Housing in the Bay Area
blog.samaltman.com
blog.samaltman.com
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.
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.
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.
I honestly like living in a semi-rural part of the Midwest. I like seeing fields and forests while driving to work. If I want to get out to some wilderness, I can do so in 15-30 minutes. I travel in a car that, I feel, offers me freedom. To boot, I have a nice, reserved spot in the garage below my apartment. I live downtown and I still feel great freedom/"space". I cant imagine being able to do anything like this in a place like SF or even Chicago.
My cost of living is very cheap. My commute is 15 minutes. I live close to my family. Why should I want to leave?
You shouldn't. If you have a good job in such a location and are happy with the opportunities available, enjoy!
The problem is that markets naturally congregate in distinct locations so anyone who is looking to advance their career needs to make their way to a hub.
This also complicates my conundrum about whether to continue to rent vs purchasing some property to start some real roots.
Some of the best engineers I know work remote and visit occasionally. Maybe theyre outliers, but we really need to kill this narrative where to be the best you need to live in the valley.
Of course you will have less opportunities that if you're willing to move to Bay Area or NYC, but that's a choice to make. Do you prefer to prioritize on your career completely or are you will to compromise on that for a better living environment for you and your family?
Nobody said it's a obvious choice to live in a smaller city, but it's important to know that (if you're a developer) you have that choice. You can opt out of the rat race and make less, or work on less exciting projects, but still make a decent living.
FTFY, unless there is a trove of non-web remote jobs I have been missing.
It doesn't have to be SF. It's not just that rent is expensive, it's that for the price you pay you most likely aren't even living in a nice neighborhood (most parts of Mission, parts of Soma, Market, parts of Haight, Divis, most of Western Addition, Lower Nob Hill, etc. - these aren't nice places at all for $3500/ month, which would put you in the very best areas of pretty much any other city in the world).
I do not want to move to a city where I can't afford to buy a good home within walking distance of my workplace.
The world should provide this for me.
Maybe there are good answers to that question, but that should be the default.
If you go South-West of SF, you will hit Pacifica and Half Moon Bay which are quaint coastal towns that will make you forget that you're only 20 miles away from San Francisco.
Go East, past the hills of Berkeley and you hit more rural spread out developments near Orinda, Diablo, etc.
I'm glad you found balance with the things that are important to you which is what really matters. Me personally, I'm drawn to the coast and the great expanse of the Pacific Ocean. The SF area has it's fair share of urban problems, but then you also have amazing restaurants, a close-to-world-class arts scene, some of the best schools and hospitals in the country, the most impactful technology companies in the world, and the fair share of folks who have come West looking to make their mark on the world in Gold Rush 2.0.
P.S. I've spent a fair share of time in Detroit/Michigan and the area and as much as I love being able to buy a city block there, I can't live in a place that calls soy sauce on rice "Fried Rice".
I really support development along established rail corridors along CalTrain and BART lines. There should be ridiculously tall housing towers in cheap places like Hayward and open places like Walnut Creek and Pleasanton, if only the BART was not so damn slow and so freakishly expensive.
Prediction: the gentrification currently happening in Oakland will soon spread to Richmond and Vallejo. Vallejo, it's crime problems aside, actually makes a lot of sense. There's a ferry there and cheap housing.
The ferries are just as fast and definitely more pleasant than CalTrain. (BART though is faster, I'm pretty sure.)
Also, if you are in San Francisco after 10pm, no more ferry for you. BART, CalTrain, and Muni are all much more flexible options.
Cross the bridge, take a left, and drive out to the national seashore. Have lunch in Pt. Reyes. Drive back out to the 101 through the Nicasio horse country.
Thank you, thank you, Marin County NIMBYs. Thank you.
Also, as kind of an aside, Marin NIMBY's pretty much killed mountain biking in its birthplace, which I also find sad.
But over the years I've seen the hills dotted with houses, untouched swamp land (great for the local wildlife) turned into generic commercial offices, and roads developed deeper into the outskirts. Noise and air pollution is getting worse. Parking and congestion is a nightmare anywhere there are new offices or apartments in old neighborhoods (SF/PA/MV). Public transportation takes hours to get you anywhere (though I'm optimistic about Bart expansions).
I haven't heard anyone in favor of housing development talk about these problems, problems that are bound to get worse if more units are built unless equally aggressive solutions are implemented.
