The $50,000 San Francisco Home | Hacker News Reader

The $50,000 San Francisco Home

strongtowns.org

101 pointsdavidw163 comments

I think the real tl:dr of this article is: making affordable living spaces is easy if the laws and NIMBYs allow it. But they don't. So it's not.

The more I learn about this situation the more surprised I am.

George Carlin had a great bit about NIMBY-types, but in that bit the NIMBY-types, who don't want a prison built near them, have a "logical" viewpoint that he deconstructs: criminals don't hang around outside of a prison. Inmates who escape want to get as far away from the prison as possible, that's the point of escaping, after all.

From what I can tell, the NIMBY-types in SF only have...aesthetic concerns? is that really what is keeping housing from being built? concerns over an eyesore? I don't see the "logical" viewpoint that can be deconstructed here, no wonder it's such a headache.

as I understand it, the argument is that "bad" construction will make the neighborhood less desirable and cause the value of their property to drop

It all comes back to money. People who've seen 20x returns on their property value want to keep the money, people who've spent $5m on a small house want to justify that investment, and landlords want to keep renting their shoebox studio for $3k/mo. Arguments about neighborhood character are just trying to obscure the obvious greed.

Just a random opinion from someone who doesn't live in SF: I like to visit SF because of the architecture. It really is what makes it unique in the United States. It would be a shame to lose that.

It's possible to have municipal deign standard for public facades, but still build new stuff.

Nobody is asking to bulldoze the Painted Ladies or Lombard.

The problem is more about the Sunset, the Richmond, Forest Hills, Excelsior -- just these huge sweeping neighborhoods which are incredibly underzoned and underdeveloped. Or the people who fight development in SOMA because it blocks part of their view.

Sunset is the strangest place I've ever seen from the air. A totally regular grid of housing with no almost no open spaces at all. Maybe you can't see it from the air but are there even community spaces where people gather? I can't even see any shopping or restaurant areas. It's all just regular roads.

I can't imagine how you could make it any more developed. There isn't an inch of breathing space is there? If you built up how would anyone get around? In higher rise places even like London there are parks and a variety of spaces and variation in the layout to get around the extra vertical density.

I live in the Sunset. We have plenty of small parks and the Sunset runs the entire length of the enormous Golden Gate park, which stretches across half the city.

There are plenty of restaurants and shops, most of which is not yet gentrified, and they just fit into the regular grid as mixed-use urban buildings (restaurant on the street level, apartments on the floor(s) above. There are no strip malls, big box stores, etc.

Like much of the city, developing it further would likely mean building "up", yes. There are also an enormous number of single family homes in the Sunset, some of which could be converted into multi family apartment buildings to increase density.

All that said, I'm not clear on how you'd actually accomplish the above. My family and I live here BECAUSE we wanted a single family home, a backyard, etc. SF obviously needs a vast increase in residential availability, but I'm certainly not the guy to ask about how to make it happen.

I'm sure it must be nice on the ground in reality as so many people want to live there, but it looks positively dystopian on a satellite image. Hundreds and hundreds of identical crammed blocks on a rigid grid with no green spaces in them. It looks like in some places you'd have to walk six blocks to reach any kind of open space.

Other big cities like London are crowded as well but at least no two streets are the same and there's always some breathing space.

There is some good architecture in San Francisco, but there are many areas with absolutely terrible architecture. I can't imagine this proposal will produce worse architecture than what already exists.

That is staggeringly presumptuous of you to claim, lacking a shred of evidence (or, for that matter, empathy).

One person's greed is another person's "just trying to cover the mortgage".

I think that is an overly simplistic view. There are plenty of people who live in a given city, or a given neighborhood in a city, because it was a good fit for the kind of place they wanted to live.

In many non-tech fields jobs aren't concentrated so heavily in just a couple of cities. You can decide what you are looking for in terms of climate, commute, recreation, culture, transportation, and so on, find a city and neighborhood that has that, and then go there and find a job.

These people often pick a place to live, with the intent of staying there for the rest of their working life, and raising their families there.

It doesn't necessarily have anything to do with greed when they oppose changes to the factors that led them to be there in the first place, especially when the people who want that change are people who came there not because they particularly wanted to live there but rather because some company they wanted to work for requires its employees to live there, and those people have no intention of staying long term.

Next time I move, I'm going to be looking for a place with reasonably dark sky, good bicycling, a climate that is warm enough that I mostly don't need to turn on the heat, low enough density that if I want to listen to music or watch a movie at 3 AM I won't be bothering my neighbors (and vice versa), a decent chess within 60 miles, and good internet access. You can bet afterwards I'll vote against change that would change any of those, even if the proposed changes would raise the value of my property, because I'd be buying the property as a home, not as an investment that I can incidentally live in.

> From what I can tell, the NIMBY-types in SF only have...aesthetic concerns?

They also often have economic concerns, to wit, that increasing the supply of housing will, ceteris paribus, reduce the market clearing cost, reducing the value of the housing that they own.

There are also quality of life concerns relating to expected effects of increased density on crime, on transportation and other infrastructure, and other things, as well. Those and aesthetic issues are more likely to be cited in public debate than the economic issue above, but I suspect for homeowners the economic issue is actually the overwhelming one.

A good friend of mine recently was able to purchase a home in the Bay Area (we're in our late 20's). It has been absolutely fascinating the last few months watching his views towards housing supply do a complete 180 from "We need to build more housing" to "If they can't afford it maybe living here isn't for them".

Eh, criminals don't hang around outside of a prison, but that could mean they break into your house to steal a getaway car. I don't know. But I can understand people not wanting the possibility of a desperate escapee convict who has nothing to lose, loose in their neighborhood looking for a way out.

There's a financial interest. Cheaper homes means your home is worth less. There's a tipping point, however. There's a point where you can no longer afford your home or the neighborhood.

