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> SF isn't building more housing as as fast as possible to try to bring the prices down. If every construction company and contractor in the entire state of CA

> SF isn't building more housing as as fast as possible to try to bring the prices down. If every construction company and contractor in the entire state of CA came to SF and started building apartment buildings as fast as they could, they would still only add enough capacity to prevent rates rising, at best. No human agency can actually bring the prices down.

erik_seaberg 6y ago
https://en.wikipedia.org/wiki/California_Contractors_State_License_Board https://en.wikipedia.org/wiki/California_Contractors_State_L... says California has 104K licensed building contractors. Couldn't they build 200K duplexes housing 800K people (roughly the current population of SF) in a couple of years?
- carapace 6y ago
  I'm exaggerating, here's the article I'm drawing on: https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme... He collects and analyzes historical data going back to 1948. Punchline: "Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago." Rent in the Bay Area has gone up 6.6% per year for sixty years. > In conclusion > San Francisco is an expensive city because it is an affluent city with a growing population and no easily available land for development. Sonja Trauss is right that building more housing would reduce rents of both high- and low-end apartments. Tim Redmond is right that building enough housing to make much of a dent in prices would change the visual character of most streets, although the result could be more like Barcelona than like the Hong Kong that he fears. The unsettled question is which of these is the higher priority. > Building enough housing to roll back prices to the "good old days" is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse. > In the long run, San Francisco's CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably. > If you want to do your own analysis, the data is all available to download on Github. Please let me know what other explanations you find for the patterns!

erik_seaberg 6y ago

https://en.wikipedia.org/wiki/California_Contractors_State_License_Board https://en.wikipedia.org/wiki/California_Contractors_State_L... says California has 104K licensed building contractors. Couldn't they build 200K duplexes housing 800K people (roughly the current population of SF) in a couple of years?

carapace 6y ago
I'm exaggerating, here's the article I'm drawing on: https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme... He collects and analyzes historical data going back to 1948. Punchline: "Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago." Rent in the Bay Area has gone up 6.6% per year for sixty years. > In conclusion > San Francisco is an expensive city because it is an affluent city with a growing population and no easily available land for development. Sonja Trauss is right that building more housing would reduce rents of both high- and low-end apartments. Tim Redmond is right that building enough housing to make much of a dent in prices would change the visual character of most streets, although the result could be more like Barcelona than like the Hong Kong that he fears. The unsettled question is which of these is the higher priority. > Building enough housing to roll back prices to the "good old days" is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse. > In the long run, San Francisco's CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably. > If you want to do your own analysis, the data is all available to download on Github. Please let me know what other explanations you find for the patterns!