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Both. I spent the last decade having these conversations with people who also grew up here and can’t afford to remain here without staying with their parents, w
by SllX 6y ago
Both. I spent the last decade having these conversations with people who also grew up here and can’t afford to remain here without staying with their parents, with some of the stranger conversations devolving into my counter parties brainstorming ways to kick tech people out of the City and stop new people from moving in altogether, as if freedom of movement in the United States wasn’t really a thing.
It’s not “supply and demand”, it’s “selfish rich techies and landlords”. I mean you can read that as supply and demand restated, until you get to next steps like solving the supply problem, and apparently building one more apartment building will irrevocably ruin the character of the City.
- FreakyT 6y agoExactly -- there's a pervasive belief in the bay area that high rents are solely due to the evil cabal of landlords who meet every week in a dimly lit room and agree to charge sky-high rents while cackling maniacally and twirling their perfectly-waxed moustaches. The sudden COVID-related rent price drop indicates that this theory is nonsense, and that the high rents are solely a function of supply and demand, but I'm sure that won't stop anyone from believing in it.
- ashtonkem 6y agoI’m not sure why, but a surprising number of people seem to have convinced themselves that supply and demand doesn’t apply to housing.
- SpicyLemonZest 6y agoI think most people doubt supply and demand to some degree. How often have you seen someone argue we should secure the supply of food to disaster zones by repealing price gouging laws? Rent control is popular because many people believe, wrongly but wholeheartedly, that landlords are just price gougers and everyone could get cheap adequate housing if they weren’t manipulating it.
- ashtonkem 6y agoMy opinion is that rent control is much less about actually controlling rent, and more about controlling who is allowed to be in the city and where. Most rent control systems I’ve seen strongly favor those who have been in their current apartment for a long time, as moving often resets the rents back to market rate. And while that does help avoid evicting long time (and old) tenants, it also has the effect of forcing everyone on rent control to stay where they are. I mentally couple the way that rent control works with the pretty common opinion that the city was great until “they” came, and would be excellent again if they’d just leave. While the “they” changes from place to place and time to time, the attitude seems to be pretty common. You even see this attitude here on HN, with occasional assertions that those who moved there for tech jobs should move and let rents fall for those who have always been there.
- SpicyLemonZest 6y agoThat concern, though, is something I've grown much more sympathetic to. There's a fundamental unfairness in putting in work to make your local community great, making it so good that rich people want to live there, and then being told that the community no longer has room for you because the rent is too high. If the city won't allow enough housing to keep your area affordable, you have a right to feel aggrieved, and it's understandable that you might misdirect the grievance if you have no lived experience of a city successfully expanding the housing supply.
- renewiltord 6y agoPeople overestimate their impact on the community. The elephant here is that those people contributed very little to making the place desirable. You can usually tell. They'll say that the culture has changed because the desirable people left. That's right. But the groupies are still there. They just don't know where the desirable people went.
- imtringued 6y ago>There's a fundamental unfairness in putting in work to make your local community great, making it so good that rich people want to live there, Actually that is a the result of an incredibly skewed tax policy. Prop 13 means that the government cannot derive any significant tax income from residential property. It is forced to allow commercial property because it brings in tax money. This means you will always have more commercial property than residential property. Land owners want this because it raises their property values. The government wants this because it's the only way to fund itself. When you look at the reality of what you are doing you are actually incredibly selfish. You are creating jobs and moving them away from rural places but at the same time you are not building enough housing so that people can live near those jobs. You do this because you want the value of your property to go up. Then once those people are coming because you moved all the jobs to your city you start complaining because they want to work there. There is this misconception that it's "rich people" who want to live there when the reality is that those people only became rich after they arrived in your city. It's you who created them. >, and then being told that the community no longer has room for you because the rent is too high. Well, that's exactly what you wanted. You wanted more jobs meaning more people but you did not want more housing which means someone has to go. If you call this unfair then you have no one to blame other yourself.
