That's not really an excuse for the error. The general term for the thing in question is a legislature (which is also California's specific term.) Being wrong and calling it California's Congress doesn't make it more accessible, nor does calling state legislators "Congress members"just, it just makes it look like you don't know what you are talking about to anyone with even a passing familiarity with California government.
And if you can't get that kind of basic thing right, why would people trust you on the substance, which takes a lot more understanding of government to interpret correctly.
> Tim Redmond of 48 Hills has argued that building more housing would make the problem [high housing costs] worse because the people who would move into it are likely to be wealthy newcomers whose demand for services will increase low-income employment, putting further pressure on older, lower-cost housing.
The affordable housing requirements to qualify for the streamlined process should mitigate this effect, to the extent that it's real in the first place.
this is a reduction of current affordable housing restrictions, and "affordable" / Below-Market Rate housing is currently awarded by a lottery which is harder to win than the actual lotto.
Maybe in rural America, but in SF it would relieve the downward pressure creating by outbidding.
Right now people are being outbid on homes they would normally win, and in turn are overbidding on lower-priced housing. Increasing the supply even at the high-priced end would help reduce the displacement.
He's saying that land is the actual limited resource and therefore landowners will capture all the value that comes from upzoning. But as-of-right zoning makes it possible to use land much more efficiently than before, because the buy-side of the market really does care about housing units. So while they might still be willing to pay 50% of their incomes from housing, their demand for land will fall as housing units require less land. This will shift the balance of economic power in the favor of residents.
Think of what happened with modern agriculture. Food used to be much more expensive, then we greatly increased yields. People still need food and would be willing to pay more for it, but as the cost of production has fallen, agricultural landowners failed to totally capture the benefits. Instead, society allocated resources that would have gone into low-efficiency agricultural production to other uses, such as industrial goods production.
Technically increasing the housing supply would make rent cheaper. But realistically it won't because it's not possible to build enough housing to increase the supply enough to tip the scales in demand versus supply.
They start building more and those houses are going to be just as expensive as the existing housing.
By technically you seem to mean "all else being equal". The difference between that and reality is that when housing is created, it does indeed change things. Build some nice housing in a decrepit area (Shipyard, etc) and housing values will indeed go up because desireability has increased.
I'd be happy to extend a beta license for a brand new grassroots lobbying platform to the folks at YC for them to be more efficient and effective while managing this effort.
Heck, if anyone on HN is part of any lobbying effort in California and would like a beta experience of a new platform email me lane (at) fastAdvocate (dot com)
Warning you in advance, the website up today is horrible and not representative of the beta product. The homepage is about to be replaced. We focused on the product first.
I have a room in my house in the Sunset opening next month. $900. It's month-to-month rent. Looking to house a founder/hacker/designer/etc currently struggling with SF rent (or someone who wants to move to SF but didn't think they could afford to live in SF)
I'm new to the Bay Area (moved here officially at the beginning of the year) so definitely interested in meeting more people / assembling a space for hackers/founders who want to live with others who are building things.
May have an additional room opening in July as well for a similar price.
I'd also like to host as many smart/driven folks as possible via couchsurfing.
That's cool and all, but sort of counter to the point being made. Subsidizing housing for those already on top doesn't really help with wealth inequality.
Couldn't be further from my intent. I'm not looking to give housing to people who are "already on top" - those people would not want to live in an old house in the Sunset ;)
I highly doubt this bill would pass without severe modifications. The problem is that we have two groups in population: One who own houses and other who don't. First group don't want new houses and dilute value of their property. Politicans very well knows that making this group unhappy will end their careers. The second group is often in minority outside large cities. This is why its very hard to pass laws that would allow build new houses. It's great that SamA is taking interest in this. If enough valley billionaires can pay for lobbing then politicians can finally ignore their majority constituents and do the "right thing" :).
This is exactly what is happening. Those who own homes don't care what the consequences of preventing new housing nearby are. The consequence is income segregation, especially in areas zoned for single family homes. Single family zoning is inherently segregationist—you can only live in those neighborhoods if you can afford the most expensive type of housing. Our homeowner-run local governments feign concern about housing costs while it's literally illegal to build cheaper homes on less land in so many neighborhoods.
To repeal segregation laws that are supported by the public, you're going to need a desegregation movement. Here's one: https://www.facebook.com/DesegregateATX/
Ditto. If only we could next rationalize and overhaul our property tax system / prop-13[1] of 1978. Then we might have a fighting chance of [ more ] affordable housing.
Maybe instead of paying linear tax based on purchase price, we could implement a reverse logarithmic scale for property tax % based on state / national / something average sales prices / sqft that would be re-assessed yearly. And then either apply that to all new home purchases, and when enacted, allow existing home owners to opt-in ( recent buyers ), or opt-out.
You've described why it's almost impossible to do anything about housing policy at the local level. That's why state-level action such as this bill is so important. The state legislature represents a much broader constituency, including lots of people who would like to live in SF but can't currently afford to.
This is a big argument going on in Austin too. Housing prices are going through the roof, yet home owners don't want multi family units in their neighborhood.
I can't say I blame them, either. It's nice having some quiet - four families in the lot next door means 4x more noise, cars, dogs, parties, etc.
Difference here is that you can live insanely cheap in the suburbs, so most end up doing that, but with no reasonable public transport and no current ridesharing, it's a mess that will continue to grow.
"Just move to the suburbs" is a solution that sounds fine, but it's really not. Wealthier folks feel entitled to central living because a market economy distributes scarce goods to the wealthiest. But the middle class is perfectly capable of outbidding the rich for housing: they do it by buying cheaper homes on less land. Four middle class families in a fourplex spend more on housing than most Central Austin families, but those are illegal to build. Every single family homeowner got a leg up in the housing market because it was illegal for the middle class to bid against them.
Our affordability crisis is a charade. It was manufactured by selfish people looking out for their own interests without caring about the consequences. They have segregated our cities by income, and pushed people away from jobs and communities that would've improved their lives. Our cities must be desegregated. This injustice must end.
Around 65% of the population in SF are renters. If it were simply homeowners vs renters, renters would win in a landslide.
Who do you think was pushing for proposition I (an 18 month development moratorium in the mission) to pass? It wasn't homeowners, that's for sure. It was renters living in the Mission who were (not incorrectly) terrified that new development means they will get evicted and displaced.
Why did 60% of SF voters (keeping in mind only 30% are homeowners) vote for Proposition B, requiring a city wide up-or-down vote on all new waterfront development over 40-80 feet? A measure that was also endorsed by multiple major newspapers? Because people are afraid of everything changing too quickly and the nice beautiful waterfront turning into midtown Manhattan.
It's complicated. This isn't homeowners giving the middle finger to everybody else. The situation is more akin to existing residents fighting against future residents. Though whatever the situation is, pointing fingers at individual constituencies instead of trying to understand the problem holistically is not helping anything.
This is an excellent writeup by Jason Furman, chief economic adviser to President Obama, which explains in detail how land use restrictions make cities expensive (and cause other problems besides):
People presumably think it is. As a visitor there now a lot of SF looks quite low density low rise, but a lot of the buildings are very pretty and the low rise wooden houses are part of the charm. Not sure how much less dense than Tokyo it is but maybe 4x? As a Brit I love the history, but there are probably parts that could be rebuilt. But there is a high risk that they won't be built as high density, the fact that the proposal includes affordable is because the builders will infill high end mostly. You need to allow rebuild of low density at eg 10x at scale to get a fall in prices. Builders don't want that.
Are you sure that only 30% of SF voters are homeowners? Maybe in presidential elections (with 70% turnout), but in all the other elections where turnout ranges from 30-50% I wouldn't be surprised if homeowners make up more than half of actual voters.
Because the actual building they live in gets demolished to build another building. Or because the new building next door is filled with 'luxury' $5000/mo rents, which might drive the rent up in their building.
If someone is living in the mission there are only 3 options;
1) They own their house
2) They are renting but their unit is rent controlled
3) They are rich or have high paying jobs (and building more actually helps them)
"Because the actual building they live in gets demolished to build another building"
This happens very rarely, people will literally revolt before a rent controlled unit gets demolished in the mission
So someone opposing more building in the mission falls into the first two categories and they are extremely selfish
This happens all the time (#2), it's literally happening to me right now. Look at the map of Ellis and Owner Move-In evictions in SF. Thousands of people are being displaced.
Not in real estate economics. Housing isn't a commodity market. There are firm price tiers, different methods of construction, different fixed costs for those methods, and drastically different markets for individual neighborhoods. Real estate isn't fungible and it's isn't particularly liquid. Basically none of the requirements of Econ-101-style supply and demand are met in the world of real estate. Building skyscrapers is nothing like creating an assembly line for widgets.
So yes, "construction" has some small aggregate effect on the price of a rental in the city, but that effect is meaningless to you if your affordable building was knocked down to make room for a luxury skyscraper.
Moreover, if you do happen to overbuild housing in a market, the price sags. Developers then almost immediately stop building, because the costs of new construction don't decline with scale. Thus, price controls enabled by construction happen on the order of decades, not years. Neighborhoods gentrify much more quickly.
In practice, a low-density neighborhood gentrifies, land values go up, and developers start to replace cheaper, low-density construction with expensive, high-density construction that can only be justified because of the higher land values. Existing residents are displaced. Ideally, those residents then move to a cheaper neighborhood. If no such neighborhood exists (because, say, you're in a small land-locked city with more millionaires per capita than anywhere on earth, and no remaining "undesirable" land), then those residents are, indeed, completely displaced. The fact that luxury apartments are theoretically $30 a month cheaper in some other neighborhood is thin gruel.
"None of this dismisses the fact that displacement from specific homes happens when low-income housing is literally knocked down to build high-end towers. A good amount of new supply in cities, though, can rise on under-utilized land (former industrial plots, surface parking lots, abandoned properties, etc.). And the cumulative effect of all that new supply can hold down rents across neighborhoods and cities, including for the poor."
Nobody thinks that new housing is bad - in the long term. Where economists start to disagree is how to prioritize low-income housing and market-rate construction in the near-term:
"To be sure, more supply is needed, but unless it is targeted to those who need it most, it will only help wealthier residents."
"'Filtering,' where older housing units trickle down to lower-income families as they age, can happen in the broader metropolitan context. But it can take decades for filtering do deliver truly affordable units to lower-income households. As apartments age, the rent of a typical unit – not in a hot area - declines an average of 0.31 percent per year so even after 30 years, the rent will have fallen by only 9 percent."
"In gentrifying neighborhoods, filtering does not work at all, because land values and rents rise as the neighborhoods become more desirable and developers bid up land values. So lower-income households must look in other neighborhoods where services and schools are likely to be much weaker. Hence the gentrification process can reconstruct economic segregation."
If you're simply replacing cheap housing with an equal number of expensive units, yeah, that's not doing much good. The idea is to add to the total number of units.
But just because the best time to build more was 30 years ago doesn't mean now isn't a good time to start.
Also: if you are adding expensive housing it takes some pressure off of the cheaper housing that would otherwise be the 2nd choice of those going into the expensive housing.
The first article, headlined The poor are better off when we build more housing for the rich literally makes my argument.
The second article lets various people give their reaction to the first one. The non professionals say what they usually say. But the Berkeley professor of economics answers my question very clearly:
Economic research on this topic is unanimous. There is no question that on net, adding more units tends to lower rents. All existing peer-reviewed academic studies — including work done at Harvard University, the Wharton School at the University of Pennsylvania and by me at UC Berkeley — find that more housing supply results in lower rents and house prices, everything else being constant.
Ok....there is clearly more housing in San Francisco today than there was 50 years ago. Why does housing in San Francisco cost more today than it did 50 years ago?
Congratulations on recognising that your glib generalization above was wrong! Now see if you can imagine any way in which development of a neighbourhood can ever increase demand. An idea to get you started: there exist people who would like to live in a nice apartment but who would not be interested in an old rooming house. There exist people who only want to live somewhere that already has residents at their (higher) income level. There exist services that are only offered in areas that have people with x disposable income. And there exist people that will only move somewhere that said services exist.
Here a scenario that can illuminate the unavoidable fact of supply and demand.
- A building owner doubles his rents from $3000/month to $6000/month. What happens? Everyone moves out. The high price eliminated Demand for that building.
ANALYSIS: When the owner tried to jack up his rents too high, it created an excess supply of $6000/month units and not enough demand. What will happen to that owner? ANSWER: go out of business or increase Demand by lowering his asking rent. CRUX: owners only have 'pricing power' matching the strength of demand, they cannot just start 'greedily' raising rents.
Now assume Zynga opens up shop in the neighborhood. Does demand increase for apartments? YES. There are hundreds of new renters.
Building owners see they get 20 applications now for a vacancy instead of 5. They raise their asking rents to $3100 and people pay it due to lack of Supply of units.
The owners cannot raise the rent unless Demand increases. But in San Francisco, which has become much more of a Tech hub over the past 20 years, Demand for apartments has increased. Supply hasn't kept up.
INCREASE IN DEMAND = more applications for a vacant unit = HIGHER RENT because lack of supply means renters have few choices.
Okay, now assume Zynga goes out of business.
Does demand DEcrease for apartments in the neighborhood? YES. There are hundreds of fewer renters.
Building owners see they get 5 applications now for a vacancy instead of 20. If they keep the rents at $3100 there is now an excess supply of expensive units. They must lower their asking rents or wait longer to fill a vacancy and lose money on an unrented unit.
I own/operate rental properties. Supply and Demand is alive and well in the apartments realm on the Peninsula.
During the worst parts of the recsssion we had 20% vacancy (normally it's between 3% to 5%).
Demand for apartments dropped precipitously. Did we lower our rents? We had to. We entered a 'race to the bottom' competition with other rental property owners.
THERE WAS AN EXCESS SUPPLY OF APARTMENTS in the 2008-09 recession. Rents dropped.
Right now there is a lack of supply of units because Demand rose as the job market got healthy.
Rents are higher.
When Demand drops in the next few years in the next recession (due to layoffs, tech firms folding, etc.), will my firm have to lower our asking rents?
OH BABY. Yes indeed. It hurts too.
The argument 'Supply and Demand don't apply to housing' is patently false.
During a recession, there's lower Demand for units (fewer people working; living in parent's basement or leave the area). RENTS DROP.
