5 ms·

This looks like a poorly written sponsored article. More housing will boom real estate market, and only for short term. I don't believe new housing will help a

by ctulek 10y ago

This looks like a poorly written sponsored article. More housing will boom real estate market, and only for short term. I don't believe new housing will help average Joe to have better prices. To the contrary, it will make some real estate investors richer.

selectodude 10y ago
So you think the demand for housing in San Francisco is literally infinite?
- PaulHoule 10y ago
  No, but new construction is never cheap. If you want affordable housing or business space you'd need to invent a way to make more old buildings.
  - dublinben 10y ago
    The way to make more old buildings is to build more new buildings, ten years ago. We're just playing catch-up.
  - hx87 10y ago
    Construction isn't cheap, but making it more expensive or impossible certainly doesn't help things.
- Kinnard 10y ago
  Perhaps OP never took economics and doesn't understand supply-demand dynamics? Perhaps OP thinks housing doesn't behave like a normal good or perhaps he think there are some other governing dynamics than the ones people typically learn?
  - mrec 10y ago
    > Perhaps OP thinks housing doesn't behave like a normal good Unfortunately, to some extent it doesn't. House prices go up, especially in a terminally low-interest rate environment, and lots of people with (unearned) equity from that increase pile in buying more as speculative investments. You'd hope that government would step in to break such an obvious vicious circle, but... no, it's no use, I can't keep a straight face. (Not defending OP's specific claim. Also speaking from a London perspective; YMMV.)
    - selectodude 10y ago
      London has the same issues as San Francisco, New York and Vancouver, where housing prices are skyrocketing due to it being almost impossible to build new construction, along with foreign money flowing into real estate in those cities. As such, all new construction is hyper-luxury because those are the only buildings that are worth building in this political climate of NIMBY-ism. The new construction going up was never intended to be purchased by people who need a 30-year fixed to pay for it. If new construction was going up that was priced in a normal bracket, affordable for mere normal people who had 150k to put down for a mortgage, I would consider that a massive improvement.
      - mrec 10y ago
        There's actually quite a lot of new construction in London, to the extent that some areas have a serious glut with many many years' worth of supply sitting on the market not selling. The problem here isn't just that what's being built is unaffordable - although it definitely is that - but that it's not what inhabitants want. It's being built to appeal to mostly Asian investors who like shiny high-rise newbuild and will probably never even see their purchases, much less live in them, so you end up with minuscule unit sizes, poor build quality, overheating, insufficient elevators and boilers, all the obvious corners to cut. Not sure what you mean by "mere normal people who had 150k to put down for a mortgage" - with median London incomes somewhere around £30k, needing a £150k deposit doesn't sound especially normal-friendly. If you meant total price, yes, now you're talking.
        selectodude 10y ago
        >Not sure what you mean by "mere normal people who had 150k to put down for a mortgage" - with median London incomes somewhere around £30k, needing a £150k deposit doesn't sound especially normal-friendly. If you meant total price, yes, now you're talking. I was being facetious, $750,000 is a totally insane cost for a condo unit, but even that would be far more affordable than what's been going up in San Francisco over the last 10 years.
    - ktRolster 10y ago
  - geebee 10y ago
    Not the OP, but I actually think there's a chance greater density might, long term, increase housing costs in SF, though this is kind of an artifact of borders. SF isn't taking full advantage of the business opportunity that greater housing density presents. It could be that more density, especially if handled well (better public transportation, proper infrastructure) would lead to even more economic activity, more high paying jobs, and so forth. Keep in mind, the cities that are more expensive than SF tend to be denser as well. People actually do like dense neighborhoods under the right circumstances - dense parts of Brooklyn and Manhattan are more expensive than SF, and some of SF's dense neighborhoods are more expensive than the low density ones (russian or nob hill vs excelsior or outer sunset). I figure that the desirability of higher density housing with good public transportation, combined by the increase in economic activity from greater density and a larger population... yeah, it could happen. Not saying it would, but I don't think it's all that outlandish a thesis. Also, this is partly a trick of borders, since lower cost housing would probably be built outside SF's proper, so taken as a region, costs could drop even thought they went up in SF. Kind of like Manhattan vs New York generally.
- st3v3r 10y ago
  Depends on what you're building. If you're concentrating on high end, luxury apartments, then no, you're not gonna do much for the price of housing. To believe otherwise is to believe in trickle down economics, which is well known to be a failure. Nor can you really do it by concentrating purely on low end housing, as that will probably fill up faster than it can be built.

by ctulek 10y ago

selectodude 10y ago

So you think the demand for housing in San Francisco is literally infinite?

