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The problem is a lack of inventory. When you have limited supply and a ton of demand, that's how you get high prices. Why is there a lack of housing? While Prop
by chaostheory 8y ago
The problem is a lack of inventory. When you have limited supply and a ton of demand, that's how you get high prices. Why is there a lack of housing? While Prop 13 is an issue, imo it's not the core problem.
This is the problem:
"High rents reflect the success of California’s businesses—but also decades of low investment and over-regulation. The California Environmental Quality Act, passed in 1970, aimed to ensure that environmental concerns got a proper hearing in planning and development. In practice, the act has become a NIMBYs’ charter. Four-fifths of all suits filed under it have sought to stop infill development in cities (ie, on land already zoned for building) even though this usually has a smaller environmental impact than building on green fields. California’s development and impact fees are about three times higher than the national average. Zoning laws and parking requirements are onerous, too."
SF isn't even the worst offender compared to cities like Belmont and Palo Alto. While there are real safety concerns that limit development since 1. we're in earthquake country, and also because of 2. some Superfund sites in parts of the Bay Area; most of the problems just stem from current homeowners of single family homes (NIMBYs), who do not want high-density housing near their house. Until this changes, no reasonable amount of income assistance will solve this problem for the poor or the middle class. There's just too little usable land here to be exclusively used for traditional single-family homes.
This has more detail about the problem in SF: https://www.sfchronicle.com/politics/article/How-powerful-is-Bay-Area-s-pro-housing-13352047.php https://www.sfchronicle.com/politics/article/How-powerful-is...
- i_am_nomad 8y agoWe should tear down whatever cruel fences and checkpoints exist that prevent people from leaving the Bay Area for more affordable places.
- chaostheory 8y agoA lot of Californians have already done this and continue to do this, which is why the natives of places like Portland, Austin, Boulder, and Boise complain about former CA residents causing housing prices to spike
- fjsolwmv 8y agoNone of those places have Prop 13 or California's environmental rules, so why can't they build appropriate density?
- mattrices 8y agoHousing supply isn't very elastic.
- jtbayly 8y agoPresumably it takes time and a continual influx is going to leave the demand constantly ahead of the catching up supply.
- pmorici 8y agoSkilled construction workers are a limited resource.
- mmirate 8y agoSkilled construction workers that aren't yet half-disabled, you mean. They have a shelf life, not unlike those of professional football players, stuntmen, longshoremen, firefighters, soldiers, pre-Industrial-Revolution farmers, etc. "Back-breaking" isn't just a figure-of-speech; modern medicine isn't (yet?) advanced enough that a rational actor should ever choose construction work over something else; and there are just enough desperate people around that I doubt anyone is willing to pay the true cost of construction-work to a not-as-desperate would-be construction-worker. The limited resource here, then, is actually: desperate people who are still smart enough to do construction work. I can't wait until construction becomes a non-human-powered activity - even if it still requires a human to control the machinery.
- pmorici 8y agoYeah, I don't buy this. The problem is more about the cyclical nature of the construction industry and the trend to push people to get a college degree and away from the trades which pay pretty well it's not as back breaking as you are making it out to be.
- jinglebells 8y agoSmart-ass answer, but the fences are financial and very real. If you have no money, how are you supposed to afford to travel to a completely different part of the country where you have no friends or family, find a job and rent an apartment?
- chaostheory 8y agoCA actually offers free bus passes for this. Well every state does - some like NY even offer plane tickets: https://www.theguardian.com/us-news/ng-interactive/2017/dec/20/bussed-out-america-moves-homeless-people-country-study https://www.theguardian.com/us-news/ng-interactive/2017/dec/...
- bvxvbxbxb 8y agoIt's true but it's horrible. It's called homeless dumping, similar to hospital patient dumping. Pencil-pushers use it to play games with citizens they view as "liabilities," rather than as human-beings.
- chaostheory 8y agoI agree since it doesn’t solve the real problem. I commented on it in a separate thread below
- georgeecollins 8y agoHow do you think this country was settled-- by a bunch of wealthy people staying on a friends couch?
- deleted 8y ago[deleted]
- Retric 8y agoBy people with enough resources to move to an area without infrastructure and set it up. That takes money, not necessarily crazy money but far more than a the average homeless person has. PS: The first US colonies actually took a crazy amount of capital to set up. The west was largely settled by people in covered wagons which for the time period also represented a lot of capital ~50,000+$ in 2018 USD.
- prolikewh0a 8y agoWhy do only the rich get to live in sprawling nice populated and interesting areas? It's literal segregation.