During a healthy job market, there's higher demand for apartments (more people working -- move out of parent's basement; and new people get hired locally and move to the area). RENTS INCREASE.
The argument that 'everyone must have an apartment in San Francisco, regardless, if they want one' is BOGUS. If you cannot afford to live there, that's YOUR FAULT. Not the city's fault. Not Zynga's fault. YOUR FAULT.
Because new housing doesn't magically appear around existing tenants and their furniture. Existing tenants get told to leave, then there is construction for x months, then a new building is there with more units available, and (especially if the old building was under rent control) each new unit costs more than each old unit in the building that used to be there. And its possible none of the tenants who used to live in that building can afford to live in the replacement units - tada, displacement by adding more apartments.
We don't in practice have "1 person, 1 vote". Because of the influence of money in politics, the effective reality is somewhere in between "1 person, 1 vote" and "1 dollar, 1 vote". There are far more dollars on the property owning side.
There is a third group - landlords. Those are the ones that have the means to scoop up multiple properties and collect the rents. I believe this to be the main problem in the build more housing plan...
I managed to talk to someone at both of my representatives' offices within a minute, without any sort of delay. It's very easy, please do call in if you support this measure!
Also, when you do call in, post here afterwards with how long it took you. A lot of people don't bother because they think it'll be a hassle, but it's about a 100 times easier than calling to book a restaurant reservation.
Thank you for this post. I am now very encouraged to contact my state legislators. I might even muster up the courage to call my federal representatives!
Won't work. Imagine supply is met, housing is cheap. People then want to live there more. Eventually the point of equilibrium is restored which is that banks keep on creating fiat money until land prices reach a point where you can just about eat and afford the interest repayments.
Land value tax is the answer for all those who don't simply want a quick in so they can get on the gravy train and actually want their kids to grow up in a society where wealth creation, not money creation, makes you richer.
Yeah, it's always going to be a function of income in the area. People value housing enough to pay up to 50% of their income towards it in desirable cities. If more inventory is available more people will elect to live in SF and rents will find equilibrium at around the 50% of incomes
In large part because many people own/mortgage multiple homes because it's a one-way bet under the current system where all productivity gains flow to land.
I tend to agree with you, but you've got it all wrong. People already want to live there like crazy.
The demand keeps piling on and supply has not risen to meet it. I agree that land value tax is a big part of the problem, but new, high-density development is the only solution.
And even then, housing won't be cheap. You just might be able to get a reasonable mortgage on a place built in the last 50 years.
We've seen what happens when you meet supply in a speculative bubble. The USA, Ireland, Portugal and Spain all had big supply and banks kept on lending into it because it costs them zero to create fiat money to rent out against land.
Then you get a massive crash again.
How would demand be if you force a big wedge of people who own/mortgaged more than one home to sell up? I think it would ease considerably. How many SF tech "entrepreneurs" are leveraged on housing? Flush 'em out with land value tax.
Even if this bill passes and substantially more multi-family housing starts getting built, do not be surprised if house prices remain extremely high.
Vancouver doesn't have the same anti-development issues that SF has, and has been building multi-unit condos and apartments all over the region for decades. Multi-unit housing starts are about at its highest level ever. The average price of a detached house however is C$1.3 million (~US$998k thanks to the weak Canadian dollar) and rising. Low interest rates, "fear of missing out," incredible amounts of real estate speculation and a dash of foreign investment can go a long way.
It's likely that the strongest benefits to increased supply in SF will manifest itself in lower rents and/or lower rate of rent increases.
Nobody's expecting housing prices to drop by half overnight. It's just the best thing we can do to limit future growth and make it SOMEWHAT affordable.
(and, frankly, as a homeowner, I don't WANT my housing prices to drop in half overnight, but I DO what the region to be affordable to more people, and hence I support this even though it's against my own personal interest).
Vancouver is a bit of an anomaly, and much of the housing pricing there is being driven by foreign investment rather than occupation rates.
I moved out of the sea-to-sky about 6 years ago (I'm from Whistler) but I seem to recall huge amounts of apartment vacancy in Yaletown and even Coal Harbour areas. From what I've been reading in Canadian news, it seems that many of these properties remain empty and are not in the rental pool as the act as a shell game for foreigners to move money our of other contries (mostly China, but others too I'm sure).
SF is a very small city, even compared to Vancouver, and from what I understand, vacancies are almost nil.
The official vacancy rate is low but the unofficial vacancy rate is much higher. Many empty units are kept off the rental market due to how tilted the rights are in favor of tenants. 39 percent of the landlords surveyed in 2003 said they kept vacant apartments off the market because of regulations. [1]
Detached homes will not fall in price, pretty well ever. Since San Francisco is pretty well "out of space," when it comes to developing land, building up is the only option and will come to the detriment of detached housing.
This sort of development however should, as you say, assuage high rents and perhaps expand the condo market in SF.
I think what you mean to say is cheaper, not affordable.
a software engineer makes over 80K if he is lucky, you would be considered an exception if you make anything over 100K. also pretty much everything else costs more in Canada than it does in US which leaves even less money for housing,
$300k (USD) 1 bd room apartment in Yaletown, equivalent of this in SF is at least $750k. Plus property taxes in SF are around %1.15 for a $750k condo that comes down to 10k a year, just on property taxes. Not sure about the rules in Vancouver but the link I posted above claims $1,008 in property taxes. So yea I think Vancouver is affordable.
It would be pretty much impossible to buy that unit at that price. The new normal is that you list your property at below market rate and a get nice silent auction going.
for example a friend of mine just bought a condo in vancouver last week, List price was around 500K, he put an offer of $530, got a counter of $550 and it finally sold for $580.
This is one of the top factors preventing me from moving back to the Bay Area. It's good to know there's at least SOME serious attempt at a solution (even if folks around here are mostly pessimistic.)
It still surprises me that an industry that's all about connecting the world through the internet and allowing anyone to work with anyone else on anything says "yeah but you need to work in this small area of the country to do it."
The armchair economist in me says that high housing prices in the Bay Area will cause a market "correction" of sorts with other cities exploding as tech sectors -- see NY, Boston, Chicago, Austin, Las Vegas -- as those cities can get away with much better housing for cheap, even if the opportunities aren't as plentiful (yet.)
<conspiracy theory> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity ("you can have my funding if you live in SF" or "we don't allow remote workers"), as they all probably own houses in the area; the incentives for them would be to have housing prices keep rising, NOT fall, as they would lose significant real-estate equity. </conspiracy theory>
It's a good theory but I think the investors are pretty straight-up about wanting their companies on a short leash.
The key will be those other cities/hubs having their own successes, bringing in the capital and expertise to nurture new talent. It's likely that the number of successful hubs that can be supported is pretty low. I happen to believe that the amount of (awful word) synergy needed to flip a few percent of startups from fail/borderline to success is pretty high. In other words, all those know-a-guy-who-can-help connections have to have a high concentration before it starts to pay off.
But then mine is just a theory as well and has a high chance of being wrong.
Its true but its not limited to SF/Bay Area. I had the impression the other day that city-specific industries are much like Universities; so you see that MIT, Berkeley etc. that had CS dept's early on now have the best programs in CS. So it is with cities: the tech industry was born in Silicon Valley so of course there are a lot of Software/EE engineers out there.
> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity
I think the benefits of more people meeting, networking, and starting new things in the area vastly outweighs their interest in their homes. It's not like this really affects the pricing of mansions much anyway, and if they aren't living in a mansion, it's probably such a small amount of their overall wealth that it's inconsequential.
Somehow the city with the highest average salary/cost of living usually goes unmentioned... Seattle has two huge tech companies, a lot of mid sized tech companies, and a growing startup scene... and it's not that far away from the bay.
Good instinct. The housing prices, while still pretty good, are going up fast, and unless you work for MS or Amamzon, I'm not sure the salaries are really that amazing.
It rains too much, like 14 months per year is just rain. And the Seattle freeze...ya, people in Seattle don't like to talk to other people, it is like Northern Europe. /s
We've always made up crazy lies just to keep the Californians away, but ultimately it isn't working. Seattle is a nice place to live/work, and has plenty of jobs for techies.
It's not very cold at all --it might snow a couple of times a year --it drizzles 6 months out of the year, but it's okay. OP was putting a front hence the "/s"
My experience with people in the bay is most are superficial and make their identity around either their careers or that they live in San Francisco. Pretty insufferable group compared to the "freeze" in Seattle. Also, believe it or not, some people actually like when it rains all the time, especially people who came from very sunny (and drought-y) climes. It's nice not having to worry about water rationing. Frankly, constant sunshine drives me batty.
Living in Beijing now, I would die for more rain. Ok, just having more clean air would be a nice start.
I was born in Portland when it was bigger than Seattle (after the early 70s Boeing bust, and when Intel/Tektronix was picking up). How times have changed...
On top of the weather, which is a big deal to a lot of people, the problem is exactly in what you said: there are two huge tech companies. And that's it.
Basically, if you move to Seattle, you are pretty much restricted to working for Microsoft or Amazon and that's it. Period. Nothing else.
It's a huge career limiting move, make sure you're okay with it.
There are a couple of other companies here that didn't make your list... not including the pretty active startup scene. Sure it's not any near as vibrant as around San Francisco but to say there are only two tech companies hiring people is pretty ludicrous.
I'm not from Seattle nor do I live in Seattle, but I'm pretty sure this is not the case.
There ARE other cities with a lot of quality, diverse tech jobs outside of the Bay Area. I live in one of them and I don't consider it a 'career limiting move'.
All depends on where you live. If you're trying to raise a family, you definitely have to live in the burbs and commute in.
I pay $1850 a month for a 496 sq ft "Open" one bedroom. It's basically a studio with a wall that segments off my bedroom.
Which is more than fine for me :D Get to live downtown, get to walk to work, walk to bars, etc. But if you wanted an average 3br/2ba apartment, you're probably looking in the $3500+/mo. And buying is so competitive right now it's insane.
I live in Queen Anne in a 1000 sq ft 2br for $1850 a month.
It's really not that bad. Even in the core of Capitol Hill when I was looking a few months ago I saw places for 1650/mo for 700 sqft non-studio.
Is this anything like my plan to invest in McDonalds franchises and then kill off a huge proportion of the world's cattle to "own larger portions" of each?
No. I was writing a serious reply, but then I realized that there's no point in explaining the mathematics of a VC portfolio to somebody who was a jerk just because they didn't understand the situation.
And congratulations on learning how to be rude enough to be a toxic, while using the type of language that dang, pg, and saltman have all decided is A-OK. You're doing a great job of keeping HN horrible.
I think NYC is already there. It's so easy to find a tech job in NYC. Maybe it's even easier in SV, but I've never missed not being in SV. There's such a variety here. Plenty of startups, all the tech giants, and plenty of tech/IT jobs at "regular" companies, consulting opportunities, etc... And it's not _just_ tech -- plenty of other industries are headquartered in NYC. By contrast I can't think of any other industries that SV is the flagship metro-area of besides tech... If software is going to eat the world, it helps to have some of those industries you're going to disrupt nearby already.
I'd love to see NYC co-opt SV as the world capital of the tech industry, and I think it could totally happen. The only thing SV has going is historical inertia, and it's eroding. This housing problem in SV is going to make it erode faster.
Honestly I don't understand SV at all. They say NYC has a housing cost problem, and it sure does, but it's nothing compared to SV -- in SV you have people paying Manhattan prices so they can live in SF... yet somehow still commuting an hour to the suburbs where the offices are! At least here you can either pay Manhattan prices and get a 10 minute commute for it -- or take an hour-long commute and at least get a much cheaper and/or larger place in exchange. And your commute won't require you to drive, unless you want that.
NB: I've never lived in the SV area so maybe I have some misconceptions that need correcting? :-)
NYC is far far far way from overtaking SV as the capital of tech industry. The combined value of just Google, Apple, and Facebook is $1.3 trillion dollars. To reach that scale will take many many years and some incredible companies. Honestly, places that can put in a serious competition to SV are in Asia - China and India. Chinese tech companies are raising massive rounds, with multiple billion dollar investments in 2016. Also, most successful hubs are often one industry towns. Think Detroit and Houston. That's how clusters are formed and they have a self full-filing effect. But it is also a mistake to think SV is just a "tech" hub. Is Tesla a tech company ? Or is Sunrun a tech company ? Are Impossible Foods or Bolt Threads tech companies ? Technology is now integral to any industry. And increasingly we are seeing R&D shops being set-up in the valley to stay ahead of the game
> The combined value of just Google, Apple, and Facebook is $1.3 trillion dollars.
Well, to the extent that those three companies have employees in other cities, I'd count their market caps proportionally towards those cities. I'm not sure offhand about Apple or FB but Google has a huge office in NYC. But that still leaves the vast majority in SV.
> Also, most successful hubs are often one industry towns. Think Detroit and Houston.
Ominous and timely comparisons. One-industry towns are also way more vulnerable in the long run. NYC is actually a counterexample -- it is the industry hub for at least three industries (finance, fashion, advertising) and leads or has a strong presence in many others, and it's been that way for a long time.
> But it is also a mistake to think SV is just a "tech" hub.
If being close to other members of the industry you are "disrupting" with tech is useful, then that is a huge advantage for a city like NYC with a wide variety of industry. But maybe that's not that necessary -- maybe Tesla would not get much advantage out of being in Detroit near other automakers. If that's the case then a city like NYC does not have any special advantage there.
Yeah true that Google, Apple, FB have NY offices, but all of these companies are very HQ focused. Especially Apple and Alphabet, with most of Alphabet's based are based in SV (Calico, Verily, YouTube etc.). Apple is also notoriously Cupertino centric.
Yea so the problem is you can't think of tech as one industry. Every company that's being created right now has to involve software one way or the other. That's why companies like Tesla (auto), Netlfix (entertainment), Solarcity (energy), Sofi (finance), airbnb (tourism), uber (logistics), tons of biomedical companies that I don't know the names of (medicine) all headquartered in the bay area.
The size of the campuses in Silicon Valley literally cannot fit in NYC. No comparison.
Its fantastic that Google bought a block of Manhattan for 1 billion dollars, but Google's Mountain View campus is ALL of Mountain View. These are sprawling districts that cannot fit inside of a skyscraper.
The next fundamental difference is the variety of VCs. NYC cannot replicate this, and there is nothing eroding about it. NYC has one or two VCs looking at the same industry trends. Silicon Valley has many VCs interested in completely different things, different portfolio niches.
