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To add to this, it's not just that restricting the housing supply results in a shortage. Also, because there's systematic restrictions on construction, speculat

To add to this, it's not just that restricting the housing supply results in a shortage. Also, because there's systematic restrictions on construction, speculating on a continued housing shortage (and hence consistently high housing prices) is a surefire bet if the housing supply never increases. If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. On the other hand, going housepoor on a six figure salary seems like a reasonable choice when you see articles like this https://www.mercurynews.com/2018/06/28/map-shows-it-may-take-centuries-to-reach-housing-goals-in-the-bay-area/ https://www.mercurynews.com/2018/06/28/map-shows-it-may-take... and think that you might not have another chance in your lifetime to afford a house in the area.

mywittyname 8y ago
> If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. This is absolutely the way people think, but it might actually not be true. The person in question may be able to sell their land for a large multiple of their purchase price, if a developer were able to tear down the structure to build a multi-tenant dwelling. As it currently stands, the maximum economic value that can be derived is based on that of a single family home for the top x% of earners who can afford to buy one. But if you could house ten families on the same land, the economic value probably skyrockets.
- helen___keller 8y ago
  In my particular case I was starting with the assumption that the single family home remains zoned for single family, but elsewhere in the economic region theres a huge building boom relieving the region of housing scarcity. That said, you are absolutely correct. If building large multifamily dwellings were cheaper & always viable, you would see the cost of a single family home increase to reflect the profitability of doing so (until it is not as profitable, at which point single family homes would start decreasing)
conanbatt 8y ago
> speculating on a continued housing shortage (and hence consistently high housing prices) is a surefire bet if the housing supply never increases. Two important concepts about this. The first is that in places like SF, those making the speculation are also the ones that dominate the elections. Figure that SF has a high amount of renters, of the which many are foreigners that can't vote. That shows a skewed and corrupt political system. Second, that such a ploy of decreasing housing shortage is economically inefficient, and thus makes the whole poorer. In an efficient system, the more housing, the more people, the more services and tax income and everybody wins. So how can the home-owners be benefitted more if the pie shrinks than if it grows? Its the tax system that double punishes renters and prizes landlords. SF spends 2,600U$S a month per household. If the city levied its taxes on land instead, it would literally eat up all the rental prices of land, and housing would be worth next to nothing: but because instaed it punishes workers coming into the city with sales taxes, and companies with corporate taxes, landlords actually get a double pay: they get paid by the renters twice.

mywittyname 8y ago

> If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. This is absolutely the way people think, but it might actually not be true. The person in question may be able to sell their land for a large multiple of their purchase price, if a developer were able to tear down the structure to build a multi-tenant dwelling. As it currently stands, the maximum economic value that can be derived is based on that of a single family home for the top x% of earners who can afford to buy one. But if you could house ten families on the same land, the economic value probably skyrockets.

helen___keller 8y ago
In my particular case I was starting with the assumption that the single family home remains zoned for single family, but elsewhere in the economic region theres a huge building boom relieving the region of housing scarcity. That said, you are absolutely correct. If building large multifamily dwellings were cheaper & always viable, you would see the cost of a single family home increase to reflect the profitability of doing so (until it is not as profitable, at which point single family homes would start decreasing)

conanbatt 8y ago

> speculating on a continued housing shortage (and hence consistently high housing prices) is a surefire bet if the housing supply never increases. Two important concepts about this. The first is that in places like SF, those making the speculation are also the ones that dominate the elections. Figure that SF has a high amount of renters, of the which many are foreigners that can't vote. That shows a skewed and corrupt political system. Second, that such a ploy of decreasing housing shortage is economically inefficient, and thus makes the whole poorer. In an efficient system, the more housing, the more people, the more services and tax income and everybody wins. So how can the home-owners be benefitted more if the pie shrinks than if it grows? Its the tax system that double punishes renters and prizes landlords. SF spends 2,600U$S a month per household. If the city levied its taxes on land instead, it would literally eat up all the rental prices of land, and housing would be worth next to nothing: but because instaed it punishes workers coming into the city with sales taxes, and companies with corporate taxes, landlords actually get a double pay: they get paid by the renters twice.