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I am an admirer of the YIMBY movement, but I do have an issue with the idea. You seem to be assuming that, by building more units and increasing density, normal

I am an admirer of the YIMBY movement, but I do have an issue with the idea. You seem to be assuming that, by building more units and increasing density, normal supply/demand forces will normalize the housing market. But, and here's my issue, what incentive is there for the landlord to lower prices before everyone who can't afford the current rates leave the SF area forever? I see the possibility of a landlord bringing more units online but still charging $3-4k a month rent just because they can. I also see the possibility of possible market collusion in order to keep rents high (multiple landlords colluding with each other to maximize profit) at the continued expense of tenants. With these possibilities in mind, just building more apartments may not be enough. I feel that the YIMBY idea is a good first step, but it is far from an end all solution.

davidw 8y ago
You're 100% correct that allowing more housing will not fix things overnight - it'll take time. "The best time to plant a tree was 20 years ago. The second best time is now." I don't think collusion is easy in a market with so many landlords. Here's an article about Denver prices dipping a few years back due to - you guessed it - lots of supply: https://www.curbed.com/2017/1/25/14342828/denver-rents-affordable-housing-apartments https://www.curbed.com/2017/1/25/14342828/denver-rents-affor...
higginsc 8y ago
You started off saying one thing: >You seem to be assuming that, by building more units and increasing density, normal supply/demand forces will normalize the housing market. And then proceeded to say a bunch of stuff that makes me think you don't believe this assumption. Think through your own example. Even if landlords collude, "still charging $3-4k a month rent", and more units open up, eventually some of those units will not be rented. Dormant units do not generate revenue, regardless of the asking price. If even more units are added, more landlords will continue to collect $0 on their dormant units. Landlords then have two options: continue to ask for $X dollars and get $0 or ask for $X-Y dollars and get $X-Y dollars. If $(X-Y) > $0, the law of large numbers, empirical studies, and common sense dictate that landlords will choose option B. Prices could stay high, however, if more people move to the area, increasing demand to match supply.
- fragmede 8y ago
  SF's strong renter's rights mean that $0 can be a better deal for the landlord. There exist values for X and Y where $X * 12 months < $Y * 8 months, and if the landlord believes the market will be that much higher in 4 months, then the unit stays empty.
  - closeparen 8y ago
    >if the landlord believes the market will be that much higher in 4 months This is a well-founded belief only because demand is increasing faster than supply.
  - lsc 8y ago
    You see this in commercial real-estate, too, where there is nothing like rent control, especially in downturns. in the late aughts/early teens I was looking for commercial space. Being a capitalist, I would target places that had been vacant for over a year, then offer 30-40% less than asking for a 1-3 year lease, with the value proposition being that I'd give them something for the downturn and they could kick me out if things picked up after a few years. No takers; the real-estate folks thought that prices were going back up and that they'd be better off with empty buildings, primed for when the economy recovered than accepting money from the likes of me. (The other bit is that rent control is not the whole of this... In california, rent control mostly doesn't apply to anything modern.) https://en.wikipedia.org/wiki/Costa%E2%80%93Hawkins_Rental_Housing_Act https://en.wikipedia.org/wiki/Costa%E2%80%93Hawkins_Rental_H... You really gotta understand that law to understand this debate; that law is essentially why the poor oppose most of these 'yimby' ordinances; the buildings that would be demolished are rent controlled in SF, and under that law would be replaced by units that are not rent control. If you don't understand that,the opposition from the poor simply doesn't make sense, because more units, in a free market, wouldn't drive up rents for anyone... but in a market with rent control, if you demolish rent control housing and replace it with market rate housing, you have less housing available for the poor. (scott wiener and other yimby types often respond by adding a certain number of affordable housing units and/or prohibit tearing down existing rent controlled places. The latter pushes new construction to more commercial/industrial spaces, which if you ask me, is just fine, as it usually means more mixed-use kind of construction)
golemiprague 8y ago
It might not come down but it won't go up so after 10 years you will find that it is cheaper because of inflation. I wish there was the same movement in Australia, in some stations you can see a lot of apartment buildings but usually it is just houses which is a huge waste.
parsthis 8y ago
One things that needs to be considered though is how does lower rental prices affect those that are currently renting in dense living situations (3/4 roommates)? If we assume prices are lowered maybe John decides room with Matthew only instead of with Matthew, Ashley and Jaheim.
refurb 8y ago
Rents in SF dropped during the financial crisis and they can drop again. Supply and demand. Demand dropped during the financial crisis. They would also drop with enough supply.

