Ah, ok, I got caught too much into the hypotheticals. If you are going to say that additional costs to holding housing, do not effect supply in San Francisco,

Ah, ok, I got caught too much into the hypotheticals. If you are going to say that additional costs to holding housing, do not effect supply in San Francisco, because the bottleneck is actually a supply cap, which makes it illegal to build more, then I can agree with that. But, in general, if there are not laws that put a maximum on housing supply in the area, THEN property taxes would effect supply, as the bottleneck to new housing is costs and profitability, and not laws.