There's also a question of quality of life. A prison is one, extreme example. But an apartment building aimed at college students or young professionals might be another. High density housing might create more traffic, noise, parking problems, property issues, mess, and so on. As someone who recently moved out of a "low rent" neighborhood, I had my property thrown up on and vandalized multiple times, and been woken up in the middle of the night more times than I can count. I was not sad to move to a neighborhood not far away, but significantly quieter. I realize these problems are not related to the property per se, but certainly people chose a neighborhood for a variety of reasons that are not aesthetic.

This isn't to dismiss the need to improving access to housing. I don't want to be NIMBY, but we seem to have this immovable dichotomy between liberal "expand access" policies and conservative "if you don't like the neighborhood, move" policies and no real way to reconcile them.

EDIT: I have a short anecdote to try and illustrate my point. In my former neighborhood I was lucky to have a small, one car garage on an alley. Parking was at a premium and most residents in the converted rental housing (houses that were turned into multi-unit rentals) did not have parking. At least a handful of times per year, I would find a car blocking my garage. Perhaps I didn't leave for work until later in the day or something, but whoever needed that spot thought they were OK there for a while. This is not a trivial problem for me. I needed that car to get to work and now I either have to track down the owner or wait for a tow truck (and incur the owner's wrath which usually involved yelling at me from my yard or smashing my mailbox) and be late for work or wherever I was going. The problem is that this wasn't a serious issue to most people reading an article on HN (or even the local paper). It's not an issue that you make policy based on, but it is an issue for everyone who lived in the neighborhood, including the people who were forced to block my garage for lack of other parking. I can't call the cops and tell them I think my irate neighbor smashed my mailbox or call my city and tell them to do something about parking. I'm stuck with that problem until the slow wheels of planning fix it, and by then I've been late to work a dozen or more times.

For most owners, there is no tipping point. Their house payments are fixed based on when they purchased the house, not on its appreciation since then.

Only if property taxes remain constant (which I guess may be true in parts of the country.)

Property taxes.

In most places where property value growth is fast, tax relief does not keep up. And it can become a significant part of your home's upkeep, especially if you own it and have been there for some time. Rapid growth in value disproportional effects residents on fixed incomes. This is not a problem unique to San Fransisco, but to all "boom towns", large and small.

Additionally, services you once were able to afford such as parking, grocery stores, restaurants, etc. become expensive quickly. Think having your bodega replaced by a Whole Foods.

Aren't property tax increases in the state of California limited by Proposition 13?

https://en.wikipedia.org/wiki/California_Proposition_13_(197...

Thanks to California's Prop13 that caps how fast assessed property values can be raised to 2%/year, this isn't much of an issue in SF - once you're in your house, property tax is not going to make it unaffordable.

That's good for California. But if we are to generalize this problem, many states don't have that.

Still, it's a good policy and I wish my state would pursue it. The oil boom priced many people out of their homes.

Many people see it as bad for California. We're foregoing tons of tax revenue and warping real estate markets. There are always trade-offs.

Here's one article:

http://www.slate.com/blogs/moneybox/2016/09/22/california_s_...

There are plenty more.

In my experience, NIMBYs are far more motivated by quality of life concerns than by real estate values. The most active NIMBYs have lived in a particular neighborhood for years and aren't planning to sell any time soon, so a decline in property values is abstract. But increased traffic congestion, school overcrowding, and heavier use of other local infrastructure has a real and immediate negative impact.

Why should the interests of potential future residents outweigh those of people who already live there?

Except that in a lot of cases the rise of property prices isn't just pushing out potential future residents, it's also pushing out people who grew up in the area and people who've lived there a long time but never managed to get on the property ladder.

In those situations, high property prices are directly impacting the quality of life of a lot of people who have the same justification for being in the area as the NIMBYs do, but have less of a voice.

> Why should the interests of potential future residents outweigh those of people who already live there?

If all the residents agree to not sell or build more densely or whatever, fine, but once someone does, why should their right to do as they see fit with their own property be trampled?

Most people would agree there's a line somewhere, but 1) no one actually wants to build a nuclear waste dump in the middle of a suburb and 2) we've gone way over the line to the point where people freak out about a little bit more housing in an area full of housing like it's the end of the world.

People don't have an unrestricted right to their property, because actions on your property affect the property rights of others.

"Rights" have been stretched to mean, whatever is profitable or desirable for some group. In fact, owning the property is as far as it goes. Enjoying it. The interpretation that your neighbor's use of their property affects your 'enjoyment' of your own is a stretch.

I disagree, especially if a property creates negative externalaties. Smell, noise, parking issues, etc. are all quality of life problems. I shouldn't be able to tell a neighbor what color to paint their house, but I think it's ok to make sure a neighbor mows their lawn or shovels their sidewalk. Both of these issue impact me directly, and not just in preference.

The problem with not having zoning is that you end up with a two tiered housing system. People who can afford it move into private communities where standards can be enforced, and people who can't just live wherever they can find, despite their neighbors. Since I can't afford a private community where I can distance myself from my neighbors, I will support zoning restrictions, thank you.

That's what I meant about there being 'a line' somewhere. No one much wants to see a toxic waste storage facility near housing. People seem to mostly be ok with the law not being used to prevent people with children from moving in to a neighborhood though, even though kids can be noisy and "change the character of the neighborhood". Once upon a time, it was pretty normal to restrict black people from moving into a neighborhood too. That's no longer acceptable.

I think modern zoning is way too restrictive. Central planning was best left to die with the Soviet Union.

There are age-restricted communities which don't allow people with children to move in. I don't know whether this is a good idea, but it is legal in the US.

https://en.wikipedia.org/wiki/Age-restricted_community

Certainly, but those are private in nature, require buying in, and do not cover nearly every major city, as zoning does.

>Why should the interests of potential future residents outweigh those of people who already live there?

Because otherwise the people who own land in that area get to extract massive rents from everyone else for no reason.

>making affordable living spaces is easy if the laws and NIMBYs allow it

Buckminster Fuller discovered this back in the 1930's with the Dymaxion House.