NYC has variety of industries and conveniences.
Silicon Valley doesn't even know how backwards its infrastructure is, while trying to change a world that functions better than it does already.
San Francisco masquerades as Silicon Valley and an international city but it is neither. New York, London and Hong Kong are international cities, SF struggles to keep up with the tech bubbles that it remains on the periphery of and only recently gained relevance for.
There is more tech focused stuff in SF and Silicon Valley, but New York has enough satellite offices to keep you occupied.
"These are sprawling districts that cannot fit inside of a skyscraper."
Is that a definite? I mean, most of Mountain View and its tech campuses are sprawling suburbia (e.g. vast fields of asphalt and grass with a building sprinkled here and there). It's amazing what can fit in a well-designed commercial district.
That got me curious and I think you might be onto something:
Google employs 19,000 people in Mountain View currently
The Twin Towers in NYC each held 25,000 people on a daily basis.
Two buildings in NYC could accommodate the populations of two tech giants that sprawl across entire south bay towns. So several of NYC's average sized and planned skyscrapers could do a fine job. And there is room every direction away from Midtown Manhattan to replicate new robust building clusters.
To be honest I am always amazed how many homeless folks and dirty the place is. You hear billion dollar raises all the time but the city seems very fragmented. Vancouver on the other hand is insanely expensive but very well put together.
When I look at this bill I have to wonder if it will really help. Outside of the city of San Francisco itself, almost nothing is being built, because the construction costs are too high. Not the permitting and planning costs, but the actual guys-with-hammers-and-saws costs. For example in Oakland there are number of properties that are fully entitled to build and have been sitting that way for years. So how does Brown's bill help?
If construction costs explain the high price of bay area housing, how is it possible that houses in the midwest are produced at less than 1/5 the price? Are the Kansas guys with hammers really making 1/5 the wages of the California hammer swingers?
Construction costs do not explain housing prices, but construction costs do explain which developments are undertaken and which are not. Consider that construction costs are basically the same in Oakland and San Francisco, but prices are higher in San Francisco, it makes little sense to develop in Oakland. The profits are simply not there.
Its almost 1/3rd last I checked. But thats not everything you pay a difference on when you build something. The high cost of living and many other things in the bay area factor into everything.
Redwood city, about 30-40 min south of SF, has been booming with building growth. Developers are building, but can't get approvals with local governments fast enough.
There are currently 18 residential projects in Redwood City, 7 of which are already entitled but not under construction, 1 which withdrew the application after being entitled, and three in planning, leaving 7 under construction. Given that half of the entitled projects are not proceeding, I don't see the evidence that the government is the one holding things back.
Don't get me started on that. RWC resident here, and there have been major issues with the city rubber stamping development without enforcing minimum parking requirements, or giving any major thinking to how to solve the cities insane traffic/parking problems (particularly compared to neighboring cities).
Oh, except the thought they had to make Farmhill suddenly go from two lanes to one lane. Yeah, that's a great solution on a main connector to 280 in a city that already has major rush hour congestion issues.
I actually don't think it would in this case. Part of the issue is that people keep circling at really low speeds endlessly (seriously, try parking there on a weekend), which worsens congestion.
Beyond that, the issue is that it is required in these cases, but the buildings just don't build enough and then pay the slap on the wrist fine for it.
I have seen hundreds of new apartment and condo units built within three miles of my LA neighborhood in the last four years. Dozens within a half mile.
What it has meant so far is additional traffic congestion, increased commute times for everyone, more demand for government education and emergency services and more air pollution.
I'm not quite seeing how the government can be taking enough money in to make up for the reduction in service levels and overburdened infrastructure. Based on the broken roads and sidewalks around my neighborhood and LA generally, it doesn't seem like it is doing that.
That is one reason why transit-oriented development makes more sense today. We don't want to build a lot of car-dependent neighborhoods because the freeways can't handle it. It is very important today that cities develop in ways that make sense, are sustainable, and contribute to the health (financial and otherwise) of their cities, instead of being maintenance burdens without accompanying tax revenue. In my city of Oakland unfortunately we have both. A successful example would be the Fruitvale transit village (https://critical-sustainabilities.ucsc.edu/fruitvale-transit...).
Isn't housing just a painful side effect of an astronomical influx of people moving to one city? IMHO, the problem is the tech industry being too centralized.
I'm currently renting out my upstairs walk-in closet. I live in Potrero, near 26th & Rhode Island. The closet is pretty big and can easily fit a double bed and dresser. $900 + utilities, but we might be able to work something out.
I think you mean bedroom. There is no legal definition of a generic "room". Such rooms are often part of the building plan and are called "bonus rooms".
I'm in favor of how "building in the Bay Area is approved by discretion", I call it having some power over what gets built. "Democracy" y'know?
I'm from SF. I grew up here. I'm also a computer nerd.
To me, the tech "industry" has been ruining the city I love since the Dot-Com boom. To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed.
The saddest part is, this city kinda sucks. It's not even a good place to locate a business. The city gov is soft-corrupt. The weather NEVER gets better. We're on a damned peninsula. If I were starting a company I'd go to Davis CA! People aren't coming here because it makes sense. This is just where the game is being played. They are drawn here like aspiring actors are drawn to Hollywood, but the prospects are just as glamorous and illusory. A few will strike gold, the rest will toil and vanish.
This is a town for freaks and weirdos. If you don't believe me, visit Civic Center. ;-) It is said "The people who are too strange for the rest of the country move to California, and the people to weird for California move to San Francisco." (If you are still too weird you go to Berkeley.)
What concerns me the most is that the newcomers might lack the environmental commitment, and tip the scales from valuing conservation to valuing rampant development. San Francisco is the largist metropolitan area with the most wilderness/open space around it in the world. The last thing we need is more lux condos and freeways.
I'm going to be calling those numbers, you can bet, but it will be to urge "con" on this abrogation of the weirdo-freaks ability to stonewall development. This is a good thing.
Y'all "young gods" will just have to figure out some other place to hatch the singularity. Move away. Build a floating "Seastead". Just please stop trying to cram a million more people into the Bay Area. It's not actually a good idea!
Your statement is not false, but if you're into software engineering it's awesome know so many people who are world-class engineers. I've heard from multiple people that they've grown more in a year of being in SV than the 5 years before. Why? Because a lot of their friends are engineers (Kinda sucks too but...), you casually meet a lot of people working in cool stuff, you go to a lot of really really good meetups, and what you're doing at work is probably only a handful of companies in the world are tackling (at least me and most of my friends are working on stuff like that).
Yeah, you can do software from anywhere! But SF/SV is probably one of the best places in the world to do for it.
I can see that. I'm just optimistic that more and more regions will grow to have local VC capital, startup experience, and engineer-dense environments.
I've situated myself in southern Taiwan. I may be the only foreign coder in the city, haha, and the startup scene is almost entirely up north around Taipei, but I hope that changes =)
> San Francisco is the largist metropolitan area with the most wilderness/open space around it in the world.
It's high on the list, but it's not the one with the most:
Vienna 51%
Singapore 47%
Sydney 46%
Hong Kong 40% 70% is the total green space 40% is protected
Rio De Janeiro 40%
London 38.40% Almost 40%!
Stockholm 30%
Johannesburg-Gauteng 24%
New York City 19.7 % or 14% Park Score/World Culture Report
San Francisco 17.9%
Believable (17.9%) if you are measuring only within the S.F. city limits. San Mateo and Marin counties and the East Bay have huge tracts of open space for metropolitan areas.
That is the unspoken thing, the "third rail" of SF Bay area housing is the fact we have a huge Green Belt surrounding the bay.
Yes, we pride ourselves on our parks and reserves and natural beauty. But meanwhile Marin County's population hasn't really changed in 30 years, while commuters from Stockton have grown three or four orders of magnitude. There's a real bay incumbent insiders versus valley outsiders thing going on.
I'm surprised Seattle doesn't make the list. Maybe thats based on parkland within the city. To the east you have immense tracks of wilderness in the cascade mountains and to the west the olympic peninsula.
>City proper is used as metropolitan boundaries are harder to determine. Will make a note if the data is for metropolitan area. Green spaces that are planned are used in the statistics. S For the most part the higher percentage of green space the most accessible to more people, however Hong Kong green spaces are usually not with many being in hills. Tree lined streets don't count as green spaces. Instead open green areas park, gardens, and squares? I'm not sure if squares are counted? Tree lined streets percent of tree canopy is not counted. This data is for open spaces."
This ranking only counts San Francisco city/county. I think the OP was referring to the San Francisco Bay Area [1]. It is comprised of nine Bay Area counties and has quite a bit of open space, as well as federal, state, county, and city parks.
This is absolutely democracy. It's just democracy on the state level, rather than the local level. In this case, the state level is appropriate, because San Francisco's policies have an effect on all the surrounding cities, and all the other Americans who might want to live in SF. Would it be "undemocratic" to say that San Francisco can't unilaterally vote to stop paying federal income taxes?
In any case, cities will still have huge influence over what gets built, since every building under this law still has to comply with local zoning. All this law says is that cities can't pretend to allow development, and then arbitrarily block individual developers for no reason (or because they didn't pay enough bribes).
> San Francisco's policies have an effect on all the surrounding cities, and all the other Americans who might want to live in SF.
You could make that case for all regions of the world. Nobody is completely isolated. We breath the same air and everyone deals with the effects of pollution.
It's not a reason to prevent changing existing law.
It's a difference of degree. The effect of most local policies on the region, nation, or world is negligible. The effect of San Francisco's is very large.
See this magazine article on how NIMBYs pushed suburban sprawl on surrounding areas:
There are plenty of things that lower GDP. Environmental policies, for one. That's not reason enough alone.
I suspect the impact of restrictions on SF growth at this point are large because as the parent notes, growth has been large there in the digital age. Tech businesses have had it good there for awhile. Maybe time for some change, no? At least get rid of Feinstein..
I hear what you're saying, but, maybe a "brick wall" of resistance is not the only possibility.
I'd like to suggest an alternative: a companion bill that requires local and regional governments to provide adequate service and infrastructure expansion once the inevitable building surge happens.
Access to government services and infrastructure really ought to be maintained at current levels for everyone.
And if that can't be guaranteed, then cramming more people into a given city or area should be recognized for what it is: a transfer of wealth. And _of course_ there will be resistance to government mandated transfers of wealth. We should expect such resistance as a fair and rational response to these kinds of laws.
The real question becomes: how do we make this as fair as possible for both the newcomers and the existing residents?
Except at the end of the day it does not really matter. "I was here first" has usually been a strong economic force, but has never been overriding or absolute. SF has spent decades doing its damned hardest to resist growth and development, and has failed to stop it so far, and it has only caused pain for everyone involved by gentrifying unevenly and having its present housing crisis.
In the same line of thinking about democracy - the entire established population of SF might not want to attract the tech industry, but the tech industry - many times more people, in effect, than SF - chose SF. The greatest flaw in democracy is being out of the majority opinion, and if "build up SF" were not so it would not even be on the radar as a question.
My first day in SF after coming from London for a tech job I accidentally walked into a protest. I asked one of the protestors who they were protesting and he told me it was foreign tech people. So for fun I pretended to be a banker. Apparently bankers are ok.
"San Francisco is the largist metropolitan area with the most wilderness/open space around it in the world."
This bill specifically applies to development in urban areas only. More development in areas that are already urban will reduce pressure for cities to expand outward, into pristine wilderness. That's why environmentalist organizations like the Sierra Club support infill development: it's a low-water-use, low-greenhouse-gas alternative to suburban sprawl.
The modern Sierra Club's motives are political, not environmental. That's why they'll have rallies in SF against oil development in the Dakotas while remaining completely silent on groundwater poisoning right here in CA and the fact that (unlike the red oil states), CA has no oil extraction tax.
scarcity has never brought the price of anything down. your idea only works if the freaks could still live here, which they can't (mostly due to prices). why not support a bill that allows everyone a space?
"To me, the tech "industry" has been ruining the city I love since the Dot-Com boom. To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed."
Isn't this just what natives say about every group of immigrants? The West Coast, in particular, has seen this before:
> To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed.
This is xenophobia in another skin. There are a lot of people who don't want brown people coming into the country and changing the "feel" of their home too.
Anyways, as long as we severely restrict housing, techies will continue to outbid the locals on what remains. Passing this legislation might give the weirdo-freaks a chance to remain in the city.
Xenophobia is defined (by one source) as "intense or irrational dislike or fear of people from other countries."
Maybe comparing this commenter to "a lot of people who don't want brown people" is ham fisted and inaccurate.
The commenter seems more interested in the culture, the freakiness or weirdness, of the people who come in, and not so much which country they came from. I do not see where the commenter mentioned race or skin color.
> The commenter seems more interested in the culture, the freakiness or weirdness, of the people who come in, and not so much which country they came from
Go to a Trump rally and ask if they actually hate minorities for the color of the skin. They'll say no.
Xenophobes and racists always insist it's about "culture" and an invading army which is somehow destroying that "culture" and ruining their way of life with an outside culture.
I fail to see how this attitude is acceptable when it comes from privileged urban hippies, but unacceptable when it comes from poor rural workers.
There are plenty of xenophobes and racists who actually do insist that they're concerned about race itself.
Anyway, it seems that what you want to establish is not that xenophobes and racists "insist it's about culture", but that anyone who "insists it's about culture" is a xenophobe or racist.
> Anyway, it seems that what you want to establish is not that xenophobes and racists "insist it's about culture", but that anyone who "insists it's about culture" is a xenophobe or racist.
Yes, I do think that everyone who insists that culture is a valid reason for opposing the ability of people to migrate into their area is an xenophobe.
As an outsider I have a hard time seeing how the people living in and the people wanting to live in the bay area are of different cultures for any meaningful sense of the world. This is largely a political issue over priorities and not a fear of the unknown.
I guess you use "xenophobic" more broadly than I do.
For example, if a large influx of patriotic, Budweiser-drinking gun-owners from Texas occurred in Berkeley and a long-time Berkeley resident complained about it because they didn't want a "culture of watery-beer, flag-waving gun ownership" to expand in their neighborhood, I would not call that xenophobic. But it seems like you would.
Or, maybe you wouldn't. Can you clarify this a bit more?
