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>If it were bifurcated, pressure in the luxury segment would not affect the working-class segment. But it does. If the market isn't bifurcated as you say then

>If it were bifurcated, pressure in the luxury segment would not affect the working-class segment. But it does. If the market isn't bifurcated as you say then building lots of lower rent units will bring down the rents in the luxury segment. Great for everyone! >In an ideal world, new housing would most directly target those in need What you're arguing for is a removal of the poor from certain parts of the city they currently exist in. It's a purely political decision and an ugly one at that. We don't need an ideal world or a revolution to build and maintain affordable housing.

closeparen 9y ago
>building lots of lower rent units will bring down the rents in the luxury segment Sure. Wealthy people can lower their standards and take housing meant for the class below; people who are struggling can't exactly raise theirs, but they do group into larger/more crowded households to bid upmarket. When there are not enough small apartments, for example, people find several other working housemates for single-"family" homes that are then no longer available to 1- or 2-income middle class families. I suspect the pressure is stronger in the downmarket direction but it absolutely cuts both ways. (And homes that are too upmarket sometimes don't act as housing at all). >What you're arguing for is a removal of the poor from certain parts of the city they currently exist in Nope. With sufficient heights, the problem is addressable through infill development on commercial/industrial properties (ideally replacing existing uses on the lower floors) and upzoning to permit mid-rises in predominately owner-occupier single-family house zones. >We don't need an ideal world or a revolution to build and maintain affordable housing. The Bay Area's housing deficit over 2012-2017 is conservatively 120,000 homes based on 400,000 new jobs, 60,000 new homes, and an average household size of 2.3 (many household members are not workers). [0] The average cost to build an affordable housing unit in California (so an underestimate for the Bay Area) is $332,000. [1] So $39 billion is a lower bound to walk balk just 5 years of a problem decades in the making. Where's the money going to come from? Not property taxes: prop 13 repeal would be a revolution in itself. Not federal subsidies: do you think the Trump administration wants to subsidize coasties? Not tech companies: there's always some Bay Area municipality that's happy to keep the free tax revenue and soaring housing demand (particularly for owner-occupier areas) local. San Francisco spends tens of millions on affordable housing when what's needed is tens of billions. Even the state of California spends only hundreds of millions. So far the best anyone has come up with is (effective) taxes on market-rate development. To get the numbers required, we're going to need a hell of a lot more market-rate development to tax. [0] https://www.bloomberg.com/news/articles/2017-06-23/why-can-t-they-build-more-homes-where-the-jobs-are https://www.bloomberg.com/news/articles/2017-06-23/why-can-t... [1] https://www.mercurynews.com/2017/08/16/walters-bills-would-make-california-housing-even-more-expensive/ https://www.mercurynews.com/2017/08/16/walters-bills-would-m...
- frgtpsswrdlame 9y ago
  >Sure. Wealthy people can lower their standards and take housing meant for the class below That's the point though, if the housing is actually low rent the wealthy can't just 'take it.' Some wealthy people will get apartments but so will some poor, that's definitely better than building high rent housing which only wealthy people will have a shot at. >With sufficient heights, the problem is addressable through infill development on commercial/industrial properties So you're gonna move the poor to industrial sections... This is just a reinforcement of what I said. >and upzoning to permit mid-rises in predominately owner-occupier single-family house zones. You're going to go into neighborhoods and throw up large buildings filled with low rent housing? In your dreams you're going to. >The Bay Area's housing deficit over 2012-2017 is conservatively... I think you misunderstand. I'm talking about housing which is affordable for the poor - subsidized housing, rent controls and the like. Housing for well to do techies is of secondary importance.
  - closeparen 9y ago
    >if the housing is actually low rent the wealthy can't just 'take it.' The only buildings which are permanently carved out for low- and middle-income households are those built as permanently affordable. You are actively hostile to accelerating the construction of such buildings, so this statement is just bizarre. Of course you can spend less than your maximum budget. Do you imagine that rich people can't buy economy cars? With demand so far exceeding supply, all other housing (regardless of its quality or who previously occupied it) becomes "for" the well-to-do given enough time. Leases end, the units maybe get renovated a bit, and the new occupants are wealthier and whiter and paying more. Not caring about "techies" doesn't remove the effect of a population boom from the market. People are wildly overthinking this. Adding N + 1 households to N homes is certainly going to cause a problem, by the pigeonhole principle.
adrianmonk 9y ago
> lots of lower rent units will bring down the rents in the luxury segment I'm not sure I agree that that will help anything, and it might even be a bad thing. Assuming an area has a housing shortage because of an influx of people drawn to the area by good jobs, the newcomers' biggest problem is not a shortage of money to spend. It's a shortage of housing to spend it on. That is, if you have 100,000 people who make $150K/year, luxury units go for $3000/month, and there are only enough luxury units to house 75,000 of those people, lowering the price on luxury units to $2500/month won't pull the remaining 25,000 people out of non-luxury units. And the reason why it might be a bad thing is that it costs money to build new housing. The higher rent the developers can charge for brand spanking new housing, the more investors and developers it attracts and the more housing can be built. Once the new luxury housing can be built, the well-paid 25,000 who were forced into non-luxury housing can upgrade and stop being forced to take lower rent housing (that they don't even want to live in) away from people who don't want them to have it.
- frgtpsswrdlame 9y ago
  Well you're only considering the problems of the wealthy newcomers and not the problems of the impoverished who already exist there.
  - adrianmonk 9y ago
    No, I am considering the problems of the impoverished. One major cause of their problems is that wealthy newcomers are forced by lack of supply to compete with the impoverished for housing. This screws over everyone. The poor don't want to compete with the rich for housing. The rich don't want to live in housing that is below their quality standards. Also, how do you think new housing stock gets built? It takes capital to build housing. You attract that by luring investors with the promise of returns on their investment. Who can pay for that? Wealthy newcomers who can afford to pay high rents. The way to get housing built is to tap into the gigantic piles of cash available.

