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I looked at housing prices in SF going back to 1920, and the year over year increases are still in line with the annual increases we see today. All the rhetori
by elastic_church 10y ago
I looked at housing prices in SF going back to 1920, and the year over year increases are still in line with the annual increases we see today.
All the rhetoric and oddly empowering blame game to the tech industry (at least for us tech people) is merely trendy.
The only thing that stopped keeping up are salary increases.
- huangc10 10y agoAgreed. It's easier to blame what's in front of our eyes and trending. However, I wouldn't go as far as saying the tech industry had nothing to do with it. It's all relative.
- elastic_church 10y agothe 'tech industry' is now. the gold speculators were then. the city could have just as easily become a carcass of the industrial era like many others.
- ubercore 10y agoYou might be right, but this feels like a facile argument. Is SF an outlier in the last 30 years? Perhaps tech industry has supported a recent continuation of trends that died in the rest of the country. How has SF housing policy compared to the rest of nation impacted prices? What about cost of living _besides_ housing? That's by no means comprehensive, but I'd just suggest a) more sources and b) a more holistic look at the issue than housing prices.
- pmiller2 10y agoBut, housing prices essentially are the issue. A region where teachers, baristas, and janitors can't afford to live just can't function.
- ubercore 10y agoI agree they'd be a huge part of it. I guess I'm just trying to call out that you can't completely discount the influence the tech industry has had on the bay area by looking at _just_ housing prices. I'm certain there's more to it than that, even if it's the single biggest issue.
- dekhn 10y agoWhen I was in grad school in SF in 95-01 I lived on a $25K salary. I did this by sharing a place with several people, in the outermost part of SF. I had to spend about 1.5 hours on MUNI a day. It was pretty miserable but it was the only place I could afford. Prices have appreciated, but if you're not trying to buy a house, and you're willing to compromise a lot, I think you can live in the city on a teacher salary ($60K/year).
- mroset 10y agoThat lifestyle as a teacher is probably only desirable or realistic for the young. Once you want to settle down/have kids/whatever, you probably want to either buy a house, or not compromise quite so much. Does that mean that SF will have only young teachers? Most the experienced ones will move somewhere more affordable. Is that a problem for the city?
- swuecho 10y agoYoung people come here for a temporary period and then leave. Only the ones become affluent enough stay.
- jdmichal 10y agoOr, all the teachers marry high-income partners and can thereby afford to continue living there. ~~I'm trying to find an article I'm sure I've seen on HN of marriages mapped by occupation. I'll edit if I can find it, but I believe I remember that teachers tended to "marry up".~~ EDIT: et-al found the link I was looking for. However, it doesn't seem to support my memory of teachers "marrying up".
- gozur88 10y agoBut it does. I'm a software developer who could barely afford to live in SF. And yet people clean the floors, make coffee, and teach children there. Because they don't live there - they commute from cheaper areas. Like just about every other major city.
- coldtea 10y agoI'll give you teachers and janitors, but region "just can't function" without baristas? That is, glorified people who serve coffee?
- gautamnarula 10y agoI commented this as a reply to the parent comment, but in case you don't see it I think this will interest you: https://medium.com/@andersem/a-guy-just-transcribed-30-years-of-for-rent-ads-heres-what-it-taught-us-about-sf-housing-prices-bd61fd0e4ef9#.1c6lomtzu https://medium.com/@andersem/a-guy-just-transcribed-30-years... SF housing has averaged 6.6% yoy increases for the last 70 years.
- tacomonstrous 10y agoI would think the more relevant number is year-to-year increase benchmarked to the median increase across major US metropolitan areas. You're right though: median wealth and income were probably also growing much more commensurately mid-to-late 20th century than they do now.
- gautamnarula 10y agoThis post (https://medium.com/@andersem/a-guy-just-transcribed-30-years-of-for-rent-ads-heres-what-it-taught-us-about-sf-housing-prices-bd61fd0e4ef9#.1c6lomtzu https://medium.com/@andersem/a-guy-just-transcribed-30-years...) shows that, with a few blips, SF housing prices have been increasing at a fairly consistent 6.6% per year for the last 70(!) years, well above inflation or GDP growth, and the compounding effects add up pretty quickly.
- bicknergseng 10y agoFun fact: that 600k studio apartment might seem outrageous now, but in 30 years at 6.6% it'll be $4,345,645, and your grandkids will get a nice $16,267,583 500sqft place to hang their hats in 50. Get in while it's good folks.
- illicium 10y agoPast performance is not a guarantee of future returns. :)
- bicknergseng 10y ago/s
- cylinder 10y agoStocks increase about that rate annually but people don't seem to have an issue with that.
- ryandrake 10y agoMost people don't own stocks, either directly or indirectly [1]. Everyone needs a home. 1: http://www.cnbc.com/2014/09/08/the-stock-gap-american-stock-holdings-at-18-year-low.html http://www.cnbc.com/2014/09/08/the-stock-gap-american-stock-...
