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Cities are expensive for a relatively simple reason: the number of people who want to live there exceeds the number of open spots.

Two immediate solutions:

(1) Create compelling reasons for someone to not want to live in this one particular city. For instance, allow one to work remotely. There are hundreds if not thousands of amazing cities to be enjoyed, not to mention the vast stretches of rural land for those who don't want to live in a city at all.

(2) Build more housing units in the city. Eliminate zoning restrictions. Stop worrying about protecting the existing homeowners and pay more attention to everyone else.

Note that both of these are mostly matters of just convincing people to jump on board the plan. People in general are resistant to remote work (especially outside the software world, but even inside it), and some cities like San Francisco are extremely hostile towards a vast number of proposals to just build more housing.

When you combine the desire to compress an entire industry into one city with a refusal to build more housing units, what result could you possibly expect?

> (1) Create compelling reasons for someone to not want to live in a city. For instance, allow one to work remotely.

A lot of folks who work remotely prefer the city since it gives them all the amenities that an office usually would like food (restaurants), gyms, cafes and an environment with a lot of people.

And there are thousands of cities in the world in which they can enjoy all those amenities.

(I edited the above quote now to reflect this.)

NYC is the only city in the world with a 24 hour subway system every day. Many people enjoy not having a car: especially the very poor (can't afford car anywhere), so NYC is full of very poor; and they very middle (can't afford car in NYC), so NYC is full of very middle and everybody fights for the same resources.

It's funny, I'm currently looking for a next job, and am talking to a company in Manhattan... One of my thoughts was "damn, I'd have to get rid of my car." :-( Though, I'd absolutely hate driving in that town. The same applies to SF (made the mistake of renting a car there for a business trip, the next one Uber/Lyft was better).

It might not have 24/7 subway (i think it's 24h on the weekend and 20h during the week), but I've been living in Berlin for 2 years and have yet to chance upon the situation where I didn't have transit available to get back home (neither me not my wife have a driver's license).

Having good transit is really really important. But it doesn't have to be 24/7 for the vast majority of people. In the maybe once per year that I need to go somewhere in 3am on a weekday I can take the night bus or even a taxi.

Yeah, those are good times. SF sucks transit-wise because Caltrain (SF to South Bay) stops at midnight. BART stops around the same time too. Heck, in NYC many events don't even start until 10 pm.

Every evening transit trip to SF (if you live in the south bay) results in end-of-day stress of trying to make the last train home if you don't have overnight accommodations. Not to mention the full South Bay route takes 90 minutes (to go 40 miles!), so you leave at midnight SF and arrive at 1:30 am San Jose.

Yeah everything stopping at midnight even on the weekends would suck. I guess because of the way you wrote it I thought the literal 24h even on weekdays was your point which seemed pretty odd.

I've lived n Vienna and Berlin and in both the subways go till around 1am on weekdays and 24h on weekends, iirc it's about that way in Prague too. I thought this was the type of situation you were comparing it to.

Before they started running the subways all night on weekends in Vienna (which I think only started maybe 5 years ago) I would often have to take the night busses on weekend evenings, which would suck cause they only went every half an hour.

San Francisco is not the only city in existence.

That said, with remote work, you can choose any city. I'd rather live in Boise, Denver or Portland than Seattle, SF or NYC. For reference I'm in Phoenix, and I mainly stay because pay:cost-of-living is better here for developers than most cities. Most of the work is very business centered, but still plenty of options.

If there was more remote work that split the difference in pay, and allowed me to work in a slightly smaller city farther north, I'd really prefer that. But the income:living ratio in most of the places with more tech jobs just isn't as good.

> (2) Build more housing units in the city. Eliminate zoning restrictions. Stop worrying about protecting the existing homeowners and pay more attention to everyone else.

These three things are not synonymous - or at least, they need not be.

For example, New York is building a lot of units. (A lot of them happen to be luxury units which often sit vacant since they are used purely as investment vehicles by foreign entities, but that's a separate problem.) The real issue is that Manhattan is an island, and there's only so much you can cram into 33 square miles (though they're working on squeezing every last cubic inch out of that). They're also, of course, building at an absolutely unbelievable pace in Brooklyn, Queens, and even the Bronx[0].