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

>"The first Beech-produced Fuller House was widely publicized. Soon 36,000 unsolicited orders, many with checks attached, were received for the Fuller House... None of the building codes would permit their erection. The severest blow of all was that both the national electricians and plumber's organizations said they would have to be paid to take apart all the prefabricated and pre-installed wiring and plumbing, and put it together again, else they would not connect the otherwise "ready to live in" house to the town's or city's electrical lines and water mains. They held exclusively the official license to do this by long-time politically enacted laws. No banks were willing to provide mortgages to cover the sale of the Fuller Houses."

-Grunch of Giants

This is the deeper form of the issue: Bucky pointed out that, by some time in the 1970's, we would have the technological capability to create a physical Utopia for all. The challenge he posed is "to make the world work for 100% of humanity, in the shortest possible time, through spontaneous cooperation without ecological offence or disadvantage of anyone”

I know unions are a popular whipping boy on hn but blaming them for today's overpriced housing? And up-voting this nonsense? wow

Zoning changes may be a fine short term solution for a finite number of units. With rezoning, this plan, non-profit, government housing or any number of options become viable.

But medium term, BART is already at maximum capacity and long term quality of life continues to drop and the economy chokes as housing cost per foot rises.

The real solution is removing the policies that drive up housing prices. Repeal prop 13, eliminate the mortgage deduction, tax capital gains on house sales aggressively, limit realtors to hourly compensation, end collusion among apartment management firms, improve social security so the middle class is no longer dependent on equity to survive old age, don't use tax funds to bail defaulters on mortgage payments while there are other people living on the street.

Your solutions would only make things worse. Repealing Prop 13 will hurt the middle class you want to help with increased Social Security. They'll be priced out of homes. Repealing it will also not lower housing costs.

Eliminating the mortgage interest deduction will do similar damage, as will eliminating the capital gains protections on primary residence sales. That would just encourage more people to sit on their houses instead of paying an extra 20% or so.

Limiting realtors to hourly compensation? Why don't we limit you to hourly compensation? That's the nuttiest, out of left field suggestion I've ever heard.

So much of your reply is nonsense that I'm tempted to think you're trolling, but nonsense isn't always a good indicator of that.

>Repealing Prop 13...

Would put houses that the owner can't afford on the market thereby increasing supply. Adequate social security would mean they don't then get dumped on the streets.

>Eliminating the mortgage interest deduction...

Waiting changes the tax burden? No. But a capital gains tax would deincentivize flipping houses, a practice that serves little purpose other than inflating prices.

All the benefits of mortgage deduction are immediately swallowed by a commensurate increase in house price. People will always budget the same monthly payment, the only difference is whether the non-home owners (or future generation due to budget deficits) are unfairly burdened by having to make up for the missing tax revenue. The mortgage deduction is simply a funneling of money from the treasury to lending institution and provides zero long term benefit to the home owner. And Canada does not have it and their country has not fallen apart.

>Limiting realtors to hourly compensation?...

Hourly is good enough for lawyers, but salaried would also work. Seriously though, anything that does not incentive maximizing the sale price (such as pegging compensation to sale price) would reduce housing prices. Better would be tech simply replacing realtors entirely but unfortunately they have such clout in the assembly, their privileges are sacrosanct.

>I'm tempted to think you're trolling...

That is because you have never hear these ideas before exactly because they are not disseminated exactly because they would reduce housing prices which is political suicide and will cause TV views to turn the channel. I assure you not one of these ideas is my own and indeed they are well understood and discussed by very serious people eg[0], [1] and [2]

[0]http://fivethirtyeight.com/features/the-tax-deductions-econo...

[1]http://www.nytimes.com/roomfordebate/2015/04/14/the-worst-ta...

[2]http://www.forbes.com/sites/realspin/2014/04/15/heres-a-way-...

Sure, your ideas are so unique, never heard of them before; except from people who don't understand how politics work. Prop 13 isn't going anywhere, especially not with both California's dysfunctional legislature, and its popularity with homeowners. Same with mortgage interest deduction. You'll never see a major candidate campaigning to reduce the deduction because it's political suicide.

Do you have a suggestion of what might work?

There's only so much you can do to increase affordable housing in SF/Bay area without infringing on the rights of property owners. Rezoning so more vertical structures can be built will help, but not much in the scheme of things. SF will just continue to be an expensive area to live in. There's not always an easy or realistic fix to some problems in life.

> infringing on the rights of property owners

When this refers to the beneficiaries of land grabs (either directly or indirectly), I don't think an appeal to the natural rights of property owners holds much power.

Support for abolitionism was political suicide at once point, too.

I reject the idea that "political feasibility" can ever be a conversation-ender, especially when put against a true injustice.

Prop 13 (and all other subsidies for special interests) are unjust and unsustainable; they persist due to the support of these special interests (and the indifference of everyone else). With the proper education and elegance, one can hope for a day that we can see through this and implement the right policies.

And anyway I think you'll find it just as 'impossible' to do any zoning change that reduce any asset on the mortgage holder's books: Anything that actually reduces land price is equally politically 'impossible'. One may as well try do something that is going to work broadly and fairly rather than a random patchwork of small superficial zoning fixes.

And incidentally it's probably easier to argue for fairness and fiscal responsibility than to argue for bulldozing open space to put in a high-rise apartment.

Politics is the art of the possible. Sure Prop 13 might get revoked. Anything is possible, but is it probable? People have been railing against Prop 13 for decades. The longer a law is in effect, with clear beneficiaries who vote, the longer a law will persist.

Will it revoked today or tomorrow? Certainly not. But with the proper amount of contemplation and dialogue, will we get the point that we can decide upon more optimal policy? I believe so.

At any rate, I'll always fight for dialogue upon the BEST policies before settling upon a compromise, as this will guide us in the right direction.

Bart usage would go down, not up. People use Bart because they live far away and need to commute into the city.