Yes, I would consider it xenophobic. From my viewpoint, it's hard to see how any attitude which discriminates against people not like you isn't prejudices and backwards.
An example closer to home for me is that Vermonters constantly complain of "flatlanders" from NYC are moving in and ruining the culture. I consider this attitude xenophobic and ignorant of the fact that culture is never static.
Why should the national border make a difference? Why is it not xenophobic if Californians oppose Texans moving to town, but xenophobic when Texans oppose Mexicans moving a few miles north?
FWIW, personally, I would refrain from using the word "xenophobic" so readily, especially because of its deeply negative connotations.
In my Berkeley/Texas example, imagine a scenario where the Texas transplants destroyed all their guns, recycled all of their cans of Budweiser, started buying Chimay Ales from the Berkeley Bowl and put Bernie Sanders bumper stickers on their cars. If some long-time Berkeley resident _still_ rejected these erstwhile Texans as outsiders, then I would trot out the label "xenophobe." But probably not before that.
As someone who grew up in Portland [1], I could write a post just like yours, and I'm sympathetic to the frustration...
But I still side with the pro-housing crowd. What are people who seek to move up in life (i.e., take that dream job and build a career), but who happen to have been born in the middle of nowhere, supposed to do? Is it fair to say "hey, my home, don't come here" when a large fraction of the industry is in one place and the individual software engineer has very little power to change that? Yes, long term, we should spread out and build clusters of industry elsewhere, but that doesn't help the fresh college grad today who gets an offer in the Bay Area but can barely afford rent.
[1] and I want to move back someday so please don't ruin it!
San Francisco, and several other American cities, were places for freaks and weirdos in the mid-20th century because of a historical anomaly in which the US federal government deliberately subsidized white, middle-class families into leaving for nearly-created suburbs. This trend began reversing in the 1980s and now land-values in the urban core reflect what is seen in cities all over the rest of the world -- that central areas have higher land and housing costs than the periphery.
It was a great, interesting, trippy twenty to thirty-year period, but it doesn't exist anymore and its loss in the Bay Area was probably accelerated in part because California has such an unusually politicized and unpredictable land-use and development process that has led it to consistently underproduce housing for the last 40 years.
The "young Gods" you speak of tend to have higher incomes not just because of the tech industry. They have higher costs because the elder babyboomer Californians rigged and created a system that is so constricted that only the wealthiest millennials can afford to participate in it.
Those are all the people currently getting forced out by the lack of housing supply. Opposing this legislation won't magically make the rich leave, instead the city will continue to be less accessible to the middle class.
I hope that some day everyone who wants to live in San Francisco can live here. It seems like the only way for that to happen is to increase the housing supply.
This town won't be for the freaks and weirdos for long: they're being priced out. You can rage against the techies all you want, but unless we can build more housing, the techies will be the only ones who can afford to live here.
It seems bizarre to me that those most fervently opposed to the influx of tech in SF are doing the most to harm the existing residents. If you make it hard to build in San Francisco, there won't be enough houses. If there aren't enough houses, who do you think gets the few that remain? It's not the freaks and the weirdos– it's the wealthy. The freaks and the weirdos have to leave because of your shortsighted policies.
I think they're hoping that eventually, investors will get tired of paying the high salaries needed to locate their engineers in the Bay Area (or salaries won't increase commensurate to cost of living, and they will stop finding engineers willing to move there).
Whether the city's culture or the tech community's attachment to the region will break first is, of course, an open question.
That's a common sentiment, and I think there are a few points against it:
1. SF could double it's current housing density tomorrow and still have less than half of manhatten's density. That's not a serious concern.
2. Even if it were, we're faced with a tough choice: preserve SF's low-density housing, or preserve it's people. Which is better: a city with 20% taller buildings, or a city where the only the rich can afford to live, secure in their $10m victorians and $5k/mo NEMA towers?
3. Many would argue that SF's uniqueness is its population, its freespirited attitude, and its rich history of art and culture. The buildings themselves are only a small part of that. Losing them would be a bummer, but far worse than losing the real soul of the city.
I'm not disagreeing with anything that you said. I'm just lamenting the fact that SF will look just like every other skyscraper style skyline. You won't even know where you are
<SF could double it's current housing density tomorrow and still have less than half of manhatten's density. That's not a serious concern.>
Count how many bridges and tubes connect Manhattan to the mainland vs. how many bridges and freeways connect SF to the rest of the world, and revisit that concept again.
don't worry. they won't. take LA for instance. most parts of it look like a giant traffic jam. looking like a nice shopping mall would be a welcome upgrade. LA will never look as nice as Singapore. Singapore has a huge amount of surplus investment cash. LA's budget is constantly at a breaking point.
I'm not arguing against development. I'm just saying that the iconic look and feel of SF will be lost. Maybe that's inevitable, but it saddens many people
Tokyo and Mexico City have very, very few buildings over five stories and still have double the density of SF. Paris and Barcelona have almost none over seven stories and have four times the density of SF.
So it doesn't have to be high rises and skyscrapers. SF can look like SF and build enough to make living affordable.
Of course, the real problem is the peninsula cities that insist on densities much lower than one third of SF. 80% of buildable land on the peninsula is tied up there being wasted.
You could cut housing prices in half by building 111,000 new units. You could do that by converting 6% of the city's single-family homes into six-story apartment buildings, leaving the other 94% untouched, and not building a single structure taller than that.
As a life-long immigrant, I hear this everywhere I go. "My <geographical location> is the best. Go Away Hordes of invaders!". Hearing this from a progressive immigrant sanctuary city is especially disconcerting.
Sounds like you want to live in the past. Unfortunately this is not how life works. The more you try to keep something from happening that is inevitable the less effective your attempts will become until you lose.
NYC experienced this yesterday. SF is experiencing this today. Many cities will be experiencing this tomorrow. As population density grows this same scenario will repeat everywhere over the next century. There is no escaping it.
His point though was that SF isn't particularly suitable as a city for startups; there's no magical "tech gold" that you can't get elsewhere, like West Virginian coal - people go there just to be in the game, because that's where the VCs chose to be. Historical and geographical factors in fact make it a particularly unsuitable place for a bootstrapped startup to exist.
The difference perhaps is that although Hollywood is the place to make deals and host awards ceremonies, the actual work of filming is done around the world, from New Zealand to Ireland to Vancouver.
> His point though was that SF isn't particularly suitable as a city for startups; there's no magical "tech gold" that you can't get elsewhere, like West Virginian coal - people go there just to be in the game, because that's where the VCs chose to be. Historical and geographical factors in fact make it a particularly unsuitable place for a bootstrapped startup to exist.
While I agree with that I don't see any of that in the parent's post. It's actually pretty frustrating so many VCs insist that companies need to be in SV as there really isn't a real need to be and I know start-ups that would be much happier if they could get VC funding but not be in SV.
You do have some power over what gets built. It's called the zoning process, which allows us to decide ahead of time which types of things we will allow or not, so that people can plan and proceed accordingly. It's why we have laws that people can read, rather than just bringing everything before a jury to decide after it happens whether or not it was illegal.
Deciding what housing can be built should not be like a game of Scattergories, where we all just argue about whether or not something is okay after the fact.
Because the way it stands, only projects with high rate of return will be built--ie luxury housing. A 10% rate of return on investment might be okay for a project that takes one year, but if it drags on to 4 years, that's barely beating inflation. Time is money, and our process makes our housing more expensive.
>The saddest part is, this city kinda sucks. It's not even a good place to locate a business.
San Francisco is the second-densest city in the country, and is one of only a few cities (and the only city in the West) that had a large urban core designed in the pre-car era, which means that its infrastructure is already designed to accomodate dense urban development moreso than any other American city west of Chicago.
Contrary to popular belief, making money in the Bay Area isn't that difficult or unlikely. I think the comparison to a gold rush is more of a meme than a representation of what's actually occurring (>95% of new arrivals are not entrepreneurs).
The good news is that tens of thousands of people from impoverished countries have been able to move here, become US citizens, and live a first-world life they might not have had access to otherwise. The sad part is, they're not cool -- or "weird" -- enough, so they have to live 90 minutes away.
"is one of only a few cities (and the only city in the West) that had a large urban core designed in the pre-car era, which means that its infrastructure is already designed to accomodate dense urban development moreso than any other American city west of Chicago"
.... Yea, maybe. But muni's average speed is 8 mph. For a city that is 7 miles across that's pretty sad.
> I'm in favor of how "building in the Bay Area is approved by discretion", I call it having some power over what gets built. "Democracy" y'know?
That's what zoning laws are for, which the proposed legislation doesn't affect. The kind of thing Governor Brown wants to get rid of is Nosy Neighbor Syndrome being able to block or stall reasonable development that follows code.
I grew up in the bay area, and it sickens me how many people here are more interested in making sure homes have a front lawn than making sure homes can be affordable to people outside the upper class.
Most homes with a front lawn were middle-class when they were built and for many years thereafter. Upper class types wouldn't live in tract neighborhoods, for the most part.
Funny isn't it, how some people only have one idea, which is, whenever there's a problem, the culprit is always "too much local oversight." "Too much interference in the free market." Let the forces of supply & demand straighten everything out as they always do, right?
Except how did it get this way in the first place? How did SF come to be? How did it become as it is now and get to have the problems it has now? Supply & demand, baby. The free market. Oh sure, the community having the audacity to block certain developments might've slowed it a little -- like shoveling seawater against an oncoming tide. And now the city that's overcrowded because of free market forces, will have all its problems solved by even freer markets? Good luck with that. I'm not saying a centrally-planned city would work out any better, but don't be surprised if this initiative produces more than a few unintended consequences.
> What concerns me the most is that the newcomers might lack the environmental commitment, and tip the scales from valuing conservation to valuing rampant development.
Actually, if you care about the environment, dense development is the best option.
You talk as if culture is some constant. Culture has throughout history been shaped by change. So why should SF somehow try to hold on to the good old times, whatever that is? Why shouldn't SF change to accommodate a revolution that will likely rival the industrial revolution in its impact.
You are right in that we need to make sure development is respectful of the environment but your attitude of "they are ruining it" is not helpful. Given that attitude of yours I do sincerely hope you are the one who leaves SF instead of discouraging the new comers. I hear Portland is nice.
> To me, the tech "industry" has been ruining the city I love since the Dot-Com boom. To me, they are an invading army culturally speaking.
I assume you're also planning to vote for Drumpf this fall?
After all, the rights of "natives" to enjoy a nice place without any cultural changes is far more important than allowing others to seek new opportunities for themselves. Where you were born is the most important determinant of where you should be allowed to live.
It's precisely because of the bullshit NIMBY attitudes in SF that Portland is getting a huge influx of tech people, who, in turn end up, through no fault of their own, forcing out other people, because Portland isn't building quite fast enough either.
> Y'all "young gods" will just have to figure out some other place to hatch the singularity. Move away. Build a floating "Seastead". Just please stop trying to cram a million more people into the Bay Area.
Money talks, whereas "just go away" is not an effective argument.
Rather than be angry about the things you have no ability to change, consider how you might work with this "invading army" to find mutually agreeable circumstances.
After all, tech nerds are their own kind of freak and weirdo.
>To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed.
California has a long history of newcomers coming in and destroying the local culture. LA 4 generations ago had roughly the same population as Sunnyvale.
This is a contentious issue and in case you are not from SF and wondering why Y Combinator is taking a stand on it, it has to do with the politics of the tech boom.
The plain truth is that the housing crisis is a combination of too much sudden demand fueled by the tech boom and too little supply. The tech community likes to deflect criticism of their sudden influx of relatively high-income workers and say "don't blame us, it's a supply problem."
This bill focuses mainly on juicing supply by removing restrictions on builders. But part of that is weakening the affordable housing restrictions on them.[1] The problem with that is, increasing market-rate housing alone may not make an appreciable difference in prices where it matters most from a macroeconomic perspective: for low-to-mid income residents.
Cities need teachers, service industry workers, artists, etc. Already the restaurant industry is facing a major worker shortage.[2] Let's not even get into the cultural effects of long-term residents getting displaced en masse. So if market-rate supply alone can't solve this, then you need affordable housing regulations to set aside spots.
Sam has offered a rather simplistic statement on the law of supply and demand on this. But that masks the real question: whether weakening affordable housing demands as this bill does is a smart move. Will juicing mostly market-rate housing be enough?
My understanding is the bill has weaker requirements (as little as 5%) on affordable housing than alternatives. Think of cities and negotiating with developers over affordability, and this is a more developer-friendly offer.
That's the key question. The article I cited details many limitations on local governments that would seem to limit their ability to demand affordable housing.[1]
Bottom line, this bill is massively supported by developers, so take that as a gauge of how much power it gives municipalities.
But bear in mind this just brings California in line with a bunch of places that managed to build their way out of a housing crisis. $1T in war spending dumped on DC in the last decade, led to cranes everywhere, not massive rent increase.
Uh, DC has had significant rent (and home price) increases in the past decade. Not as bad as here, but it's definitely not correct to claim that they've built their way out of a housing crisis.
In fact, when you look around, you see similar trends nationwide. A lot of this is just the predictable consequence of our near-zero interest rate policy since 2009.
You are confused; the 48hills article is referring to a different bill[1] (affordable housing bonus) than the Governor’s budget trailer bill that Sam Altman is referring to[2]. The Governor’s bill requires that localities deterministically and expediently approve projects near transit that provide some low-income housing and comply with local zoning laws.
But speaking of the affordable housing bonus, Tim Redmond’s specific concerns seem to be that height limits, setbacks, and backyard requirements may be waived, not that there would be any reduction in affordable housing. But I agree that the affordable housing bonus law is somewhat open-ended so who knows what concession a developer might request.
The Governor’s budget trailer bill says that if a developer sets aside a certain fraction of the units for inclusionary housing and the proposal complies with the local zoning code, then the locality must approve it deterministically and quickly. This does not prevent a local government from setting a higher inclusionary requirement in their zoning code; it would remain 12% in San Francisco (or higher if Proposition C of June 2016 passes). The inclusionary fraction in the bill is just the threshold at which the other provisions begin to apply.
By the way, the Legislative Analyst’s Office has released an endorsement[1] of the bill which provides background, justification, and proposed improvements.
> increasing market-rate housing alone may not make an appreciable difference in prices where it matters most from a macroeconomic perspective: for low-to-mid income residents.
