4 ms·

While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to ac

While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to actually bring prices down, instead of just slowing their rate of increase. It's a lot. I don't recall all the numbers, but I believe I saw something suggesting that we need to increase the rate of housing starts by a factor of 4 just to stabilize prices. To actually bring them down would require even more than that. Again, we should absolutely do it, in my opinion, but if we were to only double construction — difficult as that will already be, politically — and prices didn't plateau, people might conclude that it doesn't work. We need to make sure they know what it's going to take. It's not so much induced demand as it is pent-up demand. Lots more people would already love to live here — indeed, many have moved away solely because of housing costs.

davidw 7y ago
This is definitely a fair point. There's also - in my mind, living in a smaller town - the idea that it'd be nice if everyone coordinated to catch up mostly at the same time, so that it's not just Portland or Seattle or Boulder or San Diego or wherever... but everywhere.
- BurningFrog 7y ago
  The bigger point is that today allowing housing construction is a burden for cities. You hint that it would be good if all cities shared that burden. This is especially true in California, due to Prop 13. If we reformed the relevant rules, so cities profited from allowing new housing, I think a lot would change in this area!
  - ScottBurson 7y ago
    Yeah, Prop. 13 is such a disaster. Supposedly, the big selling point was that seniors on fixed incomes were getting priced out of their homes. But that would only happen because they have a substantial, appreciating asset. These aren't poor people who deserve our sympathy; they're relatively well-off people with a cash-flow problem! We could have solved their cash-flow problem without destroying our cities' tax bases by allowing them to defer some of their taxes [0] until their property was sold. Here's a great article from 2014 that talks about it: https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/ As for cities profiting from allowing new housing, this might interest you: http://www.henrygeorge.org/pcontents.htm http://www.henrygeorge.org/pcontents.htm [0] For example, the amount of tax due immediately could be allowed to grow at 2% annually, following the Prop. 13 formula. Also, the tax due at sale could be limited to, say, 70% of the gain on the sale. That limit would probably never take effect, in practice, but I've learned from previous occasions where I've proposed this that people tend to get hung up on the possibility that one might owe more in tax than one stood to make on the sale. In fact, if you run the numbers, it takes some very strange assumptions to make the deferred tax even approach getting that large; but this rule should assuage that concern. (Basically, you'd need several years of strong price growth followed by a sudden, huge collapse.)
    - hedora 7y ago
      Here’s a simple compromise that most people I know support: Eliminate prop 13 for all but one property, both for individuals and for businesses. This would eliminate the current tax loophole for investment properties, and demand that tech companies that have scaled to more than one campus pay their fair share to the communities they are located in. Also, have prop 13 valuations reset whenever the property changes hands (including inheritance, and, for commercial real estate, this would get rid of the “sell via a holding company” loophole).
ericd 7y ago
Yeah, I’ve seen a lot of “we’ve been building a ton and prices are still high” comments on Nextdoor and heard the same in person. Not sure if it’s all in good faith, but some people at least seem to be persuaded by what you’re talking about.
- davidw 7y ago
  "We've been building a ton" is false though. That's the error there.
- tmh79 7y ago
  the issue is the reference frame. We are building a lot relative to 2009 to 2013, but that time period was a historic aboslute low point in new housing starts, the "boom" that were in now has less new housing production that the majorith of previous "busts" since WWII
  - ericd 7y ago
    Yep, I think that has a lot to do with it.
buss 7y ago
Yes, I unironically want 4 million new homes in San Francisco. The housing shortage in the Bay Area might be the single largest drag on American prosperity.
- xixixao 7y ago
  I think it makes sense. There is absolutely space. BUT you couldn’t move the people through the city and bay area with current infrastructure. Money (in big amounts) needs to be taken away from roadwork and poured into public transport.
  - tmh79 7y ago
    moving 4 million people here would create the money to allow the infra changes
- jariel 7y ago
  "Yes, I unironically want 4 million new homes in San Francisco." Why would any SF resident care even a little bit what non-residents think of their housing situation? "The housing shortage in the Bay Area might be the single largest drag on American prosperity." Have you considered that someone's home, their life is not a function of 'industrial prosperity'? And that they're not interested in having their neighbourhood turned into a bunch of skyscrapers hosting Facebook Engineers? It's possible they do - but it's entirely up to the residents to decide.
  - dasil003 7y ago
    Facebook engineers are not the ones being forced out of the area.
    - jariel 7y ago
      Most new housing in the Bay will go to higher than average income earners, not poorer people, unfortunately. The Bay is a very dynamic city there vastly more people who would like to live there than actually do, given the right conditions. The Bay may have to contend with paying 'regular people' simply a lot more and contemplate actually sharing more of that wealth being created.
DataWorker 7y ago
You will just increase the number of unaffordable apartments. The added units will come with added traffic from the new wealthier residents, and higher prices on everything. It doesn’t seem like a win to me, unless you have very narrow goals.
- imtringued 7y ago
  These "wealthy residents" are poorer in their hometowns. They don't migrate out of fun. In middle of nowhere they may get 40k per year and in the bay area it may be 160k or more.
  - DataWorker 7y ago
    Your point is the same one I’m making. People come here because FANG and tech generally subsidize that movement. It’s great for tech profits and great for that one guy from Russia or wherever who can make 140k salary, but it’s a net negative for society. The housing crisis is the result. A greedy growth at any cost business culture, not senior citizens trying to avoid displacement in their golden years; that’s what caused the crisis. If those businesses all went belly up like in the dot com bust, we’d have the opposite problem, a housing glut and falling prices. Yet, if you removed all forms of nimbyism, things would remain almost exactly where they are at now. The housing problem is a problem of demand- the whole world can’t move to San Francisco just because that’s what a bunch of tech companies want. Nor can the whole world move to Manhattan or Tokyo or any other place with high housing prices and too many people.
    - ScottBurson 7y ago
      > The housing problem is a problem of demand Prices are set by the balance of demand and supply. The demand isn't going away. The supply is what we can do something about. Even building expensive luxury apartments helps, unless no one can afford them at all (which is not what the builder wants to happen). The people who rent those aren't taking up spaces others could have afforded.
      - 7y ago