If there are X number of jobs in the city, and less than X apartments, people need to commute.

By building houses next to jobs, transportation usage goes massively down.

I like this, although one thing that I've recently learned is that Silicon Valley has a number of large trailer parks, and you can often purchase a home in one of them for about $70-90K. Many of the trailers are actually quite retro cool. I believe Tony Hsieh still lives in a trailer, in Vegas.

http://www.zillow.com/homedetails/191-E-El-Camino-Real-SPC-2...

http://www.zillow.com/homedetails/2150-Almaden-Rd-SPC-125-Sa...

Which is nice right up until the trailer park gets sold for condos.

I feel obliged to point something important out about trailer park homes (and other temporary dwellings)...

They're a financial trap. So MOST people buy a home with finance, it might be a bank, credit union, or whatever but ultimately these loans are backed by larger organisations in the background that set the rules.

One thing you may not be aware of is that once a trailer park home is 15+ years old a LOT of companies won't loan against it. Even for a new dwelling of that type it can be hard to get finance, but as they grow older loan providers vanish.

There's a whole host of reasons for this (e.g. the type of people that live there are "high risk," the home can literally be stolen, there's less standardisation for home inspection, the land is low value since it is often in the middle of a trailer park (i.e. has no general purpose value)).

I call this a "trap" because you'll buy the trailer park home, then at some stage in the future you'll want to resell it; when that occurs you may suddenly find that while there are a lot of interested buyers none of them can get finance(!) to buy your home.

This has nothing to do with a buyer's credit score by the way. It is the property itself that won't be loaned against (since when you mortgage the property itself is normally collateral in case you don't pay, in this case they cannot determine that the property is worth as much as the loan you're asking for).

I know someone who's been trying to sell their trailer park home for a year. Lot's of interested buyers, all with good jobs and solid credit scores, but none of them can get finance because the property is too old, and none have the cash. They're tried dozens of financial institutions.

> the land is low value

from what I understand mobile home owners don't own the land their houses are on, they are on a lease

Could they offer seller financing?

I knew a seller - a veterinarian in Missoula, MT - who purchased a trailer, then sold it on owner financing, and repeated the process many times as his buyers defaulted.

Even at the lowest income bracket, there are buyers who can put together 10% down on a $12,000 house - even some who can put together 20%. If you owner finance such a sale, and charge interest rates that make the monthly mortgage competitive with rent elsewhere, you can do very well for yourself.

Dodd-Frank significantly curtails this sort of predatory behavior.

https://www.ortconline.com/Web2/Downloads/English/CFPB%20and...

Absolutely. But then the seller has their money tied into the property for potentially years and you're now in business with this complete stranger (e.g. if they stop payments you're responsible for chasing that down, if the property burns down they may just run off into the sunset, etc).

Unfortunately some people are forced into that arrangement simply because otherwise they'll never be able to offload it. It is something to keep in mind when getting into these types of property.

PS - Keep in mind that if you receive cash for this property you could use it as a downpayment on another, without getting all of the cash up-front you'll have to take out a bigger mortgage against your next property which will cost you money in interest over the life of the loan. So even ignoring the administrative hassle of seller financing, you're now also out of pocket.

I feel like that may be a problem everywhere in the country except for Silicon Valley.

Hmmm that purchase price does not cover the monthly free from the trailer park company. I am guessing its going to be close to market rate for the land value.

Of course, then it would just get "flipped" back on the market for $500k because that's what people are willing to pay.

The laws of supply and demand hold true for housing too. Add enough supply, and those prices start to drop.

I'm fairly ignorant of the housing market in general, but from what I understand the problem in SF has more than one layer: the local government won't allow new housing to be built, the NIMBY crowd wants a one-story skyline across the entire bay, etc.

what is to be done to introduce new supply? the whole thing seems like a hell of a headache, I feel for folks trying to live in that area.

Yes, the problem is an entirely artificial, political lack of supply.

I mean, at a certain point, you get so dense that only building way, way up (skyscrapers) works to add new housing, and those are expensive. But SF is a long ways from there.

If the problem is a political one, is the only solution to fight fire with fire? Politics is a slow turning ship, so I can't imagine the problem getting better any time soon for folks who's lives are affected most.

I'd probably just settle for a much longer commute if push came to shove, but I imagine that's not an option for everyone.

Yes: http://www.sfyimby.org/

> I'm fairly ignorant of the housing market in general, but from what I understand the problem in SF has more than one layer: the local government won't allow new housing to be built, the NIMBY crowd wants a one-story skyline across the entire bay, etc.

That's not really more than one factor. That's a root cause and a mechanism by which that root cause produces the effect under consideration.

You can always build down. It's a lot more expensive than building up, but with prices where they are I'm surprised it's not feasible by now.

Maybe the earthquakes make underground habitation too dangerous?

There isn't really a place where underground habitation is feasible, even places where you can build down. New York has a well developed underground world, but a basement apartment is still a basement apartment, dark and dank.

But what if an above-ground apartment was $3,000/mo and the same apartment below-ground was $500/mo? I'd take the darkness, dankness, and $2,500/mo, thank you.

Fire safety is a bigger issue with underground construction. Above-ground, you have an easy alternative access - out the window, and down a fire escape if you're above the ground floor.

    > Maybe the earthquakes make underground habitation too
    > dangerous?

The inherent (underground) conditions anywhere make it too undesirable.

> the NIMBY crowd wants

If it's become a company town as so many suggest,[0] why isn't the company writing the rules?

I don't know much about local politics, except that the area is considered decidedly liberal. Why hasn't a pro-tech party emerged as a meaningful political force?

Or why hasn't Google migrated significant portions of its workforce to a more accommodating location?

Honest questions as an outsider, just curious.

[0] http://www.theverge.com/2014/2/26/5444030/company-town-how-g...

Not necessarily. If zoning laws become such that it is possible for anyone to just build 50,000$ per unit homes, no questions asked, then the market would solve the problem.

