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Comment by karmakaze | Hacker News Reader

I think it's too late for that. Adding more reasonable priced homes just means that companies currently looking outside the valley can now continue to grow there so there will continuously be a shortage and thus high pricing and wages. It's going to take a significant bubble burst to reset it.

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If it's too late, when (in the past several years) would it have not been too late? There were always companies that have considered expanding in San Francisco, as there will be for years to come, and if building more housing helps at least a few existing residents then it seems like a net positive.

At any given point in time, there is a roughly finite amount of demand, and inching closer to meeting that demand can't hurt.

I agree that it can't hurt. My point was simply at this time it's not enough to solve the problem so it can only be a part of the solution.

Thanks, that makes sense and I agree. I guess I misinterpreted a little.

Maybe the author would be happier if even just 2 out or her 12 best friends had been able to stay?

As an outside it became apparent that moving to SF/SV would be a challenge around ten years ago. There are a number of post on HN from "back in the day" that discusses this topic e.g:

https://news.ycombinator.com/item?id=170719 https://news.ycombinator.com/item?id=860913 https://news.ycombinator.com/item?id=236853 https://news.ycombinator.com/item?id=1255718

9-10 years is about right. 2005, I had a one bedroom for $1700, and in 2008 I moved into a studio on Twin Peaks for $1300/month. Both were high but still affordable. By 2011, a 2 bedroom in SOMA was $3000/month, and by 2014 it was $4500/month.

This coincides with when tech companies started popping up in SF, instead of South Bay where they traditionally went to.

Are you sure it's tech companies? In 2006 I was paying (part of) $2800 for a generous sized two bedroom apartment in the East Village of Manhattan. At the beginning of 2010 when I moved out the landlord wanted $3500. Today it's going for for $4400.

That's a 25% increase in 3 years and then another 25% increase over the next 9 years. And there was no, or at least only minor, tech company factor in NYC.

This is like adding road capacity. If you want cheap and plentiful housing or free flowing traffic at all hours, you're going to have to build ahead of demand. If you're building to satisfy demand, you're not likely to get ahead of demand, but you may be able to build to keep up, so it doesn't get worse, or so it gets worse slower.

For San Francisco, the rate of new unit construction was always too little, but in the 2008 housing crisis, construction stopped and was slow to restart; that would have been a great time to get ahead of demand -- labor and materials were less expensive (because construction was slowed everywhere), but there was risk that the prices would stay low, and difficulties with construction financing.

And like adding road capacity, improvements can increase demand and make conditions worse, so getting ahead means speeding up until other limiting factors come into play.

In transportation, this well-established response is known in various contexts as the Downs-Thomson Paradox, The Pigou-Knight-Downs Paradox or the Lewis-Mogridge Position: a new road may provide motorists with some level of respite from congestion in the short term, but almost all of the benefit from the road will be lost due to increased demand in the longer term.[0]

[0] https://www.citymetric.com/transport/does-building-more-road...

Demand is likely to increase in the longer term regardless of construction; until you get to the point where your roads and housing are so oversubscribed that people are not willing to pay $10,000/month for a sublet in a studio and have a 4 hr each way commute -- people do have limits.

Considering road or housing construction as something you can do once to 'fix' the situation only works if you are able to limit demand. Most metropolitan areas are encouraging of population growth, though. Areas with limited population growth generally can build enough roads and housing to satisfy demand and have a static demand, so there's not a lot of congestion or rapidly rising housing costs.

agreed. living in NYC, i’ve seen how extensive the problem is. we have lots of housing being built over a much broader area than san francisco and yet we still have the same problem. the number of people moving in to the city and getting high paying jobs (i’m a part of this problem) is so great that basically anyone else is pushed out. our affordable housing program has the right idea, but is so limited in its scope as to hardly make a dent. developers keep making luxury buildings with minimal affordable units and flipping them for big money. we need more regulation, more affordable housing.

The Bay Area is still much worse. In the NYC area you can rent a place for a family in Queens or parts of Jersey on a modest income and still have a not-ridiculous commute into Manhattan. There aren’t really any equivalents left in the Bay Area.

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