5 ms·

This doesn't seem to address high end housing vs (unsubsidized) low end housing. Is a hundred new units with marble countertops as good, holistically, as a hund

This doesn't seem to address high end housing vs (unsubsidized) low end housing. Is a hundred new units with marble countertops as good, holistically, as a hundred with laminate? I think a lot of the opposition revolves around frustration with developers building luxury when the intent of the given policy was low or mid market units, combined with a belief that units targeted at the needy market segment would be the best solution.

unfiltered 9y ago
The point is if nobody builds the nicer dwelling, the person with the money that could have afforded the higher price will just turf out a lower-earning person living in a worse house, because the main feature of the house is that it provides access to the occupant's job.
jogjayr 9y ago
There are reasons for developers to prefer to build high-end housing over low-end housing. 1. City parking requirements drive up the cost of construction to the point that only luxury units would be profitable. 2. Land acquisition costs (referenced in the article) are high due to zoning laws, so developers prefer to build high-end housing to recoup those costs. 3. Labor costs the same no matter what you're building (beyond some extra for a marble installer or whatever). Labor cost is a function of cost-of-living in the area, which itself is proportional to housing costs. Since the cost of construction is high, a builder is going to build the highest-value product possible at that cost. So really all the problems boil down to city regulations, zoning, and unaffordable housing creating more unaffordable housing. "Trickle-down" is a dirty word in many circles but I think it does apply to a certain extent for housing. Today's luxury apartment is tomorrow's mid-market apartment. If I could get a better apartment than what I have for slightly more rent, I'd probably upgrade, but the difference is stupid high (nearly double). In turn, my current apartment would probably be rented by a middle-income earner if it was located somewhere other than Silicon Valley.
- sliverstorm 9y ago
  It's pretty obvious why luxury development is preferred; anybody, in any market, would prefer to make luxury units. Yet no other market seems to operate by supplying only luxury units and depending on trickle down. Why are there Corollas, instead of just more Lexuses?
  - kelnos 9y ago
    SF already has plenty of "non luxury" housing that has been gobbled up for luxury prices, often displacing people who could normally afford such housing. The theory is that building more luxury housing will take pressure off the non-luxury stock. I agree with that theory, but building more affordable and below-market housing (instead, or simultaneously) will likely have a faster, more positive effect.
    - jogjayr 9y ago
      But it's impossible to make affordable and below-market housing profitable unless the underlying issues, land acquisition costs and zoning, are addressed. That means the government will have to subsidize these units and they still won't be enough to meet demand. So only the lucky few who win the housing lottery will benefit. Everyone else (most lower-income people, middle-income renters overpaying for low-end housing) still loses out. I'd prefer that we solved the problem for most people rather than just a lucky few. If people couldn't afford food because not enough farmland was available for reasons like "preserving the character of the area" (imagine that you can't truck food in from lower-cost locations in this scenario) you bet we'd find a way to start growing more food stat. No one would say "Well we'll just subsidize food for some people so fewer people will starve. But it's no use letting farmers farm because they'll just grow Kobe beef and avocados instead of wheat and corn".
      - kelnos 9y ago
        > But it's impossible to make affordable and below-market housing profitable unless the underlying issues, land acquisition costs and zoning, are addressed. Totally agree. Developers don't want to build affordable housing because they in some cases actually stand to lose money when doing so. SF's byzantine planning process makes it that way, and that's not going to change without some heavy reform there.
dredmorbius 9y ago
From TFA: "Two market rate houses reduce displacement as much as one affordable house".
- sliverstorm 9y ago
  If you read TFA more closely, they clarify that "affordable house" is a euphemism for "subsidized house".
kelnos 9y ago
In a city like SF, it's very expensive to build housing, due in no small part to the city's ridiculous planning process. Developers try to offset this cost by building luxury housing, which will of course fetch a higher price when sold.

unfiltered 9y ago

The point is if nobody builds the nicer dwelling, the person with the money that could have afforded the higher price will just turf out a lower-earning person living in a worse house, because the main feature of the house is that it provides access to the occupant's job.

jogjayr 9y ago

There are reasons for developers to prefer to build high-end housing over low-end housing. 1. City parking requirements drive up the cost of construction to the point that only luxury units would be profitable. 2. Land acquisition costs (referenced in the article) are high due to zoning laws, so developers prefer to build high-end housing to recoup those costs. 3. Labor costs the same no matter what you're building (beyond some extra for a marble installer or whatever). Labor cost is a function of cost-of-living in the area, which itself is proportional to housing costs. Since the cost of construction is high, a builder is going to build the highest-value product possible at that cost. So really all the problems boil down to city regulations, zoning, and unaffordable housing creating more unaffordable housing. "Trickle-down" is a dirty word in many circles but I think it does apply to a certain extent for housing. Today's luxury apartment is tomorrow's mid-market apartment. If I could get a better apartment than what I have for slightly more rent, I'd probably upgrade, but the difference is stupid high (nearly double). In turn, my current apartment would probably be rented by a middle-income earner if it was located somewhere other than Silicon Valley.

sliverstorm 9y ago
It's pretty obvious why luxury development is preferred; anybody, in any market, would prefer to make luxury units. Yet no other market seems to operate by supplying only luxury units and depending on trickle down. Why are there Corollas, instead of just more Lexuses?
- kelnos 9y ago
  SF already has plenty of "non luxury" housing that has been gobbled up for luxury prices, often displacing people who could normally afford such housing. The theory is that building more luxury housing will take pressure off the non-luxury stock. I agree with that theory, but building more affordable and below-market housing (instead, or simultaneously) will likely have a faster, more positive effect.
  - jogjayr 9y ago
    But it's impossible to make affordable and below-market housing profitable unless the underlying issues, land acquisition costs and zoning, are addressed. That means the government will have to subsidize these units and they still won't be enough to meet demand. So only the lucky few who win the housing lottery will benefit. Everyone else (most lower-income people, middle-income renters overpaying for low-end housing) still loses out. I'd prefer that we solved the problem for most people rather than just a lucky few. If people couldn't afford food because not enough farmland was available for reasons like "preserving the character of the area" (imagine that you can't truck food in from lower-cost locations in this scenario) you bet we'd find a way to start growing more food stat. No one would say "Well we'll just subsidize food for some people so fewer people will starve. But it's no use letting farmers farm because they'll just grow Kobe beef and avocados instead of wheat and corn".
    - kelnos 9y ago
      > But it's impossible to make affordable and below-market housing profitable unless the underlying issues, land acquisition costs and zoning, are addressed. Totally agree. Developers don't want to build affordable housing because they in some cases actually stand to lose money when doing so. SF's byzantine planning process makes it that way, and that's not going to change without some heavy reform there.

dredmorbius 9y ago

From TFA: "Two market rate houses reduce displacement as much as one affordable house".

sliverstorm 9y ago
If you read TFA more closely, they clarify that "affordable house" is a euphemism for "subsidized house".

kelnos 9y ago

In a city like SF, it's very expensive to build housing, due in no small part to the city's ridiculous planning process. Developers try to offset this cost by building luxury housing, which will of course fetch a higher price when sold.