This may well be possible to argue, but you're going to need a source for a claim that goes against the basic concept of supply-and-demand.
It doesn't go against it. The question is how elastic is the demand curve. If it's not elastic enough to make SF affordable for low-to-mid income residents then we may face bad macroeconomic and cultural effects. That's where price controls come in.
Articles by Tim Redmond are usually full of misinformation, and that one (link #1) is no exception. I could go on forever, but eg., he says:
"The problem is that the building and real-estate industries have a huge lock on California politics."
San Francisco is the #1 most development-hostile major city in the world. According to World Bank data, even in places like Ethiopia and Zimbabwe, it's still much easier to get planning permits than it is in SF. Blaming the power of the real estate industry for San Francisco's rents is like blaming the Chinese famines on capitalist saboteurs.
A 2% chance today, right? Increasing the supply of affordable housing should improve those odds.
What's at stake here is how much affordable housing the city for negotiate for with developers. Critics argue this state bill undercuts the city's negotiating position.
Doesn't the bill only apply to developments with at least 10% onsite affordable housing? Is the city really going to negotiate a higher amount than that?
It allows for as little as 5%. Some in the city are fighting for more. For example Jane Kim, the SF supervisor who Bernie Sanders just endorsed for state senate, is fighting for 25% (down from 30%).[1]
Basically this state bill is a developer move to undercut SF's negotiating position, as they have more political influence at the state level.
> The tech community likes to deflect criticism of their sudden influx of relatively high-income workers and say "don't blame us, it's a supply problem."
Well duh, ostensibly high-paying jobs are good, remember? Like, the tech sector is one of the few remaining industries with lots of jobs that pay well, and now we gotta demonize them too? Would it be preferable for everyone to be equally poor?
And it obviously is a supply problem. The California Legislative Analyst Office was pretty clear on that:
> While many factors have a role in driving California's high housing costs, the most important is the significant shortage of housing in the state's highly coveted coastal communities. We advise the Legislature to address this housing shortfall by changing policies to facilitate significantly more private home and apartment building in California's coastal urban communities.
It's important to understand the other factors alluded to by the California Legislative Analyst Office, among others. Specific to SF is a sudden influx of wealthier residents. With such a huge gap between their income levels and say service industry or blue collar folks, they are going to throw the market rate for housing way high. Increasing the supply of market-rate housing alone may not bring things down enough, at least, not without much greater developer concessions than have been suggested.
"Well duh, ostensibly high-paying jobs are good, remember?"
To whom, exactly? If those jobs are going to people who are moving here from somewhere else, then who benefits? There was a thriving city here long before tech startups came along.
The cruel irony of this kind of job growth is that it doesn't benefit the people who are being displaced. I personally think we need a more balanced approach: we need to build more housing, but we also need to start implementing some disincentives for companies to locate offices in San Francisco. It makes no sense, for example, that we're giving tech companies tax breaks to move their employees here.
> The cruel irony of this kind of job growth is that it doesn't benefit the people who are being displaced
That's because they're being displaced. Because there is not enough housing.
There are a lot of benefits to being in a wealthy area even for those who are not the ones with the highest paying jobs, as Enrico Moretti explains in "The New Geography of Jobs".
And if you want to see what an actual bad economy does for people.... check out Greece, or even Italy (which isn't nearly as bad off). It's not pretty.
"That's because they're being displaced. Because there is not enough housing."
Nor will there be at any point in the near future, no matter how much housing gets built. But that's a red herring. If the question is "should we favor policies that encourage the tech industry, or discourage it?", you have to do better than arguing that the tech industry is a net good in some ideal world that doesn't currently exist.
SF had a pretty strong economy before tech came along. Saying "tech...or the Greek economy" is clearly absurd.
I agree with you completely that 'special tax breaks' are BS.
I think there could certainly be enough housing to help a bunch of people at the margins, especially if density were allowed in a lot of the greater bay area.
While the cost of housing in the bay area gets a lot of press the entire infrastructure of the bay is getting stretched by the current tech boom. The traffic is already the second worst in the nation [1], and existing public transportation like bart[2] and caltrain[3] are already overloaded.
While I'm generally in favor of development I think that this simplistic approach of just going around local planning departments is just going to lead to more problems. I think it would be better to cut state and local funding of counties if they don't match growth targets that region commits to. This way we incentivize communities to embrace growth while letting the residents still have a strong say in how and where their community grows. Letting developers call the pace hasn't made for good urban planning in other parts of the country and there is no reason to expect it to do a lot better here. Let's incentivize these parties to work together rather than giving one all the power to drive the process.
If they end up implementing all their plans its a major capacity expansion for cal train, and part of a sister plan that would connect oakland to downtown SF via second transbay tube.
I don't live in SF, but having spent most of the past 15 years in Europe, which is dense: it's almost completely a supply problem. SF is not really very dense at all for a place with such a high demand for housing.
Apples to oranges. SF has always been more of a boomtown. Neither of the cities you mention have experienced the sudden, massive surge in demand that SF has in recent memory.
When you have sudden surges in demand you can't just pin it on supply. You have to think about macroeconomic objectives for the city (i.e. preserving low and mid income housing) as well as how to plan for the long term, like when the boom turns to bust and lots of those new residents leave.
When was the last time SF had too much housing? Obviously prices have gone down at times in the past but it's hard to argue there's ever been an oversupply....
Parent said that SF has to "plan for the long term, like when the boom turns to bust and lots of those new residents leave."
I don't think that's something that needs to be planned for. Even in a worst case scenario there will be plenty of demand to fill up any the new housing that's coming up in SF.
> Neither of the cities you mention have experienced
> the sudden, massive surge in demand that SF has
> in recent memory.
They haven't? According to what? I just looked this up for Milan real quick:
SF had 350k people in 1900, and 800k in 2010[1], a growth of ~2.3x. Milan had 550k people in 1900 and 1.3 million in 2010[2], a growth of ~2.35x.
I don't understand how you think SF is the exception in this example. Both of these cities have had similar population growth, Milan slightly more actually. It seems the difference is that Milan decided to build up.
First, you are looking at the wrong time scale. Second, population growth is not the same as demand. In just a few years SF has experienced a massive surge in demand, i.e. the price new residents are willing to pay for housing.
Well of course population growth isn't the same as demand, that's the point!
What davidw was observing was that there's plenty of cities that do better at satisfying the demand for housing than San Francisco does.
You can have a growing population in the same area while demand goes down, if you're building enough new housing to offset the demand. The examples davidw and I have been citing here show cities that have faced similar population growth that have built up rather than succumbing to SF's housing problems.
I think your claim that it's apples to oranges is invalid. Yes SF has been a boomtown, but plenty of cities all over the world have been boomtowns without the same issues.
The issue is that SF has been a boomtown AND hasn't gotten its act together when it comes to building up density. That's what makes it a special case, and that's why both the demand for housing housing prices are ridiculous there.
> cities that have faced similar population growth
You've simply ignored my point about the rate of growth in demand. That introduces a new factor, which is the need to control displacement of lower-income people and maintain healthy economic diversity.
Also, the issue here is not that SF is opposed to density. SF has many high-density neighborhoods and virtually all new construction is higher density. The issue is how hard the city should negotiate with developers to set aside price-controlled units to maintain economic diversity.
It's even worse in the suburbs. Everything is incredibly sprawled out. Every major city I've been to has apartment towers. It's just a more economical way to use land. Given how much demand for housing there is, there are obviously regulations in place keeping anything very tall from being built. The bay area doesn't want to grow.
That's awesome! What is the interior like? Is it two rooms stacked on top of each other, or does the house go further back?
EDIT: I actually just noticed the street view image cuts off part of the house, making it seem tinier than it actually is. Originally, I thought it was a "micro-house" or something.
I don't think the tech community is deflecting criticism. As a minority voting group, what are they supposed to do about the problem?
The limited supply is not their fault. The refusal to bid in the market would be a meaningless self-sacrifice. The lack of healthy leverage and organization by workers in other industries have nothing to do with tech workers, who, again, are a minority power in politics.
Your premise that the tech community is not a major player in local politics because of their relatively small body count does not hold water. Money plays a large influence in local politics. Ron Conway is a perfect example of this: he dines with the mayor and provides major funding to local campaigns and initiatives, which usually win.
So you're saying that tech has been a major political player with respect to housing laws? If anything, restrictions on housing supply hurt tech companies who wish to import workers to their area. Restrictions on housing supply hurts everyone who isn't a landowner.
If you're saying that a few tech elites are players in politics, fine, but that has nothing to do with the rest of the world who aren't elites. It's almost not worth mentioning that elites everywhere are players in politics. The rest of the tech world are not creating organized vehicles to channel money or votes (unlike teachers or firemen, who do organize). They're just people participating in the housing market. And whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing so they can import more employees.
What's the reason that money from employees of one industry are displacing workers from another industry? Because workers in that other industry lack the leverage to demand more wages that keep up with other industries, because housing supply is limited, and because population is growing.
> restrictions on housing supply hurt tech companies who wish to import workers
That may be true, but a city needs more than just tech workers to function. The goal is balanced growth.
> Restrictions on housing supply hurts everyone who isn't a landowner.
Objectively false. Affordable housing requirements help lower income people.
> whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing
You mean up the supply of market-rate housing. Most critics are not anti-growth, they just want more affordable housing.
And as for displacing workers from other industries who can't afford market rate, it's not us vs. them. The "industries" you're talking about are intertwined: tech, restaurants, cafes, schools, police, nursing, art, and so on. If a city doesn't grow in a balanced way and pushes all those other people out it could make it an undesirable place to live. Already we are seeing big increases in restaurant prices due to cost of living.
Then they should support as-of-right construction. Mandating affordable housing doesn't actually increase its availability if a developer's plans to build affordable housing keep getting shot down.
I don't see how worker shortages in the service industry could possibly be seen as a bad thing. Service industry workers will be required regardless of cost of living. If supply is constrained because of cost of living, these workers will simply be paid more. Rather than trying to legislate our way to $15/hr, how is it not better to achieve the same thing with less government intervention? 'affordable housing', as required by the government, is not necessary at all.
"His bill would make it so multi-family buildings are automatically approved by right as long as they comply with local zoning, and have 5-20% affordable units--the percentage depending on location and subsidy offered."
The problem here is that this leaving height limits in place and could create a rush to impose even more stringent zoning restrictions.
What would be necessary would be legislation that pre-empts both local zoning and other mechanism for a relatively small area to allow the construction of a few high rises without the destruction of existing housing stock.
The ideal of Nimbys seems to be no development and the ideal of developers seems to be building a limited number of ultra-high-priced units in the super desirable places like the Mission. The sane approach would be to allow a series of high rises in Potrero Hill and along the Bay.
This approach sounds like it would simply push-through development according to the developer ideal, which would serve the Nimbys right but also destroy whatever remains of the character of the mission.
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[ 3.5 ms ] story [ 338 ms ] threadI mean, yes, I knew what he meant, but it doesn't give me confidence that he understands how to influence the political system.
And if you can't get that kind of basic thing right, why would people trust you on the substance, which takes a lot more understanding of government to interpret correctly.
> Tim Redmond of 48 Hills has argued that building more housing would make the problem [high housing costs] worse because the people who would move into it are likely to be wealthy newcomers whose demand for services will increase low-income employment, putting further pressure on older, lower-cost housing.
Right now people are being outbid on homes they would normally win, and in turn are overbidding on lower-priced housing. Increasing the supply even at the high-priced end would help reduce the displacement.
Think of what happened with modern agriculture. Food used to be much more expensive, then we greatly increased yields. People still need food and would be willing to pay more for it, but as the cost of production has fallen, agricultural landowners failed to totally capture the benefits. Instead, society allocated resources that would have gone into low-efficiency agricultural production to other uses, such as industrial goods production.
They start building more and those houses are going to be just as expensive as the existing housing.
http://www.planetizen.com/node/86486/does-new-housing-create...
Heck, if anyone on HN is part of any lobbying effort in California and would like a beta experience of a new platform email me lane (at) fastAdvocate (dot com)
Warning you in advance, the website up today is horrible and not representative of the beta product. The homepage is about to be replaced. We focused on the product first.
They are one of the groups doing the most activism on this issue.
Fun fact: some of you may have seen us canvassing at tech bus stops in SF.
Will this have the impacts Mr. Altman suggests they will? Specifically - significantly more development of multi unit dwellings?
I have a room in my house in the Sunset opening next month. $900. It's month-to-month rent. Looking to house a founder/hacker/designer/etc currently struggling with SF rent (or someone who wants to move to SF but didn't think they could afford to live in SF)
My email is in my bio.
May have an additional room opening in July as well for a similar price.
I'd also like to host as many smart/driven folks as possible via couchsurfing.
Sorry, couldn't resist.
To repeal segregation laws that are supported by the public, you're going to need a desegregation movement. Here's one: https://www.facebook.com/DesegregateATX/
Maybe instead of paying linear tax based on purchase price, we could implement a reverse logarithmic scale for property tax % based on state / national / something average sales prices / sqft that would be re-assessed yearly. And then either apply that to all new home purchases, and when enacted, allow existing home owners to opt-in ( recent buyers ), or opt-out.
[1] http://www.californiataxdata.com/pdf/Prop13.pdf
Increasing as-of-right development opportunities can potentially actually increase land values. Definitely bad for condo owners though.
Why? I would assume, as the area gets denser, more popular, more shops, more restaurants, that also condos go up in price?
I can't say I blame them, either. It's nice having some quiet - four families in the lot next door means 4x more noise, cars, dogs, parties, etc.
Difference here is that you can live insanely cheap in the suburbs, so most end up doing that, but with no reasonable public transport and no current ridesharing, it's a mess that will continue to grow.
Our affordability crisis is a charade. It was manufactured by selfish people looking out for their own interests without caring about the consequences. They have segregated our cities by income, and pushed people away from jobs and communities that would've improved their lives. Our cities must be desegregated. This injustice must end.
Who do you think was pushing for proposition I (an 18 month development moratorium in the mission) to pass? It wasn't homeowners, that's for sure. It was renters living in the Mission who were (not incorrectly) terrified that new development means they will get evicted and displaced.
Why did 60% of SF voters (keeping in mind only 30% are homeowners) vote for Proposition B, requiring a city wide up-or-down vote on all new waterfront development over 40-80 feet? A measure that was also endorsed by multiple major newspapers? Because people are afraid of everything changing too quickly and the nice beautiful waterfront turning into midtown Manhattan.