Like others here have said, the Bay Area pressures career-oriented individuals to move here. Although I love the diversity of backgrounds, it is clear that the vast majority of my friends who moved here haven't developed the affinity or interest in non-career-related aspects of the culture/geography. They are not emotionally invested in everything else the bay area has to offer (I theorize that this is because their families and their childhood memories are elsewhere).
I'm not saying new housing shouldn't be built (affording housing for lower-income families/individuals need to be built ASAP). I can't afford rent here either and commit social suicide by choosing to live with my parents despite being in my mid 20s (fortunate enough to have this option). But I can't in good conscience support development in the Bay Area until it comes bundled with discussions on environmental protection, transportation expansion, tax changes (who is going to pay for the extra firefighters/police offers needed if population increases), infrastructure projects (pumping water into the bay, electricity, etc). As of right now, it is so singly-focused on lowering rent that these other issues don't seem to matter in comparison.
I appreciate sama's attempt to get us to call our representatives. As an active voter and lifelong bay area resident, I will do so too.
I prefer having friends over and cooking. Restaurants are too impersonal. It is often hard to hear, and they can't be that intimate in nature as you are out in public. There is nothing like eating the meal of a friend or cooking for a friend.
A Planet of The Apes remake? That's the first anchor you reach for?
Muir Woods is the planet Endor!
True, but in the Planet of the Apes, it's actually supposed to be Muir Woods, so they don't dress it up to look different.
While Detroit doesnt have a huge asian population, and thus doesnt have great asian food - it does have huge middle eastern and mexican populations. You can get some of the best mexican, greek, and middle eastern food you'll ever have right in Detroit, as well as Detroit specialty foods like Coney Dogs, Detroit style pizza, and Hani.
Detroit is well regarded for its food, so its surprising for me to see someone disliking that part of the city.
If you like where you are, then you should definitely stay there.
I have 11 acres, horses, a goat, cats, a dog, and I live 15 minutes from downtown and 17 minutes from work. This is in a mid-sized midwest city (Grand Rapids, MI). While I realize that I could achieve a substantial pay raise on one of the coasts, a similarly sized plot there would cost millions. I paid under 200k 5 years ago with a 1500sf house on it, and it's still probably only worth the mid 200k range after we improved it (cleared 6 acres of trees, planted and fenced a bunch of pasture, made significant improvements to the house). I could not achieve a similar lifestyle on an engineer's salary near a major urban center on a coast ... and I have no desire to move to one :).
Plus, I get to make avionics, which is on my short list of the best jobs ever.
Thanks in advance.
Not really.
There's plenty of tech work in GR, if your just looking for a job you probably won't have any problems. And there's plenty of social / networking events. GR definitely punches above it's weight for the region -- but not enough to compare to a real market.
Grand Rapids is closer to a small town than a major city, so despite our best efforts, there isn't really a scene that's comparable to anything like what I've seen in Minneapolis or Portland or Austin or even Milwaukee.
Of course, those places are larger and cost more. Low cost of living is great, (cheap housing even with good schools, lots of space, easy commutes, no crime, silly amounts of lawn and garden) but it has its own drawbacks (very low wages, worthless public transit, everything's suburban, greatly reduced career opportunities, etc)
I would personally prefer an urban lifestyle, and that's impossible to have in Michigan, which is frustrating to me. But if you want a suburban lifestyle in a ranch house with a huge yard, Grand Rapids is perfect for that. There's tons of those properties around for about $200k.
I have worked in tech here for over 10 years and there are very few jobs. I've already used up Plans A, B and C. My next move will probably be somewhere else (if I'm still competitive). This is where you go to retire, not to advance your career.
I think we would make our industry better not by trying to fix Bay Area housing, but by decentralizing it.
That typically means companies should stop forcing their new hires to move to SF/Bay Area, and VC should stop forcing companies they fund to move there too. Same goes with London/Paris for Europe.
I used to live in SV but now I'm in a medium-to-big French city. I'm 20 minutes bike/light rail from downtown but I still live in a house with a garden. I'm also at 5 minutes bike from the forest or shops.
You also can't have any of the culture and city life that a major city like SF has. You see easily 10x as many people in a day in SF than you see all week in a semi-rural town in the Midwest. There's 10 cafes within a 10 minute walk. The nightlife is extensive and amazing. The restaurant scene, world class.
And that's fine if it has no value to you. But clearly for many there is more to consider than just cost of living and space. There is a reason startup hubs happen in major cities.
