Should we build lots more housing in San Francisco?
juliagalef.com
juliagalef.com
Oddly, cities began to freeze in earnest, via zoning laws, in the 1970s. One can see this both from the link and from Google’s Ngram viewer, which sees virtually no references to gentrification until the late 70s, and the term really takes off later than that.
Moreover, the book Zoning Rules! discusses how this actually happened: https://www.amazon.com/Zoning-Rules-Economics-Land-Regulatio.... The fact that it used to be relatively easy to build new housing as demand increases means that we could make it easy again. This is fundamentally a legal problem (we should not allow so many property rights to be violated by non-owners) and a political problem (we are not addressing housing and issues at the right level of government).
It's striking how few affordable housing discussions have a historical view of the issue!
I also like "Zoned in the USA" for its comparisons with other countries, particularly in Europe, which - to my way of looking at things - seem to get some things right that are very strange in the US.
Here's a bunch of other articles and things I've found interesting/useful:
The first, and main point, about whether the supply would appreciably drop the price is a great example of where it is needed.
Has there been any study of the elasticity of house pricing? Give us the range, and then we know roughly how much housing it would take to drop the price by $10/sf.
Then let's see how much extra housing we could build, and what the bottlenecks are.
Now we are having a conversation. Otherwise it is just intuition mongering (which, by the way, is a useful and noble exercise as well, but it is not complete).
Edit - I found some: http://urbanpolicy.berkeley.edu/pdf/HQ_REStat80.pdf http://budgeting.thenest.com/price-elasticity-affect-housing... https://www.rand.org/content/dam/rand/pubs/reports/2009/R284...
Berkeley and Rand, so trying to cover different views.
It sounds like she's just articulating the arguments of both sides, rather than taking a stance herself, so I don't know how much quantitative analysis would really improve it.
The article does actually mention quantitative analyses some, and why critics dismiss it:
Critics think advocates put too much trust in quantitative analyses which try to estimate the effect of supply on prices. (Like this one [1] which estimates that adding 5,000 new units each year would be enough to stabilize real prices.) Such studies inevitably make dubious simplifying assumptions, and it’s all too easy to set up an analysis to get the conclusion you want.
[1] http://experimental-geography.blogspot.com/2016/05/employmen...
However, it does focus the debate on better issues.
The question of housing may hang on exactly how much new housing is introduced by allowing people to kill more birds, for instance.
Without the quantification, you might still be arguing about how much green space should be mandated.
(These examples are pulled out of thin air).
To put my point another way, the absence of criticism is not a benefit of quant analysis.
"I'm an architect in LA specializing in multifamily residential. I'd like to do my best to explain a little understood reason why all new large development in LA seems to be luxury development"
https://www.reddit.com/r/LosAngeles/comments/6lvwh4/im_an_ar...
As much as everyone here hates cars, the unfortunate fact is we currently need them. If I could snap my fingers and be able to afford a $1.2M "starter home" within walking distance to work, trust me, I would do it in a heartbeat. If there were any politicians serious about building useful public transit, I'd vote for them. But, for now, at least in most metro areas (where the jobs are), most people can only afford to live in places where you need a car to get anywhere.
http://www.bendbulletin.com/opinion/5249862-151/guest-column...
The end result is parking in grey-legal spots, parking in too narrow streets making it dangerous, parking in ex-greenery-now-sandy-parking-lot and whatnot. And lots of bad blood between neighbours who took whose spot :) Yes, there're rules to fine such behaviour. But it'd be political suicide to enforce those rules because everybody breaks them.
https://www.google.com/maps/@44.0492073,-121.3266077,3a,75y,...
Is a pretty common sight in the US. What a colossal waste of land!
Here's the book everyone cites on the issue:
https://www.amazon.com/High-Cost-Free-Parking-Updated/dp/193...
Here's the first lot I found in Portland... nice, waterfront parking!
https://www.google.com/maps/@45.5319709,-122.6711514,3a,60y,...
And of course people use cars a lot to get around here. That doesn't mean the government has to require it: any business that depends on car-dependent people is going to want to provide some parking. There's no reason for the government to get involved in it.
Also: part of the reason people need cars to get around is because we fill land up with useless BS like that, rather than housing or businesses or commercial - empty space stretches everything else out so that more trips require a car.
What is interesting, this evolved despite OK public transit and very little cars in the early 90s.
This is far superior to the government dictating X parking spots per house (2 in the city I live in), and Y per type of business.
A recent example.. There was a mall with a parking lot, not too small not too big. A new apartment building was built. One of their selling points was huge free parking nearby. Mall was pissed off that their parking lot is full and customers can't find a spot and installed barriers to prevent overnight parking (2 or 4h free, longer - €€€). Now people who bought apartments are pissed because they were told the parking lot was public (= gov-owned). Mall customers are pissed because barriers is inconvenience. Mall is pissed because operating barriers cost them extra money. City is pissed because suddenly they have a load of cars on narrow street nearby. The only ones who won are the sleazy developers.
