5 ms·

I know nothing about the San Francisco housing market apart from what I've heard in discussions here on HN. The received wisdom here seemed to be that powerful

by zazen 10y ago

I know nothing about the San Francisco housing market apart from what I've heard in discussions here on HN. The received wisdom here seemed to be that powerful NIMBY lobbies in SF were preventing needed development and causing the sky-high rent. But this article is talking about an "historic construction boom". Did something change regarding development in SF? Or was the NIMBY effect always a bit over-stated? Anyone care to speculate?

rkayg 10y ago
The NIMBYs have had a very strong effect in that they significantly delayed the pipeline of development. Ultimately, the demand for housing had to be met, but it required extra years of community meetings and fights with the NIMBYs. Basically, the construction boom would have come sooner.
SomeStupidPoint 10y ago
Speculation that this is the case in SF, but is an effect I've seen: You can get a dip in average rent without (sufficiently) dropping bottom quartile rents, which is what NIMBYism tends to block, by having a lot of nice condos built. The top quartile of rents dips heavily as places jockey for condo buyers, everyone moves in to a nicer place as the wave spreads, but the price at the bottom remains (mostly) the same (even if unit quality goes up), because the oldest buildings get torn down at the end of the wave, rather than genuinely increasing the housing supply (because land to develop on is still hard to come by). So it's possible average rents dipped, but service workers still struggle to afford rent, even if they struggle in a nicer unit. Tl;dr: I expect the building that happened raised low-end apartment quality rather than drop price, even if average rent is down. Because NIMBYism.
- zazen 10y ago
  This sounds plausible, and it chimes with the article's statement that the new supply is at the high end. Thanks! If people were only blocking certain kinds of development, that would explain why low-end prices stay high even while there's a lot of construction causing the median price to drop.
  - deleted 10y ago
    [deleted]
  - SomeStupidPoint 10y ago
    I think of it as: NIMBYism keeps high-density zoned land high value, so the floor never comes out of the market, even if you squish the top down. Houses don't belong in (the core of) major metros anymore, but there are a lot of wealthy home owners who live there, and have built up political networks over decades or centuries. It's a tragedy of our system that we let 20 residents keep out 200.
    - mooreds 10y ago
      Should the 20 just be bought out, or forced to sell, or allowed to rezone and then sell one by one (with the first person getting the most money, as each lot is turned into a high rise). We are facing some of this in the city in which I live and I don't really know how to address it (I can see validity in the arguments of both sides) so was wondering what you see as the path forward.
      - SomeStupidPoint 10y ago
        This is a tough one. I'm generally leery of things like eminent domain, because they can be very problematic. On the other hand, there's a good chance that converting a lot of blocks also means we need to up utility capacity in the area, which can be very disruptive for residents, so it also makes sense to rebuild an area at a time. I like the idea of having the city nominate regions, and then any time 90% of a block agrees, the whole block is sold as a unit (or maybe auctioned with minimum bid) and rezoned at that time. (This kind of idea meshes well with the development plan of having several high density clusters smattered around the city as neighborhood focal points, which is what my city recently switched to.) It doesn't quite fix the utilities problem or some people being forced out, but I think it balances out a lot of competing forces reasonably, and keeps us from working with weird lots during development (as the city can repartition the block during rezone).
- foota 10y ago
  This is not entirely accurate. If the median rent drops, this means necessarily that the rent for at least some portion of the renters below the 50th percentile has dropped. So while it is possible that the very bottom hasn't changed much, the middle/top of bottom necessarily has.
  - SomeStupidPoint 10y ago
    It's not necessary for the bottom quartile (which is what I was talking about) to change at all for the median to move, as long as the median stays above the highest value in the bottom quartile. The lower-middle quartile could absorb all of the change. A quartile is 25%, or a quarter, if you didn't know. My concern was for bottom quartile rents, since the bottom 20% of society is largely concentrated on the low end of that quartile, and they're largely the ones who actually suffer from high housing costs (as opposed to merely having fewer luxuries).
    - foota 10y ago
      Sorry, I misread your comment. I'm curious what a rent vs percentile curve looks like for the area. Unfortunately, I wasn't able to find one.
- refurb 10y ago
  This is a theory, but wouldn't dropping upper quartile rents automatically flow down to lower quartiles? Let's say you have a market with 3 apartments for rent. $100, $200, $300 per month. Luxury apartment is created and starts at $400 per month, but no one rents, so they drop it to $300 per month. The guy renting a non-luxury apartment for $300 says "screw that" and moves to the luxury apartment. Plus, the guy renting the non-luxury apartment looks at comparables and says "jesus, a luxury apartment is $300, mine is maybe worth $200". And so on, all the way down the line. Sure it's not a perfect example, but I can see how cheaper luxury apartments could cause prices to fall overall.