It's complicated. This isn't homeowners giving the middle finger to everybody else. The situation is more akin to existing residents fighting against future residents. Though whatever the situation is, pointing fingers at individual constituencies instead of trying to understand the problem holistically is not helping anything.
New development as the cause of displacement is just outright misinformation. There has been very little development in the Mission:
https://rationalconspiracy.com/2015/05/25/new-york-times-mak...
There is an extremely strong negative correlation between development and housing prices across cities:
http://www.spur.org/sites/default/files/wysiwyg/asking.price...
This is an excellent writeup by Jason Furman, chief economic adviser to President Obama, which explains in detail how land use restrictions make cities expensive (and cause other problems besides):
https://www.whitehouse.gov/sites/default/files/page/files/20...
This is such a bizarre idea.
How exactly do renters get displaced by adding more housing?
"Because the actual building they live in gets demolished to build another building"
This happens very rarely, people will literally revolt before a rent controlled unit gets demolished in the mission
So someone opposing more building in the mission falls into the first two categories and they are extremely selfish
http://sfist.com/2016/03/29/report_evictions_continue_to_inc...
This is such a stupid myth. On par with "vaccinations cause autism" or Bigfoot.
Science has studied how price depends on supply and demand very thoroughly. Increased supply always leads to lower prices.
Not in real estate economics. Housing isn't a commodity market. There are firm price tiers, different methods of construction, different fixed costs for those methods, and drastically different markets for individual neighborhoods. Real estate isn't fungible and it's isn't particularly liquid. Basically none of the requirements of Econ-101-style supply and demand are met in the world of real estate. Building skyscrapers is nothing like creating an assembly line for widgets.
So yes, "construction" has some small aggregate effect on the price of a rental in the city, but that effect is meaningless to you if your affordable building was knocked down to make room for a luxury skyscraper.
Moreover, if you do happen to overbuild housing in a market, the price sags. Developers then almost immediately stop building, because the costs of new construction don't decline with scale. Thus, price controls enabled by construction happen on the order of decades, not years. Neighborhoods gentrify much more quickly.
In practice, a low-density neighborhood gentrifies, land values go up, and developers start to replace cheaper, low-density construction with expensive, high-density construction that can only be justified because of the higher land values. Existing residents are displaced. Ideally, those residents then move to a cheaper neighborhood. If no such neighborhood exists (because, say, you're in a small land-locked city with more millionaires per capita than anywhere on earth, and no remaining "undesirable" land), then those residents are, indeed, completely displaced. The fact that luxury apartments are theoretically $30 a month cheaper in some other neighborhood is thin gruel.
Increased supply leading to higher prices would be something that Economist would crawl over each other to study, if true.
So where are these studies?
Who are the professional economists who support this view?
https://www.washingtonpost.com/news/wonk/wp/2016/02/12/the-p...
"None of this dismisses the fact that displacement from specific homes happens when low-income housing is literally knocked down to build high-end towers. A good amount of new supply in cities, though, can rise on under-utilized land (former industrial plots, surface parking lots, abandoned properties, etc.). And the cumulative effect of all that new supply can hold down rents across neighborhoods and cities, including for the poor."
Nobody thinks that new housing is bad - in the long term. Where economists start to disagree is how to prioritize low-income housing and market-rate construction in the near-term:
https://www.washingtonpost.com/news/wonk/wp/2016/02/19/how-t...
"To be sure, more supply is needed, but unless it is targeted to those who need it most, it will only help wealthier residents."
"'Filtering,' where older housing units trickle down to lower-income families as they age, can happen in the broader metropolitan context. But it can take decades for filtering do deliver truly affordable units to lower-income households. As apartments age, the rent of a typical unit – not in a hot area - declines an average of 0.31 percent per year so even after 30 years, the rent will have fallen by only 9 percent."
"In gentrifying neighborhoods, filtering does not work at all, because land values and rents rise as the neighborhoods become more desirable and developers bid up land values. So lower-income households must look in other neighborhoods where services and schools are likely to be much weaker. Hence the gentrification process can reconstruct economic segregation."
Filtering does work, but as you point out, it takes time: https://oregoneconomicanalysis.com/2016/05/25/housing-does-f...
But just because the best time to build more was 30 years ago doesn't mean now isn't a good time to start.
Also: if you are adding expensive housing it takes some pressure off of the cheaper housing that would otherwise be the 2nd choice of those going into the expensive housing.
The second article lets various people give their reaction to the first one. The non professionals say what they usually say. But the Berkeley professor of economics answers my question very clearly:
Economic research on this topic is unanimous. There is no question that on net, adding more units tends to lower rents. All existing peer-reviewed academic studies — including work done at Harvard University, the Wharton School at the University of Pennsylvania and by me at UC Berkeley — find that more housing supply results in lower rents and house prices, everything else being constant.
Supply has gone up, but demand has gone up even more.
- A building owner doubles his rents from $3000/month to $6000/month. What happens? Everyone moves out. The high price eliminated Demand for that building.
ANALYSIS: When the owner tried to jack up his rents too high, it created an excess supply of $6000/month units and not enough demand. What will happen to that owner? ANSWER: go out of business or increase Demand by lowering his asking rent. CRUX: owners only have 'pricing power' matching the strength of demand, they cannot just start 'greedily' raising rents.
Now assume Zynga opens up shop in the neighborhood. Does demand increase for apartments? YES. There are hundreds of new renters.
Building owners see they get 20 applications now for a vacancy instead of 5. They raise their asking rents to $3100 and people pay it due to lack of Supply of units.
The owners cannot raise the rent unless Demand increases. But in San Francisco, which has become much more of a Tech hub over the past 20 years, Demand for apartments has increased. Supply hasn't kept up.
INCREASE IN DEMAND = more applications for a vacant unit = HIGHER RENT because lack of supply means renters have few choices.
Okay, now assume Zynga goes out of business.
Does demand DEcrease for apartments in the neighborhood? YES. There are hundreds of fewer renters.
Building owners see they get 5 applications now for a vacancy instead of 20. If they keep the rents at $3100 there is now an excess supply of expensive units. They must lower their asking rents or wait longer to fill a vacancy and lose money on an unrented unit.
I own/operate rental properties. Supply and Demand is alive and well in the apartments realm on the Peninsula.
During the worst parts of the recsssion we had 20% vacancy (normally it's between 3% to 5%).
Demand for apartments dropped precipitously. Did we lower our rents? We had to. We entered a 'race to the bottom' competition with other rental property owners.
THERE WAS AN EXCESS SUPPLY OF APARTMENTS in the 2008-09 recession. Rents dropped.
Right now there is a lack of supply of units because Demand rose as the job market got healthy.
Rents are higher.
When Demand drops in the next few years in the next recession (due to layoffs, tech firms folding, etc.), will my firm have to lower our asking rents?
OH BABY. Yes indeed. It hurts too.
The argument 'Supply and Demand don't apply to housing' is patently false.
During a recession, there's lower Demand for units (fewer people working; living in parent's basement or leave the area). RENTS DROP.
During a healthy job market, there's higher demand for apartments (more people working -- move out of parent's basement; and new people get hired locally and move to the area). RENTS INCREASE.
The argument that 'everyone must have an apartment in San Francisco, regardless, if they want one' is BOGUS. If you cannot afford to live there, that's YOUR FAULT. Not the city's fault. Not Zynga's fault. YOUR FAULT.
Yes, but many renters are covered by rent control, and thus immune to increasing market rents.
We don't in practice have "1 person, 1 vote". Because of the influence of money in politics, the effective reality is somewhere in between "1 person, 1 vote" and "1 dollar, 1 vote". There are far more dollars on the property owning side.
I managed to talk to someone at both of my representatives' offices within a minute, without any sort of delay. It's very easy, please do call in if you support this measure!
Also, when you do call in, post here afterwards with how long it took you. A lot of people don't bother because they think it'll be a hassle, but it's about a 100 times easier than calling to book a restaurant reservation.
Land value tax is the answer for all those who don't simply want a quick in so they can get on the gravy train and actually want their kids to grow up in a society where wealth creation, not money creation, makes you richer.
The demand keeps piling on and supply has not risen to meet it. I agree that land value tax is a big part of the problem, but new, high-density development is the only solution.
And even then, housing won't be cheap. You just might be able to get a reasonable mortgage on a place built in the last 50 years.
Then you get a massive crash again.
How would demand be if you force a big wedge of people who own/mortgaged more than one home to sell up? I think it would ease considerably. How many SF tech "entrepreneurs" are leveraged on housing? Flush 'em out with land value tax.
Vancouver doesn't have the same anti-development issues that SF has, and has been building multi-unit condos and apartments all over the region for decades. Multi-unit housing starts are about at its highest level ever. The average price of a detached house however is C$1.3 million (~US$998k thanks to the weak Canadian dollar) and rising. Low interest rates, "fear of missing out," incredible amounts of real estate speculation and a dash of foreign investment can go a long way.
It's likely that the strongest benefits to increased supply in SF will manifest itself in lower rents and/or lower rate of rent increases.
(and, frankly, as a homeowner, I don't WANT my housing prices to drop in half overnight, but I DO what the region to be affordable to more people, and hence I support this even though it's against my own personal interest).
I moved out of the sea-to-sky about 6 years ago (I'm from Whistler) but I seem to recall huge amounts of apartment vacancy in Yaletown and even Coal Harbour areas. From what I've been reading in Canadian news, it seems that many of these properties remain empty and are not in the rental pool as the act as a shell game for foreigners to move money our of other contries (mostly China, but others too I'm sure).
SF is a very small city, even compared to Vancouver, and from what I understand, vacancies are almost nil.
http://missionlocal.org/2015/06/a-closer-look-at-airbnbs-inn...
This sort of development however should, as you say, assuage high rents and perhaps expand the condo market in SF.
a software engineer makes over 80K if he is lucky, you would be considered an exception if you make anything over 100K. also pretty much everything else costs more in Canada than it does in US which leaves even less money for housing,
so cheaper yes, but definitely less affordable.
$300k (USD) 1 bd room apartment in Yaletown, equivalent of this in SF is at least $750k. Plus property taxes in SF are around %1.15 for a $750k condo that comes down to 10k a year, just on property taxes. Not sure about the rules in Vancouver but the link I posted above claims $1,008 in property taxes. So yea I think Vancouver is affordable.
for example a friend of mine just bought a condo in vancouver last week, List price was around 500K, he put an offer of $530, got a counter of $550 and it finally sold for $580.
http://bc.ctvnews.ca/fierce-bidding-wars-a-new-reality-in-lo...
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You've been posting many unsubstantive comments to Hacker News. Please stop.
Is this forum so sensitive that I cannot criticize its executive?
It still surprises me that an industry that's all about connecting the world through the internet and allowing anyone to work with anyone else on anything says "yeah but you need to work in this small area of the country to do it."
The armchair economist in me says that high housing prices in the Bay Area will cause a market "correction" of sorts with other cities exploding as tech sectors -- see NY, Boston, Chicago, Austin, Las Vegas -- as those cities can get away with much better housing for cheap, even if the opportunities aren't as plentiful (yet.)
<conspiracy theory> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity ("you can have my funding if you live in SF" or "we don't allow remote workers"), as they all probably own houses in the area; the incentives for them would be to have housing prices keep rising, NOT fall, as they would lose significant real-estate equity. </conspiracy theory>
The key will be those other cities/hubs having their own successes, bringing in the capital and expertise to nurture new talent. It's likely that the number of successful hubs that can be supported is pretty low. I happen to believe that the amount of (awful word) synergy needed to flip a few percent of startups from fail/borderline to success is pretty high. In other words, all those know-a-guy-who-can-help connections have to have a high concentration before it starts to pay off.
But then mine is just a theory as well and has a high chance of being wrong.
I think the benefits of more people meeting, networking, and starting new things in the area vastly outweighs their interest in their homes. It's not like this really affects the pricing of mansions much anyway, and if they aren't living in a mansion, it's probably such a small amount of their overall wealth that it's inconsequential.
We've always made up crazy lies just to keep the Californians away, but ultimately it isn't working. Seattle is a nice place to live/work, and has plenty of jobs for techies.
I split the difference and ended up in Portland.
I was born in Portland when it was bigger than Seattle (after the early 70s Boeing bust, and when Intel/Tektronix was picking up). How times have changed...
Basically, if you move to Seattle, you are pretty much restricted to working for Microsoft or Amazon and that's it. Period. Nothing else.
It's a huge career limiting move, make sure you're okay with it.
There ARE other cities with a lot of quality, diverse tech jobs outside of the Bay Area. I live in one of them and I don't consider it a 'career limiting move'.
Google has a big campus here in Fremont and Kirkland, and they're building a huge new complex in South Lake Union (Amazon's stomping grounds).
Facebook just opened their brand new office in SLU.
Samsung is here. Adobe is here. Atlassian is here. Uber is here. DocuSign is here.
Expand the metro area to Bellevue (since we included Microsoft above) add companies like Redfin, Zillow, Expedia, FICO, Disney.
Edit: Oh yeah, forgot Intel and EMC as well.
I'm sure there's many I missed but there's WAY more than just Microsoft and Amazon.
... Just don't tell anyone. Go to Portland instead. I hear they want you ;)
I just hope housing there is affordable without a roommate by the time I can graduate.
I pay $1850 a month for a 496 sq ft "Open" one bedroom. It's basically a studio with a wall that segments off my bedroom.
Which is more than fine for me :D Get to live downtown, get to walk to work, walk to bars, etc. But if you wanted an average 3br/2ba apartment, you're probably looking in the $3500+/mo. And buying is so competitive right now it's insane.
They can make billions from funding startups.
And congratulations on learning how to be rude enough to be a toxic, while using the type of language that dang, pg, and saltman have all decided is A-OK. You're doing a great job of keeping HN horrible.
I'd love to see NYC co-opt SV as the world capital of the tech industry, and I think it could totally happen. The only thing SV has going is historical inertia, and it's eroding. This housing problem in SV is going to make it erode faster.
