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Comment by timr | Hacker News Reader

Silicon valley is about 60 minutes south of San Francisco by any mode of transportation convenient to low-income people. It's also a different government. So while I agree that there should be more high-density construction in, say, Mountain View, it's a different discussion.

As for higher buildings: I'm not going to argue that we shouldn't raise building heights in SF. I'm just saying that developers aren't going to voluntarily make any of those tall buildings cheaper than market rate. They also won't build more space than they know they can make a comfortable profit on, at current prices.

Again, name a city in the US where construction has lowered real estate prices. Developers don't have any natural incentive to do that.

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> Developers don't have any natural incentive to do that.

Unless they're colluding, they'll keep building if it's profitable to do so. And there's a lot of margin for that in SF, especially if they get rid of some of the big obstacles.

There are various articles about 'filtering' and how it's not happening in cities like SF. Here's one - there are probably better ones:

http://www.forbes.com/sites/scottbeyer/2016/02/19/what-liber...

I know SV is a separate entity (entities, actually), but it's obviously very closely related.

People in the US are going to have to figure out density sooner or later. This stuff has knock-on effects all up and down the west coast. Lots of people move here to Bend to escape the bay area, and are driving up local prices...

if it's profitable over the long term.

Keep in mind that builders have to allocate ever-increasing percentages of units to "below-market housing".

Then, with the current bubble bursts, they're stuck with the below-market renters but will be scrambling to fill the rest of the units.

"Filtering" -- interesting dynamic. So why isn't filtering working in SF?

> "Filtering is the idea that, as new market-rate housing is built, higher-income people move into it, leaving behind older housing stock for lower-income people."

Because no one is building much of anything there!

> So why isn't filtering working in SF?

It does, there was an article here a few weeks ago where they had studied gentrification in SF and found that the areas that allowed more new (luxury) apartment construction had less reduction in poor people living in the area compared to the ones that didn't.

name a city in the US where construction has lowered real estate prices.

I watched Seattle build like crazy in the late 90s. It seems like every month a huge skyrise apartment building came online in Belltown. Many thousands of units were added every year. It coincided with a continuing influx of people so I don't think it lowered the absolute price of real estate, but the laws of supply and demand are pretty inviolable. Seattle is pretty affordable by present SF standards, and with much of the same cultural appeal.

(I live in SF but used to spend lots of time in Seattle)

I lived in Seattle from 2000-2008. Rent (and property values!) went up by -- more than inflation -- nearly every year that I lived there. They skyrocketed by the end of that period. Wikipedia says the population grew by 8% between 2000 and 2010.

I'll give you that Seattle is more affordable than San Francisco...but it's also at least twice the land area of SF, with fewer people and geographic constraints. And the weather is...an acquired taste.

SF is half as dense as Brooklyn. The major supply constraint is not geographic, its land use regulation.

Brooklyn is flat, and almost all of it is safely improvable, unlike SF.

1. What do you mean by safely improvable?

2. Hong Kong, one of the densest cities in the world, is built on land much steeper than SF.

Seattle is not without a strong NIMBY contingent of its own.

None of these places is really keeping up with demand. SF is simply the worst of the worst from that point of view.

I agree completely about the weather. I grew up in western Oregon and I don't know how it's possible to sustain human life further north without an IV of antidepressants!

New York from 1910s-1930s. Manhattan had more people living on it in 1920 than it does right now. During that time there was a ton of construction: prices went from $10/sq ft to $15/sq ft. Then with the market crash, demand for the overbuilt city real estate went down, leading to costs more in the range of $5/sq ft: http://www.millersamuel.com/change-is-constant-100-years-of-...

No, housing prices do not necessarily immediately sink. Developers will only build when they believe they can turn a profit. But you can overbuild during boom times and allow housing prices to correct when demand diminishes.

LOL. I was waiting for someone to confuse an economic crash as an answer to my question. You get a prize for suggesting that the actual Great Depression is an example. Well done!

Obviously, with perfect foresight, few intelligent developers would choose to begin a construction project just before a major economic retraction. But if your suggestion is that we should build now, then wait for economic armageddon to really adjust prices downward, then I guess I can't argue.

The cheap housing created by new construction isn't the new construction itself. It's a result of reduced demand for older housing stock.

http://cityobservatory.org/what-filtering-can-and-cant-do/

I think that it is part of the same conversation. Many of the workers in SV live up here in SF because finding housing in the valley is such a pain. If there was more housing down south, a good chunk of the pressure would be taken off of San Francisco proper.

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