  - SomeStupidPoint 10y ago
    I get the chain effect, but because of the scarcity of land zoned that way, the buildings that are currently the bottom end up torn down rather than rented for less, and the land re-used because the base value of the land doesn't allow the rent to drop. So you see drops across most of the market, except at the bottom. This market effect is actually good! It keeps land cycling to be productively used and everyone gets to live in a nicer place. The problem is we need to rezone land to drop the value of highly dense land, so those low end apartments drop a bit, rather than being repurposed. (At least, until cities are rebalanced a bit.)
    - refurb 10y ago
      That makes sense. There would be a floor to rents, so the bottom wouldn't have much further to fall.
hkmurakami 10y ago
Luxury highrise condos and apartments have been showing weakness all year due to oversupply. Deeded land single detached homes (where the strongest coalitions of SF NIMBY lobbies reside) are still very supply constrained and are still very strong wrt price. This is the source of the discrepancy you're talking about. Source: friend who's been in Bay Area real estate for over a decade.
- superuser2 10y ago
  "Oversupply" at $3000+/mo, haha. We can start talking about oversupply when they're more like $700.
  - hkmurakami 10y ago
    Haha totally agreed!
BurningFrog 10y ago
The "historic boom" is big compared to the very low rate of new construction of the last few decades, but still small compared to the need and potential. There is a fair amount of construction downtown, but most of the city remains frozen in time. That said, I wouldn't blame it all on NIMBYs. Few changes of any kind get done in this town.
- cwp 10y ago
  I wouldn't blame it all on wealthy NIMBYs. There are poor, renting NIMBYs too, and they're just as much a problem.
- x0x0 10y ago
  Lots of it is nimbys, just not sf nimbys. The entire peninsula dumps their housing problem onto sf and san jose. viz linkedin and google building millions of ft2 of new campuses for tens of thousands of employees in a town of 80k that is possibly going to study maybe building some housing. Potentially. So where do the employees go? The only places there is housing available.
  - laurencerowe 10y ago
    SF has a net commuter inflow so it's better characterized as the peninsular becoming more like SF when it used to be more like SJ.
    - ptaipale 10y ago
      Indeed. If there are more jobs than apartments in SF, and more people commuting to SF than from SF, it doesn't sound like "the entire peninsula dumps their housing problem onto sf"; it's rather the other way round.
      - BurningFrog 10y ago
        But there is also vastly more jobs than apartments on the peninsula. I think it's the East Bay and Deep South Bay that gets "dumped on". The fact that it's seen as a burden/sacrifice for a city/region to provide housing tells you a lot about what's wrong with California.
icantdrive55 10y ago
San Francisco is building, like they always have. They are building luxury condos. Condos that only the wealthy can afford. An outside econonomist, would claim the supply is widening. As someone who works on these luxury condos, as a union electrician, these condos are only bought by the very rich. Many units are second, third, tenth homes the 1 percent buy, and many times left vacant. San Francisco can be a charming city if you have money. I arrive at the job site at 8 a.m. I gaze into units I once worked on, and so many are vacant. Yes, there's always a naked woman putting on a show. It's San Fransisco. Not a lot of straight single guys. Women don't realize just how invisible they will be when they move here. It's hard not to notice the attractive woman in the buff, putting on a show, but honestly; the empty units bother me. I haven't worked on a reasonably priced apartment complex-- ever. I have no idea why the market in San Francisco is "softening". I have a feeling tech workers are being let go? That gold rush feeling is dying. I don't have numbers-- just have a hunch. It almost feels like a lot of start-ups are spending their last bit of money; hoping for a hail marry? I don't blame developers for building these luxury condos. There's just no way to make a healthy ROI in San Francisco. It's just too small. The workers who put up these buildings are paid $100/hr, in most cases. It's all Union work. San Francisco is a union city. Tech workers should take notice. You guys are expendable, exotically once you hit your Kate thirties. Even though a local 6 Union electrician makes over $100/hr; there's no way I could buy in SF. And after all; we all love Capitalism? Let them build their cocoons. Let them build to the stars. Let them build into the sand with friction piles.(Millenial sink hole). Build out into the bay--who cares? It's all working out so great for service workers; and 95% of tech workers are basically service workers. Some of you like to think otherwise, but when the boom slows, I see you guys going home real fast. The only guys I see sticking around are usually founders(they always seem to have a rich relative though), or guys who met a woman with rent controlled housing. Just don't piss her off.
Spooky23 10y ago