Another issue is small apartment blocks built in single-family houses quarters. Tiny streets over there can easily take a car or two in front of each house. Then suddenly a 6-apartment building comes up and there're 10 cars in front of a property that'd otherwise have 1 or 2 cars. This happens in rather remote suburbs mind you.
By the way, over there housing costs climb regardless of little parking required. Apartments in central locations (= walkable/bikable to most offices) cost a shitload of money compared to houses in suburbs. Especially once you step in family-sized market.
"A cheap home isn’t affordable if it comes with high transportation costs."
https://www.citylab.com/equity/2017/06/the-problem-with-how-...
What a lot of people do is to rebalance things so we have more of a 'right tool for the job' culture in the US. Cars for some things, bikes or walking for closer trips (enabled by legalizing things like corner stores or neighborhood barbers again), public transportation for other things.
The solution that urbanism offers is to stop massively subsidizing the latter. Let car culture live or die on its own merits, not because of government subsidies.
Subsidizing infrastructure that increases quality of life and lowers cost of living is kind of the point of government.
There were suburbs before cars existed and there can be suburbs that don't require cars for every single trip. Before the widespread adoption of cars, suburbs were often served by streetcars that let people travel into the city. They also were walkable for trips within the suburb. Unlike modern suburbs, they also allowed low nuisance commercial properties to be interspersed with residential properties so that many of people's basic errands could be accomplished without traveling large distances.
Exactly! Things like corner stores, or neighborhood barber shops. Illegal in many suburbs of the US, these days.
https://oregoneconomicanalysis.com/2016/05/25/housing-does-f...
I mean, yeah, existing law makes it hard to get affordable housing. But that's what we're trying to change! It's flawed reasoning to use whatever the law is to argue against what the law ought to be.
https://fred.stlouisfed.org/graph/fredgraph.png?g=ekXr
https://plus.google.com/104092656004159577193/posts/Akjfruv9...
San Francisco rents over 70 years, showing a 6.6% annual rate of increase.
https://medium.com/newco/a-guy-just-transcribed-30-years-of-...
6.6 percent is 2.5 percentage points faster than inflation, which doesn’t seem like a lot but when you do it for 60 years in a row it means housing prices quadruple compared to everything else you have to buy.
That’s bad. But that’s SF today, compared to 1956. So what caused prices to go up? That’s the really exciting part of Fischer’s discovery. Armed with his data, he more or less answered that question....
It would take a 53% increase in the housing supply (200,000 new units), or a 44% drop in CPI-adjusted salaries, or a 51% drop in employment, to cut prices by two thirds.
Why the increase? Asset price inflation of Maslovian goods.
https://www.reddit.com/r/dredmorbius/comments/608w97/asset_p...
One highlight:
"These kind of responses miss the simple fact that of the three variables in Fischer’s model, only employment and wages really matter. (The demand-only model achieves an R squared value of .924 and adding the supply variable, housing units, gets us to .940)....Another found that the best model of San Francisco rents needs just one variable: wages (although wages and housing were a close second)."
I think that kind of confirms my gut feeling on first hearing about the problem years ago: the issue is that there is too much money flowing into (a particular sector of) San Francisco.
[1] https://www.theurbanist.org/2016/05/27/rents-in-san-francisc...
Unless you increase land taxes, that's what you end up with.
There has still been a noticeable increase, but in part because the City of Seattle underestimated the rate of future growth in demand (https://goo.gl/QKpb36). (The city is actually making moves right now to increase housing supply over the next few years to prevent accelerating increases in rents).
Demand, however, is not the only factor commonly cited as putting pressure on housing prices. As tech workers flood the city and mean incomes outpace inflation (which has a positive effect on the overall economy), their purchasing power increases. New construction is of comparatively higher quality, especially in neighborhoods like Capitol Hill, which was not nearly as desirable before 2000.
This is another part of the “noticeable increase”. As neighborhoods become more desirable (such as SLU, Ballard, and Capitol Hill), residents suddenly find themselves paying a premium (which is not reflected in mean pricing). I believe this is much of what has contributed to the idea that rents have risen dramatically (even when the data says otherwise).
Things may not be optimal (there are certainly challenges with market mismatch and misplaced incentives), but I don't think anyone in the industry is saying the major challenges are regulatory.
(The ecological argument against growth in this case is backwards, though. Urban development is less resource intensive than the alternative of suburban or exurban development that uses up a lot more land and requires much longer commutes. And urbanization also tends to suppress birth rates, if you're concerned with very long-term ecological consequences.)
Or skip the land and buy a solar powered houseboat which can go just about anywhere for less than a 600sf condo.
Rich people are still more powerful than average/poor people in the absence of intensive, high-impact statist government, but the rich people:everyone else power ratio in traditional western governance is long regulation.
Except all actual concrete deregulation proposals are backed by powerful interests, and not because it reduces their power.