Or if you don't believe in the laws of supply and demand, then you could just team up with a bunch of other people and pool your funds, and build your own 50,000$ unit. Who cares about the market price, if you can personally fund the building of your apartment yourself!

I agree...if you can build enough of these. I can't remember off hand, but I think that you need to build something like 40,000 more units to even start making a dent. Call me skeptical that you can build 40k of these.

You could build 40k of them, it's been done and it's called Silicon Valley. Take a look at the place with Google Earth, it's a perfect example of 50's - 60's dense Western-style suburban development. Even if you could do that, however, I think the cost of land there would be prohibitive, which I don't think was factored into the original post.

Yes, cost of land was factored in to the original post. That's what the whole section about density was about. Keeping land costs at 10k per unit defines how many units you need to put on a given plot of land, based on price paid.

Excluding political opposition the bigger problem could be scaling up the service infrastructure to keep up. I think of some management games where, if you aren't careful while scaling, you have a collapse which triggers a domino effect until everyone dies. It isn't quite that extreme, but probably no one wants to turn the bay area in to a favela.

Another big question is what is the price curve where companies hire more locally rather than branching operations out elsewhere, and then when do other companies start flooding in?

The bay area/SF is at a point where it could become a major global city. It already is critically important, no question. If accessible, the capital would flow in. It may take a major earthquake before that happens.

> If zoning laws become such that it is possible for anyone to just build 50,000$ per unit homes, no questions asked, then the market would solve the problem.

Until you ran out of space to build such homes, in which case scarcity would again be a factor. Of course, if you succeeded in making the area undesirable enough through willy-nilly construction, that might not bring the price up much -- but that's hardly a victory, either.

That's why the article spends so much time on the huge amounts you could pay for land while still building cheap living space. At those prices, you will not 'run out' of space.

Space is not a limiting factor. You will never run out of land, if zoning laws are such that you can build as high as you want.

Also, tall buildings don't make an area undesireable to live. Just go check out the Financial District sometime. Lots of people would love to be able to live there.

We just need more areas in san francisco that are like the financial district.

This is exactly why I want people to be able to build a studio apartment in SF for $50k - people can now be paid $450k per studio apartment in order to alleviate the housing shortage.

It's really easy to get what you want when you pay people lots of money for it. The problem is that we're not willing to shovel money at the people who can fix the problem.

I find it so strange that experts center their goals around how to fit as many people as possible into these cities, rather than figuring out how to scale what makes places like the Bay Area desirable out to other regions...

It's possible to do both. It's a lot easier to figure out how to allow people to live in cities though, because the technology has existed for 100's of years. Figuring out how to "replicate Silicon Valley" is something everyone would love to do, but very few places have come close.

Silicon Valley as a phenomenon is about network effects, so of course it's extremely difficult to reproduce. How do you reproduce the mid-century hacker culture leading to technical giants leading to VC money attraction leading to startup culture?

VC money moving to the Midwest will maybe change where future startups happen, but there's still a lot of networking power centralized to Silicon Valley that will take time to match. And in the meantime, those other places are at a disadvantage in that respect.

If someone finds a way to scale nice weather to other parts of the world, I'm all ears.

The Bay Area is so desirable because it where all the tech companies are located and the tech companies are there because it were all the tech workers are. It's an unbreakable cycle.

For others (including me) high density is itself one of the key attractors. I enjoy the big city lifestyle, with subways and museums and economies of scale and millions of potential new friends.

I keep waiting for one of the major tech companies to get fed up with what it has to pay staff in SV, and start moving jobs somewhere cheaper. And pretty much anywhere is cheaper.

Even the Wall Street banks eventually moved their back-room staff to places cheaper than Manhattan. Apparently New Jersey was a popular destination.

> I find it so strange that experts center their goals around how to fit as many people as possible into these cities, rather than figuring out how to scale what makes places like the Bay Area desirable out to other regions...

What makes the Bay Area desirable is climate plus being on a natural river- and sea-based trade nexus.

Did you read the linked article? One of its main goals was showing that neighborhoods with the desired density are actually nicer places to live than less dense neighborhoods. Like the kind of neighborhoods you visit in Europe and wish you could live somewhere like that. Or, if not you, at least many people prefer that type of living, both practically and aesthetically.

I currently live in a new 330 sqft microhouse in Berkeley. Its not a solution at all. You can't have a family and you don't gain enough value to buy an actual livable size home.

The only use it has is to rent to others on your backlot to help pay for your $1.2m two bedroom home's constant renovation needs.

Its like living in too small of a pot, you either end up with a tiny plant (your life) or a dead one.

According to the 2010 census (via wikipedia), in SF "There were 345,811 households, out of which 63,577 (18.4%) had children under the age of 18 living in them."

It seems highly likely that much of the other 81.6% might be willing to sacrifice some space in order to spend less on housing. But it's not an option. Instead we either overpay or have roommates - often both - and rent rather than buy.

The article isn't really about how big your home needs to be. If you want a multiple of that many square feet, you pay a multiple of $50k.

You're talking about a budget of $1.2m. Let's spend half of that with the article's math. $600k gets you 3000 square feet of low-rise, or 1500 square feet of mid-rise right at the center of downtown. That's enough for a pretty big family.

FYI: In Soviet Russia in the early 80's, there were 161,5sqft of house space per each resident. The most common accomodation was single-room apartment 351sqft sized.

You just cited a nation who has been in a population decline.

USSR's population had grown up since WWII to the end. https://en.wikipedia.org/wiki/Demographics_of_the_Soviet_Uni...

The article has a picture of a "typical" san francisco street that doesn't represent most of the city. Maybe weighted by population the photo from chinatown is typical, but weighted by land use this photo is more typical:

https://www.google.com/maps/@37.7432808,-122.4896485,3a,75y,...

This 3rd world cabling...