davidw 7y ago

This is definitely a fair point. There's also - in my mind, living in a smaller town - the idea that it'd be nice if everyone coordinated to catch up mostly at the same time, so that it's not just Portland or Seattle or Boulder or San Diego or wherever... but everywhere.

BurningFrog 7y ago
The bigger point is that today allowing housing construction is a burden for cities. You hint that it would be good if all cities shared that burden. This is especially true in California, due to Prop 13. If we reformed the relevant rules, so cities profited from allowing new housing, I think a lot would change in this area!
- ScottBurson 7y ago
  Yeah, Prop. 13 is such a disaster. Supposedly, the big selling point was that seniors on fixed incomes were getting priced out of their homes. But that would only happen because they have a substantial, appreciating asset. These aren't poor people who deserve our sympathy; they're relatively well-off people with a cash-flow problem! We could have solved their cash-flow problem without destroying our cities' tax bases by allowing them to defer some of their taxes [0] until their property was sold. Here's a great article from 2014 that talks about it: https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/ As for cities profiting from allowing new housing, this might interest you: http://www.henrygeorge.org/pcontents.htm http://www.henrygeorge.org/pcontents.htm [0] For example, the amount of tax due immediately could be allowed to grow at 2% annually, following the Prop. 13 formula. Also, the tax due at sale could be limited to, say, 70% of the gain on the sale. That limit would probably never take effect, in practice, but I've learned from previous occasions where I've proposed this that people tend to get hung up on the possibility that one might owe more in tax than one stood to make on the sale. In fact, if you run the numbers, it takes some very strange assumptions to make the deferred tax even approach getting that large; but this rule should assuage that concern. (Basically, you'd need several years of strong price growth followed by a sudden, huge collapse.)
  - hedora 7y ago
    Here’s a simple compromise that most people I know support: Eliminate prop 13 for all but one property, both for individuals and for businesses. This would eliminate the current tax loophole for investment properties, and demand that tech companies that have scaled to more than one campus pay their fair share to the communities they are located in. Also, have prop 13 valuations reset whenever the property changes hands (including inheritance, and, for commercial real estate, this would get rid of the “sell via a holding company” loophole).