Honestly I don't understand SV at all. They say NYC has a housing cost problem, and it sure does, but it's nothing compared to SV -- in SV you have people paying Manhattan prices so they can live in SF... yet somehow still commuting an hour to the suburbs where the offices are! At least here you can either pay Manhattan prices and get a 10 minute commute for it -- or take an hour-long commute and at least get a much cheaper and/or larger place in exchange. And your commute won't require you to drive, unless you want that.
NB: I've never lived in the SV area so maybe I have some misconceptions that need correcting? :-)
> The combined value of just Google, Apple, and Facebook is $1.3 trillion dollars.
Well, to the extent that those three companies have employees in other cities, I'd count their market caps proportionally towards those cities. I'm not sure offhand about Apple or FB but Google has a huge office in NYC. But that still leaves the vast majority in SV.
> Also, most successful hubs are often one industry towns. Think Detroit and Houston.
Ominous and timely comparisons. One-industry towns are also way more vulnerable in the long run. NYC is actually a counterexample -- it is the industry hub for at least three industries (finance, fashion, advertising) and leads or has a strong presence in many others, and it's been that way for a long time.
> But it is also a mistake to think SV is just a "tech" hub.
If being close to other members of the industry you are "disrupting" with tech is useful, then that is a huge advantage for a city like NYC with a wide variety of industry. But maybe that's not that necessary -- maybe Tesla would not get much advantage out of being in Detroit near other automakers. If that's the case then a city like NYC does not have any special advantage there.
Then you'd have to count Wall Street, which for a great part are big software companies as well.
The size of the campuses in Silicon Valley literally cannot fit in NYC. No comparison.
Its fantastic that Google bought a block of Manhattan for 1 billion dollars, but Google's Mountain View campus is ALL of Mountain View. These are sprawling districts that cannot fit inside of a skyscraper.
The next fundamental difference is the variety of VCs. NYC cannot replicate this, and there is nothing eroding about it. NYC has one or two VCs looking at the same industry trends. Silicon Valley has many VCs interested in completely different things, different portfolio niches.
NYC has variety of industries and conveniences.
Silicon Valley doesn't even know how backwards its infrastructure is, while trying to change a world that functions better than it does already.
San Francisco masquerades as Silicon Valley and an international city but it is neither. New York, London and Hong Kong are international cities, SF struggles to keep up with the tech bubbles that it remains on the periphery of and only recently gained relevance for.
There is more tech focused stuff in SF and Silicon Valley, but New York has enough satellite offices to keep you occupied.
Is that a definite? I mean, most of Mountain View and its tech campuses are sprawling suburbia (e.g. vast fields of asphalt and grass with a building sprinkled here and there). It's amazing what can fit in a well-designed commercial district.
Google employs 19,000 people in Mountain View currently
The Twin Towers in NYC each held 25,000 people on a daily basis.
Two buildings in NYC could accommodate the populations of two tech giants that sprawl across entire south bay towns. So several of NYC's average sized and planned skyscrapers could do a fine job. And there is room every direction away from Midtown Manhattan to replicate new robust building clusters.
Redwood city, about 30-40 min south of SF, has been booming with building growth. Developers are building, but can't get approvals with local governments fast enough.
Oh, except the thought they had to make Farmhill suddenly go from two lanes to one lane. Yeah, that's a great solution on a main connector to 280 in a city that already has major rush hour congestion issues.
Planners are finally realizing the requiring parking spaces subsidizes car use, making transit less viable, worsening traffic. http://mobile.nytimes.com/2010/08/15/business/economy/15view...
Beyond that, the issue is that it is required in these cases, but the buildings just don't build enough and then pay the slap on the wrist fine for it.
What it has meant so far is additional traffic congestion, increased commute times for everyone, more demand for government education and emergency services and more air pollution.
I'm not quite seeing how the government can be taking enough money in to make up for the reduction in service levels and overburdened infrastructure. Based on the broken roads and sidewalks around my neighborhood and LA generally, it doesn't seem like it is doing that.
http://www.mountainview.gov/depts/comdev/planning/activeproj...
edit: this is a serious post
And is unsustainable.
I'm from SF. I grew up here. I'm also a computer nerd.
To me, the tech "industry" has been ruining the city I love since the Dot-Com boom. To me, they are an invading army culturally speaking. In a very real sense my home is being destroyed.
The saddest part is, this city kinda sucks. It's not even a good place to locate a business. The city gov is soft-corrupt. The weather NEVER gets better. We're on a damned peninsula. If I were starting a company I'd go to Davis CA! People aren't coming here because it makes sense. This is just where the game is being played. They are drawn here like aspiring actors are drawn to Hollywood, but the prospects are just as glamorous and illusory. A few will strike gold, the rest will toil and vanish.
This is a town for freaks and weirdos. If you don't believe me, visit Civic Center. ;-) It is said "The people who are too strange for the rest of the country move to California, and the people to weird for California move to San Francisco." (If you are still too weird you go to Berkeley.)
What concerns me the most is that the newcomers might lack the environmental commitment, and tip the scales from valuing conservation to valuing rampant development. San Francisco is the largist metropolitan area with the most wilderness/open space around it in the world. The last thing we need is more lux condos and freeways.
I'm going to be calling those numbers, you can bet, but it will be to urge "con" on this abrogation of the weirdo-freaks ability to stonewall development. This is a good thing.
Y'all "young gods" will just have to figure out some other place to hatch the singularity. Move away. Build a floating "Seastead". Just please stop trying to cram a million more people into the Bay Area. It's not actually a good idea!
Also, I hear Portland is nice.
Edit: cool I see the down votes. Is this an unfriendly question? Just wondering what the diversity is like in SF and if people care
Lol. I've always found it amazing how many people run towards SV. Software is cool because you can do it from anywhere. To each his own, I guess.
Yeah, you can do software from anywhere! But SF/SV is probably one of the best places in the world to do for it.
I've situated myself in southern Taiwan. I may be the only foreign coder in the city, haha, and the startup scene is almost entirely up north around Taipei, but I hope that changes =)
It's high on the list, but it's not the one with the most:
http://www.skyscrapercity.com/showthread.php?t=1660203Yes, we pride ourselves on our parks and reserves and natural beauty. But meanwhile Marin County's population hasn't really changed in 30 years, while commuters from Stockton have grown three or four orders of magnitude. There's a real bay incumbent insiders versus valley outsiders thing going on.
The light green bits are barely a quarter, and a good chunk of that is agricultural (mostly greenhouses), not "wilderness/open space".
>City proper is used as metropolitan boundaries are harder to determine. Will make a note if the data is for metropolitan area. Green spaces that are planned are used in the statistics. S For the most part the higher percentage of green space the most accessible to more people, however Hong Kong green spaces are usually not with many being in hills. Tree lined streets don't count as green spaces. Instead open green areas park, gardens, and squares? I'm not sure if squares are counted? Tree lined streets percent of tree canopy is not counted. This data is for open spaces."
[1] https://en.wikipedia.org/wiki/San_Francisco_Bay_Area
In any case, cities will still have huge influence over what gets built, since every building under this law still has to comply with local zoning. All this law says is that cities can't pretend to allow development, and then arbitrarily block individual developers for no reason (or because they didn't pay enough bribes).
You could make that case for all regions of the world. Nobody is completely isolated. We breath the same air and everyone deals with the effects of pollution.
It's not a reason to prevent changing existing law.
See this magazine article on how NIMBYs pushed suburban sprawl on surrounding areas:
https://web.archive.org/web/20001001083046/http://www.sfweek...
See this article, on how restrictive urban land use is estimated to lower America's entire national GDP by 5-15%:
http://www.economist.com/news/leaders/21647614-poor-land-use...
I suspect the impact of restrictions on SF growth at this point are large because as the parent notes, growth has been large there in the digital age. Tech businesses have had it good there for awhile. Maybe time for some change, no? At least get rid of Feinstein..
Edit: please explain down votes, thanks!!
and http://qz.com/169767/the-century-old-solution-to-end-san-fra...
I'd like to suggest an alternative: a companion bill that requires local and regional governments to provide adequate service and infrastructure expansion once the inevitable building surge happens.
Access to government services and infrastructure really ought to be maintained at current levels for everyone.
And if that can't be guaranteed, then cramming more people into a given city or area should be recognized for what it is: a transfer of wealth. And _of course_ there will be resistance to government mandated transfers of wealth. We should expect such resistance as a fair and rational response to these kinds of laws.
The real question becomes: how do we make this as fair as possible for both the newcomers and the existing residents?
In the same line of thinking about democracy - the entire established population of SF might not want to attract the tech industry, but the tech industry - many times more people, in effect, than SF - chose SF. The greatest flaw in democracy is being out of the majority opinion, and if "build up SF" were not so it would not even be on the radar as a question.
Tech employees are hated everywhere. Portland, Seattle, etc. want us gone just as much as everyone else. Why is your hatred special?
This bill specifically applies to development in urban areas only. More development in areas that are already urban will reduce pressure for cities to expand outward, into pristine wilderness. That's why environmentalist organizations like the Sierra Club support infill development: it's a low-water-use, low-greenhouse-gas alternative to suburban sprawl.
Except the Sierra Club in SF, which strongly opposes dense housing.
Isn't this just what natives say about every group of immigrants? The West Coast, in particular, has seen this before:
http://3.bp.blogspot.com/-DXu9eKM4kJI/T_D5ucc8SPI/AAAAAAAABK...
This is xenophobia in another skin. There are a lot of people who don't want brown people coming into the country and changing the "feel" of their home too.
Anyways, as long as we severely restrict housing, techies will continue to outbid the locals on what remains. Passing this legislation might give the weirdo-freaks a chance to remain in the city.
Maybe comparing this commenter to "a lot of people who don't want brown people" is ham fisted and inaccurate.
The commenter seems more interested in the culture, the freakiness or weirdness, of the people who come in, and not so much which country they came from. I do not see where the commenter mentioned race or skin color.
Is it ever ok for a person to argue against policies that increase population in the city where they reside?
If so, what are some ethical reasons for resisting and/or advocating against population growth in a city?
Go to a Trump rally and ask if they actually hate minorities for the color of the skin. They'll say no.
Xenophobes and racists always insist it's about "culture" and an invading army which is somehow destroying that "culture" and ruining their way of life with an outside culture.
I fail to see how this attitude is acceptable when it comes from privileged urban hippies, but unacceptable when it comes from poor rural workers.
Anyway, it seems that what you want to establish is not that xenophobes and racists "insist it's about culture", but that anyone who "insists it's about culture" is a xenophobe or racist.
Yes, I do think that everyone who insists that culture is a valid reason for opposing the ability of people to migrate into their area is an xenophobe.
For example, if a large influx of patriotic, Budweiser-drinking gun-owners from Texas occurred in Berkeley and a long-time Berkeley resident complained about it because they didn't want a "culture of watery-beer, flag-waving gun ownership" to expand in their neighborhood, I would not call that xenophobic. But it seems like you would.
Or, maybe you wouldn't. Can you clarify this a bit more?
An example closer to home for me is that Vermonters constantly complain of "flatlanders" from NYC are moving in and ruining the culture. I consider this attitude xenophobic and ignorant of the fact that culture is never static.
Why should the national border make a difference? Why is it not xenophobic if Californians oppose Texans moving to town, but xenophobic when Texans oppose Mexicans moving a few miles north?
FWIW, personally, I would refrain from using the word "xenophobic" so readily, especially because of its deeply negative connotations.
In my Berkeley/Texas example, imagine a scenario where the Texas transplants destroyed all their guns, recycled all of their cans of Budweiser, started buying Chimay Ales from the Berkeley Bowl and put Bernie Sanders bumper stickers on their cars. If some long-time Berkeley resident _still_ rejected these erstwhile Texans as outsiders, then I would trot out the label "xenophobe." But probably not before that.
As someone who grew up in Portland [1], I could write a post just like yours, and I'm sympathetic to the frustration...
But I still side with the pro-housing crowd. What are people who seek to move up in life (i.e., take that dream job and build a career), but who happen to have been born in the middle of nowhere, supposed to do? Is it fair to say "hey, my home, don't come here" when a large fraction of the industry is in one place and the individual software engineer has very little power to change that? Yes, long term, we should spread out and build clusters of industry elsewhere, but that doesn't help the fresh college grad today who gets an offer in the Bay Area but can barely afford rent.
[1] and I want to move back someday so please don't ruin it!
It was a great, interesting, trippy twenty to thirty-year period, but it doesn't exist anymore and its loss in the Bay Area was probably accelerated in part because California has such an unusually politicized and unpredictable land-use and development process that has led it to consistently underproduce housing for the last 40 years.
http://www.lao.ca.gov/reports/2015/finance/housing-costs/hou...
The "young Gods" you speak of tend to have higher incomes not just because of the tech industry. They have higher costs because the elder babyboomer Californians rigged and created a system that is so constricted that only the wealthiest millennials can afford to participate in it.
Look at the differences in housing cost burdens based on year of birth here: http://www.lao.ca.gov/LAOEconTax/Article/Detail/120
Those are all the people currently getting forced out by the lack of housing supply. Opposing this legislation won't magically make the rich leave, instead the city will continue to be less accessible to the middle class.
I hope that some day everyone who wants to live in San Francisco can live here. It seems like the only way for that to happen is to increase the housing supply.
It seems bizarre to me that those most fervently opposed to the influx of tech in SF are doing the most to harm the existing residents. If you make it hard to build in San Francisco, there won't be enough houses. If there aren't enough houses, who do you think gets the few that remain? It's not the freaks and the weirdos– it's the wealthy. The freaks and the weirdos have to leave because of your shortsighted policies.
Whether the city's culture or the tech community's attachment to the region will break first is, of course, an open question.
1. SF could double it's current housing density tomorrow and still have less than half of manhatten's density. That's not a serious concern.
2. Even if it were, we're faced with a tough choice: preserve SF's low-density housing, or preserve it's people. Which is better: a city with 20% taller buildings, or a city where the only the rich can afford to live, secure in their $10m victorians and $5k/mo NEMA towers?
3. Many would argue that SF's uniqueness is its population, its freespirited attitude, and its rich history of art and culture. The buildings themselves are only a small part of that. Losing them would be a bummer, but far worse than losing the real soul of the city.
Count how many bridges and tubes connect Manhattan to the mainland vs. how many bridges and freeways connect SF to the rest of the world, and revisit that concept again.
Also, Hong Kong is a rather beautiful city.
So it doesn't have to be high rises and skyscrapers. SF can look like SF and build enough to make living affordable.