Even if they do make houses for $50K, there is a huge demand so prices will still rise well above those prices. Both government and local home owners don't want more housing. Nobody who already owns a home wants more built because it would mean their home goes down in value. Also, it means it would be more crowded and more traffic. It's a crappy situation all around.

That aside, I wish we could get some better 100% telecommuting / remote jobs.

> here is a huge demand so prices will still rise well above those prices.

That is not supply and demand works, price will fall.

It might pick up again due to increased economical activity driven by population growth, but that is a second order concern. At some point housing itself will not be a limiting factor to the growth of the economy, however SF is far being Manhattan, London, Paris.. It might take 10 years to get there.

Once SF increases its population by 7-8x a simple investment in underground metro would undo the effect of congestion.

That is where technology is right now, Greater Tokyo supports 40 million people ! and the city is an economical powerhouse. It allows cool stuff like trains that travel at the speed of a bullet.

I should have clarified. Yes, increasing supply satisfies some demand and brings down prices. My point was that demand is so much higher than supply that the market value is still much higher than the intrinsic value. Saying you can build a home for $50K doesn't mean it will cost that.

Regulatory concerns are a large part why homes so much more expensive.

I built a 2 story, 4 room structure inside of a friend's warehouse for $3,800 total. I got a book on framing and just bought a bunch of lumber and drywall from Home Depot and built it myself with the help of a friend.

It wasn't legal of course. If I actually followed the law I couldn't have afforded a place to live and would have been homeless.

I agree that technology follows an exponential curve and will bring construction costs down, but gov't and society in general doesn't move at that speed and so I don't anticipate homes being much cheaper.

That and inflation.

    > That is not supply and demand works, price will fall.

Below its existing point, but well above the stated $50K.

Besides NIMBYism, a drop in home equity will be extremely bad for the economy due to how much of debt is linked to mortgage debt, so I do not expect to see a drop in price anytime soon.

rent-extractors going bankrupt is a net-positive for the economy. There will be losers, sure, but we're better off overall if the Bay Area has three times as many people at the current levels of productivity/salary.

$10,000 profit and $40,000 expenses is not a 20% profit margin, it's a 25% profit margin.

Is it just me or has there been a recent uptick in miscalculations like this on the part of professional journalists?

You sure about that? https://en.wikipedia.org/wiki/Profit_margin

Apparently I've been mistaking profit percentage for profit margin all along.

Thanks for setting me straight.

Wait, they're proposing four story, wooden multiple-occupancy buildings? Would those meet fire safety standards anywhere in the developed world? I doubt their example photo (sheltered accommodation for the elderly in the UK) is wood, since we don't generally build that way, and from what I can tell it cost substantially more than their budget despite being built somewhere with low land costs.

I also notice that their photos of how six-story buildings would look are actually mostly four stories or less - and even at that height, they're starting to look pretty crowded in and dark. That's the trouble with dense high-rise buildings - you rapidly run out of light and privacy. This has two nasty effects on their proposals: it limits the density at which you can manage to cram them in and puts a lower cap on the minimum size.

In the US, home construction is almost entirely wood. Masonry is usually reserved for commercial buildings. Really large apartment buildings are often made with concrete and steel. Using wood isn't unusual at all for a project like this. There was even some large apartment buildings going up in SF last year between the Potrero and SOMA neighborhoods that were entirely of wood.

It really depends upon where you are in the US. Here in South Florida, most homes are built out of concrete block, due to expense (it's cheap) and building codes (for hurricanes). Yes, there are a few wood homes but you have to go out of your way to find them.

Brick houses are very rare, as it costs a ton to ship the bricks in (we lack the resources to make bricks, but not concrete blocks).

Wooden multi-story building are standard in the US, at least in the midwest. Many new apartment buildings less than 7 stories are constructed with wood. I actually live in a 6 story wooden building with about 300 housing units.

Also, stepping back higher stories is commonly done to help deal with shadows.

http://www.woodworks.org/wp-content/uploads/2012/02/Paper_38...

1) construction costs don't scale down linearly with square footage. Every home needs a kitchen, a heater, a bathroom, a foundation. This makes micro homes much more expensive on per foot basis 2) using construction costs from rural areas with low cost labor. Majority of home construction is labor with materials and overhead the rest. Contractors in SF are highly sought after due to hyper demand and charge double the figures here 3) seismic reinforcement in SF significantly increase construction costs 4) the cheapest anyone ever built anything in dense urban areas is $250/sq ft. My architect here says $350/ft is a challenge in SF for 2000 sq ft build. Good luck!

By "home", the author apparently means "120 square foot studio apartment". And by San Francisco, the author apparently means "somewhere near San Francisco, except the zoning laws don't allow this anywhere near SF right now".

There are plenty of people who would happily live in those, if the choice were available to them:

http://www.sightline.org/2016/09/06/how-seattle-killed-micro...

I don't buy the math in that article one bit for why they can't build more houses. I also don't buy the premise that building as many SRO-style apartments as possible is a good thing.

Well fortunately, you don't have to live in them! If you don't like micro-apartments, why not just let other people live in them, and allow developers to build them>

> I don't buy the math in that article one bit for why they can't build more houses.

Why?

He discusses both the feasibility of living in a 120 sq. ft. apartment and SF zoning laws in the article.

I live in a 140sqft unit, and am quite happy. If anything, even at 140, I still have too much space for junk to accumulate.

I'm a little surprised that the Googles and Apples of the valley aren't trying to build company housing on their campuses.

It's not without its own problems, as the history of "company towns" shows, but something has got to give.

Lots of zoning problems over there. They'd probably do anything they could (e.g., finance a builder) to get stuff constructed out there.

Google has proposed more than once building housing at their North Bayshore (HQ) site but the "city" of Mountain View is having none of it.

Google has been struggling with Mountain View city council to get housing built in North Bayshore for about a decade.

It got approved this spring:

http://www.mv-voice.com/news/2016/03/03/council-oks-plans-fo...

