6 ms·

Amazing, supply and demand actually works! Someone should tell all the protestors who opposed construction of new luxury condos because they thought it would s

Amazing, supply and demand actually works! Someone should tell all the protestors who opposed construction of new luxury condos because they thought it would somehow increase rents.

rahrahrah 10y ago
Hah I love those people.
matt_wulfeck 10y ago
It's unlikely to slow down San Francisco's unstoppable march towards the most legislated society in America.
- coolsunglasses 10y ago
  March? They're Kings & Queens atop a pile of the bones of the impoverished, trying to find more skeletons to add to the pile.
  - BipolarElsa 10y ago
    And now they want to abolish the electoral college so the upper crust of SF, LA, NYC, CHI (and more) can dictate what they want from candidates. Soon you'd see candidates touting "Vegan Rights" instead of "Rust Belt jobs"...not a world I want to live in. I'd rather middle America's vote count for more if you ask me.
  - deleted 10y ago
    [deleted]
fram 10y ago
There's nothing saying that increased supply always leads to higher supply in relation to demand, which is what affects price.
- gragas 10y ago
  So you're arguing that demand increased more than supply in the same period? By your logic, that's the only way that prices could fall while the new housing was built.
  - fram 10y ago
    I'm not sure what you mean, but I'll try to express myself more clearly. In the most basic sense of economics for prices to fall supply has to increase more than demand. If demand increases more than supply the opposite is true. There's nothing saying that a more supply can't also increase demand or even increase demand more than supply. When more wealthy (or ambitious) people move into an area it often leads to that area becoming more attractive (schools, restaurants, entertainment get better) increasing demand. Therefor there's nothing particularly strange about arguing that luxury condos could lead to higher rents as the op makes it out to be.
    - _delirium 10y ago
      Yeah, this is one particular kind of gentrification cycle that's sometimes seen in cities (most clearly in parts of Manhattan). Higher-quality new housing is built, which is one part of making an area more attractive to more affluent residents, which drives up prices despite there being more total housing available than before. What of course is less agreed on is how to untangle all the interacting causal factors here. Manhattan is a particularly stark example because not only did its 20th-century building boom go along with long-term price increases, but it also went along with decreased population density. Compared to year 1900 Manhattan, year 2000 Manhattan had more square feet of residential space and fewer people living in it! (The reason for that is that wealthier families demand more square feet of living space per person, and in the case of Manhattan this effect outpaced the net increase in residential space.)
      - gragas 10y ago
        >Higher-quality new housing is built, which is one part of making an area more attractive to more affluent residents, which drives up prices despite there being more total housing available than before. This has me convinced that people might be right that new housing could lead to higher rent in some cases, but at the same time those people are wrong for arguing against basic supply and demand. Sure, supply increased and prices went up. But it could be that demand increased more than supply did, as pointed out by the parent comment.
branchless 10y ago
Yes, rents are set by wages as you have to pay them out of your wages. Supply and demand also works for buying. Because central banks have ran with ultra-loose monetary policy since forever credit supply is huge and prices detach from wages. What a total mess these guys have created. Easy on the way down, chaos on the way back up.
- gragas 10y ago
  > rents are set by wages as you have to pay them out of your wages. Are you implying that there's some sort of grand-scale collusion on rent prices? If most rent takers think "hey, the median salary is X so I'll just charge X * 0.33" then what's stopping another rent taker from drastically undercutting that price?
  - 13of40 10y ago
    You could argue that home prices are tied to wages and rent is tied to home prices.
    - ehnto 10y ago
      I would say that easy access to loaned capital has perversed the connection between wages and house prices a bit.
      - gragas 10y ago
        >easy access to loaned capital has perversed the connection between wages and house prices a bit Only to a certain extent. Loaned capital is still limited by wages (no one is going to give a $1 million mortgage to someone who makes $40k per year). But again, I don't think wages has hardly anything to do with house prices; it's all about supply and demand. Sure, most people might only be willing to pay 1/3 their salary on housing. That doesn't mean that the price for housing is that number. If a huge supply of housing for less than that price floods the market, then why would everyone continue to pay 1/3 their salary for housing when they could pay 1/4 or 1/6?
    - 10y ago
kevinburke 10y ago
For what it's worth - Four of the eleven Supervisors (in San Francisco) were just up for re-election. Some of the candidates were much better than the others. Marjan Philhour, a pro-housing candidate in District 1, lost by 1000 votes. If she won, pro-housing SF Supervisors would have had a 6-5 majority on the board. We were 1000 votes away from a much better housing situation in SF. If you live in SF, the way we change this is by electing better Supervisors and kicking off the NIMBY's. Sandra Lee Fewer (the "progressive" candidate who wants zero new housing) had volunteers on every Geary street corner the day of the election. Get involved in your local races, donate money, volunteer to call people. Also, call/write your Supervisor when they try to pull crap like this: http://missionlocal.org/2016/11/in-stunner-city-strikes-down-major-mission-project/ http://missionlocal.org/2016/11/in-stunner-city-strikes-down...
- sagarm 10y ago
  Hillary Ronen, Campos's former chief of staff, could turn out to be pro housing. She included building 5,000 units of "affordable" (BMR) housing in her platform: http://hillaryronen.com/hillarys-plan/ http://hillaryronen.com/hillarys-plan/ There's nowhere near enough public funds to subsidize that much BMR housing, so in theory she would have to support mixed developments. In practice it might just be lip service.
  - kevinburke 10y ago
    Affordable housing is great but gets more expensive as market rate rent increases, and won't meet the demand for housing. I'm much more concerned about the market rate housing stock.

