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Comment by megaman8 | Hacker News Reader

What's crazy is, even with the insanely high rents, they would still need to go much higher in order to make high-rise construction profitable. I think we really need to start looking at what exactly is driving all those costs in these blue states. Other cities in the US are able to build high rise for much less rent: Chicago, Columbus, Houston, etc.

It would be interesting to see, in a chart, all the costs that go into housing construction and compare them all city to city. I suspect the answer has a lot to do with Regulation and the local labor cost (now a self perpetuating problem).

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Earthquakes probably play a bigger factor.

Tokyo would beg to differ

You mean a city with higher cost per sqft compared to the bay despite having significantly higher density and no housing shortage?

Tokyo is also far more livable place with excellent transit, low crime, clean, with much better food. And hell, I've stayed in hotels in Tokyo (perfectly fine ones, although obviously not 5-star ones) that would cost me less for a month than a crappy rental apartment in SJ.

Oh I definitely agree. Tokyo has done an excellent job keeping housing supply ahead of demand. That means the price of the housing in Tokyo is primarily the cost of T&M for the property, where as the cost of housing in California is almost entirely demand far exceeding supply.

That’s not the story anybody else is telling

https://www.vox.com/2016/8/8/12390048/san-francisco-housing-...

https://www.thenational.ae/business/property/want-affordable...

https://www.forbes.com/sites/scottbeyer/2016/08/12/tokyos-af...

Having visited Tokyo, I was very surprised by how un-dense it was. I was expecting far more skyscrapers and tall buildings.

My understanding is that the most cost effective building height is ~8 stories tall. That's usually the height where wood can still be used and seismic resistance is generally a non-issue. Any higher and steel must be used and the price of the building generally increase exponentially. When that happens, the buildings must be built tall enough so that luxury pricing at the upper floors can offset the increase in building material cost.

Tokyo has many many many mid-height buildings to make density more affordable. The US typically tries to increase density by mixing tall buildings near single story houses which is generally terrible for affordability.

Chicago is in a blue state with a rather notorious history of regulation and local labor.

Also, the cities you list have different seismic realities to contend with.

Chicago may be blue, but it has relatively few regulation for housing compared with cities here. And the cost of labor is lower there than cities in CA.

Doesn't seem to prevent Japan from building skyscrapers. And excellent transit.

And real estate is very very expensive there too.

Actually, it’s not. Here is a great video (from a great channel) that explains why: https://youtu.be/iGbC5j4pG9w

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