Comment by chaostheory | Hacker News Reader

Comment by chaostheory | Hacker News Reader

The problem is a lack of inventory. When you have limited supply and a ton of demand, that's how you get high prices. Why is there a lack of housing? While Prop 13 is an issue, imo it's not the core problem.

This is the problem: "High rents reflect the success of California’s businesses—but also decades of low investment and over-regulation. The California Environmental Quality Act, passed in 1970, aimed to ensure that environmental concerns got a proper hearing in planning and development. In practice, the act has become a NIMBYs’ charter. Four-fifths of all suits filed under it have sought to stop infill development in cities (ie, on land already zoned for building) even though this usually has a smaller environmental impact than building on green fields. California’s development and impact fees are about three times higher than the national average. Zoning laws and parking requirements are onerous, too."

SF isn't even the worst offender compared to cities like Belmont and Palo Alto. While there are real safety concerns that limit development since 1. we're in earthquake country, and also because of 2. some Superfund sites in parts of the Bay Area; most of the problems just stem from current homeowners of single family homes (NIMBYs), who do not want high-density housing near their house. Until this changes, no reasonable amount of income assistance will solve this problem for the poor or the middle class. There's just too little usable land here to be exclusively used for traditional single-family homes.

This has more detail about the problem in SF: https://www.sfchronicle.com/politics/article/How-powerful-is...

I have a slightly different interpretation of the problem and the solution.

NIMBYism is not the origin of the problem, but the consequence. Nimbyism pays off because for the owner, increased rents is a stronger incentive than increased value. The more people go into, for example, San Francisco, and less units are build, rents go up, and city revenues go up as well. Thus NYMBIsm has a strong incentive to be used.

The situation would be exactly opposite if San Francisco did not charge, for example, Sales taxes to everyone, and used prop taxes to levvy its revenues. Ideally, they would use land value tax. This would change the basic incentive to be nymby: the more the city spends and builds, the more people in low density housing will have to pay. And then they will be asking themselves for developers to build and give them units, which is what happens in cities that have alligned incentives.

This is an important idea: this means that the solution is NOT to prevent NIMBY, because you cant fight against powerful incentives.

The single most powerful thing the city could do is move sales taxes into land value taxes: every worker's income will increase, including landlords, but will shift the burden from poor to rich, from landlod to renter, and from non-labor to labor.

This * 1000. There’s a reason why even though Seattle has a big boom the house prices are not SF crazy.

The more your house increases in value, the more tax you pay.

I love Seattle for its shitty weather and somewhat affordable housing for how much companies are willing to pay.

My main issue with seattle is that, although the rent problem is not nearly as bad as SF, they have been ramping up their own spending exponentially. So what the landlord is not getting, the public officials are spending.

I will add that zoning is the first thing that needs to go in San Fransisco.One of the most liberal cities in United States is not so liberal when it comes to housing.Why? Because it affects their bottom line.

Did you know that it is illegal to build apartments in over 73% of San Francisco neighborhoods?[0]

That's why I don't support this ideal of tax proposition to cater for homeless as it is being introduced. The proponents are just chasing shadow while leaving the substance. Instead I suggest proposition to dismantle zoning as the first step in the right direction.

[0]https://sfzoning.deapthoughts.com/

So there seems to be a solution for the housing part.

I wonder though if there is one for the job part as well. Even if you fix the housing problem to some degree by having much more capacity and cheaper housing. I doubt this would stay stable, if the Bay Area continues to grow - I don't see any serious sign that this is not the case - the problem will emerge eventually again. I wonder how the job market would have to look like to make this stable.

Why doesn't the government just use eminent domain to buy out some Nimby's in crucial areas and build some high rise apartments? The housing issue is 100% supply and demand. If I could wave a magic wand and create 1,000,000 apartments in SF rent prices would drop.

I'm assuming there's political pressure from wealthy land lords who don't want their cash cow slain?

Even with eminent domain, you have to pay fair value for compensation. Plus, there are some clear guidelines California and the government setup for this. I don't believe there is precedent for building low cost housing in a safe, well-off, neighborhood (the kind that get people elected)

Exactly. There is absolutely no way anyone sane would want to live in a society where eminent domain is free and easy. Today its funny because they are tearing down some NIMBY mansion, but tomorrow they are tearing down your house. In the end, you realize you have created a society in which the same people who run BART can wake up in the morning and just decide your house is getting demolished "for justice".

