SF YIMBY Platform
sfyimby.org
sfyimby.org
If this becomes law, NIMBYs will become extinct quickly as developers will just bite the bullet and include a lower-cost component to get fast-track approval to build directly from the State. And they'll get it.
Personally I feel that we are really getting close to killing the golden goose. At some point, companies will leave or grow large satellite offices elsewhere if housing becomes unattainable even to well-paid employees. We need to inform change, not fight it.
In CA, various state laws require that cities zone some parcels for new housing. Often, that housing never happens because cities can disapprove even zoning-compliant projects on those parcels. The by-right law is intended to fix that problem.
Unfortunately, the by-right law does not seem likely to pass the legislature. If you support it, you should call and email your state reps.
For once, CEQA would actually protect the environment: Nowadays, downzoning requires an impact study. There's no way any credible study could conclude that promoting sprawl is good for the planet.
a) It would lower their home values (note that the railroad tunnel predates the houses by a few decades, and the railroad has talked about doing this project for 2 decades)
b) Extra train traffic means more pollution. Seems reasonable, until you realize that the tunnel is almost literally in the shadow (it's on the south side, not north, so not quite literally) of an interstate. Guess who's responsible for most of the air pollution.
c) The project calls for railroad to temporarily run in a exposed trench while building the tunnel. Residents are worried about what would happen if an oil tanker car caught fire. Unfortunately, a glance at the map indicates that this is not on the routes between oil supply centers and oil demand centers, and, as Baltimore found out (see https://en.wikipedia.org/wiki/Howard_Street_Tunnel_fire ), fires in tunnels are much worse than fires in the open air.
Yes, but this time instead of an individual development being up for CEQA obstruction (which favors NIMBYs), proposed rezoning would be subject to environmental review. This means pro-growth people could use the NIMBYs' own favorite tool against them, preventing down zoning. Poetic justice.
[1] https://leginfo.legislature.ca.gov/faces/codes_displayText.x....
[2] http://www.abag.ca.gov/planning/housing/datasets.html#report...
Good! Fantastic! Brilliant! Because that's the start to an actual, sustainable solution for this problem. I have no problem with construction, but diversification of the tech industry is far more important.
It is absolutely insane to believe that you can continue to cram the global tech industry into the popular third of the SF peninsula (i.e. the ~20 square miles east of Divisadero and north of Cesar Chavez), and maintain affordable housing. No matter how much you build, it's going to be ridiculously expensive, because developers do not build into falling markets. Manhattan and London and Tokyo are not cheap places to live, despite decades of construction. Moreover, even in "high-rise" cities like Tokyo, most of the residential construction is under 5 stories. Those cities sprawl to accommodate their population. SF doesn't have that option.
At this point, the only rational solution is for the tech industry to diversify geographically. It's better for SF, it's better for the companies, and it's way, way better for the employees.
You can use either the carrot or the stick to promote tech companies to either deploy satellite offices across the country or enable remote work, but this is not a planning problem, its a tech sector externality.
With apologies to Sam Kinison, "Move where the land is cheap."
The SF housing crunch is an acute, hyper-local problem, obviously caused by a tech bubble. Rents were declining in SF as recently as 2009. Rents decline rapidly as you get further from the city.
The long-term price trends of homes in (say) San Luis Obispo, while interesting, is of little relevance to the discussion. The markets are so different that you can't draw any conclusions (except, perhaps, that Prop 13 is a horrible law, and that mortgage interest deduction is a disastrous public policy choice).
http://www.oregonlive.com/front-porch/index.ssf/2016/05/port...
You shock me.
I could have just as easily used 2012 as the year, because rents were more-or-less flat in SF from 2010-2012, after some declines in 2009. Rent lunacy began concurrently with startup valuation lunacy.
That said, I fail to see how this makes me "wrong"...I said that most residential construction in Tokyo is under five stories, and that the city sprawls. Both are true statements. Tokyo has enormous, far-flung suburbs of low-rise buildings, and most of the population lives there.
It's better than SF, in that you do see taller (i.e. 5-10 story) buildings along major roads, and the buildings have a smaller footprint, but these things are details. Tokyo is a gigantic, sprawling city. It's something like 20 times the size of SF.
The higher property prices are, the more homeowners will do to protect their economic interests by voting to restrict supply.
It's a vicious cycle.
> therefore public policy should be based on viewing homes as places to live, not as investments.
This sounds all well and good, but can you really expect people to support diluting their >$1mm property investment?
Apart from being unjust, that approach would completely break the market and put people out on the street. You buy a house for $200k; its value increases to $400k; you sell it, and the city takes $200k, leaving you with $200k. You now cannot afford any of the houses currently for sale for $400k, even though the additional $200k you don't have would just go to the city, and the seller just gets the $200k you actually have.
Typical price controls affect both sides of the transaction, so the house value can't increase, or doesn't increase faster than a certain limit. That at least doesn't directly prevent people from selling one house and buying another comparable house.