PaulHoule 10y ago
No, but new construction is never cheap. If you want affordable housing or business space you'd need to invent a way to make more old buildings.
- dublinben 10y ago
  The way to make more old buildings is to build more new buildings, ten years ago. We're just playing catch-up.
- hx87 10y ago
  Construction isn't cheap, but making it more expensive or impossible certainly doesn't help things.
Kinnard 10y ago
Perhaps OP never took economics and doesn't understand supply-demand dynamics? Perhaps OP thinks housing doesn't behave like a normal good or perhaps he think there are some other governing dynamics than the ones people typically learn?
- mrec 10y ago
  > Perhaps OP thinks housing doesn't behave like a normal good Unfortunately, to some extent it doesn't. House prices go up, especially in a terminally low-interest rate environment, and lots of people with (unearned) equity from that increase pile in buying more as speculative investments. You'd hope that government would step in to break such an obvious vicious circle, but... no, it's no use, I can't keep a straight face. (Not defending OP's specific claim. Also speaking from a London perspective; YMMV.)
  - selectodude 10y ago
    London has the same issues as San Francisco, New York and Vancouver, where housing prices are skyrocketing due to it being almost impossible to build new construction, along with foreign money flowing into real estate in those cities. As such, all new construction is hyper-luxury because those are the only buildings that are worth building in this political climate of NIMBY-ism. The new construction going up was never intended to be purchased by people who need a 30-year fixed to pay for it. If new construction was going up that was priced in a normal bracket, affordable for mere normal people who had 150k to put down for a mortgage, I would consider that a massive improvement.
    - mrec 10y ago
      There's actually quite a lot of new construction in London, to the extent that some areas have a serious glut with many many years' worth of supply sitting on the market not selling. The problem here isn't just that what's being built is unaffordable - although it definitely is that - but that it's not what inhabitants want. It's being built to appeal to mostly Asian investors who like shiny high-rise newbuild and will probably never even see their purchases, much less live in them, so you end up with minuscule unit sizes, poor build quality, overheating, insufficient elevators and boilers, all the obvious corners to cut. Not sure what you mean by "mere normal people who had 150k to put down for a mortgage" - with median London incomes somewhere around £30k, needing a £150k deposit doesn't sound especially normal-friendly. If you meant total price, yes, now you're talking.
      - selectodude 10y ago
        >Not sure what you mean by "mere normal people who had 150k to put down for a mortgage" - with median London incomes somewhere around £30k, needing a £150k deposit doesn't sound especially normal-friendly. If you meant total price, yes, now you're talking. I was being facetious, $750,000 is a totally insane cost for a condo unit, but even that would be far more affordable than what's been going up in San Francisco over the last 10 years.
  - ktRolster 10y ago
- geebee 10y ago
  Not the OP, but I actually think there's a chance greater density might, long term, increase housing costs in SF, though this is kind of an artifact of borders. SF isn't taking full advantage of the business opportunity that greater housing density presents. It could be that more density, especially if handled well (better public transportation, proper infrastructure) would lead to even more economic activity, more high paying jobs, and so forth. Keep in mind, the cities that are more expensive than SF tend to be denser as well. People actually do like dense neighborhoods under the right circumstances - dense parts of Brooklyn and Manhattan are more expensive than SF, and some of SF's dense neighborhoods are more expensive than the low density ones (russian or nob hill vs excelsior or outer sunset). I figure that the desirability of higher density housing with good public transportation, combined by the increase in economic activity from greater density and a larger population... yeah, it could happen. Not saying it would, but I don't think it's all that outlandish a thesis. Also, this is partly a trick of borders, since lower cost housing would probably be built outside SF's proper, so taken as a region, costs could drop even thought they went up in SF. Kind of like Manhattan vs New York generally.
st3v3r 10y ago
Depends on what you're building. If you're concentrating on high end, luxury apartments, then no, you're not gonna do much for the price of housing. To believe otherwise is to believe in trickle down economics, which is well known to be a failure. Nor can you really do it by concentrating purely on low end housing, as that will probably fill up faster than it can be built.