- mmirate 8y agoNo, it's literal allocation of scarce resources. Their homes would do quite nicely as office-parks or some other commercial property, but those people both are rich enough and value their places irrationally enough, to [pay out their butts, and/or lose out on a big payout, to] stay there instead of taking their share of what developers think they can earn from that land.
- hopefulengineer 8y agoWhy doesn't the government just use eminent domain to buy out some Nimby's in crucial areas and build some high rise apartments? The housing issue is 100% supply and demand. If I could wave a magic wand and create 1,000,000 apartments in SF rent prices would drop. I'm assuming there's political pressure from wealthy land lords who don't want their cash cow slain?
- lettergram 8y agoEven with eminent domain, you have to pay fair value for compensation. Plus, there are some clear guidelines California and the government setup for this. I don't believe there is precedent for building low cost housing in a safe, well-off, neighborhood (the kind that get people elected)
- claydavisss 8y agoExactly. There is absolutely no way anyone sane would want to live in a society where eminent domain is free and easy. Today its funny because they are tearing down some NIMBY mansion, but tomorrow they are tearing down your house. In the end, you realize you have created a society in which the same people who run BART can wake up in the morning and just decide your house is getting demolished "for justice". Thats how revolutions start. Be sure to do a door-to-door inspection for firearms before tearing down someone's house without their consent. OR, people in the Bay Area can MOVE. Why can't you move?
- chrisdhoover 8y agoProperty rights are fundamental to the success of the country. Keto was a big mistake.
- masonic 8y agoWhy can't you move? Because losing one's Prop 13 taxation rate is a huge hit. Vote for Prop 5 so that the rate savings is portable throughout CA, and lots of Bay area homeowners will mive gladly to cheaper areas, freeing up housing.
- blablabla123 8y agoSo there seems to be a solution for the housing part. I wonder though if there is one for the job part as well. Even if you fix the housing problem to some degree by having much more capacity and cheaper housing. I doubt this would stay stable, if the Bay Area continues to grow - I don't see any serious sign that this is not the case - the problem will emerge eventually again. I wonder how the job market would have to look like to make this stable.
- conanbatt 8y agoI have a slightly different interpretation of the problem and the solution. NIMBYism is not the origin of the problem, but the consequence. Nimbyism pays off because for the owner, increased rents is a stronger incentive than increased value. The more people go into, for example, San Francisco, and less units are build, rents go up, and city revenues go up as well. Thus NYMBIsm has a strong incentive to be used. The situation would be exactly opposite if San Francisco did not charge, for example, Sales taxes to everyone, and used prop taxes to levvy its revenues. Ideally, they would use land value tax. This would change the basic incentive to be nymby: the more the city spends and builds, the more people in low density housing will have to pay. And then they will be asking themselves for developers to build and give them units, which is what happens in cities that have alligned incentives. This is an important idea: this means that the solution is NOT to prevent NIMBY, because you cant fight against powerful incentives. The single most powerful thing the city could do is move sales taxes into land value taxes: every worker's income will increase, including landlords, but will shift the burden from poor to rich, from landlod to renter, and from non-labor to labor.
- nojvek 8y agoThis * 1000. There’s a reason why even though Seattle has a big boom the house prices are not SF crazy. The more your house increases in value, the more tax you pay. I love Seattle for its shitty weather and somewhat affordable housing for how much companies are willing to pay.
- conanbatt 8y agoMy main issue with seattle is that, although the rent problem is not nearly as bad as SF, they have been ramping up their own spending exponentially. So what the landlord is not getting, the public officials are spending.
- specialist 8y agoSupply & demand. Not a mystery. Drives me nuts that my left-wing brethren often oppose upzoning, development, increasing density. Rent control is not a long term fix and ultimately makes the problem worse. Our democracy is possible BECAUSE of capitalism AND socialism, not despite one or the other. There's more housing than people in the USA. At this point, the most likely durable remedy is UBI, thereby enabling people to repopulate (or stay in) the interior, mitigating the urbanization trend.
- hvo 8y agoI will add that zoning is the first thing that needs to go in San Fransisco.One of the most liberal cities in United States is not so liberal when it comes to housing.Why? Because it affects their bottom line. Did you know that it is illegal to build apartments in over 73% of San Francisco neighborhoods?[0] That's why I don't support this ideal of tax proposition to cater for homeless as it is being introduced. The proponents are just chasing shadow while leaving the substance. Instead I suggest proposition to dismantle zoning as the first step in the right direction. [0]https://sfzoning.deapthoughts.com/ https://sfzoning.deapthoughts.com/