San Francisco, on the other hand, has been incredibly slow to build more inventory (and also build upwards), compared to the amount that the demand has increased. This may be partly due to zoning issues, but not entirely, and the situation that San Francisco is in is not typical of most cities.

Houston is famous for having no zoning code, but New York has a very extensive zoning code[1]. In fact, the market for air rights in New York is quite complicated and fascinating[2]. You can build more housing without scaling back zoning restrictions or removing them entirely; there's just not always enough will to do so in every city.

[0] not sure about Staten Island, but... well, let's not talk about that.

[1] http://www.nyc.gov/html/dcp/html/subcats/zoning.shtml

[2] https://en.wikipedia.org/wiki/Air_rights

Manhattan has plenty of places where it could get denser. The limits are 1) public transportation -- especially on the East Side and 2) rather silly preservation / zoning rules -- like preserving the character of the East Village which is ugly and not worth saving.

The second avenue subway should help somewhat (assuming it's finished before the heat death of the universe) but increasing congestion and the subsequent decay in the quality of buses transit is a worrying countervailing trend.

Expanding on #1, if you already have multiple offices remote/home workers are less of an issue in reality. You already have to make coordination efforts. As long as people show up as available in link/hangouts and respond during regular hours it shouldn't be as much of an issue.

In addition to this, you can save a lot of money... paying someone 80% more in SF or NYC, vs letting them stay in Phoenix or Austin and splitting the difference is a great option... you get very senior people for mid-level pay (vs in office). I'd much rather see $150k in Phoenix, than $190-210k in NYC, or $215-240k in SF... especially given Sr. positions in Phoenix tend to cap out around $110-130k.

Of course I'd love to keep east coast hours on the west coast ;-)

A third factor at play that certainly can’t be helping anything is how a handful of companies and individuals own the majority of real estate and use their vast fortunes to snatch up anything new the moment it appears. Ownership should be more diversified.

You could also approach the problem from the other end. Have the state offer a reduced business tax cut rate for open offices and employing people in underdeveloped cities. Similarly at the other end of scale increase business taxes for companies that insist on expanding in overdeveloped cities.

This is common in Europe where business parks are setup in underdeveloped areas to encourage investment from outside. Usually these are coupled with reduced tax deals as it's in the governments interest to have people in the area in work rather than claiming unemployment.

A stiff land tax within major cities would probably be the most comprehensive solution. It would incentivize intensive use of land, leading to denser housing (compared to a property tax, which incentivizes the opposite); it would also make urban land a less compelling investment, leading to lower prices.

Taxing used property in dense areas would likely just increase the costs further, although I assume that might be intended in the long run to push for more use of vertical space.

More useful would be a tax which increases the longer a vacancy exists on unused lots, vacant or secondary apartments/housing, and property sales that have been unsold for X number of days.

Real estate speculation and housing as financial instruments are basically contemporary feudalism.

I like a tax on vacant property. Especially commercial property.

Increase supply (e.g., build more housing) or reduce demand (e.g., find a way to make it less important for people who want to work together to live nearby). Those are really the only two choices.

In Camberville, we're increasing supply... of luxury condos. So far, I haven't seen it make a dent in the market. Fort Point in Boston went from having almost no housing to hundreds of new units... yet I called one of the buildings and found their 1BRs to be $3,200/month.

The public transit infrastructure, and road infrastructure, in Boston and SF is insufficient to make living further away ok for most people. But again, that basically just creates neighborhoods of software/biotech people and nothing else, which feels terrible.

Even luxury places increase supply in general. People flock to the newest most luxurious places. So when a new one opens up, it decreases demand elsewhere.

It might also push the rent up in your neighorhood/suburb, but across the metro area as a whole, adding luxury housing lowers prices.

The one other thing is to dramatically improve public transportation connections so that areas of the region that are currently not convenient for many people to live in become viable neighbourhoods.

In the Boston area, building a few miles of subway is a 30+ year project (see: Green Line Extension)

https://en.wikipedia.org/wiki/Green_Line_Extension

In NYC, it takes 87 years and $4.5 billion to build 1.5 miles of transit: the 2nd Ave subway was originally approved in 1929 and the first phase won't open until 2016 at the earliest.