They are: http://www.wsj.com/articles/facebooks-answer-to-silicon-vall...

I did the math and it checks out. $500,000 for 1200sq is essentially DC prices for a condo in 12-16 story buildings.

Our land values aren't that high though, so there's definitely some money being put into the luxury of the building and grounds.

Thing about dense housing is that one or two streets lead in/out of a community of 1000 cars. When everyone wants to leave at 8:30 AM and get back at 6 PM, this often ends in traffic tragedy

Strange that places like Manhattan and Paris have a solution to this issue

which is?

public transportation.

With all due respect, I live in a dense community in the bay area with the aforementioned problem. Public transit isn't in sight for miles!

Do you mind saying where?

I live in North Oakland and commute by bus every day to downtown SF. There are 24 transbay bus lines, 4 Bart Lines, and a ferry into san francisco from various parts of the east bay every day. Most of them (all of them?) with multiple departures per hour. Hell, now Chariot has routes into the east bay as well if you want cheap private transport.

I admit I have no idea what the bus system is on the peninsula, but San Francisco is littered with transportation options. They aren't always perfect, but if you work in SF you'll pay $30 a day for parking which makes commuting by car the worst possible option.

I think the issue raised by the article is the reverse of what you're describing - tons of people living in SF that need to commute to the south bay or south peninsula to work. Traffic patterns out of the city in the AM make it pretty clear that there is huge demand for living in SF by people who don't work there.

> With all due respect, I live in a dense community in the bay area with the aforementioned problem. Public transit isn't in sight for miles!

Did you mean to say "without"? Because your statement doesn't disprove what he is saying at all. The argument is that public transportation would fix it and if there is no public transportation for miles than it means the system is clearly inadequate.

I'm unsure about the grammar. All I know from my own experience living in the bay for 10 years, is that if your home and workplace are within walking distance of BART, public transit is an viable option. Else, unless you're in the city, cars are the only way to get about.

Also, living is getting denser due to obvious reasons, while the roads aren't getting wider - and I'm not even talking about the highways.

Or Caltrain, which is packed.

I'm in Norway - Trondheim. And it is fairly compact in some areas.

Public transportation is only part of the solution here. Some of the zoning is really and truly different. In the center of town, the ground level are stores and above that are offices and apartments. Grocery stores are scattered throughout the city. It isn't a problem to stop on the way home or walk a little past the bus stop to get to the grocery store. Shopping centers are scattered through town as well. Not all has every store, but you can get what you need during the week. Things like this make the compact areas much better.

I recently visited a family member who lives south of SF and we spent a couple of days in the city. I've been to lots of cities, but was really surprised how miserable SF was to get around in. Chicago, Washington D.C., New York and Minneapolis all have either decent traffic management or a public transit system that got you there with some semblance of speed. I don't think I spent less than an hour getting anywhere in San Fransisco either by transit or car. And damn, was it confusing. How many systems do they have squeezed into that place?

This is the baffling thing to me -- the way people philosophize about rent in SF you'd think it was the only city to ever grow bigger.

I think a true urban transit system is underground or elevated, and in that sense SF has half a transit system.

I am curious about this, though, and I have posed this question to HN. Is there a lot of precedent for a city that has been at a medium level of density for 75+ years suddenly going to a much higher density model?

One example I frequently hear about is Vancouver which is similar to SF in square mileage, which did add a lot of density without tearing a lot of old stuff down. However, people often don't realize that SF is already more densely populated than Vancouver managed to achieve after it's very high profile density initiatives. Not to say we shouldn't try that here, but keep in mind we'd be starting this high-rise density initiative from a higher density point than Vancouver reached after the high rise initiative. Again, we may be in uncharted political waters here. Clearly, SF isn't the first city to grow bigger, but it may be the first city facing pressure to tear down the oldest housing stock west of the Mississippi. Even in the relatively low density and unfashionable SFH neighborhoods like the excelsior or outer mission, many of the houses are nearing their 100th birthday. Out here, that's old.

The reason I ask this question is that I'm not really sure this is a "SF" specific phenomenon. It may be an artifact of borders. Many cities do have a relatively old "core", but their borders extend far beyond this core. In other words, growth in concord or walnut creek or antioch would count as growth in "SF". So if they protect their older neighborhoods, they can still build elsewhere and show new construction growth.

I'd be interested in seeing what kind of precedent there is for something like this. It's reasonable to ask why SF isn't building more, but it may be in a much more unusual situation than people realize. No, of course it isn't the only city ever to grow bigger, but it may be the first city under pressure to grow bigger by tearing down neighborhoods that have been in a relatively stable, medium density state for close to the last 100 years.

That's the problem -- SF isn't going to a much higher density model. The population growth is actually pretty tame, especially compared to cities in Texas and Arizona. Granted, they have more land, but it's not like this kind of growth is unprecedented. San Francisco doesn't want to be low-growth, it wants to be no-growth.

I appreciate the desire to protect the housing stock, but there's a reasonable balance. For example many of the neighborhoods between Midtown and Downtown in NYC are protected -- but neighborhoods like Hell's Kitchen, FiDi, Long Island City, and Downtown Brooklyn/Dumbo offset the housing impacts. SF can't even agree to build a couple of high-density buildings in SOMA which was (still is?) a wasteland.

What about growth outside SF in nearby areas, though? For instance, Austin Texas, a city growing rapidly, has a current population density of 3,360 per square mile

https://en.wikipedia.org/wiki/Austin,_Texas

But here's the thing - Austin has a land area of 271.8 sq miles! SF has about 48. Yes, like SF to the Bay Area, Austin city is smaller than Austin metro, but even the city area is so much bigger that there's probably far more space to build without tearing down something old, enough that I'm not sure the comparison is a fair one.

My guess is that you could draw a square around 48 square miles of Austin that locals would consider completely off limits to demolishing for high rises. Thing is, Austin continues to grow because growth at the peripheries counts as growth "in Austin".