- bluntfang 6y agoeven for hyperbole this is hogwash. No one thinks people become landlords because they want to treat their tenets like shit. Obviously they just want to make ends meet like everyone else, they just happen to do so in a way that hurts communities, not on purpose, mind you, but because that's how you get ahead in this society.
- guiambros 6y agoTechnically it is supply and demand, but there are systemic factors at play that can't be ignored. This is not a typical supply and demand marketplace. The supply here is artificially constrained by existing regulations, and there's a vicious relationship between land owners, elected officials, and demand pressure from folks with high paying jobs. It's interesting to see how little things have progressed over the last few decades. For example, check this study [1] from fourty years ago. TL;DR: "A recent survey of local land use policies in the Bay Area identified the important role that land-use controls play in limiting developments. The suburban land squeeze is not the exclusive result of immutable natural constraints. It is the outcome of the restrictive land use and development regulations imposed by many of the region's 100 land governments. A new mood has emerged in the suburbs; land use controls now place severe limits on where, when and how the region can develop. Continued suburban land conversion is now viewed as undesirable, and efforts to limit residential development are well organized and effective." It's certainly not an "evil cabal of landlords in a dimly lit room", but it'd be naive to ignore the systemic forces at play. [1] https://escholarship.org/uc/item/0ds0q9q4 https://escholarship.org/uc/item/0ds0q9q4
- mancerayder 6y agoThere are two problems with this line of reasoning of the type of muddied thinking you're replying to. The first is that it can both be true that supply and demand as a phenomenon can be used to meaningfully explain the world and applies to housing, AND that an individual can denounce landlords morally with the phrase "greedy". However, the OP cannot reconcile the two concepts, they said. Next, the idea that landlords are a unified group with a common set of designs is itself a premise that requires a little bit of legwork. Here's one. What are landlord expenses versus their expenditures. Are they large or small landlords. etc. To hell with nuance, let's create an Us v Them type of discourse, and see who bites.
- AtlasBarfed 6y agoartificially restricted supply Let's not pretend this is Milton's economic utopia.
- maxsilver 6y ago> The sudden COVID-related rent price drop indicates that this theory is nonsense, and that the high rents are solely a function of supply and demand, Except your own example demonstrates that it's not. If it was "solely supply and demand", then rents should drop far more dramatically than they have, down to levels comparable to other cities that used to be equally unpopular. Yet there's a literal pandemic and even though demand for San Francisco housing is at a ~20-year low, with newly-empty units everywhere, San Francisco still remains one of the priciest cities in the nation. Short of like, an earthquake wiping SF off the map or similar sized event, demand for SF housing will never get lower than this, and it's still not enough to bring rents remotely back into the real world. Supply and demand have an impact on housing prices, but are definitely not the "sole" source of them. Landlord behaviour, city tax goals, investment banking demands, private equity involvement, and much more all dramatically impact the price of rent far more than "supply v demand" or any "regulation" does. This is hard to understand for folks used to megacity pricing, where "high demand" (i.e., a small-but-consistent influx of new residents) is until recently, an automatic given thing you could just always point to as blame for any problem. For those of us out in the midwest, where demand is regularly falling in many places, where new construction always outpaces population growth every single year, and yet the housing prices still always rise, the disconnect between prices and supply/demand is quite a bit more obvious.
- chii 6y ago> where demand is regularly falling in many places, where new construction always outpaces population growth every single year, and yet the housing prices still always rise that just sounds wrong, and may be i can't see the whole picture from just your comments, but the price _can't_ be rising if demand is falling. Otherwise, these new construction will not sell at all. SO there _must_ be some sort of demand.