Transit improvement is catastrophically stalled. Improved rapid transit options could plausibly expand the area where Boston-area workers can live and have a reasonable commute by 100 to 300%. But these require approval from (especially in MA) dozens of towns. Plus we can barely keep the subways operational.

> quickly create scalable affordable housing in major cities?

Even in Finland, with relatively good salaries for construction workers, and high quality buildings insulated to withstand Finnish winters, building an apartment building usually costs under 2000€/m2 ($165/sq-ft).

It is not the construction that makes apartments expensive, it is the price of land in a good location.

So the problem is mostly political. Existing residents usually strongly oppose building new homes for new people in their neighborhoods. Especially if you'd like to build higher and denser than the area previously was. And the potential future residents do not have a right to vote, only the existing residents can vote. And even if you can buy a piece of land, city politicians/bureaucrats may not give you permission to build as much square footage as you might want. Because the want to "preserve the character of the neighborhood".

So usually cities do all kind of kicking and screaming to resist growth.

>Especially if you'd like to build higher and denser than the area previously was.

because typical "higher and denser" coupled with bottom-line optimization by the developer results in making crappy, less livable environment. More people means need for more transportation, more parks ... - the developer in cooperation with the city could build parks inside/on-top the new high-rise, build new transportation options, etc.., yet it would cut into the bottom-line. Classical tragedy of commons. So existing residents resist more load on the existing commons, yet i think it would be different if new construction was creating more commons and/or really improving existing.

Is that to own, or rent? If that's rent, then that's insanely high... If it's to own (assuming modest mgt fees), that's not too bad.

Right now my rent in a fairly nice place in Arizona (Tempe) is $1400/month. Similar places in SF/NYC are 3-4 times that much.

> Is that to own, or rent?

To own. Apartments in central areas of Helsinki typically sell between 4000€/m2 to 8000/m2. So the cost of just constructing the building would be something between 20% to 40-50% of the total price. It is the land price, not the construction, that dominates apartment prices in any city.

1. Live and work somewhere sane.

2. Buy some popcorn.

3. Wait for the bubble to burst.

4. Actually you don't care if the bubble will burst because you are not living in SF.

Today it doesn't matter. As long as money remains cheap (and the Fed keeps insisting on it), it will fuel property prices in SF and other desirable places. If you buy a place in San Francisco in 2 years, THEN maybe you'll go negative for a bit.

After the last bubble "burst", you think you could scoop up some cheap property in SF? Nope. Maybe prices dropped 10-15%, and now they're higher than they ever were.

People are flocking to cities, which means the suburbs are the ones that get hammered when prices drop.

Don't get me wrong - I am not betting against property (real-estate) investment. Always a good bet for the long term in great cities.

What I am saying is why bust a gut as a sub $150k coder to see all your money burned up as rent in SF when you can go to a.n.other city have a better quality of life, more expendable income, the chance to buy instead of rent, etc.

Prices in SF fell by more than 40%: https://us.spindices.com/indices/real-estate/sp-case-shiller...

In established neighborhoods, it was probably more like 20%, but there were still foreclosures and a lot of deals to be had. Even 4-5 years ago, there were condo foreclosures near the Caltrain station at 4th and king going for around 300-400k. Granted, SOMA has improved as a neighborhood more than pretty much anywhere else in the city, but it is a myth that property values don't fall in SF. They do and have every 7-10 years (91, 01, 08...), though the long-term trajectory is obviously up.

If you have a limited amount of area and many many people that want to live there, something has to give. You can build up (which SF largely refuses to do) but even that has its limits and its costs.

The larger answer is changing things so not everyone wants to live in the same place.

Figuring out how more people could work remotely while remaining productive would have a huge payoff in this area. But I don't think that's particularly amenable to a wholly technical solution. It's more of a problem of applied psychology in the form of management techniques.

From a different direction, considerably better urban and regional mass transit would help. In the bay area, that's made much more difficult by the relatively small geographic size of SF proper as compared to the metro area. Compare NYC which incorporated its inner suburbs a century ago. Though on the upside at least all of the bay area is in one state.

> You can build up (which SF largely refuses to do) but even that has its limits and its costs.

