4 ms·

Well, it seems like you're making an assumption about the 'opportunity cost' of building/operating the apartment building, that it's grown far less than the wag

by ColanR 8y ago

Well, it seems like you're making an assumption about the 'opportunity cost' of building/operating the apartment building, that it's grown far less than the wages. If your argument (that rental costs are too high) rests on that assumption, seems like it should be addressed and backed up. I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more.

thereisnospork 8y ago
My analysis is a top-down one, In summary: rents in SF/Bay area are 3-4k for new construction 1 bedroom, which is say double Chicago or Houston, and much more even than the Bay Area 10 or 15 years ago. So it reasons that at the prices being paid, people should be able to build profitably. That they aren't implies they can't or have onerous restrictions. For fun, take a (google maps) walk around SF or downtown Oakland and count the single-family homes, parking lots, and vacant lots that, at least mechanically, could easily be turned into very profitable apartments - yet aren't. > I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more. Restrictive zoning, planning commissions, NIMBYs, activist groups (historical societies, environmental groups,), onerous and vague regulations1 (that can be easily challenged in court.) for a few examples. All serve to both make development costs increase and project success uncertain. 1 e.g. Regulations should exist that require buildings to be earthquake safe (environmentally friendly, etc.), but said regulations should also provide concrete metrics to define 'earthquake safe' otherwise nothing stops lawsuits alleging a failure to properly design a building to be earthquake safe -- which costs a lot of money and time.
- ColanR 8y ago
  Well, I don't disagree with either of those points. :) Thanks for the elucidation.
- njarboe 8y ago
  You should take a walk around downtown Oakland. Most of the parking lots have turned into construction sites over the last 3 or 4 years. Not many tear downs happening yet(a few, like an Acura dealership across from Whole Foods getting torn down and a ~20 story apt building going up in its place), but this boom has gone on so long that the NIMBYs have finally gotten tired and thousands of apartments will be coming on the market in Oakland pretty soon. As a long time home owner in the area I like how this is finally happening after decades of people thinking an Oakland revival was just around the corner. Most of the companies doing the construction are from out of state. Maybe they just didn't know it was impossible to build in Oakland, saw the huge potential profits, and went for it.

by ColanR 8y ago

thereisnospork 8y ago

My analysis is a top-down one, In summary: rents in SF/Bay area are 3-4k for new construction 1 bedroom, which is say double Chicago or Houston, and much more even than the Bay Area 10 or 15 years ago. So it reasons that at the prices being paid, people should be able to build profitably. That they aren't implies they can't or have onerous restrictions. For fun, take a (google maps) walk around SF or downtown Oakland and count the single-family homes, parking lots, and vacant lots that, at least mechanically, could easily be turned into very profitable apartments - yet aren't. > I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more. Restrictive zoning, planning commissions, NIMBYs, activist groups (historical societies, environmental groups,), onerous and vague regulations1 (that can be easily challenged in court.) for a few examples. All serve to both make development costs increase and project success uncertain. 1 e.g. Regulations should exist that require buildings to be earthquake safe (environmentally friendly, etc.), but said regulations should also provide concrete metrics to define 'earthquake safe' otherwise nothing stops lawsuits alleging a failure to properly design a building to be earthquake safe -- which costs a lot of money and time.

ColanR 8y ago
Well, I don't disagree with either of those points. :) Thanks for the elucidation.
njarboe 8y ago
You should take a walk around downtown Oakland. Most of the parking lots have turned into construction sites over the last 3 or 4 years. Not many tear downs happening yet(a few, like an Acura dealership across from Whole Foods getting torn down and a ~20 story apt building going up in its place), but this boom has gone on so long that the NIMBYs have finally gotten tired and thousands of apartments will be coming on the market in Oakland pretty soon. As a long time home owner in the area I like how this is finally happening after decades of people thinking an Oakland revival was just around the corner. Most of the companies doing the construction are from out of state. Maybe they just didn't know it was impossible to build in Oakland, saw the huge potential profits, and went for it.