Certainly "extensive and amazing" is open to debate (can't hold a candle to NYC for example)... but objectively there are vastly more options than a small midwestern city.
Pros: * I live the heart of downtown in a major Canadian city * Rent is $1025/mo, plus $100 for underground heated parkin. (Hey it's Canada) * Work is across the street (it's not abused) * Wilderness is only 15-20 minutes away * Montreal/Boston are only 12 hours away
Cons: * I'm a "devops lead" and making $70k/yr
I've come to the realization it'll take six figures plus to get me to move away.
In the non-coastal, non-major-city US, it's rare for a salary to hit "low six figures".
Wages aren't quite as low as listed for Canada, but most leads here are in the $80-90k range.
That said, it could be Vancouver, I remember getting an offer from Arista in 2013 for about $78k + some stock.
I used to take it personally when people would look down on any other non-SF locales, especially the Midwest. Now I realize that they just don't know what they're talking about, and that's okay, they don't need to. I've already used the advantages of our location to compete on hiring with talent that does get it, and I'm happy to keep doing that!
Why is it so hard for people to accept that not everyone wants the same thing, so that any disagreement offer preferences must be grounded in someone's ignorance?
Not to mention the economical benefits of dense living when ideas are forced to live next to each other to create new ideas through osmosis [1].
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.
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.
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.
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.
> Neither of the cities you mention have experienced
> the sudden, massive surge in demand that SF has
> in recent memory.
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.
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.
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.
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.
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.
1) You can't add housing without adding proper infrastructure (transportation, sewage, power, etc). Adding infrastructure is expensive and takes a very long time. There will be no budget for proper infrastructure increase if the population keeps rising - remember that hundreds of thousands of people work for companies that offshore their taxes.
2) Most people need financial advice on what real estate investment means. If there's another bubble burst, a lot of average income people will have their life ruined. They would have bought an apartment for, say, $1M, with 200k down, only to see its value decrease by 30-35%, essentially wiping out their savings and forcing them into unsustainable debt.
3) I wish there was an easy way to fix the housing problem in SF. There isn't. Let's be realistic about it.
Please don't downvote me just because you disagree with me. Instead, tell me why.
I'll do both, because you are acting like an informed person but wrong about very basic things.
> 1) You can't add housing without adding proper infrastructure (transportation, sewage, power, etc). Adding infrastructure is expensive and takes a very long time. There will be no budget for proper infrastructure increase if the population keeps rising - remember that hundreds of thousands of people work for companies that offshore their taxes.
One, you don't "offshore taxes", you offshore profits. Two, corporations don't pay local taxes based on profits, so I'm not sure what you're on about. Tech workers? They pay quite a lot in local taxes.
> 2) Most people need financial advice on what real estate investment means. If there's another bubble burst, a lot of average income people will have their life ruined. They would have bought an apartment for, say, $1M, with 200k down, only to see its value decrease by 30-35%, essentially wiping out their savings and forcing them into unsustainable debt.
It is not the purpose of an economy to coddle wealthy people with artificial market restrictions, so I don't have any sympathy here. Also, mortgage debt isn't like college debt or credit card debt; it's secured by your house alone. Banks can't go after you for it. All they can do is give you a bad credit score for seven years. Which is bad, but I'm sure people who can afford million-dollar homes can afford to face the consequences of their actions.
> 3) I wish there was an easy way to fix the housing problem in SF. There isn't. Let's be realistic about it.
This isn't saying anything.
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...
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:
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%
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.
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."
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!!
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.
1. Eligible property will have to change hands and land in the right hands to make the projects happen. That's the nature of redevelopment, someone has to be willing to knock down a profitable building in hopes of building something more profitable.
2. The rate at which property will change hands will correlate to the legal certainty it can be redeveloped. Until new legislation successfully survives court challenges, the uncertainty will swirl around its "by right" provisions.
3. The trades base will affect the cost of construction and hence the viability of projects. Imagine there is some number /n/ of plumbers in the Bay area. At some threshold amount of construction, these plumbers are all in demand, and so the price of plumbing rises. This happens across several trades and formerly viable pro forma's pencil out poorly with the new cost structure.
4. People sitting on the land now are already in a wait and see mode. As land becomes more desirable to developers, prices go up. Rising prices attract speculators hoping to sell on. The rate at which developable land flows to competent developers remains moderate.
