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I don't live in SF, but having spent most of the past 15 years in Europe, which is dense: it's almost completely a supply problem. SF is not really very dense at all for a place with such a high demand for housing.

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.

Apples to oranges. SF has always been more of a boomtown. Neither of the cities you mention have experienced the sudden, massive surge in demand that SF has in recent memory.

When you have sudden surges in demand you can't just pin it on supply. You have to think about macroeconomic objectives for the city (i.e. preserving low and mid income housing) as well as how to plan for the long term, like when the boom turns to bust and lots of those new residents leave.

    > Neither of the cities you mention have experienced
    > the sudden, massive surge in demand that SF has
    > in recent memory.

They haven't? According to what? I just looked this up for Milan real quick:

SF had 350k people in 1900, and 800k in 2010[1], a growth of ~2.3x. Milan had 550k people in 1900 and 1.3 million in 2010[2], a growth of ~2.35x.

I don't understand how you think SF is the exception in this example. Both of these cities have had similar population growth, Milan slightly more actually. It seems the difference is that Milan decided to build up.

1. http://www.sfgenealogy.com/sf/history/hgpop.htm

2. https://en.wikipedia.org/wiki/Timeline_of_Milan

First, you are looking at the wrong time scale. Second, population growth is not the same as demand. In just a few years SF has experienced a massive surge in demand, i.e. the price new residents are willing to pay for housing.

Well of course population growth isn't the same as demand, that's the point!

What davidw was observing was that there's plenty of cities that do better at satisfying the demand for housing than San Francisco does.

You can have a growing population in the same area while demand goes down, if you're building enough new housing to offset the demand. The examples davidw and I have been citing here show cities that have faced similar population growth that have built up rather than succumbing to SF's housing problems.

I think your claim that it's apples to oranges is invalid. Yes SF has been a boomtown, but plenty of cities all over the world have been boomtowns without the same issues.

The issue is that SF has been a boomtown AND hasn't gotten its act together when it comes to building up density. That's what makes it a special case, and that's why both the demand for housing housing prices are ridiculous there.

> cities that have faced similar population growth

You've simply ignored my point about the rate of growth in demand. That introduces a new factor, which is the need to control displacement of lower-income people and maintain healthy economic diversity.

Also, the issue here is not that SF is opposed to density. SF has many high-density neighborhoods and virtually all new construction is higher density. The issue is how hard the city should negotiate with developers to set aside price-controlled units to maintain economic diversity.

> the issue here is not that SF is opposed to density.

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.

When was the last time SF had too much housing? Obviously prices have gone down at times in the past but it's hard to argue there's ever been an oversupply....

Nobody claimed there's an oversupply of housing. The question is how much affordable vs. market-rate housing the city should negotiate for.

Parent said that SF has to "plan for the long term, like when the boom turns to bust and lots of those new residents leave."

I don't think that's something that needs to be planned for. Even in a worst case scenario there will be plenty of demand to fill up any the new housing that's coming up in SF.

It's even worse in the suburbs. Everything is incredibly sprawled out. Every major city I've been to has apartment towers. It's just a more economical way to use land. Given how much demand for housing there is, there are obviously regulations in place keeping anything very tall from being built. The bay area doesn't want to grow.

> Random place in SF: https://www.google.com/maps/@37.7718267,-122.4388549,3a,75y,...

What is that really narrow, darkly painted building? Is that a house? Whatever it is, it sure looks peculiar (but I like it!)

It's actually a really nice house. I've been in it.

That's awesome! What is the interior like? Is it two rooms stacked on top of each other, or does the house go further back?

EDIT: I actually just noticed the street view image cuts off part of the house, making it seem tinier than it actually is. Originally, I thought it was a "micro-house" or something.

Pics :-) http://www.zillow.com/homedetails/151-Broderick-St-San-Franc...

Thanks for posting! That is a very interesting interior haha

While the cost of housing in the bay area gets a lot of press the entire infrastructure of the bay is getting stretched by the current tech boom. The traffic is already the second worst in the nation [1], and existing public transportation like bart[2] and caltrain[3] are already overloaded.

While I'm generally in favor of development I think that this simplistic approach of just going around local planning departments is just going to lead to more problems. I think it would be better to cut state and local funding of counties if they don't match growth targets that region commits to. This way we incentivize communities to embrace growth while letting the residents still have a strong say in how and where their community grows. Letting developers call the pace hasn't made for good urban planning in other parts of the country and there is no reason to expect it to do a lot better here. Let's incentivize these parties to work together rather than giving one all the power to drive the process.

[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

With the right projects like, the transbay terminal and I-280 city can actually allow development and create funds for transit at the same time.

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

http://www.sfchronicle.com/bayarea/article/Transit-plan-to-r...

the transbay terminal is not another transbay tube, nor is it an expansion of the capacity of major bart stations.