- gautamnarula 10y agoI'm not sure what you're getting at--people don't complain about stocks increasing at that rate because they aren't negatively affected by that. When housing increased a rate that significantly exceeds that rate that wages increase, people will have to leave and the social structure of the city changed drastically when only a certain type of person (in the case of SF, typically wealthy, male, and childless) can live there.
- who_is_firing 10y agoOver the last 100 years, the Bay Area has created a regulatory environment which essentially has made increasing housing supply 100x more difficult than the average American city. This would be "fine" if the population of the area was constant. "Unfortunately" the area has been a source of economic growth for the last century as well. So you need two things for high housing price growth: 1) factors that restrict housing supply from responding to the market 2) economic growth or some other factor to make people want to move to the city. For the NIMBYs, they are ok with #1. They desire that their city stays the same, it has the same architecture, unblocked vistas, the density they are used to, the natives they know. So the NIMBYs argue to those affected by high housing costs that #2 is the real factor, i.e. "if rich people stopped moving here we would be ok". #2 is the easier argument to make, as it casts the narrative as outsiders vs natives. #1 appeals to the existing natives since they don't want change. We have to figure out a way to change the message to awareness of #1. The average Bay Area resident has no idea how many of our state and local laws are in place to make sure that market rents / housing prices can be as high as possible.
- narrator 10y agoMaybe the restrictions on building created the growth? The Bay Area is an awfully nice place to live if you have money. Every other American city, except for maybe New York City, is endless chain store filled sprawl which requires a car to do anything in. Even New York requires a minimum two hour drive to get to some decent natural scenery while with San Francisco you don't have to go very far to get to be in a great natural environment.
- coldtea 10y ago>Every other American city, except for maybe New York City, is endless chain store filled sprawl which requires a car to do anything in. Ever been to Chicago, New Orleans, Austin, San Diego, Denver, Santa Fe, Boston, Providence, Miami etc?
- ch4s3 10y agoI agree about Chicago and Boston, and I've never been to New Orleans. However, you can't walk anywhere in Austin.
- JPKab 10y ago"The only thing that stopped keeping up are salary increases." While I agree with you on the whole "tech blame game", the quoted statement makes no sense. Of course housing prices mirrored salary increases previously. That's a natural phenomenon. As you know, this is a supply issue being mistaken by the rebellious barista set as a demand issue.
- robg 10y ago"The only thing that stopped keeping up are salary increases" That's a pretty big only.
- kafkaesq 10y agoThe only thing that stopped keeping up are salary increases. What's wrong with your overall summation of the situation is that the housing crisis is -- like most things that go systemically wrong in economics and public policy -- a product of multiple sources of causation, acting in concert. That's why you can't (meaningfully) just say, "See, there's this other favor X [lack of middle class salary increases] at play. Therefore this factor Y everyone keeps talking about [high-salaried tech workers pouring into town] can't be the major factor. In fact, it's merely trendy." Because in reality the housing crisis is a product of X, Y, Z, and a host of other factors acting in concert.
- elastic_church 10y agoI was waiting for your comment. I primarily didn't want to write a dissertation with two footnotes. I also didn't want to point to the people whose salaries have caught up with housing price increases.
- kafkaesq 10y agoThose weren't footnotes. My point was that you were completely mischaracterizing the core nature of the problem.
- mikestew 10y agoMeh, it's what I've said here and elsewhere for years: California has always been expensive, always will be. (Where definition of CA == "SF/LA/San Diego, not Stockton".) The only difference I've seen lately versus historically is that during the most recent housing crash Bay Area housing didn't seem to get hit much, if at all. OTOH, there was a considerable dip in CA housing prices in the 70s that didn't seem to affect the rest of the country. The CA housing market, if nothing else, gives newspapers something to chat about on slow news days.
- wahern 10y agoPrices in San Francisco were rock bottom in 2008-2009. I saw some insanely low listing prices at the time. I'm talking stuff listing for less than $400,000 that's listing for over $1.5 million today. Unfortunately I had _just_ begun graduate school on the East coast. I spent many nights trawling Trulia with my jaw agape, pleading with my S.O. (comfortable in her rent controlled apartment) to consider buying something. Those prices don't show up on most historical charts because there were very few sales overall, and of course most sales were at the very high-end which are typically much more inelastic price-wise. Most of the market was exceptionally illiquid, which is why many of those listings were so slow. Alot of renovations and new construction that had just come onto the market were discounted to fire sale prices, dragging other listings with them, and _still_ didn't sell until a year or two later. Banks simply weren't making loans, and the all-cash buyers weren't around either because the stock market had tanked. The market rebounded much faster here than elsewhere. But, still, if you actually had hard cash at the time, and an appetite for risk (nobody knew if and when things would rebound) you could have made a killing. Some people did.
- wtvanhest 10y agoOne factor that may explain the reduced correlation between salaries and rent growth is the increase in dual income families.