- pydry 6y agoIt's a side effect of de-taxing land. The more land becomes an asset and the less it becomes a liability (e.g. by capping property taxes) , the greater incentive there is to hoard it and jealously guard its value with NIMBYism which leads to even less development, greater shortages and even higher prices on an upward spiral. Saying "it's about supply and demand" is not technically wrong but it glosses over the toxic systemic changes which brought us here and exculpates the people who deliberately fought for them to create this mess. If land were closer to being in a liability in SF then the NIMBYism would be a pale imitation of what it is now and the land would be used much more efficiently and property wouldn't be as astronomically expensive. However, land owners need an economic incentive to develop that requires them to lose money if they use land unproductively. That means taxing the value of the land - preferably directly (via LVT) but failing that by raising property taxes.
- throwaway0a5e 6y agoEven if land were historically taxed at say NYC rates in SF the supply and demand problem would still rear its head. The problem is artificial supply constraints created first and foremost by zoning and secondly by a myriad of other regulation that infringed upon property rights and adds friction (time, money, risk, all of the above) that prevents people from exercising their property rights. Prop 13 (a monetary incentive to not sell) falls into this latter category. LVT would just be the revers of Prop 13. It's not going to solve a fundamental supply and demand problem that's created at a lower level. You'd have everything built out as much as the zoning allows for but the net result would still be inadequate because the zoning is too restrictive and the regulatory friction is going to still works its magic at the margin.
- thaumasiotes 6y ago> a myriad of other regulation that infringed upon property rights and adds friction (time, money, risk, all of the above) that prevents people from exercising their property rights. Prop 13 (a monetary incentive to not sell) falls into this latter category. I think Prop 13's incentive not to redevelop is actually more significant here than its incentive not to sell.
- Reedx 6y agoIt's all but illegal to build new or higher density housing in SF. We need to start electing people who will actually embrace or at least allow construction. This is what it's like: "San Francisco Man Has Spent 4 Years and $1 Million Trying to Get Approval to Turn His Own Laundromat Into an Apartment Building" https://reason.com/2018/02/21/san-francisco-man-has-spent-4-years-1-mi/ https://reason.com/2018/02/21/san-francisco-man-has-spent-4-...
- SllX 6y agoI agree.
- wpietri 6y ago> freedom of movement in the United States To the extent that this means the freedom of poor people to get out of the way of rich people, you can see how some would not be excited. SF's black population has fallen by half in recent decades, for example. Honestly, the geographic narrowness of the tech boom has always been weird. At the same time we've been selling the limitless power of the Internet to connect people, we've also been working for companies whose structures didn't demonstrate that, and in a financing ecosystem where physical proximity to VCs was a major advantage. So San Francisco got turned into a bedroom community for South Bay companies in areas that refused to build adequate housing for their workers. Thanks to the pandemic, that is evaporating. We'll see what happens in 6-12 months, when everybody's vaccinated. But the people I'm talking to are unable to remember why commuting every day was ever a thing, and they're very reluctant to go back to it. In which case, we'll write SF's housing issues off as just another bubble.
- SllX 6y agoIt means government authorities don’t have the authority to restrict people from moving in if they are US Citizens or otherwise in the country legally certainly not on the basis of whether they were born, grew up in the City or based on the type of job they have and its location. An HOA might, I’m not too familiar with them, but as I understand it even they have legal limits on the restrictions they can place on people moving in, so maybe not. Someone else would have to chime in on that one. Agreed otherwise.
- wpietri 6y agoI understand what the words nominally mean, thanks. But based on America's long, long history of de jure and de facto segregation by race, class, and income level, it's reasonable for people on the sharp end of that to not take "freedom of movement" very seriously as some sort of American core principle. It reminds me of this classic line: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal loaves of bread.” -- Anatole France
- fragmede 6y agoIt's important to note that jurisdictions in the South Bay refuse to build more housing. Both Google and Facebook tried to but were blocked by the government.
- mola 6y agoThere so much land in the US. People don't have to live in San Fransisco. These people grew up there, they want to live in their home. You know, that emotional thing that money can't really explain. Sure they see the people arriving in, with huge paychecks that drive prices up, and them out as bad. Any human will, a rational agent won't.