Thats how revolutions start. Be sure to do a door-to-door inspection for firearms before tearing down someone's house without their consent.

OR, people in the Bay Area can MOVE. Why can't you move?

Property rights are fundamental to the success of the country. Keto was a big mistake.

  Why can't you move?

Because losing one's Prop 13 taxation rate is a huge hit. Vote for Prop 5 so that the rate savings is portable throughout CA, and lots of Bay area homeowners will mive gladly to cheaper areas, freeing up housing.

The "government" is the same people that live in those single family house and they like that their value is 10 times what it was 20 years ago

Irony is that if Cali curtailed its absurd zoning laws and codes those single family houses would be worth 100x more overnight once developers can replace them with 50 stories of condos. If most of Cali rezoned a hundred billion dollars of development capital would flood the state and leave all the NIMBYs incredibly rich.

The only case where property values would drop is if you were in an area that exists unnaturally due to how low density the city core is. The trick is though if California ever fixed this problem the immense influx of capital investment, job creation, and migration pressure since the economy would be kicked into overdrive would drive those property values back up and way higher than the currently crippled density environment can allow. It might take longer than some owners are comfortable with (ie, decades) but considering how much growth Cali sees while stabbing itself in its own foot I'd imagine almost any currently developed and commutable single family home in any major metro area of the state would be worth twice what it is now in 30 years (adjusted for inflation) if they allowed unlimited building because the manic development you would see would drive density up in all directions of city cores for miles around each year.

Your argument makes sense. I wonder what the carrying capacity for California is. The once excellent drinking water in San Francisco is now foul as the pristine Hetch Hetchy source is diluted with ground water to compensate for diversion to neighboring towns.

They wouldn't build 1 million apartments, for one, Apartments would likely be built at a slower rate than people moving there. Two, as seen in Seattle, only housing for the already wealthy is built. There is tons of demand for low income housing, but no supply because it doesn't make as much profit (if any) so there's no incentive for capitalists to house low income people and the cycle keeps going.

Before I moved into my current place, I was in low income HUD subsidized housing. It was a brand new building with rent control. Rent control worked great, but the owners didn't keep their side of the promise. Maintenance took months, all amenities we paid for were broken, access to the garage to store our vehicles was broken for 4+ months, elevators were broken for months at a time.

There is no way to get people to freely build affordable housing in or around larger cities under this current system.

> There is no way to get people to freely build affordable > housing in or around larger cities under this current system.

This is largely true but needs more qualifiers. There are non-profits that have done this successfully in cooperation with federal and local governments for the long term, for example Arlington Housing Corporation

  https://www.ahcinc.org/

They created a business model that works and are staffed with people that are happy to take the combination of salary and pride in what they accomplish.

Like many business models it is often a challenge to pull off successfully and attempts to make it work without the right combination of people with the right skills, motivation, long term vision, persistence... will fail.

I don’t really buy this. If you build enough market-rate housing to satisfy demand, then the price of older, less nice, formerly for-the-wealthy housing stock will become considerably less expensive.

You can see it in the used car market. Low income folks drive around in very old Lexuses. Smart move.

I used to drive around in an old ‘91 Lexus LS400. It was a fantastic car. I still see that generation of LS400 on the roads :)

> If I could wave a magic wand and create 1,000,000 apartments in SF rent prices would drop.

Yeah but the problem is you can’t. Additional capacity always comes in onesie-twosie, not fast enough to outstrip the seemingly limitless demand to live in the area. Put up a couple thousand unit high rises? Big deal, won’t affect prices one bit, they’ll get snapped up before breaking ground. You really would have to build a million units all at once to do anything, and logistically you can’t.

The problem isn't NIMBYs refusing to sell. It's NIMBYs writing the zoning rules so their neighbors can't sell to infill developers either.

Comapre to Massachusetts. We have a law against snob zoning. So while there is a homeless problem, we're making steady progress because of developers buying people out and building apartments. (Mind you're, they're mostly buying parking lots, gas stations, and mini strip malls and putting housing there. And nobody's eminent domaining anybody.)

Because building isn't the core problem. It is that a large part of the population have a large part of the life savings in the housing market and therefor would take a loss if housing became affordable. It is like asking why the government can't make stocks fall.

If you could just do something there are a number of solutions to housing affordability. Building, zoning, public transport, taxes or mortgage regulation. None of these by themselves solve the actual problem.