closeparen 9y ago

>building lots of lower rent units will bring down the rents in the luxury segment Sure. Wealthy people can lower their standards and take housing meant for the class below; people who are struggling can't exactly raise theirs, but they do group into larger/more crowded households to bid upmarket. When there are not enough small apartments, for example, people find several other working housemates for single-"family" homes that are then no longer available to 1- or 2-income middle class families. I suspect the pressure is stronger in the downmarket direction but it absolutely cuts both ways. (And homes that are too upmarket sometimes don't act as housing at all). >What you're arguing for is a removal of the poor from certain parts of the city they currently exist in Nope. With sufficient heights, the problem is addressable through infill development on commercial/industrial properties (ideally replacing existing uses on the lower floors) and upzoning to permit mid-rises in predominately owner-occupier single-family house zones. >We don't need an ideal world or a revolution to build and maintain affordable housing. The Bay Area's housing deficit over 2012-2017 is conservatively 120,000 homes based on 400,000 new jobs, 60,000 new homes, and an average household size of 2.3 (many household members are not workers). [0] The average cost to build an affordable housing unit in California (so an underestimate for the Bay Area) is $332,000. [1] So $39 billion is a lower bound to walk balk just 5 years of a problem decades in the making. Where's the money going to come from? Not property taxes: prop 13 repeal would be a revolution in itself. Not federal subsidies: do you think the Trump administration wants to subsidize coasties? Not tech companies: there's always some Bay Area municipality that's happy to keep the free tax revenue and soaring housing demand (particularly for owner-occupier areas) local. San Francisco spends tens of millions on affordable housing when what's needed is tens of billions. Even the state of California spends only hundreds of millions. So far the best anyone has come up with is (effective) taxes on market-rate development. To get the numbers required, we're going to need a hell of a lot more market-rate development to tax. [0] https://www.bloomberg.com/news/articles/2017-06-23/why-can-t-they-build-more-homes-where-the-jobs-are https://www.bloomberg.com/news/articles/2017-06-23/why-can-t... [1] https://www.mercurynews.com/2017/08/16/walters-bills-would-make-california-housing-even-more-expensive/ https://www.mercurynews.com/2017/08/16/walters-bills-would-m...

frgtpsswrdlame 9y ago
>Sure. Wealthy people can lower their standards and take housing meant for the class below That's the point though, if the housing is actually low rent the wealthy can't just 'take it.' Some wealthy people will get apartments but so will some poor, that's definitely better than building high rent housing which only wealthy people will have a shot at. >With sufficient heights, the problem is addressable through infill development on commercial/industrial properties So you're gonna move the poor to industrial sections... This is just a reinforcement of what I said. >and upzoning to permit mid-rises in predominately owner-occupier single-family house zones. You're going to go into neighborhoods and throw up large buildings filled with low rent housing? In your dreams you're going to. >The Bay Area's housing deficit over 2012-2017 is conservatively... I think you misunderstand. I'm talking about housing which is affordable for the poor - subsidized housing, rent controls and the like. Housing for well to do techies is of secondary importance.
- closeparen 9y ago
  >if the housing is actually low rent the wealthy can't just 'take it.' The only buildings which are permanently carved out for low- and middle-income households are those built as permanently affordable. You are actively hostile to accelerating the construction of such buildings, so this statement is just bizarre. Of course you can spend less than your maximum budget. Do you imagine that rich people can't buy economy cars? With demand so far exceeding supply, all other housing (regardless of its quality or who previously occupied it) becomes "for" the well-to-do given enough time. Leases end, the units maybe get renovated a bit, and the new occupants are wealthier and whiter and paying more. Not caring about "techies" doesn't remove the effect of a population boom from the market. People are wildly overthinking this. Adding N + 1 households to N homes is certainly going to cause a problem, by the pigeonhole principle.

adrianmonk 9y ago

> lots of lower rent units will bring down the rents in the luxury segment I'm not sure I agree that that will help anything, and it might even be a bad thing. Assuming an area has a housing shortage because of an influx of people drawn to the area by good jobs, the newcomers' biggest problem is not a shortage of money to spend. It's a shortage of housing to spend it on. That is, if you have 100,000 people who make $150K/year, luxury units go for $3000/month, and there are only enough luxury units to house 75,000 of those people, lowering the price on luxury units to $2500/month won't pull the remaining 25,000 people out of non-luxury units. And the reason why it might be a bad thing is that it costs money to build new housing. The higher rent the developers can charge for brand spanking new housing, the more investors and developers it attracts and the more housing can be built. Once the new luxury housing can be built, the well-paid 25,000 who were forced into non-luxury housing can upgrade and stop being forced to take lower rent housing (that they don't even want to live in) away from people who don't want them to have it.

frgtpsswrdlame 9y ago
Well you're only considering the problems of the wealthy newcomers and not the problems of the impoverished who already exist there.
- adrianmonk 9y ago
  No, I am considering the problems of the impoverished. One major cause of their problems is that wealthy newcomers are forced by lack of supply to compete with the impoverished for housing. This screws over everyone. The poor don't want to compete with the rich for housing. The rich don't want to live in housing that is below their quality standards. Also, how do you think new housing stock gets built? It takes capital to build housing. You attract that by luring investors with the promise of returns on their investment. Who can pay for that? Wealthy newcomers who can afford to pay high rents. The way to get housing built is to tap into the gigantic piles of cash available.