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Even if all new construction was luxury apartments and condos it would still help. Right now if you make $120,000/yr in SF as an entry level software developer

Even if all new construction was luxury apartments and condos it would still help. Right now if you make $120,000/yr in SF as an entry level software developer you might pay $2500/mo for an old one bedroom. If new luxury buildings go up, you might be able to upgrade to a nicer one bedroom for $2500 and now the old one bedroom will be available for someone making $90k/yr and so on.

sandworm101 7y ago
It would help somewhat but if a city is deciding how to zone a plot of land to best address the housing problem, smaller/cheaper units would be the more efficient route. >> Right now if you make $120,000/yr in SF as an entry level software developer SF's government doesn't care much about those making 100+/year. They are looking at a sea of homeless people. They need/want to address the lower end of the market, apartments for waiters and bus drivers.
- erik_seaberg 7y ago
  That's nice but the upmarket shortage is adding to the downmarket (substitute good) shortage. If a techie and a waiter each need an apartment, but the city doesn't permit two apartments to be built, they shouldn't be surprised what happens.
- twblalock 7y ago
  People are moving to San Francisco to take high-paying jobs and there is not enough luxury housing to accommodate them, so they are out-competing poorer people for whatever housing they can get. If more luxury housing was built, those people would take it and leave the rest of the housing for other people.
  - sandworm101 7y ago
    If the rich people are already willing to live in smaller apartments, let them. I say the city should concentrate on housing the poor and homeless. Let the rich take care of themselves. They generally do.
    - sigstoat 7y ago
      and the point is they'll take care of themselves by renting the cheap housing if that's all thats available. even if the rental cost is fixed, they'll outbid by being better tenants, or hiring agencies to get their name in first on waiting lists, or just bribing the low-level decision makers. build more housing.
anigbrowl 7y ago
Only if you assume the current population of the city is held steady and you are not beaten out by new arrivals. Every law of basic economics exists only under very narrow conditions where all but one factor is controlled. Expecting the real world to conform to theoretical models is about as sensible as looking for rocks that happen to be perfect platonic solids. Pointing this out is not a rejection of economics any more than pointing to the variegation of rocks indicates a dislike of geometry.
- foota 7y ago
  It would help relative to doing nothing in that case though, right?
  - anigbrowl 7y ago
    I'm honestly not sure. I can't think of arguments both ways but not an easy way to model it.
    - nostrademons 7y ago
      You can model it effectively by taking dollar values out of the equation and assuming a rank ordering of people who want to live in an area by the amount they are willing & able to spend on housing. If an area has say 1M housing units but 3M people want to live there, only the top 1/3 of people who want to live there will be able to. The market-clearing housing price (or rent) will be whatever that 67th-percentile hopeful has available to spend on housing. Building more housing means you go further down the list of incomes. Fixing income inequality reduces the gap between what the person who gets the house pays and what the person who doesn't get the house would need to pay, which makes things seem more achievable (and increases disposable income for people who get the house), but doesn't change who gets the houses. Rent control replaces the price-ordering by time-and-luck-ordering for a subset of the population: some people enter a secondary housing market where they get the house by virtue of being lucky at the time it went on the market. Prop 13 preferences older homeowners over new immigrants (or young people) by effectively surcharging new purchasers. The only two policies that solve the displacement problem are building more housing and making the city less desirable to residents, but other policies can change who gets displaced. San Francisco is an interesting case because tech tends to have so much higher salaries than other industries. As long as there are enough tech workers to fill up all vacancies in a given housing market, the market-clearing price will rise to a tech-worker's salary, and everyone in other industries will be forced out. How many people can San Francisco tech companies hire? I dunno, but I'd bet it's a lot more than the number of housing units currently being built in SF, which means that some people are gonna get kicked out on the street. The single-family home market in the Bay Area is probably already shot - given the number of units on the market, dual-tech-earner families could easily fill them. But the condo and rental market might be able to be saved; enough building could probably create enough housing there to absorb the tech industry, which would leave units that rent at the price an ordinary worker could afford.

sandworm101 7y ago

It would help somewhat but if a city is deciding how to zone a plot of land to best address the housing problem, smaller/cheaper units would be the more efficient route. >> Right now if you make $120,000/yr in SF as an entry level software developer SF's government doesn't care much about those making 100+/year. They are looking at a sea of homeless people. They need/want to address the lower end of the market, apartments for waiters and bus drivers.

erik_seaberg 7y ago
That's nice but the upmarket shortage is adding to the downmarket (substitute good) shortage. If a techie and a waiter each need an apartment, but the city doesn't permit two apartments to be built, they shouldn't be surprised what happens.
twblalock 7y ago
People are moving to San Francisco to take high-paying jobs and there is not enough luxury housing to accommodate them, so they are out-competing poorer people for whatever housing they can get. If more luxury housing was built, those people would take it and leave the rest of the housing for other people.
- sandworm101 7y ago
  If the rich people are already willing to live in smaller apartments, let them. I say the city should concentrate on housing the poor and homeless. Let the rich take care of themselves. They generally do.
  - sigstoat 7y ago
    and the point is they'll take care of themselves by renting the cheap housing if that's all thats available. even if the rental cost is fixed, they'll outbid by being better tenants, or hiring agencies to get their name in first on waiting lists, or just bribing the low-level decision makers. build more housing.

anigbrowl 7y ago

Only if you assume the current population of the city is held steady and you are not beaten out by new arrivals. Every law of basic economics exists only under very narrow conditions where all but one factor is controlled. Expecting the real world to conform to theoretical models is about as sensible as looking for rocks that happen to be perfect platonic solids. Pointing this out is not a rejection of economics any more than pointing to the variegation of rocks indicates a dislike of geometry.

foota 7y ago
It would help relative to doing nothing in that case though, right?
- anigbrowl 7y ago
  I'm honestly not sure. I can't think of arguments both ways but not an easy way to model it.
  - nostrademons 7y ago
    You can model it effectively by taking dollar values out of the equation and assuming a rank ordering of people who want to live in an area by the amount they are willing & able to spend on housing. If an area has say 1M housing units but 3M people want to live there, only the top 1/3 of people who want to live there will be able to. The market-clearing housing price (or rent) will be whatever that 67th-percentile hopeful has available to spend on housing. Building more housing means you go further down the list of incomes. Fixing income inequality reduces the gap between what the person who gets the house pays and what the person who doesn't get the house would need to pay, which makes things seem more achievable (and increases disposable income for people who get the house), but doesn't change who gets the houses. Rent control replaces the price-ordering by time-and-luck-ordering for a subset of the population: some people enter a secondary housing market where they get the house by virtue of being lucky at the time it went on the market. Prop 13 preferences older homeowners over new immigrants (or young people) by effectively surcharging new purchasers. The only two policies that solve the displacement problem are building more housing and making the city less desirable to residents, but other policies can change who gets displaced. San Francisco is an interesting case because tech tends to have so much higher salaries than other industries. As long as there are enough tech workers to fill up all vacancies in a given housing market, the market-clearing price will rise to a tech-worker's salary, and everyone in other industries will be forced out. How many people can San Francisco tech companies hire? I dunno, but I'd bet it's a lot more than the number of housing units currently being built in SF, which means that some people are gonna get kicked out on the street. The single-family home market in the Bay Area is probably already shot - given the number of units on the market, dual-tech-earner families could easily fill them. But the condo and rental market might be able to be saved; enough building could probably create enough housing there to absorb the tech industry, which would leave units that rent at the price an ordinary worker could afford.