> Because building isn't the core problem. It is that a large part of the population have a large part of the life savings in the housing market and therefor would take a loss if housing became affordable. It is like asking why the government can't make stocks fall.

Boo-hoo. Poor rich people.

It's not necessarily rich people. Imagine spending waaay too much of your income on your house, not a huge house by any stretch of the imagination, something seen as average to small in the rest of the country. You bought the house because it was where family/you job/your life is. So a large part of your net worth is tied up in this house, for better or worse. You sure as hell don't want housing prices to go down, you'd loose your shirt, wouldn't be able to retire, etc etc. It's not all rich people with big houses wanting to keep the status quo, it's all the middle class that already bought in that would be financially devastated if housing dropped, good luck trying to get them to change the nimby mindset, they've been paying for (or you can see it as investing in) their desired lifestyle, and they are not about to give it up.

Thank you, the grandparent comment isn’t helpful and shows a lack of understanding.

> magine spending waaay too much of your income on your house, not a huge house by any stretch of the imagination, something seen as average to small in the rest of the country.

Then sell it and stop being that person. There's no obstacle. The interests of the landlords financial situation requires no extra care, let alone at the expense of tax payers or citizens at large.

Everyone person that buys a house is responsible for that decision, and punishing renters to protect them is straight up poor payers for the rich.

Where does the government get the money to buy out all of these owners? Or are you proposing just throwing a wrecking ball through someone's home without compensation?

And these one million new apartments...where shall they get their water to drink or send their waste water? Where will these people park? What highway will they use?

Typically, eminent domain is only applied when there are buyers waiting in the wings (developers), so financing isn't so much an issue. You issue some 5 year bonds to float it and you're done.

You're missing the ten years of lawsuits. Eminent domain cases have gone to the SCOTUS.

Which would then be snapped up by speculators just as in London.

> Why doesn't the government just use eminent domain to buy out some Nimby's in crucial areas and build some high rise apartments?

Because the mechanism by which NIMBYism works is democratic control of the relevant governments, not a few hold outs refusing to sell out to a government-approved development (because if there was a such a development, it would use eminent domain from the outset, so such resistance would fail.)

Do you own a car? There are plenty of homeless without transportation. Can we rip the keys out of your hand? Don't worry about the fact that you paid for it, this is for justice! We'll pay you a "fair market value" - 10% of its original price.

Eminent domain isn't so much fun when its your stuff is it?

Supply & demand. Not a mystery.

Drives me nuts that my left-wing brethren often oppose upzoning, development, increasing density.

Rent control is not a long term fix and ultimately makes the problem worse.

Our democracy is possible BECAUSE of capitalism AND socialism, not despite one or the other.

There's more housing than people in the USA. At this point, the most likely durable remedy is UBI, thereby enabling people to repopulate (or stay in) the interior, mitigating the urbanization trend.

We should tear down whatever cruel fences and checkpoints exist that prevent people from leaving the Bay Area for more affordable places.

Smart-ass answer, but the fences are financial and very real. If you have no money, how are you supposed to afford to travel to a completely different part of the country where you have no friends or family, find a job and rent an apartment?

CA actually offers free bus passes for this. Well every state does - some like NY even offer plane tickets: https://www.theguardian.com/us-news/ng-interactive/2017/dec/...

It's true but it's horrible. It's called homeless dumping, similar to hospital patient dumping. Pencil-pushers use it to play games with citizens they view as "liabilities," rather than as human-beings.

I agree since it doesn’t solve the real problem. I commented on it in a separate thread below

How do you think this country was settled-- by a bunch of wealthy people staying on a friends couch?

By people with enough resources to move to an area without infrastructure and set it up. That takes money, not necessarily crazy money but far more than a the average homeless person has.

PS: The first US colonies actually took a crazy amount of capital to set up. The west was largely settled by people in covered wagons which for the time period also represented a lot of capital ~50,000+$ in 2018 USD.

A lot of the Anglo emigration occured during the Gold Rush period and some later to Central California during the Dust Bowl.

But the west was first colonized by the Spanish.

One of the first Anglos to reach Alta California was the Bartleson-Bitwell party https://en.m.wikipedia.org/wiki/Josiah_Belden

The common theme with pre-civil war settlement in the US is that people would rather risk financial ruin and/or starvation than live their life (and raise their kids) according to the whims of a city/town ruled by people they do not agree with.