To answer your original question, though: to what extent do the areas in most dire need of housing have any undeveloped land? Those areas don't have much undeveloped land; they have underdeveloped land. If you had price controls on undeveloped land but not on developed land, at some point you'd end up with a price inversion where a given property with a house on it has less value than the same property without the house. At which point someone wanting to extract the increased value could demolish the house and then sell the land at market value.
Why would the houses continue to be for sale for $400k? I can't see why people would bother to charge any more than the price they bought the house for, once they realized that the government would pocket any profit. If selling for either $400k or $200k gives you either way $200k, it's in your interest as a seller to sell for the lesser amount, because you get more buyers more quickly that way.
> At which point someone wanting to extract the increased value could demolish the house and then sell the land at market value.
That was actually partly the point! It incentivizes property-management companies to try to lobby to remove the NIMBY barriers in the way of tearing down old buildings.
That sounds like a plausible (but not certain) outcome, assuming a 100% tax with no way around it. I wouldn't underestimate creative (legal) solutions, though. A structure like this creates major incentives for under-the-table sales, fees, or anything that doesn't qualify as "part of the sale price". For instance, it would create an incentive for "buyer pays" transactions, where the buyer directly pays for all associated services involved with a sale without paying the seller directly, including those costs typically paid by the seller or split between the two.
> That was actually partly the point! It incentivizes property-management companies to try to lobby to remove the NIMBY barriers in the way of tearing down old buildings.
Interesting notion. What stops them from tearing down those old buildings today, though? It seems like the bigger problem is that they can't build new buildings that aren't just as sparse and under-developed as the old.
https://en.wikipedia.org/wiki/Price_controls
Let's say we implement full controls tomorrow in SF, where all real estate appreciation is capped at, say, inflation.
As demand for housing continues to grow, you'll find that the government-mandated capped price will rapidly diverge from what the free market price is, e.g. someone is willing to pay $1mm for a house but it can only be sold for $600,000.
Since the seller is essentially being forced to take a bath, property owners will simply not sell. The market becomes extremely illiquid and everyone loses.
The key to understanding the seller's behavior, by the way, is because under price controls the market becomes extremely asymmetric. An excess of demand means that every potential seller has MANY potential buyers who are all willing to pay the asking price, so buying becomes a huge lottery. So if you own a property and you sell, there's very little chance you can change your mind later on and buy a different property, whereas in a normal market you just pay the normal transaction fees.
(In other words: a roundabout mechanism to do to "land under your mattress" what inflation does to "cash under your mattress.")
Since the growth is exponential, if the pain becomes too great after N years, then everyone is forced to sell after N years. Looks suspiciously like a fixed-term lease, no?
So instead of price controls on real estate, now we've gotten rid of real estate altogether and just have price controls on rental rates.
This is one reason why mixing a command economy with markets is tricky, btw. Once you start down the rabbit hole of using coercion instead of price signals to get people to do things, you'll find you need to use more and more coercion (whether strange taxes or more draconian measures) to make things work.
This is why a real land-value tax wouldn't simply grow, but would rather reflect the current market value of the land.
The interesting thing here, to me, is that the government wouldn't want to control allocation as in a command economy; instead, they merely want to punish people for making the market inefficient. They want the market to clear, so that they don't have to figure out how to centrally allocate anything. We already have a lot of government regulations with this explicit goal. I'd be shocked if we couldn't work one out for real estate.
The SF real estate market right now is quite efficient; houses and condos sell quickly at the going market rate, but you might find the effect on the allocation of housing to be very unfair in that some people have much easier access to housing than others.
Price controls favor fairness over efficiency; e.g. selling bread below market price means everyone waits in line, which is by definition inefficient. It is fair, however, in that both rich and poor wait equally.
> They want the market to clear
That's what I mean by compulsion begetting compulsion -- the market clears just fine right now, but price and/or rent controls will probably make it not clear, at which point you need to add other taxes to force it to clear again.
It's called the Land Transfer Tax: http://www.fin.gov.on.ca/en/tax/ltt/
Effectively what's happened is that rent control has sheltered many residents from the market rate of housing to a point where they are effectively locked into staying in their current rental and will never be able to afford to move to a new rental or ever buy a house. Given that they have no hope of ever being able to afford market rate housing and the government of San Francisco is has the power obstruct planning process for a myriad of reasons [that are surreptitiously used to exercise backhanded influence rather than judicial assessment] they have every incentive to resist everything that's not subsidized. Comically to the point where obstructionists tried to literally block all housing, lest it be 100% subsidized.[2]
[1]http://missionlocal.org/2016/08/city-cites-its-own-land-for-... [2]https://ballotpedia.org/City_of_San_Francisco_Mission_Distri...
The rich want to maintain their low density single family neighbourhoods exactly as they were when they bought into them.
