Homeowners want to see their investment appreciate, plain and simple, and will do anything and make up any justification to impede development so as to reduce supply and increase home values. Pretty much any argument, any rule, that restricts housing ("ruining neighborhood character", "affecting the historic value of the neighborhood", and in almost all cases, "environmental impact") can be understood if seen through the prism of selfishness. Never mind that people's lives are more important than obtuse feelings of 'neighborhood character', and never mind that the reason the shitty silicon valley house you bought in the 70s is worth millions only because of the blood, sweat and tears of all the people who came here and started companies and built things.
As you can probably guess, I'm pretty disillusioned at probably not ever being able to ever afford a place to live in the place I call home. (And I'm a relatively well paid engineer, others have it much worse).
What they actually care about is quality of life. Their perception is that higher residential density means more traffic, parking issues, noise, crime, pollution, school overcrowding, etc. If you want to get them on board with higher density then you'll have to find a win/win solution which addresses their concerns. Maligning their motives will accomplish nothing.
How about this home: https://www.redfin.com/CA/San-Jose/468-Carpentier-Way-95111/...
2 bedrooms - you're definitely surrounded by people. In an apartment I owned in the bay area I heard screaming on both sides of me. Random times. Real fun.
So if you want to live with people, there ARE reasonably priced solutions.
There is definitely a lot of that. But that is not the only reason. The excessive housing pricing have gone on long enough now that many people will be trapped and ruined if housing prices stagnate or fall.
People have had to spend far more than is prudent to get a house that is not that great just because there are no other options.
If you are putting all of your extra money into your mortgage payment, you are going to have to rely on being able to sell that home anf move away when you retire. If you cannot at least sell it for the equity you have in it, you will be trapped in an expensive city with no money to retire on and no way to sell and get out.
So I understand why so many are fighting to keep prices high. Their financial future depends on it and I don't think it's greedy to try to avoid financial ruin.
If somebody is older with little income and goes through the exact same scenario, they would be ruined, assuming all their net worth is in real estate. However in that case I'd argue that's more about their own poor/risky financial choices. There would be less people acting like their primary residence is an investment if the market wasn't so absurd to begin with.
Only purchase mortgages are non-recourse. A high percentage of owners have refinanced into recourse loans.
What would you say to the developers who are opposed to H1bs (for supposedly lowering salaries)? Isn't constraining H1b similar to homeowners stifling housing?
More housing might actually increase existing values because the ability to convert a SFH to a multi-tenant building means that a property developer can extract much more value out of the land than is possible under current conditions. So while per-unit prices go down, aggregate housing value goes up and those with existing SFH will probably see their net worth skyrocket.
Of course, certain less desirable areas may see a decline (read: normalization) in value, but that's unlikely.
A similar thing happens with developers: more software leads to more economic value in software, which increases demand for developers. However, more developers mean more automation in certain areas, so some people may see the value of their skillset decline.
depends. It would go up for some in convenient locations but as soon as new apartments start going on the market they'll have to compete on price and prices will start to fall.
So if n * avg_condo_value - development_costs > current_home_value, then the homeowner comes out ahead.
Not to mention, a drop in housing prices will make the region even more appealing.
You want cheaper homes only till you buy a home, once you buy a home, you want homes to get expensive so that you can benefit. Similarly if you are building a company, or running a business(like a manager), you want H1B. Other wise you don't want it.
Basically people vote with their wallets.
Software is a growth and landgrab sector right now, not a “divide the pie” sector.
With floating and fractional reserve banking, bank assets (incluing mortgage) literally underpin the money supply. Reductions in asset values decrease that, and the impacts are felt throughout the system. From individual homeowners to banks and assetbmanagers to national policymakers and central bankers, rising prices are "free money", and anything which might decrease market value is seen as a threat. That's effectively what 2007-2008 was.
The modern homeless crise was co-emergent with floating the U.S. dollar, the 1970s oil crises, and the Volker inflation and recession (intentionally triggered).
Housing and real estate now function principally as asset classes rather than as a service good. When financial assets serve only (or principally) as assets, the social disruption is low: gold, siilver, gems, fine art, rare wines, etc.. When assets perform vital functions in the real economy, their store-of-wealth function can become quite problematic.
However, the 1970s stuff there sounds like a long chain of data to understand. (And is that why your comment currently downvoted)?) Do you have any recommended sources describing what you're talking about?
https://web.archive.org/web/20190115035057/https://plus.goog...
The reasoning and history seem to hold up though.
Property taxes are another way that California is extremely regressive. Since property tax is paid based on the purchase price rather than market value like in other places, and since adding additional housing means that your property tax gets reassessed at the new value, tax policy highly incentivizes reduction of housing supply.
California policy can be summed up as: "I don't want any more people here after I moved here; but please bring on the jobs and the rising property values."
On the east coast, we just call that "fuck you, I got mine."
We should buy housing to live in, not to extract rent from the suckers that were too late. A land value tax would help lower prices and remove the incentive to treat housing as an income source.
This is a really biased view of what landlords do. A landlord takes on all the risk of maintaining the home, staying in the home long-term, fixing things when things break, etc. As a renter, being able to just tell my landlord when things break means that much more convenience for myself. Moreover, as a renter, having no incentive to be gentle on my appliances, my landlord actually does quite a bit of stuff (Or pays a lot to have someone else do my stuff, hence creating a job) to make my life pretty darn easy.
Also, I'm not sure what "devaluing" is going on; by pure financial value there's almost no way to build enough to actually drive down the price of any individual home; more likely as zoning increases the home will go up in value, but individual condos or townhouses will be available for much less than a single family home.