HN will make this a SFO story because it's HN. The reality is, rental housing is a canary and shifts quickly based on market conditions. The market is flooded nationwide, and if you look closely at newer projects, the better banks have slowed down investment.
- taxicabjesus 10y ago
  > The market is flooded nationwide It was the best of times, it was the worst of times... I like the idea of 'economic canaries'. There has been a bipartisan effort to ignore fundamentals for the past 36 +/- years [1]... [1] https://dontsuemebro.com/story/2016/11/10/191217/82 https://dontsuemebro.com/story/2016/11/10/191217/82
  - eli_gottlieb 10y ago
    >I like the idea of 'economic canaries'. There has been a bipartisan effort to ignore fundamentals for the past 36 +/- years [1]... I can only pray the new administration manages to at least get something right with their supposed dedication to the Rust Belt.
- davidf18 10y ago
  > HN will make this a SFO story because it's HN Actually, the rents are far higher than they should be in not only SF, but NYC, DC, Boston, LA, London, and many other cities and the reason is structural -- the use of zoning density restrictions to create artificial scarcity of housing to help the special interest group of wealthy landlords to the detriment of renters. Many people trying to make a life have trouble making ends meet while Donald Trump and other wealthy landlords have far more wealth than they would in an efficient market.
spikels 10y ago
The NIMBY effect in SF is very real and there is lots of strong evidence from both academic and industry analysis. For example there are several indices of construction regulation and SF is usually near the top: http://realestate.wharton.upenn.edu/research/papers.php?paper=558 http://realestate.wharton.upenn.edu/research/papers.php?pape... So despite this why is there a building "boom"? Basically prices (rents and sales) have gotten so very, very high that it again makes sense to build in SF. And as mentioned this "boom" is relatively modest. To give you some flavor: the new housing (and office) construction is almost exclusively at the high-end of the market. This is because NIMBY and other policies have made it cost around $750,000 to build a unit of housing in SF. So as long as prices and rents can justify this spending taking into account risk, time, required return, etc. developers will build.
stale2002 10y ago
NIMBY is a real and powerful lobby. The thing though with this situation is that things have been so bad and so extremely NIMBY that it isn't really possible to do worse. Things are still bad, but when rents hit the outer atmosphere, there isn't really anywhere for them to go but down.
rsync 10y ago
"Did something change regarding development in SF? Or was the NIMBY effect always a bit over-stated? Anyone care to speculate?" No, not much at all has changed and the "building boom" consists of 5 or 6 high rises and a small handful of quarter-block sized rental apartment complexes. Think of the normal background level development that is always occurring in Denver/Minneapolis/Portland ... that suddenly happened here for a few years. "Boom".
- pascalxus 10y ago
  NIMBYs are extremely powerful. sometimes they even sue developers, raising the cost of housing for everyone. Environmental legislation also causes a huge increase in development costs as well.
  - IndianAstronaut 10y ago
    NIMBYs are also a major cause of the wealth inequality we are seeing. http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...
curun1r 10y ago
NIMBYism is largely targeted at preventing construction in the traditional residential areas. Most of the new development is large buildings in areas that aren't traditionally residential. In particular, the areas around where the Giants stadium (SOMA) is and where the Warrior's arena (Mission Bay) is planned have seen many new high-occupancy construction projects because there aren't neighborhood groups being obstructionist.
Decade 10y ago
The “historic construction boom” just seems historic because it followed a historic construction bust, so the first order derivative is pretty high. And it’s all concentrated in a few neighborhoods right outside reporters’ offices, so it seems more dramatic than it actually is. Even so, the construction rate now is not matching the rate in the early 1960s[0]. Back then, the bad word was “urban renewal,” and the people and politicians of San Francisco managed to stop it. Unsurprisingly, that only exacerbated the housing crisis, setting off the exponential rise in prices that has now reached unbelievable levels[1]. So, nothing of substance has changed. NIMBYs and their supervisors have still effectively outlawed affordable housing, so financiers have not been willing to fund projects until the market-rate prices reached so far into the stratosphere that they could expect to make a profit. So they make only super-expensive housing, with some “affordable” units begrudgingly provided to lottery winners as the community organizers have forced them to, which feeds back into the common misperception that developers are only willing to build super-expensive housing. Which provides political support for more restrictions, which raise the costs, which slow construction, which raises the prices, in an insane feedback loop. [0]http://www.spur.org/publications/urbanist-article/2012-12-18/san-francisco-boom-back http://www.spur.org/publications/urbanist-article/2012-12-18... [1]https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme...