davidw 8y ago

You're 100% correct that allowing more housing will not fix things overnight - it'll take time. "The best time to plant a tree was 20 years ago. The second best time is now." I don't think collusion is easy in a market with so many landlords. Here's an article about Denver prices dipping a few years back due to - you guessed it - lots of supply: https://www.curbed.com/2017/1/25/14342828/denver-rents-affordable-housing-apartments https://www.curbed.com/2017/1/25/14342828/denver-rents-affor...

higginsc 8y ago

You started off saying one thing: >You seem to be assuming that, by building more units and increasing density, normal supply/demand forces will normalize the housing market. And then proceeded to say a bunch of stuff that makes me think you don't believe this assumption. Think through your own example. Even if landlords collude, "still charging $3-4k a month rent", and more units open up, eventually some of those units will not be rented. Dormant units do not generate revenue, regardless of the asking price. If even more units are added, more landlords will continue to collect $0 on their dormant units. Landlords then have two options: continue to ask for $X dollars and get $0 or ask for $X-Y dollars and get $X-Y dollars. If $(X-Y) > $0, the law of large numbers, empirical studies, and common sense dictate that landlords will choose option B. Prices could stay high, however, if more people move to the area, increasing demand to match supply.

fragmede 8y ago
SF's strong renter's rights mean that $0 can be a better deal for the landlord. There exist values for X and Y where $X * 12 months < $Y * 8 months, and if the landlord believes the market will be that much higher in 4 months, then the unit stays empty.
- closeparen 8y ago
  >if the landlord believes the market will be that much higher in 4 months This is a well-founded belief only because demand is increasing faster than supply.
- lsc 8y ago
  You see this in commercial real-estate, too, where there is nothing like rent control, especially in downturns. in the late aughts/early teens I was looking for commercial space. Being a capitalist, I would target places that had been vacant for over a year, then offer 30-40% less than asking for a 1-3 year lease, with the value proposition being that I'd give them something for the downturn and they could kick me out if things picked up after a few years. No takers; the real-estate folks thought that prices were going back up and that they'd be better off with empty buildings, primed for when the economy recovered than accepting money from the likes of me. (The other bit is that rent control is not the whole of this... In california, rent control mostly doesn't apply to anything modern.) https://en.wikipedia.org/wiki/Costa%E2%80%93Hawkins_Rental_Housing_Act https://en.wikipedia.org/wiki/Costa%E2%80%93Hawkins_Rental_H... You really gotta understand that law to understand this debate; that law is essentially why the poor oppose most of these 'yimby' ordinances; the buildings that would be demolished are rent controlled in SF, and under that law would be replaced by units that are not rent control. If you don't understand that,the opposition from the poor simply doesn't make sense, because more units, in a free market, wouldn't drive up rents for anyone... but in a market with rent control, if you demolish rent control housing and replace it with market rate housing, you have less housing available for the poor. (scott wiener and other yimby types often respond by adding a certain number of affordable housing units and/or prohibit tearing down existing rent controlled places. The latter pushes new construction to more commercial/industrial spaces, which if you ask me, is just fine, as it usually means more mixed-use kind of construction)

golemiprague 8y ago

It might not come down but it won't go up so after 10 years you will find that it is cheaper because of inflation. I wish there was the same movement in Australia, in some stations you can see a lot of apartment buildings but usually it is just houses which is a huge waste.

parsthis 8y ago

One things that needs to be considered though is how does lower rental prices affect those that are currently renting in dense living situations (3/4 roommates)? If we assume prices are lowered maybe John decides room with Matthew only instead of with Matthew, Ashley and Jaheim.

refurb 8y ago

Rents in SF dropped during the financial crisis and they can drop again. Supply and demand. Demand dropped during the financial crisis. They would also drop with enough supply.