Of course, the real problem is the peninsula cities that insist on densities much lower than one third of SF. 80% of buildable land on the peninsula is tied up there being wasted.
NYC experienced this yesterday. SF is experiencing this today. Many cities will be experiencing this tomorrow. As population density grows this same scenario will repeat everywhere over the next century. There is no escaping it.
The difference perhaps is that although Hollywood is the place to make deals and host awards ceremonies, the actual work of filming is done around the world, from New Zealand to Ireland to Vancouver.
While I agree with that I don't see any of that in the parent's post. It's actually pretty frustrating so many VCs insist that companies need to be in SV as there really isn't a real need to be and I know start-ups that would be much happier if they could get VC funding but not be in SV.
Deciding what housing can be built should not be like a game of Scattergories, where we all just argue about whether or not something is okay after the fact.
Because the way it stands, only projects with high rate of return will be built--ie luxury housing. A 10% rate of return on investment might be okay for a project that takes one year, but if it drags on to 4 years, that's barely beating inflation. Time is money, and our process makes our housing more expensive.
San Francisco is the second-densest city in the country, and is one of only a few cities (and the only city in the West) that had a large urban core designed in the pre-car era, which means that its infrastructure is already designed to accomodate dense urban development moreso than any other American city west of Chicago.
Contrary to popular belief, making money in the Bay Area isn't that difficult or unlikely. I think the comparison to a gold rush is more of a meme than a representation of what's actually occurring (>95% of new arrivals are not entrepreneurs).
The good news is that tens of thousands of people from impoverished countries have been able to move here, become US citizens, and live a first-world life they might not have had access to otherwise. The sad part is, they're not cool -- or "weird" -- enough, so they have to live 90 minutes away.
.... Yea, maybe. But muni's average speed is 8 mph. For a city that is 7 miles across that's pretty sad.
(Slightly dated article:http://m.sfweekly.com/sanfrancisco/the-muni-death-spiral/Con... )
That's what zoning laws are for, which the proposed legislation doesn't affect. The kind of thing Governor Brown wants to get rid of is Nosy Neighbor Syndrome being able to block or stall reasonable development that follows code.
I grew up in the bay area, and it sickens me how many people here are more interested in making sure homes have a front lawn than making sure homes can be affordable to people outside the upper class.
Most homes with a front lawn were middle-class when they were built and for many years thereafter. Upper class types wouldn't live in tract neighborhoods, for the most part.
Except how did it get this way in the first place? How did SF come to be? How did it become as it is now and get to have the problems it has now? Supply & demand, baby. The free market. Oh sure, the community having the audacity to block certain developments might've slowed it a little -- like shoveling seawater against an oncoming tide. And now the city that's overcrowded because of free market forces, will have all its problems solved by even freer markets? Good luck with that. I'm not saying a centrally-planned city would work out any better, but don't be surprised if this initiative produces more than a few unintended consequences.
Actually, if you care about the environment, dense development is the best option.
You are right in that we need to make sure development is respectful of the environment but your attitude of "they are ruining it" is not helpful. Given that attitude of yours I do sincerely hope you are the one who leaves SF instead of discouraging the new comers. I hear Portland is nice.
I assume you're also planning to vote for Drumpf this fall?
After all, the rights of "natives" to enjoy a nice place without any cultural changes is far more important than allowing others to seek new opportunities for themselves. Where you were born is the most important determinant of where you should be allowed to live.
It's precisely because of the bullshit NIMBY attitudes in SF that Portland is getting a huge influx of tech people, who, in turn end up, through no fault of their own, forcing out other people, because Portland isn't building quite fast enough either.
Because you say so? Because that's how you were taught when you grew up? I don't live in SF but that seems like a flimsy case to be made.
Money talks, whereas "just go away" is not an effective argument. Rather than be angry about the things you have no ability to change, consider how you might work with this "invading army" to find mutually agreeable circumstances. After all, tech nerds are their own kind of freak and weirdo.
California has a long history of newcomers coming in and destroying the local culture. LA 4 generations ago had roughly the same population as Sunnyvale.
The plain truth is that the housing crisis is a combination of too much sudden demand fueled by the tech boom and too little supply. The tech community likes to deflect criticism of their sudden influx of relatively high-income workers and say "don't blame us, it's a supply problem."
This bill focuses mainly on juicing supply by removing restrictions on builders. But part of that is weakening the affordable housing restrictions on them.[1] The problem with that is, increasing market-rate housing alone may not make an appreciable difference in prices where it matters most from a macroeconomic perspective: for low-to-mid income residents.
Cities need teachers, service industry workers, artists, etc. Already the restaurant industry is facing a major worker shortage.[2] Let's not even get into the cultural effects of long-term residents getting displaced en masse. So if market-rate supply alone can't solve this, then you need affordable housing regulations to set aside spots.
Sam has offered a rather simplistic statement on the law of supply and demand on this. But that masks the real question: whether weakening affordable housing demands as this bill does is a smart move. Will juicing mostly market-rate housing be enough?
[1] http://48hills.org/2016/05/22/a-terrible-housing-bill-looms-...
[2] http://www.bizjournals.com/sanfrancisco/print-edition/2016/0...
This is such a confusing issue, everyone seems to be making sense.
Bottom line, this bill is massively supported by developers, so take that as a gauge of how much power it gives municipalities.
[1] http://48hills.org/2016/05/22/a-terrible-housing-bill-looms-...
In fact, when you look around, you see similar trends nationwide. A lot of this is just the predictable consequence of our near-zero interest rate policy since 2009.
https://www.washingtonpost.com/news/local/wp/2015/03/12/medi...
https://www.rentjungle.com/average-rent-in-washington-rent-t...
But speaking of the affordable housing bonus, Tim Redmond’s specific concerns seem to be that height limits, setbacks, and backyard requirements may be waived, not that there would be any reduction in affordable housing. But I agree that the affordable housing bonus law is somewhat open-ended so who knows what concession a developer might request.
[1]: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
[2]: http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG224...
By the way, the Legislative Analyst’s Office has released an endorsement[1] of the bill which provides background, justification, and proposed improvements.
[1]: http://www.lao.ca.gov/Publications/Detail/3470
This may well be possible to argue, but you're going to need a source for a claim that goes against the basic concept of supply-and-demand.
"The problem is that the building and real-estate industries have a huge lock on California politics."
San Francisco is the #1 most development-hostile major city in the world. According to World Bank data, even in places like Ethiopia and Zimbabwe, it's still much easier to get planning permits than it is in SF. Blaming the power of the real estate industry for San Francisco's rents is like blaming the Chinese famines on capitalist saboteurs.
What's at stake here is how much affordable housing the city for negotiate for with developers. Critics argue this state bill undercuts the city's negotiating position.
Basically this state bill is a developer move to undercut SF's negotiating position, as they have more political influence at the state level.
[1] http://www.bizjournals.com/sanfrancisco/blog/real-estate/201...
Well duh, ostensibly high-paying jobs are good, remember? Like, the tech sector is one of the few remaining industries with lots of jobs that pay well, and now we gotta demonize them too? Would it be preferable for everyone to be equally poor?
And it obviously is a supply problem. The California Legislative Analyst Office was pretty clear on that:
> While many factors have a role in driving California's high housing costs, the most important is the significant shortage of housing in the state's highly coveted coastal communities. We advise the Legislature to address this housing shortfall by changing policies to facilitate significantly more private home and apartment building in California's coastal urban communities.
http://www.lao.ca.gov/Publications/Detail/3214
To whom, exactly? If those jobs are going to people who are moving here from somewhere else, then who benefits? There was a thriving city here long before tech startups came along.
The cruel irony of this kind of job growth is that it doesn't benefit the people who are being displaced. I personally think we need a more balanced approach: we need to build more housing, but we also need to start implementing some disincentives for companies to locate offices in San Francisco. It makes no sense, for example, that we're giving tech companies tax breaks to move their employees here.
That's because they're being displaced. Because there is not enough housing.
There are a lot of benefits to being in a wealthy area even for those who are not the ones with the highest paying jobs, as Enrico Moretti explains in "The New Geography of Jobs".
And if you want to see what an actual bad economy does for people.... check out Greece, or even Italy (which isn't nearly as bad off). It's not pretty.
Nor will there be at any point in the near future, no matter how much housing gets built. But that's a red herring. If the question is "should we favor policies that encourage the tech industry, or discourage it?", you have to do better than arguing that the tech industry is a net good in some ideal world that doesn't currently exist.
SF had a pretty strong economy before tech came along. Saying "tech...or the Greek economy" is clearly absurd.
I think there could certainly be enough housing to help a bunch of people at the margins, especially if density were allowed in a lot of the greater bay area.
While I'm generally in favor of development I think that this simplistic approach of just going around local planning departments is just going to lead to more problems. I think it would be better to cut state and local funding of counties if they don't match growth targets that region commits to. This way we incentivize communities to embrace growth while letting the residents still have a strong say in how and where their community grows. Letting developers call the pace hasn't made for good urban planning in other parts of the country and there is no reason to expect it to do a lot better here. Let's incentivize these parties to work together rather than giving one all the power to drive the process.
[1] http://www.tomtom.com/en_gb/trafficindex/list [2] http://www.sfchronicle.com/bayarea/article/BART-gets-candid-... [3] http://www.caltrain.com/Page3882.aspx
https://en.wikipedia.org/wiki/San_Francisco_Transbay_Termina...
http://www.sfchronicle.com/bayarea/article/Transit-plan-to-r...
at rush hour, at many stations, there isn't only no space on the trains, there's nowhere to fucking stand and wait for them.
Random place in SF: https://www.google.com/maps/@37.7718267,-122.4388549,3a,75y,...
Near where I lived in Padova, which is way smaller than SF, and way, way less well off:
https://www.google.com/maps/@45.3850829,11.8706466,3a,75y,18...
They look fairly similar, despite a 3 bedroom, 2 bath house in that area of the suburbs in Padova going for under 200K euro.
Here's what Milan looks like, which does have a decent economy, for Italy: https://www.google.com/maps/@45.4582853,9.2105922,3a,90y,219...
None of this 2/3 story crap, even if it's fairly far out from the city center. They've built up.
When you have sudden surges in demand you can't just pin it on supply. You have to think about macroeconomic objectives for the city (i.e. preserving low and mid income housing) as well as how to plan for the long term, like when the boom turns to bust and lots of those new residents leave.
I don't think that's something that needs to be planned for. Even in a worst case scenario there will be plenty of demand to fill up any the new housing that's coming up in SF.
SF had 350k people in 1900, and 800k in 2010[1], a growth of ~2.3x. Milan had 550k people in 1900 and 1.3 million in 2010[2], a growth of ~2.35x.
I don't understand how you think SF is the exception in this example. Both of these cities have had similar population growth, Milan slightly more actually. It seems the difference is that Milan decided to build up.
1. http://www.sfgenealogy.com/sf/history/hgpop.htm
2. https://en.wikipedia.org/wiki/Timeline_of_Milan
What davidw was observing was that there's plenty of cities that do better at satisfying the demand for housing than San Francisco does.
You can have a growing population in the same area while demand goes down, if you're building enough new housing to offset the demand. The examples davidw and I have been citing here show cities that have faced similar population growth that have built up rather than succumbing to SF's housing problems.
I think your claim that it's apples to oranges is invalid. Yes SF has been a boomtown, but plenty of cities all over the world have been boomtowns without the same issues.
The issue is that SF has been a boomtown AND hasn't gotten its act together when it comes to building up density. That's what makes it a special case, and that's why both the demand for housing housing prices are ridiculous there.
You've simply ignored my point about the rate of growth in demand. That introduces a new factor, which is the need to control displacement of lower-income people and maintain healthy economic diversity.
Also, the issue here is not that SF is opposed to density. SF has many high-density neighborhoods and virtually all new construction is higher density. The issue is how hard the city should negotiate with developers to set aside price-controlled units to maintain economic diversity.
Sure it is. Otherwise, given the prices you could get for building higher buildings, someone would have done it. It'd be like printing money.
What is that really narrow, darkly painted building? Is that a house? Whatever it is, it sure looks peculiar (but I like it!)
EDIT: I actually just noticed the street view image cuts off part of the house, making it seem tinier than it actually is. Originally, I thought it was a "micro-house" or something.
The limited supply is not their fault. The refusal to bid in the market would be a meaningless self-sacrifice. The lack of healthy leverage and organization by workers in other industries have nothing to do with tech workers, who, again, are a minority power in politics.
If you're saying that a few tech elites are players in politics, fine, but that has nothing to do with the rest of the world who aren't elites. It's almost not worth mentioning that elites everywhere are players in politics. The rest of the tech world are not creating organized vehicles to channel money or votes (unlike teachers or firemen, who do organize). They're just people participating in the housing market. And whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing so they can import more employees.
What's the reason that money from employees of one industry are displacing workers from another industry? Because workers in that other industry lack the leverage to demand more wages that keep up with other industries, because housing supply is limited, and because population is growing.
That may be true, but a city needs more than just tech workers to function. The goal is balanced growth.
> Restrictions on housing supply hurts everyone who isn't a landowner.
Objectively false. Affordable housing requirements help lower income people.
> whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing
You mean up the supply of market-rate housing. Most critics are not anti-growth, they just want more affordable housing.
And as for displacing workers from other industries who can't afford market rate, it's not us vs. them. The "industries" you're talking about are intertwined: tech, restaurants, cafes, schools, police, nursing, art, and so on. If a city doesn't grow in a balanced way and pushes all those other people out it could make it an undesirable place to live. Already we are seeing big increases in restaurant prices due to cost of living.
Then they should support as-of-right construction. Mandating affordable housing doesn't actually increase its availability if a developer's plans to build affordable housing keep getting shot down.
The problem here is that this leaving height limits in place and could create a rush to impose even more stringent zoning restrictions.
What would be necessary would be legislation that pre-empts both local zoning and other mechanism for a relatively small area to allow the construction of a few high rises without the destruction of existing housing stock.
The ideal of Nimbys seems to be no development and the ideal of developers seems to be building a limited number of ultra-high-priced units in the super desirable places like the Mission. The sane approach would be to allow a series of high rises in Potrero Hill and along the Bay.
This approach sounds like it would simply push-through development according to the developer ideal, which would serve the Nimbys right but also destroy whatever remains of the character of the mission.