The poor simply want to keep their current home and have it not torn down, as every other apartment is almost certain to be dramatically more expensive to rent than their current one.
If the city suggested building mid rise buildings with a percentage of below market units in leafy rich neighbourhoods far from low income areas you'd see that low income persons would be quite happy about this development. The rich wouldn't be.
Of course this is almost never the case. Rich homeowners vote in greater numbers and have the time and capacity to fight back, and so what we see is that the areas first in line for redevelopment are almost always low income areas (ie. The Mission) while rich ultra low density areas are left untouched.
> If the city suggested building mid rise buildings with a percentage of below market units in leafy rich neighbourhoods far from low income areas you'd see that low income persons would be quite happy about this development. The rich wouldn't be.
I don't believe that. There are many in SF who oppose all new construction, and many others who want 100% of new construction to be subsidized housing.
People need to stop trying to make the housing issue a one dimensional fight of pro-housing vs anti-housing. It's dramatically more complex than that.
[0] https://support.squarespace.com/hc/en-us/articles/205815858-...
While I fully support this movement, I do believe rent control has been an effective way of slowing down gentrification and forcing residents out of the area (although there are exceptions to this, of course). As an engineer who should not have rent control but still does I do recognize the system does have its limitations.
I wonder why developers would want to sell houses at that rate when new townhomes in Dublin are going for 700k and your looking at 1m+ for a new home.
I wonder how people with high home values, especially those who bought in high, will feel about losing so much of their home's value.
I suspect homes in SF won't become "affordable" again until another economic crash of some sort.
> I wonder how many new houses would need to be built to reduce prices to what I would consider affordable.
A single new unit permits one additional family to live in the Bay Area. Even if we don't build enough to let everyone live here who wants to, each one we do build counts. And if we built enough it would actually bring prices down.
> I wonder why developers would want to sell houses at that rate when new townhomes in Dublin are going for 700k and your looking at 1m+ for a new home
Developers just need to earn a spread between development cost and purchase price. Developers will happily build units as long as that spread is sufficient compensation. We are a long way from bringing that spread down to zero (and if we ever got there houses would be much cheaper!!).
> I wonder how people with high home values, especially those who bought in high, will feel about losing so much of their home's value
Increased as of right property rights actually increases land value and probably ends up being net positive for homeowners.
> suspect homes in SF won't become "affordable" again until another economic crash of some sort
This is probably true, but increased supply can at least alleviate the problem.
This is the same as when pharmaceutical companies set up and fund patient advocacy organizations.
If people really want to talk about making housing affordable lets here what affordable means to them and how many new homes at what price would be required to get us there. Yes, I KNOW if you build enough homes prices will drop. Tell me what the target is and how many homes are enough. Otherwise, yeah, it smells like people with some sorta ulterior motive selling snake oil.
More new supply is great, but doubt it would be enough to significantly offset the much larger effect of Prop 13.
These demands are not very well scoped.
More homes means either building on new land or adding density to existing land. There isn't much "new" land available in SF, but knocking down existing buildings is still very risky. Even if your proposed development meets every existing zoning regulation, it can be shot down.
So "more zoning control" here means putting more control in the actual zoning regulations, as opposed to allowing anyone to try and stop the process via ballot measure or legal challenge.
Increasing supply (building more or denser housing) will naturally decrease prices, which is where the investment bit comes in.
The phrase "more zoning control" sounds like increasing the amount and complexity of zoning regulations, rather than, as you suggest, removing unwritten rules.
"Make the re-zoning process more predictable" would maybe be a better slogan.
Zoning control != zoning restriction. Control over zoning can mean things like mixed use, autonomy at the lower levels (versus "our hands are tied by group X" situations), and issuing permits on a "default yes barring interrupts" basis, instead of a "default no pending complex approvals".
Treating homes as investments is what leads to most NIMBY ways of thinking, which while harmful to the region at large, make perfect sense on a homeowner level. Many SF land owners have bought in at overvalued levels and continue to pay or receive overvalued rents. Motions that would make the city more affordable on the whole threaten the size of their returns, so people who treat homes as investments are often in direct opposition to what would be good for the less rich.
TL;DR the 3 pieces you mention can coexist as "more homes, of more varieties, regardless of the fact that will threaten existing homeowners' ROI"
This is something that puzzle me. If areas are upzoned and higher-density redevelopment becomes possible, then housing prices will drop. But housing prices aren't the same thing at all as land value. If I owned a small low-density unit on a small plot of land, I wouldn't be able to sell the house as such to someone who wanted to live in it for as much money, but I think the value if the property could redeveloped as-of-right at higher density would increase.
So at least some plots of land should increase in value.
They're saying almost exactly the opposite of that - establish clear rules that, if followed by developers, lead to automatic approval, rather than the current mess of endless, case-by-case approval processes.
> "stop treating homes as investments"
This is specifically deaing with government policies that prioritize houses' utility as investments over their utility as consumer goods - eg by restricting supply.