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CPLX

Greetings from New York.

You people are fucking insane, for the love of God please consider building some apartment buildings.

Cheers.

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Several apartment buildings by me in Sunnyvale just went up, if you want to pay $2940 for a studio[0].

In my experience, anything in the South Bay or Peninsula (in a decent area) that is managed by a large company (AvalonBay, Alliance, etc.) is going to start in the 2ks and go up a couple hundred each year.

[0]https://www.481mathilda.com/Apartments/module/property_info/...

Is that really so bad? Here in CT I payed 1.2k for studio with similar amenities. A mid-level developer making 75k +-20k is normal here. A mid-level developer making 170k +-20k is normal there.

You obviously lose some disposable income, but in exchange you're in Sunnyvale. The job market there makes CT's look like a joke and for growth as far as income is concerned in incredibly limited in most parts of CT compared to any areas around Sunnyvale, making it a great deal for younger people.

170-200 is not normal for mid level when average is 150 despite what people like about.

The range I mentioned is 150k-190k. 75k is also the number people talk about when 60k is a lot easier to find so I think the scales a pretty even

The strength of NIMBYs here is dramatically higher than in New York. That is supported structurally through the fragmentation of local politics.

Source: I'm a New Yorker transplant to Palo Alto.

> The strength of NIMBYs here is dramatically higher than in New York. That is supported structurally through the fragmentation of local politics.

Also the lack of developers. Probably owing to concentrated land ownership, e.g. the Getty family. New York's structural consolidation was driven, in part, by private companies developing real estate and transportation systems.

Developers seem to play a unique political role in organizing, in absentee, renters. Homeowners tend to self organize. This is because (a) they bet a lot of money on their houses, (b) have the time and money to politically organize, evidenced by (a), and (c) stay put for a while. Renters don't naturally self-organise. Developers naturally counterbalance homeowners by seeking to (x) increase housing supply and (y) consolidate small plots into larger ones, thereby also (z) driving density.

Apartments wont change the dynamics of SFH in the South Bay/Peninsula given local zoning rules. The main driver of price seem to be the local schools.

This is an example of a pre-1975 windfall at it's finest and the decades of legacy effects of Prop 13 [0]. Why would you ever want to sell your house if it costs almost nothing to keep empty/second home and you bought it before 1975?

If the Zillow data is correct, it looks like it's being taxed at a value of only $110k, ~60% of the original purchase price in 2017 dollars (from comment below). [1]

[0]https://en.wikipedia.org/wiki/California_Proposition_13_(197... [1]https://www.zillow.com/homes/for_sale/fsba,fsbo_lt/19540393_...

California state law means that commercial real estate is absurdly more profitable than municipalities then residential. Why would you ever approve a permit for an apartment building, when a much more taxable office building could go on a lot? There are dozens of non cooperating municipalities in the area, and none of them have incentive to allow high-density residential development, because it will just increase demand for office buildings in the neighboring municipalities.

Apartments/Condos are being built like crazy in Redwood City. It's no South Lake Union, but it's close.

Someone who wants a house is not really willing to have an apartment. Someone who is ready to put this amount of money in a house is definitely not willing to get an apartment.

Yes, but some people would prefer to have an apartment and save some money, and that would overall create less demand for the available homes.

End result: people who want apartments get them, people who want houses still get them and pay less for them too.

That's not how it works. Anyone in the market for an apartment isn't driving up demand for this $2.4m $1,200/s.f. house.

Lower apartment prices would cause a downward pressure on overall real estate prices, including for houses. As an extreme (and absurd) example, consider the scenario where apartment prices are zero or even negative. Demand for houses would drop dramatically, causing their prices to also drop.

They are not perfect substitutes. If they were, no one would be paying $2.4m for this postage stamp in Sunnyvale.

There is plenty of supply below $2.4m. The 20 people who made offers on this house weren't interested.

Aren't your apartments still over $1k/sq foot?

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