demand and faces a choice of: - median home price of $2,700,000 with current population - median home price of $2,700,000 with (current population + all those new arrivals who will quickly buy any new housing) City leadership knows that adding supply will NOT lower housing prices. It will just make Palo Alto more crowded and grouchy.

bufordsharkley 10y ago
> If Palo Alto could suddenly pop up a few skyscrapers of apartments and condos, that supply would be taken up quickly. The same is true for San Francisco. This is a sign that a few skyscrapers of apartments and condos is not enough to match demand. But (there's a little law out there called "Supply and Demand", if I'm remembering right), there's a correct amount to build that would. Saying that the necessary supply to meet demand is infinite is quite silly. > >"There is no free market in housing." Not true. Go visit large geographic areas that are not 'destination cities' like Stockton; Modesto; Vallejo. What you're seeing here is that we have land-use policy that allows us to sanely build cities up until a point, whereupon speculation over land value will make new development economically and politically infeasible. Nobody wants the extra land in Stockton very much, but everybody wants Palo Alto land. The problem is that the land is held for very little cost by people who don't want to actually use it. (The market is giving a very strong signal, via price, that is should be developed for housing with much higher density.)
- youngButEager 10y ago
  You underestimate things. Is Tokyo a destination city? Yes. Total urban population? 38 million people. I don't think you realize how attractive a beautiful city really is to the people of our planet. While I'd agree that 38 million people is not 'infinite' -- it's a lot of people. Palo Alto is at 66,000 people right now. Did Tokyo's decision to allow high density housing solve their 'housing is too expensive in Tokyo' problem? NO. Tokyo is one of the most expensive cities on the planet to reside in. Again, adding supply to a Destination City will NOT bring down housing costs. The crybaby lawyer failed to factor in the difference between Palo Alto and Stockton. And it will be a big surprise to her -- Santa Cruz is very pricey. And won't be getting any cheaper.
  - bufordsharkley 10y ago
    Will it reach 38 million people in Palo Alto? Maybe, maybe not. (My money is on "not.") In any case, the solution is to build. I don't see a good argument in your posts that it's preferable to stop building.