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.

If they end up implementing all their plans its a major capacity expansion for cal train, and part of a sister plan that would connect oakland to downtown SF via second transbay tube.

> The tech community likes to deflect criticism of their sudden influx of relatively high-income workers and say "don't blame us, it's a supply problem."

Well duh, ostensibly high-paying jobs are good, remember? Like, the tech sector is one of the few remaining industries with lots of jobs that pay well, and now we gotta demonize them too? Would it be preferable for everyone to be equally poor?

And it obviously is a supply problem. The California Legislative Analyst Office was pretty clear on that:

> While many factors have a role in driving California's high housing costs, the most important is the significant shortage of housing in the state's highly coveted coastal communities. We advise the Legislature to address this housing shortfall by changing policies to facilitate significantly more private home and apartment building in California's coastal urban communities.

http://www.lao.ca.gov/Publications/Detail/3214

It's important to understand the other factors alluded to by the California Legislative Analyst Office, among others. Specific to SF is a sudden influx of wealthier residents. With such a huge gap between their income levels and say service industry or blue collar folks, they are going to throw the market rate for housing way high. Increasing the supply of market-rate housing alone may not bring things down enough, at least, not without much greater developer concessions than have been suggested.

"Well duh, ostensibly high-paying jobs are good, remember?"

To whom, exactly? If those jobs are going to people who are moving here from somewhere else, then who benefits? There was a thriving city here long before tech startups came along.

The cruel irony of this kind of job growth is that it doesn't benefit the people who are being displaced. I personally think we need a more balanced approach: we need to build more housing, but we also need to start implementing some disincentives for companies to locate offices in San Francisco. It makes no sense, for example, that we're giving tech companies tax breaks to move their employees here.

> The cruel irony of this kind of job growth is that it doesn't benefit the people who are being displaced

That's because they're being displaced. Because there is not enough housing.

There are a lot of benefits to being in a wealthy area even for those who are not the ones with the highest paying jobs, as Enrico Moretti explains in "The New Geography of Jobs".

And if you want to see what an actual bad economy does for people.... check out Greece, or even Italy (which isn't nearly as bad off). It's not pretty.

"That's because they're being displaced. Because there is not enough housing."

Nor will there be at any point in the near future, no matter how much housing gets built. But that's a red herring. If the question is "should we favor policies that encourage the tech industry, or discourage it?", you have to do better than arguing that the tech industry is a net good in some ideal world that doesn't currently exist.

SF had a pretty strong economy before tech came along. Saying "tech...or the Greek economy" is clearly absurd.

I agree with you completely that 'special tax breaks' are BS.

I think there could certainly be enough housing to help a bunch of people at the margins, especially if density were allowed in a lot of the greater bay area.

Articles by Tim Redmond are usually full of misinformation, and that one (link #1) is no exception. I could go on forever, but eg., he says:

"The problem is that the building and real-estate industries have a huge lock on California politics."

San Francisco is the #1 most development-hostile major city in the world. According to World Bank data, even in places like Ethiopia and Zimbabwe, it's still much easier to get planning permits than it is in SF. Blaming the power of the real estate industry for San Francisco's rents is like blaming the Chinese famines on capitalist saboteurs.

Which is why this is a state bill. That would be consistent with Redmond's claim.

Deleted comment

A 2% chance today, right? Increasing the supply of affordable housing should improve those odds.

What's at stake here is how much affordable housing the city for negotiate for with developers. Critics argue this state bill undercuts the city's negotiating position.

Doesn't the bill only apply to developments with at least 10% onsite affordable housing? Is the city really going to negotiate a higher amount than that?

It allows for as little as 5%. Some in the city are fighting for more. For example Jane Kim, the SF supervisor who Bernie Sanders just endorsed for state senate, is fighting for 25% (down from 30%).[1]

Basically this state bill is a developer move to undercut SF's negotiating position, as they have more political influence at the state level.

[1] http://www.bizjournals.com/sanfrancisco/blog/real-estate/201...

> increasing market-rate housing alone may not make an appreciable difference in prices where it matters most from a macroeconomic perspective: for low-to-mid income residents.

This may well be possible to argue, but you're going to need a source for a claim that goes against the basic concept of supply-and-demand.

It doesn't go against it. The question is how elastic is the demand curve. If it's not elastic enough to make SF affordable for low-to-mid income residents then we may face bad macroeconomic and cultural effects. That's where price controls come in.

I don't think the tech community is deflecting criticism. As a minority voting group, what are they supposed to do about the problem?

The limited supply is not their fault. The refusal to bid in the market would be a meaningless self-sacrifice. The lack of healthy leverage and organization by workers in other industries have nothing to do with tech workers, who, again, are a minority power in politics.