For example, basically all of New England that isn't on the coast was settled by people who got so fed up with the puritanical authoritarians in Boston that upending their lives and moving a few days ride west (and risking starvation/financial run in the first few years) was the better option.

That view is more propaganda than reality. Most US migration had to do with economics more than politics.

The underground railroad gets a lot of coverage, but it's peak never reached 1,000 slaves per year where 23,191,876 slaves where part of the 1850 sensuous. So, people are talking about a migration of ~0.004% per year.

What you say is true for long distance relocation, not short ones. Being a farmer is not made easier by moving a couple hundred more miles west. What moving a couple hundred miles will do is put you in a substantially more rural area where a bunch of people you don't like have a lot less, if any, power over your day to day life. The people who were relocating to California to chase some dream of riches were not motivated by politics. The people moving from somewhere outside NYC to somewhere outside of Buffalo were doing it for politics.

> Being a farmer is not made easier by moving a couple hundred more miles west.

Cheaper land makes being a farmer vastly easier. The same capital allows for more either more farm land or better farm land. Remember, farms are just like any business you can extract more money when the output stays the same but your costs drop.

Sure. And no one left their home country to come to the US with meager resources. They were all wealthy.

Settled means something different from just immigration. Lot's of poor people showed up after their was infrastructure. Without that infrastructure most people would have starved and or frozen to death etc.

Also, saying significant wealth is required to setup a colony is very different from individuals having that wealth. Consider the wealth required to build a 80 story high rise generally vastly outstrips the wealth of people living in it.

PS: That said, looking at modern immigration even illigal immigrants to the US tend to be better educated than the average peopulaion of their origin countries. Likely becase immigration is a lot of effort, weeding out the less motivated and capable.

A Greyhound bus to Fresno is $22 when bought two days in advance.

Twenty-two dollars.

And a motel room in Fresno is about $20 a night, more if you want to know that the next room isn't a meth lab.

That adds up quickly.

A lot of Californians have already done this and continue to do this, which is why the natives of places like Portland, Austin, Boulder, and Boise complain about former CA residents causing housing prices to spike

None of those places have Prop 13 or California's environmental rules, so why can't they build appropriate density?

Housing supply isn't very elastic.

Presumably it takes time and a continual influx is going to leave the demand constantly ahead of the catching up supply.

Skilled construction workers are a limited resource.

Skilled construction workers that aren't yet half-disabled, you mean. They have a shelf life, not unlike those of professional football players, stuntmen, longshoremen, firefighters, soldiers, pre-Industrial-Revolution farmers, etc.

"Back-breaking" isn't just a figure-of-speech; modern medicine isn't (yet?) advanced enough that a rational actor should ever choose construction work over something else; and there are just enough desperate people around that I doubt anyone is willing to pay the true cost of construction-work to a not-as-desperate would-be construction-worker.

The limited resource here, then, is actually: desperate people who are still smart enough to do construction work.

I can't wait until construction becomes a non-human-powered activity - even if it still requires a human to control the machinery.

Yeah, I don't buy this. The problem is more about the cyclical nature of the construction industry and the trend to push people to get a college degree and away from the trades which pay pretty well it's not as back breaking as you are making it out to be.

The cyclical nature would be overcome in the relevant areas if, as stated elsewhere in this thread, this exodus from the Bay Area is a slow and steady trickle.

That trend is so powerful precisely because lots of trade-working parents don't want their kids to suffer the kinds of medical bills, chronic pains (with potential resulting opioid addictions) and stunted healthspans, that they do.

Granted, construction is rather especially bad among the trades in this manner: things like welding are not quite as physically-demanding.

Most housing construction is done largely by unskilled / semi-skilled workers with a few skilled tradesmen to supervise and do the complicated parts.

They are. But it will be built in the context of a market economy. If you want someone to pre-build a city for a million people, try China, which still has "ghost cities".

I think complaining about housing prices is in vogue because saying "we just hate your politics" is very much not in vogue.

Why do only the rich get to live in sprawling nice populated and interesting areas? It's literal segregation.

No, it's literal allocation of scarce resources.

Their homes would do quite nicely as office-parks or some other commercial property, but those people both are rich enough and value their places irrationally enough, to [pay out their butts, and/or lose out on a big payout, to] stay there instead of taking their share of what developers think they can earn from that land.

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