To be honest, San Francisco is nowhere near any reasonable density limits.

    Population densities:

    San Francisco            7 000/km²
    Paris                   21 000/km²
    Manhattan               27 000/km²
    Kowloon Walled City  1 255 000/km²

Building with Manhattan density, SF could have 4 times its current population. If it wanted to.

You don't even have to build up by much. Paris largely tops out at about 6 stories high. They just build a lot of 6 story buildings.

I think you've hit the nail on the head... they really don't want to. The people that live there like it there, and don't want it to become a city of sky scrapers.

I wish someone would wake up and try to build out from a nice city somewhere else with room to grow. Boise, ID and Reno, NV come to mind... For that matter grow existing cities with infrastructure and room for growth. Some of the latter is happening but not nearly to the extent that it has in SF.

There are plenty of cities that have room, and would appreciate seeing hundreds of thousands of tech jobs move into the area in a couple decades, without the population constraints SF is seeing.

> don't want it to become a city of sky scrapers

Paris is, mostly, not a city of skyscrapers. Depends on how you define a skyscraper, but for example Paris has less over 400ft tall buildings than San Francisco.

They also don't want to tear down every 2 floor building to build a 3-4 floor one... The only way to increase population density in an established city is to build much taller buildings compared to what is already in place. SF has height limits which prevent this, so you can't build really tall buildings. So density shifts will always be relatively small unless you start tearing down huge swaths of buildings to build slightly larger ones, and with parking requirements on new buildings still won't have much more density.

> Boise, ID

I live in Boise, good luck. Almost everyone here is actively hostile to public transportation and high-density construction - so while there's plenty of area to expand to the South towards Mountain Home it's almost entirely overpriced subdivisions, with no transit options other than your own vehicle - and don't get me started on the mess that we already have with I-84.

The lack of high-density construction isn't really that big of an issue since we have plenty of space, but the lack of public transit funding is going to bite us and is largely responsible for why you mostly see expansion towards the West along I-84, which is causing us to start looking at expanding it yet again, why on Earth we haven't invested in commuter rail at this point is beyond me.

Understandable... I wasn't really even speaking specifically to density, so much as some room for growth. It took Phoenix a long time to get the highways we do have in place. Even finishing out the I-10 in phoenix was a lot of big work.. the 101/202 work was interesting (never completed regions meant to go through reservation lands). And widening the US-60 was pretty interesting as well. It overlapped bidding for the stadium, so it seems that they held up the process to reduce the chances of Mesa or Chandler getting the bid.

I'm not saying it's a great example, just an example of a decently sized city that isn't locked in and could be a growth area. Right now, I try to live fairly centrally, but that puts work that is closer to the edges of the area out of what I consider a reasonable commute for me (I won't go much over a 30 minute commute).

Paris isn't exactly a city of skyscrapers. SF could get much denser without adding a single skyscraper.

It could but they would have to expand the public transport infrastructure. If you look at the "cheap" areas one of the many issues is that they have poor transportation links to the downtown area.

However expanding public transport in SF is almost a difficult an issue as building skyscrapers. See the central subway as an example of the other end of NIMBYism.

I think SF is building the Central Subway pretty quickly. It looks like the subway will be completed in a few years. It seems like a success in terms of putting new infrastructure in a crowded city.

The BART SFO extension took about 30 years to complete. That took a lot longer was a lot more litigious than the construction of the Central Subway.

Vertical space, and or sedan sized mobile homes.

ala Volkswagen's Westfalia

Honda Element conversions

Toyota's old mini-van (MasterAce ?)

http://www.designboom.com/design/cornelius-comanns-bufalino/

http://eliomotors.com/ but in camper form?

I do think building up is a pretty good idea. I just wish it all currently in the Boston area wasn't luxury condos. And the existence of those luxury condos hasn't seemed to deflate the demand on other housing yet. Maybe in time?

It's amazing how many luxury units are going in. Who the heck is living in them?

Derivatives.

Luxury condos unfortunately don't produce long term jobs, so I'm not too sure what the plan is with the SF/NYC/LA/Boston/London/etc luxury condo building boom that's going on right now..

If I am to believe the self fulfilling prophecy of "the market cycle", it's just a game of hot potato.