Your premise that the tech community is not a major player in local politics because of their relatively small body count does not hold water. Money plays a large influence in local politics. Ron Conway is a perfect example of this: he dines with the mayor and provides major funding to local campaigns and initiatives, which usually win.

So you're saying that tech has been a major political player with respect to housing laws? If anything, restrictions on housing supply hurt tech companies who wish to import workers to their area. Restrictions on housing supply hurts everyone who isn't a landowner.

If you're saying that a few tech elites are players in politics, fine, but that has nothing to do with the rest of the world who aren't elites. It's almost not worth mentioning that elites everywhere are players in politics. The rest of the tech world are not creating organized vehicles to channel money or votes (unlike teachers or firemen, who do organize). They're just people participating in the housing market. And whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing so they can import more employees.

What's the reason that money from employees of one industry are displacing workers from another industry? Because workers in that other industry lack the leverage to demand more wages that keep up with other industries, because housing supply is limited, and because population is growing.

> restrictions on housing supply hurt tech companies who wish to import workers

That may be true, but a city needs more than just tech workers to function. The goal is balanced growth.

> Restrictions on housing supply hurts everyone who isn't a landowner.

Objectively false. Affordable housing requirements help lower income people.

> whatever tech elites are doing, they don't look like they're winning the battle to up supply on housing

You mean up the supply of market-rate housing. Most critics are not anti-growth, they just want more affordable housing.

And as for displacing workers from other industries who can't afford market rate, it's not us vs. them. The "industries" you're talking about are intertwined: tech, restaurants, cafes, schools, police, nursing, art, and so on. If a city doesn't grow in a balanced way and pushes all those other people out it could make it an undesirable place to live. Already we are seeing big increases in restaurant prices due to cost of living.

> want more affordable housing

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.

Nor would building merely 5% affordable make much of a dent, probably, which is what this bill allows as-of-right.

How does the bill weaken affordable housing demands? And doesn't building more "luxury" condo open more affordable housing stock.

This is such a confusing issue, everyone seems to be making sense.

My understanding is the bill has weaker requirements (as little as 5%) on affordable housing than alternatives. Think of cities and negotiating with developers over affordability, and this is a more developer-friendly offer.

I think that is meant to be left to local requirements. Municipality could jack it up to 20% AFAIK.

That's the key question. The article I cited details many limitations on local governments that would seem to limit their ability to demand affordable housing.[1]

Bottom line, this bill is massively supported by developers, so take that as a gauge of how much power it gives municipalities.

[1] http://48hills.org/2016/05/22/a-terrible-housing-bill-looms-...

You are confused; the 48hills article is referring to a different bill[1] (affordable housing bonus) than the Governor’s budget trailer bill that Sam Altman is referring to[2]. The Governor’s bill requires that localities deterministically and expediently approve projects near transit that provide some low-income housing and comply with local zoning laws.

But speaking of the affordable housing bonus, Tim Redmond’s specific concerns seem to be that height limits, setbacks, and backyard requirements may be waived, not that there would be any reduction in affordable housing. But I agree that the affordable housing bonus law is somewhat open-ended so who knows what concession a developer might request.

[1]: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

[2]: http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG224...

I guess, thanks, but it looks like exactly the same problem: It sets affordability requirements as low as 5%. See: 65913.3(b)(4)

The Governor’s budget trailer bill says that if a developer sets aside a certain fraction of the units for inclusionary housing and the proposal complies with the local zoning code, then the locality must approve it deterministically and quickly. This does not prevent a local government from setting a higher inclusionary requirement in their zoning code; it would remain 12% in San Francisco (or higher if Proposition C of June 2016 passes). The inclusionary fraction in the bill is just the threshold at which the other provisions begin to apply.

By the way, the Legislative Analyst’s Office has released an endorsement[1] of the bill which provides background, justification, and proposed improvements.

[1]: http://www.lao.ca.gov/Publications/Detail/3470

But bear in mind this just brings California in line with a bunch of places that managed to build their way out of a housing crisis. $1T in war spending dumped on DC in the last decade, led to cranes everywhere, not massive rent increase.

Uh, DC has had significant rent (and home price) increases in the past decade. Not as bad as here, but it's definitely not correct to claim that they've built their way out of a housing crisis.

In fact, when you look around, you see similar trends nationwide. A lot of this is just the predictable consequence of our near-zero interest rate policy since 2009.

https://www.washingtonpost.com/news/local/wp/2015/03/12/medi...

https://www.rentjungle.com/average-rent-in-washington-rent-t...

I don't see how worker shortages in the service industry could possibly be seen as a bad thing. Service industry workers will be required regardless of cost of living. If supply is constrained because of cost of living, these workers will simply be paid more. Rather than trying to legislate our way to $15/hr, how is it not better to achieve the same thing with less government intervention? 'affordable housing', as required by the government, is not necessary at all.