by zazen 10y ago

rkayg 10y ago

The NIMBYs have had a very strong effect in that they significantly delayed the pipeline of development. Ultimately, the demand for housing had to be met, but it required extra years of community meetings and fights with the NIMBYs. Basically, the construction boom would have come sooner.

SomeStupidPoint 10y ago

Speculation that this is the case in SF, but is an effect I've seen: You can get a dip in average rent without (sufficiently) dropping bottom quartile rents, which is what NIMBYism tends to block, by having a lot of nice condos built. The top quartile of rents dips heavily as places jockey for condo buyers, everyone moves in to a nicer place as the wave spreads, but the price at the bottom remains (mostly) the same (even if unit quality goes up), because the oldest buildings get torn down at the end of the wave, rather than genuinely increasing the housing supply (because land to develop on is still hard to come by). So it's possible average rents dipped, but service workers still struggle to afford rent, even if they struggle in a nicer unit. Tl;dr: I expect the building that happened raised low-end apartment quality rather than drop price, even if average rent is down. Because NIMBYism.

zazen 10y ago
This sounds plausible, and it chimes with the article's statement that the new supply is at the high end. Thanks! If people were only blocking certain kinds of development, that would explain why low-end prices stay high even while there's a lot of construction causing the median price to drop.
- deleted 10y ago
  [deleted]
- SomeStupidPoint 10y ago
  I think of it as: NIMBYism keeps high-density zoned land high value, so the floor never comes out of the market, even if you squish the top down. Houses don't belong in (the core of) major metros anymore, but there are a lot of wealthy home owners who live there, and have built up political networks over decades or centuries. It's a tragedy of our system that we let 20 residents keep out 200.
  - mooreds 10y ago
    Should the 20 just be bought out, or forced to sell, or allowed to rezone and then sell one by one (with the first person getting the most money, as each lot is turned into a high rise). We are facing some of this in the city in which I live and I don't really know how to address it (I can see validity in the arguments of both sides) so was wondering what you see as the path forward.
    - SomeStupidPoint 10y ago
      This is a tough one. I'm generally leery of things like eminent domain, because they can be very problematic. On the other hand, there's a good chance that converting a lot of blocks also means we need to up utility capacity in the area, which can be very disruptive for residents, so it also makes sense to rebuild an area at a time. I like the idea of having the city nominate regions, and then any time 90% of a block agrees, the whole block is sold as a unit (or maybe auctioned with minimum bid) and rezoned at that time. (This kind of idea meshes well with the development plan of having several high density clusters smattered around the city as neighborhood focal points, which is what my city recently switched to.) It doesn't quite fix the utilities problem or some people being forced out, but I think it balances out a lot of competing forces reasonably, and keeps us from working with weird lots during development (as the city can repartition the block during rezone).
foota 10y ago
This is not entirely accurate. If the median rent drops, this means necessarily that the rent for at least some portion of the renters below the 50th percentile has dropped. So while it is possible that the very bottom hasn't changed much, the middle/top of bottom necessarily has.
- SomeStupidPoint 10y ago
  It's not necessary for the bottom quartile (which is what I was talking about) to change at all for the median to move, as long as the median stays above the highest value in the bottom quartile. The lower-middle quartile could absorb all of the change. A quartile is 25%, or a quarter, if you didn't know. My concern was for bottom quartile rents, since the bottom 20% of society is largely concentrated on the low end of that quartile, and they're largely the ones who actually suffer from high housing costs (as opposed to merely having fewer luxuries).
  - foota 10y ago
    Sorry, I misread your comment. I'm curious what a rent vs percentile curve looks like for the area. Unfortunately, I wasn't able to find one.
refurb 10y ago
This is a theory, but wouldn't dropping upper quartile rents automatically flow down to lower quartiles? Let's say you have a market with 3 apartments for rent. $100, $200, $300 per month. Luxury apartment is created and starts at $400 per month, but no one rents, so they drop it to $300 per month. The guy renting a non-luxury apartment for $300 says "screw that" and moves to the luxury apartment. Plus, the guy renting the non-luxury apartment looks at comparables and says "jesus, a luxury apartment is $300, mine is maybe worth $200". And so on, all the way down the line. Sure it's not a perfect example, but I can see how cheaper luxury apartments could cause prices to fall overall.
- SomeStupidPoint 10y ago
  I get the chain effect, but because of the scarcity of land zoned that way, the buildings that are currently the bottom end up torn down rather than rented for less, and the land re-used because the base value of the land doesn't allow the rent to drop. So you see drops across most of the market, except at the bottom. This market effect is actually good! It keeps land cycling to be productively used and everyone gets to live in a nicer place. The problem is we need to rezone land to drop the value of highly dense land, so those low end apartments drop a bit, rather than being repurposed. (At least, until cities are rebalanced a bit.)
  - refurb 10y ago
    That makes sense. There would be a floor to rents, so the bottom wouldn't have much further to fall.