If you mean "devaluing" by "I now have apartments on the block," there's absolutely no right whatsoever for somebody to control the use of that other property.
This ... kind of ... happened in Southern California in the early 1990s when the defence industry retrenched. SoCal housing prices had long led NoCal, and in the aftermath the south's values fell by a third or so. They've never really caught up. A different dynamic but similar result. Oddly, a consequence has been somewhat greater densification of the LA basin.
You could look at real estate in other and earlier times, especially industrial or extractive areas after the boom has passed.
But it is important to call it what it is and not be distracted by their nonsensical reasoning. They want less development because they want their housing values to increase. And in this process, they don't care about the lives of other people who'd want to move here or about the long term negative consequences of reduced growth and economic activity as a result of their greed.
Think of all of the companies that don't get started or the things that don't get invented because they simply can't get the workers they need -- It is a sort of 'negative externality', little different from pollution or lung cancer, of the reliance on housing equity to fuel savings that we've come to rely on.
The rampant NIMBYism hurts renters by constraining supply as well as well. Even if you don't want to own, you're still suffering.
(Though honestly I think the rental prices are lagging behind a bit. The home prices have truly become insane; I just watched a 4 bedroom in Burlingame that was bought for $2.3M in Oct 2017 sell for $5.1M; i.e., a 118% return in 15 months.)
You don't have to live in the Bay Area. Developers are employable all over the world and remote work is gaining popularity.
I worked in the Bay Area for a few years. As some one from Bangalore, the difference was night and day. Overall quality of people, scale of challenges, money and in general career awesomeness are just unmatched.
Eventually Bay Area will give way to high rise apartment complexes, it's just natural that it will happen. Economics is above everything, and eventually people will just make it work.
You pay for that "awesomeness" in premium housing prices.
> Economics is above everything, and eventually people will just make it work.
The economics are working. Home owners are sitting on increasingly valuable assets.
It is possible to build a high rise building but such a project needs to be approved by local town which they won't. They will put unreasonable restrictions in terms of parking spaces, open spaces etc. These laws prevent building anything bigger.
There is a deeper rot of corruption called "low cost housing". There are several organizations that will deliberately litigate any new project, run it into ground and once the developer has lost a lot of money they will buy it cheap for so called low cost housing. To give a real world example a laundramat owner in SF who made ton of profit had pity on the housing need of the city and out of his good heart decided to demolish the laundramat and build housing instead. He has been harassed, the corrupt city admin declared his building historic monument in order to prevent him from redoing it. All the while he lost money and paid property taxes. [1]
As of today it takes around 2 years to get all the necessary permissions for any kind of construction project. Most developers have turned their back on the city. See this interview with one of the builders. [2]
Third part is large empty patches of land that are for some reason not being brought under development. Look at google maps and you will notice there is plenty of land in Fremont, Santa Cruz mountains, Palo alto etc. where mountains can be demolished, new housing units created. But wont happen because of over zealus environmentalists.
[1] https://reason.com/archives/2019/03/19/the-most-contested-ap... [2] https://www.youtube.com/watch?v=GfIjDGF_YYQ
The root cause was a failure of urban planning decades ago. Now SF leaders and residents have to deal with reality as it exists today rather than what it ought to have been with better foresight.
It really sounds ludicrously obscene that the city with the highest average income per person in the world can't "afford" to do things that third world countries have done to multi-millennia old cities histories spanning much larger footprints with way more people involved and way less money in the economy.
If SF wanted to develop into the proper metropolis it should have been since the 90s there is ample money flowing through the Bay Area to pay for it. You just need the political willpower to make it happen, which may be rarer than flying pigs.
The slanting, sinking high-end building terrifies me. https://www.businessinsider.com/is-millennium-tower-safe-sti...
And many people in SF (especially if they have lived their a while; i.e. property owners) are not thrilled that their home is changing.
The NIMBYs are going against their own economic self interest by resisting density, they are just petrified with fear that their house is the one just outside the criticality zone where developers would buy all the land for exorbitant money to build a metro and their area would become some sort of forsaken blight or be bulldozed at "fair market rate" via eminent domain to build the infrastructure to support that density.
NIMBYs dominate SF politics because only NIMBYs can live in SF, which is exactly analogous to how business lobbyists dominate the rotunda of the Capital in DC because only multinational globalist corporations can afford to play the hardball bribes to get congress under their heel and crowd out everyone else with their money.
In both cases, when a few have a ludicrous amount of money / power and everyone else is left poor, the rich silence the rest and hold all the power.
You really don't want the feel of the city to change? Fine, then keep out employers.
a. That particular area happens to have had a history of earth quakes.
b. People who already have homes, think they own the view. Also known as NIMBY.
c. Building new homes(like big apartment complexes with mass housing), would crash the market. Because many people have put in $1 million+ to buy a home. Imagine what happens when homes are suddenly available for $300K a piece. Those people will go bankrupt instantly.
d. Rent control.
Beyond all this once its clear that you can get decent accommodation for $300K, spending $1.5 million for the same becomes stupid.
Sure people will buy McMansions and homes in cul-de-sac as a badge of prestige. But anybody with a brain, and knows that money is better spent on saving up for retirement will look the other way go stay in the $300K flat. You would stay in the same if you rented, anyway.
This is not an excuse. High rises that are well designed are perfectly safe in earthquakes (safer than single family homes often times). Other major cities in earthquake areas (like Tokyo) do not have this problem.