Now, the sales pitch to the public might be about reducing the influence of the powerful, but that's never the actual goal sought by the powerful backers. At best, it'd reallocation of power from one segment of the powerful to another, but more often it's just loosening constraints on the powerful.
https://www.reddit.com/r/dredmorbius/comments/608w97/asset_p...
Classic tragedy of the commons problem. In an actual literal sense in this case, as we all have to share "the commons" in cities.
It's not like those last 2 million people are what prevented it from being a 1000 year old, bike-friendly northern european hamlet or something.
But with that said, a knee-jerk cry of "deregulate" isn't going to be much better. The right answer is to figure out a more thoughtful system that enables the market to be channeled properly.
Which basically all modern successful cities have figured out.
Uh... housing costs in NYC are pretty ridiculous. Commute times as well. The furor over the subway wouldn't be as pronounced if everyone had relatively short commutes.
But NYC has a lot of options and many of them are affordable, there's much more to it than just Manhattan and gentrified Brooklyn. It has the ability to actually build, so there's somewhat of a pressure relief valve. And though it's problematic by European standards it clearly has a far more effective and comprehensive mass transit system than any other city in the western hemisphere.
There are reasons why the retired and most families end up leaving NYC fairly quickly. And those reasons are often rent and accessibility of the transit (subways don't have elevators, generally).
NYC is affordable for professionals without kids. It's very expensive in time, money, or both to live in NYC with a blue-collar income.
Pity about the climate though.
Of course it does lack many of the things people consider essential for modern urban living, and is highly bound to the automobile.
https://urbanedge.blogs.rice.edu/2015/09/08/forget-what-youv...
Yes, build in SF, but also build on the Penn, East Bay, South Bay, etc. and coordinate transit development, zoning, etc., etc.
https://en.wikipedia.org/wiki/Washington_State_Growth_Manage...
https://www.nytimes.com/2016/07/04/business/how-anti-growth-...
https://www.washingtonpost.com/news/wonk/wp/2016/08/10/why-c...
All because we don't allow the market to function properly.
Seems like a failure to me. Here's Ed Glaeser:
"Reforming local land use controls is one of those rare areas in which the libertarian and the progressive agree. The current system restricts the freedom of the property owner, and also makes life harder for poorer Americans. The politics of zoning reform may be hard, but our land use regulations are badly in need of rethinking."
https://www.brookings.edu/research/reforming-land-use-regula...
That would be the case if we were talking about their own property, but they're using rules and regulations to force other people to not do what they want with their property.
In a healthy market, yeah, some people would not sell out and change would be gradual as the city built up incrementally. That's how things should be, but we do not allow that.
How dare people elect politicians to represent their own interests, rather than the interests of the allegedly marginalized.
Absolute majority rule has some serious downsides.
The thing is I see both sides: I am in favor of private property, and I don't like the idea of e.g. home owners' associations that try to limit what color you can paint your own house. But I also grew up in San Francisco, and I really do not think this city will be more livable with ~100,000 or more people trying to live here.
But then how do we decide who does get to live here? And who gets to build what?
It's not easy, but standing around yelling "You NIMBY!" at your neighbors isn't productive.
My mother lives in a rent-controller home in SF. In effect, her landlord is donating ~$1500 to her every month (comparing what she pays with what a new tenant could expect to pay.) On the same token, does ownership of a building really confer on you the right to make as much money as you can, or are you just the temporary steward of a physical artifact the primary purpose of which is to provide a good life for its residents and the neighborhood? What is the purpose of real estate? What is the purpose of a city?
(also, the ecological "footprint" of that burger compared to a salad or veggie-burger or something blah blah yadda-yadda...)
* The skyscrapers in SF did not have problems during the last big one.
* Tokyo has earthquakes too, and manages to house a lot of people at 'reasonable' rates.
"How an Average Family in Tokyo Can Buy a New Home" https://www.youtube.com/watch?v=iGbC5j4pG9w
Where I live in England you want a house that's as old as possible in most cases. Older houses are usually in more desirable locations, with better space around them, and far more character.
I think Japan's zoning laws are great because in the US, generally you cannot walk to anything interesting (bar, coffeeshop, restaurant), because nowhere near your home is zoned for commercial, there are exceptions in the big cities obviously, but much of the population lives in non-walkable suburban layouts.
I sometimes wonder if the Europeans know how good they have it... So many beautiful walk-able cities and only a train ride away. I'm in Minnesota so there's basically nothing interesting for 1000 miles.
The skyscrapers in SF did not have problems during the last big one
It'll be interesting to see how the Millennium Tower fares in a meaningful earthquake.
Or not. They could not know it is a good idea, fail to do it, and cause a bunch of problems as a result. That could in fact be the very source of the problems being discussed here.
I believe, economics should be one of the primary subjects taught in school in K-12, that and personal finance (learning how to manage your own money). In this day and age, these are the 2 most important subjects you need to learn. We need an informed citizenry, if we're not going to end up like venezuela.