hkmurakami 10y ago

Luxury highrise condos and apartments have been showing weakness all year due to oversupply. Deeded land single detached homes (where the strongest coalitions of SF NIMBY lobbies reside) are still very supply constrained and are still very strong wrt price. This is the source of the discrepancy you're talking about. Source: friend who's been in Bay Area real estate for over a decade.

superuser2 10y ago
"Oversupply" at $3000+/mo, haha. We can start talking about oversupply when they're more like $700.
- hkmurakami 10y ago
  Haha totally agreed!

BurningFrog 10y ago

The "historic boom" is big compared to the very low rate of new construction of the last few decades, but still small compared to the need and potential. There is a fair amount of construction downtown, but most of the city remains frozen in time. That said, I wouldn't blame it all on NIMBYs. Few changes of any kind get done in this town.

cwp 10y ago
I wouldn't blame it all on wealthy NIMBYs. There are poor, renting NIMBYs too, and they're just as much a problem.
x0x0 10y ago
Lots of it is nimbys, just not sf nimbys. The entire peninsula dumps their housing problem onto sf and san jose. viz linkedin and google building millions of ft2 of new campuses for tens of thousands of employees in a town of 80k that is possibly going to study maybe building some housing. Potentially. So where do the employees go? The only places there is housing available.
- laurencerowe 10y ago
  SF has a net commuter inflow so it's better characterized as the peninsular becoming more like SF when it used to be more like SJ.
  - ptaipale 10y ago
    Indeed. If there are more jobs than apartments in SF, and more people commuting to SF than from SF, it doesn't sound like "the entire peninsula dumps their housing problem onto sf"; it's rather the other way round.
    - BurningFrog 10y ago
      But there is also vastly more jobs than apartments on the peninsula. I think it's the East Bay and Deep South Bay that gets "dumped on". The fact that it's seen as a burden/sacrifice for a city/region to provide housing tells you a lot about what's wrong with California.

icantdrive55 10y ago

San Francisco is building, like they always have. They are building luxury condos. Condos that only the wealthy can afford. An outside econonomist, would claim the supply is widening. As someone who works on these luxury condos, as a union electrician, these condos are only bought by the very rich. Many units are second, third, tenth homes the 1 percent buy, and many times left vacant. San Francisco can be a charming city if you have money. I arrive at the job site at 8 a.m. I gaze into units I once worked on, and so many are vacant. Yes, there's always a naked woman putting on a show. It's San Fransisco. Not a lot of straight single guys. Women don't realize just how invisible they will be when they move here. It's hard not to notice the attractive woman in the buff, putting on a show, but honestly; the empty units bother me. I haven't worked on a reasonably priced apartment complex-- ever. I have no idea why the market in San Francisco is "softening". I have a feeling tech workers are being let go? That gold rush feeling is dying. I don't have numbers-- just have a hunch. It almost feels like a lot of start-ups are spending their last bit of money; hoping for a hail marry? I don't blame developers for building these luxury condos. There's just no way to make a healthy ROI in San Francisco. It's just too small. The workers who put up these buildings are paid $100/hr, in most cases. It's all Union work. San Francisco is a union city. Tech workers should take notice. You guys are expendable, exotically once you hit your Kate thirties. Even though a local 6 Union electrician makes over $100/hr; there's no way I could buy in SF. And after all; we all love Capitalism? Let them build their cocoons. Let them build to the stars. Let them build into the sand with friction piles.(Millenial sink hole). Build out into the bay--who cares? It's all working out so great for service workers; and 95% of tech workers are basically service workers. Some of you like to think otherwise, but when the boom slows, I see you guys going home real fast. The only guys I see sticking around are usually founders(they always seem to have a rich relative though), or guys who met a woman with rent controlled housing. Just don't piss her off.