Amazing, supply and demand actually works! Someone should tell all the protestors who opposed construction of new luxury condos because they thought it would somehow increase rents.

rahrahrah 10y ago

Hah I love those people.

matt_wulfeck 10y ago

It's unlikely to slow down San Francisco's unstoppable march towards the most legislated society in America.

coolsunglasses 10y ago
March? They're Kings & Queens atop a pile of the bones of the impoverished, trying to find more skeletons to add to the pile.
- BipolarElsa 10y ago
  And now they want to abolish the electoral college so the upper crust of SF, LA, NYC, CHI (and more) can dictate what they want from candidates. Soon you'd see candidates touting "Vegan Rights" instead of "Rust Belt jobs"...not a world I want to live in. I'd rather middle America's vote count for more if you ask me.
- deleted 10y ago
  [deleted]

fram 10y ago

There's nothing saying that increased supply always leads to higher supply in relation to demand, which is what affects price.

gragas 10y ago
So you're arguing that demand increased more than supply in the same period? By your logic, that's the only way that prices could fall while the new housing was built.
- fram 10y ago
  I'm not sure what you mean, but I'll try to express myself more clearly. In the most basic sense of economics for prices to fall supply has to increase more than demand. If demand increases more than supply the opposite is true. There's nothing saying that a more supply can't also increase demand or even increase demand more than supply. When more wealthy (or ambitious) people move into an area it often leads to that area becoming more attractive (schools, restaurants, entertainment get better) increasing demand. Therefor there's nothing particularly strange about arguing that luxury condos could lead to higher rents as the op makes it out to be.
  - _delirium 10y ago
    Yeah, this is one particular kind of gentrification cycle that's sometimes seen in cities (most clearly in parts of Manhattan). Higher-quality new housing is built, which is one part of making an area more attractive to more affluent residents, which drives up prices despite there being more total housing available than before. What of course is less agreed on is how to untangle all the interacting causal factors here. Manhattan is a particularly stark example because not only did its 20th-century building boom go along with long-term price increases, but it also went along with decreased population density. Compared to year 1900 Manhattan, year 2000 Manhattan had more square feet of residential space and fewer people living in it! (The reason for that is that wealthier families demand more square feet of living space per person, and in the case of Manhattan this effect outpaced the net increase in residential space.)
    - gragas 10y ago
      >Higher-quality new housing is built, which is one part of making an area more attractive to more affluent residents, which drives up prices despite there being more total housing available than before. This has me convinced that people might be right that new housing could lead to higher rent in some cases, but at the same time those people are wrong for arguing against basic supply and demand. Sure, supply increased and prices went up. But it could be that demand increased more than supply did, as pointed out by the parent comment.

branchless 10y ago

Yes, rents are set by wages as you have to pay them out of your wages. Supply and demand also works for buying. Because central banks have ran with ultra-loose monetary policy since forever credit supply is huge and prices detach from wages. What a total mess these guys have created. Easy on the way down, chaos on the way back up.

gragas 10y ago
> rents are set by wages as you have to pay them out of your wages. Are you implying that there's some sort of grand-scale collusion on rent prices? If most rent takers think "hey, the median salary is X so I'll just charge X * 0.33" then what's stopping another rent taker from drastically undercutting that price?
- 13of40 10y ago
  You could argue that home prices are tied to wages and rent is tied to home prices.
  - ehnto 10y ago
    I would say that easy access to loaned capital has perversed the connection between wages and house prices a bit.
    - gragas 10y ago
      >easy access to loaned capital has perversed the connection between wages and house prices a bit Only to a certain extent. Loaned capital is still limited by wages (no one is going to give a $1 million mortgage to someone who makes $40k per year). But again, I don't think wages has hardly anything to do with house prices; it's all about supply and demand. Sure, most people might only be willing to pay 1/3 their salary on housing. That doesn't mean that the price for housing is that number. If a huge supply of housing for less than that price floods the market, then why would everyone continue to pay 1/3 their salary for housing when they could pay 1/4 or 1/6?
  - 10y ago

kevinburke 10y ago

For what it's worth - Four of the eleven Supervisors (in San Francisco) were just up for re-election. Some of the candidates were much better than the others. Marjan Philhour, a pro-housing candidate in District 1, lost by 1000 votes. If she won, pro-housing SF Supervisors would have had a 6-5 majority on the board. We were 1000 votes away from a much better housing situation in SF. If you live in SF, the way we change this is by electing better Supervisors and kicking off the NIMBY's. Sandra Lee Fewer (the "progressive" candidate who wants zero new housing) had volunteers on every Geary street corner the day of the election. Get involved in your local races, donate money, volunteer to call people. Also, call/write your Supervisor when they try to pull crap like this: http://missionlocal.org/2016/11/in-stunner-city-strikes-down-major-mission-project/ http://missionlocal.org/2016/11/in-stunner-city-strikes-down...

sagarm 10y ago
Hillary Ronen, Campos's former chief of staff, could turn out to be pro housing. She included building 5,000 units of "affordable" (BMR) housing in her platform: http://hillaryronen.com/hillarys-plan/ http://hillaryronen.com/hillarys-plan/ There's nowhere near enough public funds to subsidize that much BMR housing, so in theory she would have to support mixed developments. In practice it might just be lip service.
- kevinburke 10y ago
  Affordable housing is great but gets more expensive as market rate rent increases, and won't meet the demand for housing. I'm much more concerned about the market rate housing stock.