As for SF... well, there certainly is growth going on in SF.

http://www.sfexaminer.com/san-franciscos-most-massive-housin...

My thesis is that if you compare this to the smaller, old and medium to high density areas within the cities where growth is more substantial, you'll see a very similar pattern - in fact, SF may be be showing a greater willingness to grow - but that the supposed resistance is really just an artifact of borders.

That's a thesis, not a conclusion - it's something I find intriguing, possible true, enough that I'd be interested in seeing more data on it before concluding that SF is somehow uniquely against growth compared to comparable sub-regions in greater metro areas.

I'm not familiar with Austin, but if it's anything like most other cities, the growth is not happening at the peripheries of the city limits. It's happening in the inner urban core or well outside city limits at the edges of the metro, where there's nobody to object.

In SF proper most development is happening in the South of Market Neighborhood, an old industrial/warehouse district walking distance from downtown. The other areas seeing substantial growth are in far eastern Contra Costa County (Antioch, Brentwood, etc) which is a 90 minute commute from downtown SF. In the Bay Area nearly all the land between downtown SF and the exurbs is either protected park/watershed land or is filled with existing low-density suburban communities who object vociferously to any new development. In San Francisco much of the city was downzoned in the 70s and 80s so that even the existing structures would be too dense, tall, or otherwise non-compliant for today's codes.

That 3500 homes per year is setting a record since the mid-60s just shows how little development there has been. San Francisco has about 350000 existing homes, so that's a growth rate of 1% a year. That's only slightly above the rate of population growth nationwide, and doesn't account for the neighboring communities that have zero growth (Palo Alto, all of Marin County) or migration that would like to join the enormous economic boom going on here.

Austin's downtown isn't that big. If you drive 15 minutes away from the city center, you're basically in ranch-lands.

There's no one to object to building houses there.

San Francisco is a little different from Austin in that it's surrounded by water on three sides. There are bridges to Marin (north) and Oakland (east), but they're congested. Apparently BART is also full, though it wasn't when I lived there. Compounding the problem, a good fraction of the peninsula is parks and nature preserves, and the whole area has more mountains than buildable land. SF has severe restrictions on growing outward. And jobs are not migrating to the edge; they're being created in the city. It's more like Hong Kong than Austin.

The Bay Area as a whole is growing outward. The edge is currently around Discovery Bay in the east (66 miles, 2 hours) and Morgan Hill in the south (74 miles, 1:45). (I don't know about the north.) But those areas are not viable commuting distance to SF.

San Francisco hasn't been growing at some unprecedented pace. Just 12% in the last 15 years. DC grew 17% in that time. Austin, 40%.

Hi rainier - but what about my comment above? Austin City Region is 271.8 square miles. SF is 47. My question is, how much of that growth in austin occurred in the regions of Austin, TX that were at or above SF's average density of 18,000 per square mile for the last 75 years. Or even half that?

If we're going to say SF is uniquely against growth, wouldn't you need to compare it to something comparable? There's a big difference between expanding into "empty" space and tearing down a neighborhood that has had a medium to high stable density for the last 75-100 years.

Austin isn't expanding into "empty space." It's going from low density to medium density, but that poses the same problem of tearing down and densifying existing neighborhoods.

DC is maybe a better example. It was already pretty dense (over 10,000 per square mile), and fully developed. Most of the development has been tearing down townhouses and building 10-14 story mid-rise buildings. Indeed, places that were already dense (Chinatown) have seen much of the new development.

I'm still not sure I agree about Austin. Going from low to medium density by Austin outskirts standard may just be too different from going from 15,000 residents mi to 30,000+ to say it poses the same problem within the context of understanding political opposition. If we're going to say that SF residents are uniquely politically opposed to growth, we'd need something at least reasonably comparable. Pointing out that people haven't objected on the outskirts of Austin suggests to me that people have different political reactions to different things.

Your DC example is fairly compelling, though. DC (according to wikipedia) has density of about 11,000 on a land area of 68 sq mi. That's close enough for useful analogies.

We're looking at 17% growth in the last 15 years within that region (any links for that?) I'll try to find some data for SF, but do you have a comparable link for increase in residential units in SF in that time?

Keep in mind also that SF experienced a massive slowdown in construction after the housing bust, that may now be ramping up. So you do need to make sure you aren't measuring and projecting velocity without considering acceleration.

DC is just catching up from the huge losses it experienced in the previous years. In such a case, it's easy to re-increase the population.

SF is different, population had been growing for 20 years already before the boom happened. Before that, the days of losses were much older than for DC, and the losses were not as big, so the available 'free' population growth margin was much smaller.

Vancouver densified in the 1990s by converting near downtown, under used, low density industrial to residential condo towers. Those were easy gains.

At this point Vancouver has basically exhausted that easy stuff and has realized that while there is some industrial still around it better well protect it so that there are still places for people to do work.

Now Vancouver is in the same place as SF and has to do the much more difficult thing of upzoning existing low density single family housing areas. This has been much more contentious and slow going.

They have a solution??? They must be keeping it in a safe and they never applied it, obviously.

With greater density generally comes better public transit.

in Singapore they tax cars such that few want to use them. Then they add excellent public transit. If I could have a 30 minute public transit to my key daily destinations I think I'd give up on owning a car. Maybe just renting one quarterly for vacation trips.

If more people get bicycles that wouldn't happen.

Case in point: the Netherlands.

I wonder what people would be willing to pay for 200 sq ft apartments in, say, San Mateo if the units could be rented at market. Could you get $1000 per unit per month?

I wonder if one could create some sort of a floating platform and build housing on it.

just use a cruise ship to bring cheap labor 5 miles off shore ala http://www.sea-code.com/

Most cruise ship cabins aren't exactly comfortable. Plus cruise ships are really shitty in storms. I'm thinking of a much wider structure.

You haven't heard of seasteading?

TL;DR: It's the size of a postage stamp.

Reply on news.ycombinator.com