ericd 7y ago

Yeah, I’ve seen a lot of “we’ve been building a ton and prices are still high” comments on Nextdoor and heard the same in person. Not sure if it’s all in good faith, but some people at least seem to be persuaded by what you’re talking about.

davidw 7y ago
"We've been building a ton" is false though. That's the error there.
tmh79 7y ago
the issue is the reference frame. We are building a lot relative to 2009 to 2013, but that time period was a historic aboslute low point in new housing starts, the "boom" that were in now has less new housing production that the majorith of previous "busts" since WWII
- ericd 7y ago
  Yep, I think that has a lot to do with it.

buss 7y ago

Yes, I unironically want 4 million new homes in San Francisco. The housing shortage in the Bay Area might be the single largest drag on American prosperity.

xixixao 7y ago
I think it makes sense. There is absolutely space. BUT you couldn’t move the people through the city and bay area with current infrastructure. Money (in big amounts) needs to be taken away from roadwork and poured into public transport.
- tmh79 7y ago
  moving 4 million people here would create the money to allow the infra changes
jariel 7y ago
"Yes, I unironically want 4 million new homes in San Francisco." Why would any SF resident care even a little bit what non-residents think of their housing situation? "The housing shortage in the Bay Area might be the single largest drag on American prosperity." Have you considered that someone's home, their life is not a function of 'industrial prosperity'? And that they're not interested in having their neighbourhood turned into a bunch of skyscrapers hosting Facebook Engineers? It's possible they do - but it's entirely up to the residents to decide.
- dasil003 7y ago
  Facebook engineers are not the ones being forced out of the area.
  - jariel 7y ago
    Most new housing in the Bay will go to higher than average income earners, not poorer people, unfortunately. The Bay is a very dynamic city there vastly more people who would like to live there than actually do, given the right conditions. The Bay may have to contend with paying 'regular people' simply a lot more and contemplate actually sharing more of that wealth being created.

DataWorker 7y ago

You will just increase the number of unaffordable apartments. The added units will come with added traffic from the new wealthier residents, and higher prices on everything. It doesn’t seem like a win to me, unless you have very narrow goals.

imtringued 7y ago
These "wealthy residents" are poorer in their hometowns. They don't migrate out of fun. In middle of nowhere they may get 40k per year and in the bay area it may be 160k or more.
- DataWorker 7y ago
  Your point is the same one I’m making. People come here because FANG and tech generally subsidize that movement. It’s great for tech profits and great for that one guy from Russia or wherever who can make 140k salary, but it’s a net negative for society. The housing crisis is the result. A greedy growth at any cost business culture, not senior citizens trying to avoid displacement in their golden years; that’s what caused the crisis. If those businesses all went belly up like in the dot com bust, we’d have the opposite problem, a housing glut and falling prices. Yet, if you removed all forms of nimbyism, things would remain almost exactly where they are at now. The housing problem is a problem of demand- the whole world can’t move to San Francisco just because that’s what a bunch of tech companies want. Nor can the whole world move to Manhattan or Tokyo or any other place with high housing prices and too many people.
  - ScottBurson 7y ago
    > The housing problem is a problem of demand Prices are set by the balance of demand and supply. The demand isn't going away. The supply is what we can do something about. Even building expensive luxury apartments helps, unless no one can afford them at all (which is not what the builder wants to happen). The people who rent those aren't taking up spaces others could have afforded.
    - 7y ago