5. Five years from identification of a feasible redevelopment site for multifamily housing to full occupancy would be pretty quick even in a relatively development friendly culture. Research, options, due diligence, financing, entitlement, design, bidding, construction and leasing...any one [or several] can run out over a year.
Throw in the normal rate economic and financial cycling and the sorts of effects experience indicates these have on the construction and housing sectors, and even in the next ten years, there will likely be a period where half of all projects in the pipeline die.
There's no silver bullet.
Obviously, lower housing costs would cause a higher absolute density of people. But maybe the presence of people with other unrelated interests would somehow dampen the tech economy, even if the absolute density of tech people remained the same.
Let me be clear that I support more residential construction on the peninsula, so I am not saying this as part of a weird socio-political agenda. It's purely out of curiosity.
Will this have the impacts Mr. Altman suggests they will? Specifically - significantly more development of multi unit dwellings?
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.
This is the only way that house prices will moderate, is if these globally significant companies spread their distribution of money around the country/world. There's too much concentration of money flowing into the Bay Area in terms of revenues, and that is creating this hyper-inflation that we see here.
My house value when up by 60% in 2 years. I can sell it for almost $2 million if I wanted to, which I don't. I keep thinking it's not sustainable, until I hear the offers that people get from these companies. Google offered one of my friend $160k + 400k in RSUs, and Facebook offered another one $180k and $500k in RSUs. That's well over $1M over 4 years for both. Of course salaries like this will cause hyper-inflation in this area.
Note: Paul Graham recently spoke on how important affordable restaurants are to creating startup hubs![1] That's macroeconomics for you.
To me this is a sensible solution. Let the city start to suck a bit (expensive or closed restaurants for example) and then other cities can share the burden of being go-to places to live.
> Subsidizing their housing is a backdoor subsidy to the business owners who don't need to pay their workers enough to deal with living in the Bay Area.
Not to mention subsidizing the property investors, and driving up demand.
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.
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...
http://qz.com/169767/the-century-old-solution-to-end-san-fra...
Anything built before 1995 (that's a California State statute) can be (will be) rent controlled (unless population drops dramatically in cities near the coast).
The State passed a law (the "Costa-Hawkins Rental Housing Act") that prevents California cities from pulling in any property built after 1995 into a rent control regime. But Costa-Hawkins does not protect rental properties built between 1979-1995.
Right now, properties built before 1979 are rent-controlled in California cities (San Francisco, San Jose, etc.)
But at the drop of a gavel, a municipality can pull in all properties built between 1979 and 1995 into rent control -- the Costa-Hawkins is the only thing stopping municipalities at the year 1995 (they'd like to be able to rent control every property necessary to accommodate their increasing population over time).
The citizens of a municipality in Southern California -- Santa Monica I believe -- narrowly defeated a rent control change designed to extend rent control to apartments built up to 1995.
That does not help supply. Jerry Brown trying to 'fast track' development does not remove the risk that newer properties will be rent controlled in the future.
A new developer sees partial-confiscation of their asset being a possibility, because the California legislature could modify Costa-Hawkins and remove 1995 as the limit year for rent control.
Once a city/state has demonstrated a commitment to seizure of:
- a restaurant's right to increase prices - a dentist's right to increase prices - a doctor's right to increase prices - a private school's right to increase prices - a rental property's right to increase prices
Those restrictions lead to: - fewer restaurants - fewer dentists - fewer doctors - fewer private schools - fewer apartments
Businesses must have freedom to operate or no one will start businesses (supply of businesses will drop).
Once a city/state has demonstrated a commitment to partial seizure of personal assets (restaurant, dental practice, apartment property, etc.) of a person, or a business, there is a very strong likelihood that 'seizure/state control' tendency will never stop.
So the governor of California can wave his hands all he wants with this kind of "fast track" proposal to building real estate assets in California.
Until the state makes it clear that they will stop the partial or "legislative seizure" of rental properties, very few developers are stupid enough to risk a change/nullification of Costa-Hawkins.
Surely not all cities?
Doctors can't even choose the prices they charge
And yes, I get that the possibility of rental control can scare of developers. But I'm wondering what the effect is on current owners. I've never been a landlord so there is probably something I'm missing.
I stopped reading after that, as I was satisfied as to what the problem and solution is.
TryVoices.com (iOS + Android)
> 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...
https://medium.com/@TomPJacobs/what-housing-crisis-3c0568a5d...
I 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.
"State Legislature":
- "State Senate"
- "State Assembly"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.
edit: this is a serious post
And is unsustainable.
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.