Interesting times.
Rising demand is great. It means people want to enjoy your neighborhood. You can either meet that demand by increasing supply, or you can restrict the demand, and let certain people be outpriced by the market.
Locals aren't victims of gentrification. They're victims of zoning laws and nimbyism.
Ok, let's say we double supply.
All the houses are now either twice as high, or half as big, or maybe the trees were cut down and the bushes ripped out to make room. There's twice as many people & everything therein. Is it still the same nice neighborhood?
Things change, especially in the US.
"The immaculate conception theory of your neighborhood’s origins": http://cityobservatory.org/the-immaculate-conception-theory-...
And: if prices are going up that much, and you really want out, you can sell and move, to, say, Lakeview, Oregon.
Among many issues, the fundamental attractiveness of a particular neighborhood may be tied to low population density.
In which case ripping down the neighborhood and rebuilding makes neither resident Person A nor prospective buyer Person B happy.
Sooner or later, the US must confront the fact that not everyone can live in a single story ranch house with a big yard in an extremely desirable part of the country, without causing massive sprawl (LA).
But we should be wholly unsympathetic to that view. It's a reasonable thing to wish for, but it's not a reasonable demand to give in to.
This is a brilliant sentiment, and a brilliant quote. It applies in so many conversations...
I just wanted to express my appreciation (and my intention of stealing this quote many times in the future!).
As long as there is high demand, you can either build more or expect higher prices and more sprawl. I get that people don't like those choices, but that's what's on the table.
So you're kicking the marginal (in the economic sense) people out into marginal places where they have less access to what made the original area such a great place to have a job.
Rent control could do that for rent, but has its own problems. As for owners, how do you tell someone they aren't allowed to sell their house for what someone else is willing to pay them?
Sounds like it would work, until you realize most of the buildings are owned by landlords who want to cash in and get as much money as they can with the property they've invested in. They don't particularly care who is living in the property, just that somebody is there and that they're getting paid.
How does this work in your head? When the new homes are being built, where do the people who were living on the land they're being built on go?
Notice how these responses do absolutely nothing to address the issue. They exist only to express dissatisfaction with realistic options.
Again, you can either build to meet demand or expect higher prices. Those are the options.
Or enact preferential laws, or use vandalism in order to drive demand down, or make newcomers feel unsafe or unwelcome.
Those alternatives are not entirely rational, nor necessarily effective- but they are human nature, and not that rare.
A 500k house never gets torn down to become 3 400k condos. It becomes 3 600-800+k condos.
We should build more, because we need it. But "build more" can't be the only tool to lower prices, because simple observation shows us that it doesn't work.
http://cityobservatory.org/in-some-cities-the-housing-constr...
...which explains a lot about why residents dislike this
Quite the contrary. A pretty simple reductio proof demonstrates that more housing lowers prices. All you need is to imagine a market in which there is one more apartment available than there are people to rent it.
I'm also surprised that you would still think the math does not apply. A 100 unit building taking up the space of 12 SFH $1.5mm homes will sell many more $800k 2 bedroom apartments comparing what houses and apartments sell for Build about 1000 of the buildings close to bart and muni tunnel stations and you would get 100'000 units for the price of 3000 SFH / in law units and a larger city budget to fund the new required transit system capacity.
Cities have been able to grow for centuries. The only thing stopping them from growing are zoning and restrictions prohibiting additional homes being built.
Even if a city government has liberal attitudes toward development, it still takes years to create new supply. In the mean time the process is displacing people.
Portland now has the fastest growing real estate price increases in the country: http://content.kgw.com/photo/2016/03/29/s%20and%20p%20home%2...
This increase is not being matched by increasing salaries (they're increasing, but not at the same rate): http://koin.com/2016/03/31/report-portland-wages-not-keeping...
There are potential implications of this. Not just for people living here already, but for workers that may or may not be able to maintain mortgages at these rates if there's a contraction in the "tech" sector. I don't know how many people are weighing these decisions on a 10+ year timeline.
At the end of the day, I'm not sure how much of this is sustainable wealth. Portland got burned pretty badly in the 2000 crash, and really badly in the 2008 crash (at one point the unemployment rate was around 14%). History suggests it's a legitimate concern.
It's a combination of
1.) Wealthy Asian businesspeople who are looking for a place to park some of the foreign reserves they own overseas.
2.) Hedge funds, investing institutional capital in relatively "safe" investments with guaranteed revenue streams.
3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments.
This is what often happens after a speculative bubble bursts: all the folks who invested based on irrational exuberance get cleaned out of the market, and then assets are transferred to other investors who are generally much more prudent, often using spare cash that was sitting on the sidelines. In this case, the assets just happen to be where everybody lives.
Very interesting as Google will be expanding their offices in Boulder over the next few years. I believe they've broke ground on the campus here.
Redfin's realtors are generally pretty tech savvy as well - prefer email to phone, responsive to email, etc.
Does this industry (to the extent that you can call AirBNB, Uber, and Twitter the same industry) really act like a flock of grackles or starlings, descending on a place, eating everything, and moving on?
If art and culture are so valuable to us why are those who create these things so poor? Why do people cringe at buying an album for $9 but then spend $11 on a coffee and a biscuit?
The artists shouldn't have balked at taking a class in economics.
But there is also artistry in creating a coffee or dining experience, and hopefully that money spent on the meal and coffee goes more to the chef artist who prepared the meal, the architect artist who designed the space, and the line cook, waitress and dishwasher.
If anything music is overvalued. I'm surprised we haven't automated Skrillex and all that house crap yet. ;-)
Why is a Picasso worth more than paint?
This is causing rents to increase noticeably in nearly every major urban area. Couple that with relatively high pay for tech sector jobs that like to hire these younger folks and you get it even worse in SF, Seattle, etc.
[1] http://fivethirtyeight.com/features/why-millennials-are-less...
I've seen quite a few people here wanting high-rise residential buildings in San Francisco to alleviate the high rents there. A skyscraper is at least 40 floors, according to wikipedia and one rule of thumb I've seen puts the construction time for them at 1 month per floor, from ground breaking to completion. That's about 4 years in construction, plus design and planning time, plus site acquisition. That's five, six years (more?), total, even in the most positive political atmosphere.
Someone who wanted to alleviate SF's high rents today, assuming you could do that by building high-rise apartment buildings, would had to have started at the height of the construction bust. That would be, I think, before San Francisco proper's tech boom, i.e. before there was a problem evident.
And if you started building one today,... Once upon a time, Intel planned to build a 10 story office building in downtown Austin. They stopped, with nothing but the structure of the building up, in 2001. The incomplete building was demolished in 2007.
Meanwhile, in the real world, if attitudes and policies were to start shifting, 15 to 20 years is probably a more realistic planning horizon.
I know a number of people here who are praying for a tech crash so they can afford housing again.
I moved to Mountain View in 2009. In late 2008 (as the crisis was hitting the stock market, but before landlords had realized it would affect them), a realtor was showing me around, and I asked about a swanky corporate apartment complex we drove by. "Oh, that's out of your price range - they charge $2000+/month." I ended up living there for $1400/month in 2009-2010, then they started jacking up the rent. When I left in 2013, they turned around and rented it for $2700/month.
I'm looking to buy a home soon so the recent municipal prohibition on STR2s gives me hope that the inventory will increase and allow some downward pressure on prices.
You say that as if gentrification is a bad thing.