- fragmede 6y agoFor some it's a practical, not emotional. If your job is in the city, and does not allow working remotely, the choices are either commute an hour by car each way, commute for roughly as long via public transportation, or live closer to work. Hopefully with Covid forcing more sane remote work policies across the board, fewer people are forced to live somewhere they don't want to.
- imtringued 6y agoThat's basically what happened. There is an overabundance of jobs but since there is no need to live in San Francisco the fundamental mismatch between commercial and residential property has been resolved temporarily.
- ghaff 6y agoThough there was mostly never a need to live in SF for a lot of the tech company jobs. Many/most were people who wanted to live in a city in the Bay Area even if their jobs were in the South Bay. I assume it's an exodus from the Bay Area generally.
- epistasis 6y agoThough this is not an uncommon view in SF at the moment, I find it horrifying. What has made SF such a great place from the 1970s to ~2010 has been its willingness to accept new people, including the strange and the weird. That's not to say that it's been a great city for everyone, the first-wave gentrifiers from the 1960s pushed out Black people from the neighborhoods they took over, like Haight Ashbury, and the downzonings they enacted over the city have greatly amplified their material wealth while keeping out those without wealthy. But for a brief 40 years before the super-constriction of supply happened, it was a welcoming place to lots of people that couldn't find homes elsewhere, because there were at least some empty places to rent out. What drives up the prices isn't that people with big salaries are there, they've always been there. What's driving up the rents is that the people with big real estate holdings have said that the people with paychecks can't build anything new. So instead of those big paychecks going to building more infrastructure and subsidized low-income housing, those big paychecks are going only to current landlords, and pushing out anybody without a big paycheck. SF housing is a game of musical chairs, and all the people that found their chair in the 1970s and 1980s easily because there were lots of empty chairs have decided that there should be no more chairs. That provincial, close-minded, and ultimately xenophobic attitude is what makes the housing market so unfair.
- abalone 6y agoYou’re mischaracterizing the left-wing / long term renter position here. This is a very common tactic among local SF “YIMBYs” for some reason. Progressives are not objecting solely on the basis of “character of the city” and in fact regularly poll in favor of development. What they fight for is affordable housing development. Underlying this problem is a massive income disparity between techies and working class folks. Essentially the YIMBY position is if you build market rate housing for techies it will trickle down to the working class because “supply and demand didn’tyoutakeeconomics???” But Econ 101 has within it the concept of inelasticity that explains why increasing supply does not always move the price much under certain conditions. Like those of say a massive boom economy where tons of high income earners and speculators from around the world are waiting to snatch up new inventory. SF has had many experiences with such boom/bust cycles. It’s a real estate developer’s dream and it helps us rich-ish techies (hence heavy YIMBY presence on HN) but it doesn’t necessarily translate into lowering rents for the working class. Thus, progressive supervisors are focused on public investment in affordable housing and taxing the rich to fund it, not just serving the needs of the wealthy. YIMBYs absolutely hate this characterization because they like to claim they are on the side of the poor. But they are 100% aligned with and politically funded by the real estate industry, and that’s why they prefer to mischaracterize progressives who are actually prioritizing the needs of the most vulnerable.
- whakim 6y agoThis is a mischaracterization of the YIMBY position. Most YIMBYs are not opposed to raising taxes so that the city can pay for the construction of affordable housing units. (Note that the city doesn't build housing even if they pay for it - developers still do!) YIMBYs also believe, however, that we need housing of all kinds, including market rate housing. That is where YIMBYs and progressives disagree. Separately, developers are already required to build a certain number of affordable housing units in every development. If you require developers to build units that are mostly or solely composed of affordable housing, those developers will not earn enough money to make it worth building the units in the first place. This leads to progressives holding up all kinds of development with endless planning meetings and environmental impact assessments. The result is no housing gets built - no affordable housing, no market-rate housing. They allow the perfect to become the enemy of the good. We need to work with developers to build housing units of all kinds, including affordable housing, rather than demonizing the very developers who are going to end up building those affordable housing developments that I think we all want.