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You apparently literally don't see how high net worth individuals and speculators can drive up prices much faster than new construction can possibly keep up - r

You apparently literally don't see how high net worth individuals and speculators can drive up prices much faster than new construction can possibly keep up - remember, the demand side of price? Also, there are other forces at work on the supply side, like a bonkers property tax system which incentivizes never selling your home. But your tidy narrative is better for real estate developers, so let's blithely parrot it as often as possible.

pascalxus 8y ago
Well... yes, this problem has been developing for a long long time, over the last 50 years CA has been restricting supply ever more, like those WWII frog experiments where they boiled water very slowly to see if the frogs would jump out. Some of those frogs jumped out and some died out. Now, we're facing the same dilema in SF. That doesn't mean we shouldn't try to lower the temperature. Every last apartment or house can help. We desperately need as much housing of every type we can possibly get. I don't understand how anyone with a conscience can continue to advocate for "character" with the current housing crisis. And, why are people concerned if a developer makes a profit. If people are starving, you dont say, geez we better not grow any more food lest those pesky farmers make a profit. If developers are making too large profits, then more will enter and we'll have even more housing which will lower the prices even more.
- astazangasta 8y ago
  No, this problem appeared acutely starting in 2008. When I moved to SF, rents were not exorbitant; they were high, but ordinary people could pay them. Then they climbed dramatically in a short period. This is easy to ascertain; just look at any graph of rents. This graph has no relation to the graphs for new construction or population growth, both of which grow at a steady pace. This is an acute crisis caused by a spike in demand due to the sudden inflow of new wealth, not by a supply constraint. When one person can buy up every house in the Mission, the supply side of the equation is not as relevant as the demand size. This is blindingly obvious, and only some serious denial seems to be preventing people from acknowledging this. As for concern over whether developers are making a profit; apparently you have never read any history of redevelopment. Here is a good place for you to start, learn something about your own city: https://hoodline.com/2016/01/how-urban-renewal-destroyed-the-fillmore-in-order-to-save-it https://hoodline.com/2016/01/how-urban-renewal-destroyed-the... What will happen, over and over, is poor people will be moved out, rich people will move in, and developers will make a profit. Your econ 101 fantasy will not take place.
  - ubercow13 8y ago
    Why would that speculative new capital be interested in the property if not because they know there is a supply constraint?
aantix 8y ago
It’s not immediate, but supply will catch up. If allowed. Investors want to make money and with so much demand, will tolerate increasingly smaller margins to make even more money.
mbrumlow 8y ago
While I don't agree with you I understand your line of thinking. But I think you are underestimating how good it is for the city even if people keep speculating. It will be net more money into the city off property taxes, many of them will be taxed at a higher rate as they are investment properties and not primary residence. At some point it will when out and prices will stableize. Part problem in SF the type of thinking and hate on devlopers has turned a small problem into a huge problem. That being said I would love to know what you suggest as a alternative of increasing supply.
AnimalMuppet 8y ago
If people want to buy up apartments or condos for much more than they're worth, I'll keep building them until we run out of people who have that kind of money. If you let me keep building, I will win.

pascalxus 8y ago

Well... yes, this problem has been developing for a long long time, over the last 50 years CA has been restricting supply ever more, like those WWII frog experiments where they boiled water very slowly to see if the frogs would jump out. Some of those frogs jumped out and some died out. Now, we're facing the same dilema in SF. That doesn't mean we shouldn't try to lower the temperature. Every last apartment or house can help. We desperately need as much housing of every type we can possibly get. I don't understand how anyone with a conscience can continue to advocate for "character" with the current housing crisis. And, why are people concerned if a developer makes a profit. If people are starving, you dont say, geez we better not grow any more food lest those pesky farmers make a profit. If developers are making too large profits, then more will enter and we'll have even more housing which will lower the prices even more.

astazangasta 8y ago
No, this problem appeared acutely starting in 2008. When I moved to SF, rents were not exorbitant; they were high, but ordinary people could pay them. Then they climbed dramatically in a short period. This is easy to ascertain; just look at any graph of rents. This graph has no relation to the graphs for new construction or population growth, both of which grow at a steady pace. This is an acute crisis caused by a spike in demand due to the sudden inflow of new wealth, not by a supply constraint. When one person can buy up every house in the Mission, the supply side of the equation is not as relevant as the demand size. This is blindingly obvious, and only some serious denial seems to be preventing people from acknowledging this. As for concern over whether developers are making a profit; apparently you have never read any history of redevelopment. Here is a good place for you to start, learn something about your own city: https://hoodline.com/2016/01/how-urban-renewal-destroyed-the-fillmore-in-order-to-save-it https://hoodline.com/2016/01/how-urban-renewal-destroyed-the... What will happen, over and over, is poor people will be moved out, rich people will move in, and developers will make a profit. Your econ 101 fantasy will not take place.
- ubercow13 8y ago
  Why would that speculative new capital be interested in the property if not because they know there is a supply constraint?

aantix 8y ago

It’s not immediate, but supply will catch up. If allowed. Investors want to make money and with so much demand, will tolerate increasingly smaller margins to make even more money.

mbrumlow 8y ago

While I don't agree with you I understand your line of thinking. But I think you are underestimating how good it is for the city even if people keep speculating. It will be net more money into the city off property taxes, many of them will be taxed at a higher rate as they are investment properties and not primary residence. At some point it will when out and prices will stableize. Part problem in SF the type of thinking and hate on devlopers has turned a small problem into a huge problem. That being said I would love to know what you suggest as a alternative of increasing supply.

AnimalMuppet 8y ago

If people want to buy up apartments or condos for much more than they're worth, I'll keep building them until we run out of people who have that kind of money. If you let me keep building, I will win.