It doesn't work quite like that. Builders buying livable property and demolishing it make economical sense only in a very very few percentage of homes. My guess

It doesn't work quite like that. Builders buying livable property and demolishing it make economical sense only in a very very few percentage of homes. My guess is < 2% of entire area we talk about. For the other 98%, it is far far cheaper for the builder to get it rezoned from the goverment. Remember, we don't have a lack of land. There is plenty of prime, commute friendly, land available in SF-Bayarea and most other CA cities. Old SFH will get demo-ed and gets rebuilt as SFH - just because bulldozing a $200k+ building + spending $600k to rebuild - can only be justified by a crazy SFH owner who can justify it all in terms of getting his/her dream home.