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The elephant in the room wasn’t addressed. There is an affordable living developer involved yet no mention of pricing strategy? That said, hard to imagine it be

The elephant in the room wasn’t addressed. There is an affordable living developer involved yet no mention of pricing strategy? That said, hard to imagine it being any different than the highest of comps.

DuskStar 9y ago
Building more high income housing still reduces housing costs at the low end. Every person who rents in a new development - even if it's $5000/month - is a person who isn't competing in a lower cost market.
- newnewpdro 9y ago
  Surelly there's a threshold which must be crossed before the highly paid pool is depleted enough to make such an impact. Edit: To clarify, it's not as if tech companies, especially Google, are going to stop hiring and attracting more highly paid people to the area. 10,000 sounds like a number small enough to be gobbled up pretty quickly by SV tech growth. Not that I'm in favor of turning the bay area into a high density population. A lot of what makes the region so nice to be, especially the peninsula, is the relatively low density. I really wish tech companies would make more of an effort to distribute their workforce and better leverage technology to enable remote work. It's really messing with the demographics, culture, and gender distribution of places like SV. When San Jose is being referred to as Man Jose, you've got a real problem.
  - bo-chen 9y ago
    The demand curve is continuous so the effect on prices is continuous. There is no threshold effect.
    - dredmorbius 9y ago
      I tend to agree, though it might be interesting to consider dynasmics in which this wouldn't hold. Housing-as-asset-class, with phased new supply and demand stimulation might have opposite effects if the stock substitutes for other investment vehicles. Typical asset bubble.
briandear 9y ago
Supply and demand. If you increase supply, prices overall will go down. “Affordable” or other non-market schemes simply raise the prices for everyone else — including the non rich that don’t win the “affordable” lottery. More market housing everywhere solves the affordability crisis.
- deleted 9y ago
  [deleted]
- jartelt 9y ago
  Yes, more housing of any type will help! But, it seems like developers are only building high end housing, which means only units priced at the very top of the market are added. It would be great if developers built normal apartments that do not include every single possible amenity. Not every renter wants to pay a premium for granite countertops, a fancy gym, a pool, bathrooms for every bedroom, etc. I just want a well-built apartment that is within a mile of a caltrain stop, not a $5,000 2 bedroom luxury apartment...
  - closeparen 9y ago
    Look at the price differential between apartments in similar geography that do and don’t have these things. I have not found “luxury” to command a significant premium, particularly since “luxury” buildings are sometimes the only ones offering small units where the older stock is all large. The crappiest old buildings are still exorbitant. The amenities and countertops are practically free next to the cost of the fixed costs of a “well built” building of any kind.
  - driverdan 9y ago
    That's still a supply problem. So long as there is an artificially limited supply forced by NIMBYs they'll continue to build higher margin housing. If you open it up to allow 10x or even 100x more housing units you'll get ones in every price range.
  - MBlume 9y ago
    If you passed a law that car manufacturers could only sell 1000 cars per year, you can bet those would be some really fancy, expensive cars. Just let them sell cars and they start doing market segmentation and producing budget cars all on their own. Same with homes.

DuskStar 9y ago

Building more high income housing still reduces housing costs at the low end. Every person who rents in a new development - even if it's $5000/month - is a person who isn't competing in a lower cost market.

newnewpdro 9y ago
Surelly there's a threshold which must be crossed before the highly paid pool is depleted enough to make such an impact. Edit: To clarify, it's not as if tech companies, especially Google, are going to stop hiring and attracting more highly paid people to the area. 10,000 sounds like a number small enough to be gobbled up pretty quickly by SV tech growth. Not that I'm in favor of turning the bay area into a high density population. A lot of what makes the region so nice to be, especially the peninsula, is the relatively low density. I really wish tech companies would make more of an effort to distribute their workforce and better leverage technology to enable remote work. It's really messing with the demographics, culture, and gender distribution of places like SV. When San Jose is being referred to as Man Jose, you've got a real problem.
- bo-chen 9y ago
  The demand curve is continuous so the effect on prices is continuous. There is no threshold effect.
  - dredmorbius 9y ago
    I tend to agree, though it might be interesting to consider dynasmics in which this wouldn't hold. Housing-as-asset-class, with phased new supply and demand stimulation might have opposite effects if the stock substitutes for other investment vehicles. Typical asset bubble.

briandear 9y ago

Supply and demand. If you increase supply, prices overall will go down. “Affordable” or other non-market schemes simply raise the prices for everyone else — including the non rich that don’t win the “affordable” lottery. More market housing everywhere solves the affordability crisis.

deleted 9y ago
[deleted]
jartelt 9y ago
Yes, more housing of any type will help! But, it seems like developers are only building high end housing, which means only units priced at the very top of the market are added. It would be great if developers built normal apartments that do not include every single possible amenity. Not every renter wants to pay a premium for granite countertops, a fancy gym, a pool, bathrooms for every bedroom, etc. I just want a well-built apartment that is within a mile of a caltrain stop, not a $5,000 2 bedroom luxury apartment...
- closeparen 9y ago
  Look at the price differential between apartments in similar geography that do and don’t have these things. I have not found “luxury” to command a significant premium, particularly since “luxury” buildings are sometimes the only ones offering small units where the older stock is all large. The crappiest old buildings are still exorbitant. The amenities and countertops are practically free next to the cost of the fixed costs of a “well built” building of any kind.
- driverdan 9y ago
  That's still a supply problem. So long as there is an artificially limited supply forced by NIMBYs they'll continue to build higher margin housing. If you open it up to allow 10x or even 100x more housing units you'll get ones in every price range.
- MBlume 9y ago
  If you passed a law that car manufacturers could only sell 1000 cars per year, you can bet those would be some really fancy, expensive cars. Just let them sell cars and they start doing market segmentation and producing budget cars all on their own. Same with homes.