Spooky23 10y ago

HN will make this a SFO story because it's HN. The reality is, rental housing is a canary and shifts quickly based on market conditions. The market is flooded nationwide, and if you look closely at newer projects, the better banks have slowed down investment.

taxicabjesus 10y ago
> The market is flooded nationwide It was the best of times, it was the worst of times... I like the idea of 'economic canaries'. There has been a bipartisan effort to ignore fundamentals for the past 36 +/- years [1]... [1] https://dontsuemebro.com/story/2016/11/10/191217/82 https://dontsuemebro.com/story/2016/11/10/191217/82
- eli_gottlieb 10y ago
  >I like the idea of 'economic canaries'. There has been a bipartisan effort to ignore fundamentals for the past 36 +/- years [1]... I can only pray the new administration manages to at least get something right with their supposed dedication to the Rust Belt.
davidf18 10y ago
> HN will make this a SFO story because it's HN Actually, the rents are far higher than they should be in not only SF, but NYC, DC, Boston, LA, London, and many other cities and the reason is structural -- the use of zoning density restrictions to create artificial scarcity of housing to help the special interest group of wealthy landlords to the detriment of renters. Many people trying to make a life have trouble making ends meet while Donald Trump and other wealthy landlords have far more wealth than they would in an efficient market.

spikels 10y ago

The NIMBY effect in SF is very real and there is lots of strong evidence from both academic and industry analysis. For example there are several indices of construction regulation and SF is usually near the top: http://realestate.wharton.upenn.edu/research/papers.php?paper=558 http://realestate.wharton.upenn.edu/research/papers.php?pape... So despite this why is there a building "boom"? Basically prices (rents and sales) have gotten so very, very high that it again makes sense to build in SF. And as mentioned this "boom" is relatively modest. To give you some flavor: the new housing (and office) construction is almost exclusively at the high-end of the market. This is because NIMBY and other policies have made it cost around $750,000 to build a unit of housing in SF. So as long as prices and rents can justify this spending taking into account risk, time, required return, etc. developers will build.

stale2002 10y ago

NIMBY is a real and powerful lobby. The thing though with this situation is that things have been so bad and so extremely NIMBY that it isn't really possible to do worse. Things are still bad, but when rents hit the outer atmosphere, there isn't really anywhere for them to go but down.

rsync 10y ago

"Did something change regarding development in SF? Or was the NIMBY effect always a bit over-stated? Anyone care to speculate?" No, not much at all has changed and the "building boom" consists of 5 or 6 high rises and a small handful of quarter-block sized rental apartment complexes. Think of the normal background level development that is always occurring in Denver/Minneapolis/Portland ... that suddenly happened here for a few years. "Boom".

pascalxus 10y ago
NIMBYs are extremely powerful. sometimes they even sue developers, raising the cost of housing for everyone. Environmental legislation also causes a huge increase in development costs as well.
- IndianAstronaut 10y ago
  NIMBYs are also a major cause of the wealth inequality we are seeing. http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...

curun1r 10y ago

NIMBYism is largely targeted at preventing construction in the traditional residential areas. Most of the new development is large buildings in areas that aren't traditionally residential. In particular, the areas around where the Giants stadium (SOMA) is and where the Warrior's arena (Mission Bay) is planned have seen many new high-occupancy construction projects because there aren't neighborhood groups being obstructionist.

Decade 10y ago

The “historic construction boom” just seems historic because it followed a historic construction bust, so the first order derivative is pretty high. And it’s all concentrated in a few neighborhoods right outside reporters’ offices, so it seems more dramatic than it actually is. Even so, the construction rate now is not matching the rate in the early 1960s[0]. Back then, the bad word was “urban renewal,” and the people and politicians of San Francisco managed to stop it. Unsurprisingly, that only exacerbated the housing crisis, setting off the exponential rise in prices that has now reached unbelievable levels[1]. So, nothing of substance has changed. NIMBYs and their supervisors have still effectively outlawed affordable housing, so financiers have not been willing to fund projects until the market-rate prices reached so far into the stratosphere that they could expect to make a profit. So they make only super-expensive housing, with some “affordable” units begrudgingly provided to lottery winners as the community organizers have forced them to, which feeds back into the common misperception that developers are only willing to build super-expensive housing. Which provides political support for more restrictions, which raise the costs, which slow construction, which raises the prices, in an insane feedback loop. [0]http://www.spur.org/publications/urbanist-article/2012-12-18/san-francisco-boom-back http://www.spur.org/publications/urbanist-article/2012-12-18... [1]https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme...