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You have mischaracterized the motivation of most homeowners. Have you ever actually talked to many? The loudest, most influential NIMBYs have lived in the area since before the first Internet boom and plan to die in their current homes. They don't care about housing as in investment, and in fact complain about rising real estate values because it drives up their property taxes (albeit slowly due to Proposition 13).

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.

I agree that my comment might have been a bit hyperbolic. I don't mean to imply that homeowners are one dimensional characters with a single motivation. But also I can't help but notice that most of the quality of life objections you noted - noise, traffic, overcrowding etc - boil down to this: Their issue is people. They don't want to live with too many people. I think its fair to say that that doesn't reflect very positively on their character either.

Who are you to judge the character of others? Wanting some space and privacy doesn't make someone a misanthrope.

From where I'm sitting, people that want to live with a lot of other people doesn't reflect well on their character.

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 a simple "win/win" solution: oppose commercial development as much as you oppose residential development. The fact that this isn't happening means home owners prioritize their home value more than they prioritize the things you have listed above. More workers mean higher traffic, parking issues, etc regardless of whether they live there or not.

Many NIMBYs have also been actively opposing new commercial developments for the reasons you listed (as well as environmental impact). So it is happening. I've seen it in city council meetings.

>greed

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.

Why would it be financial ruin? California is a non-recourse state. The highly paid engineer who bought the multi-million dollar home can easily stop paying on the home and live there "rent free" for several months, recouping their down payment. By the time they are foreclosed on, they will have a sizable nest egg to do what they want with. In your scenario, the person would be "financially ruined" presumably due to a downturn in housing. In my scenario, they would be in a better position to buy again in several years at more sane levels, while ridding themselves of all the downside on their bad real estate. The only cost is a relatively minor (you can still get credit cards, etc) hit to credit for about 3 years, and in general your interest rates will be higher. But you're also cash rich, so who cares.

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.

It's hard to get another mortgage if you've previously been foreclosed upon. If you can save enough to buy a house for cash this could work (and screws the banks in a wonderfully ironic way), but housing prices would have to fall a lot without incomes falling much for the money saved in foreclosure to be enough to purchase another house for cash.

That's why you have your spouse get the second mortgage.

What spouse?

Many if not most spouses are both signed on the mortgage because they would have needed both incomes to qualify for the loan.

You cannot be serious. Planning on a strategic default is crazy from a personal finance standpoint for most homeowners. When you consider all the impacts it only makes sense in very limited circumstances. There's no reason to expect that prices would be more "sane" in the future, and in the meantime people still need a place to live.

Only purchase mortgages are non-recourse. A high percentage of owners have refinanced into recourse loans.

Honest question, not a snark.

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?

Answer is same the answer for stifling housing numbers, and the argument is same too.

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.

It's all the same, the idea is limited supply leads to increased value. The problem with both arguments is that it's too elementary to mirror real life.

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.

> those with existing SFH will probably see their net worth skyrocket.

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.

The value driver of the SFH is that is can be converted at any time into an n-family condo.

So if n * avg_condo_value - development_costs > current_home_value, then the homeowner comes out ahead.

Right, but not every SFH will not be replaced. You're going to start actually satisfying demand, and then prices will fall across the board.

Normally, I'd agree, but newcomers to SF have outstripped housing development by a large degree for something like two decades at this point. So the amount of new construction you'd need to satisfy current demand would be staggering.

Not to mention, a drop in housing prices will make the region even more appealing.

Not OP, but that’s even worse. Bringing in more engineers is likely to have a boost for local salaries, because engineers will start new companies that hire more engineers, or launch new products at existing companies and grow their market share.

Software is a growth and landgrab sector right now, not a “divide the pie” sector.

It's not just homeowners, it's the entire real estate and banking sector as well, quite posibly with other players.

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.

I've been reading a book on the credit theory of money, and it's been fairly eye opening on how banks create money when they make loans, and how fractional reserves don't really limit their ability to continue "printing" money that way.

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?

The idea's my own and more than a bit crackpot. Longer explanation:

https://web.archive.org/web/20190115035057/https://plus.goog...

Or, to phrase this less pejoratively, distinctly nonorthodox.

The reasoning and history seem to hold up though.

This is normal for any investment, why would anyone want their investment to depreciate? I also don't understand why so many people in San Francisco want to own a home. Owning a home in San Francisco is a giant pain in the ass. Everything is ridiculously expensive once you own. These homes are 100+ years old and most need updates and earthquake retrofitting (that's $100k+). You pay an obscene amount in property taxes and have to go through the city to change nearly anything. Once you do get approved you have to find a contractor and most contractors are on giant month long waits because there aren't many in the city. It's a pain, honestly I don't understand why anyone would want to buy when you can rent and be on rent control and not worry about any of these headaches.

The problem is housing being treated as an investment, resulting in artificially high prices and limited supply for the people who need to live in it.

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.

So how does this argument convince the population who has invested into their homes to suddenly want to devalue their property?

It doesn't. It requires building political will in the group that's been left out to override them.

I'm not sure why we need to convince those people, as we don't require consensus. We enact policy as a whole.

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.

Anybody who thinks they can drop $1.5 million+ into an asset without risk needs reality check on how entitlements don't work. Besides the world doesn't owe any one an insurance for stupid ideas.

Once again how does this argument convince the voters and home owners to change their mind?

Eventually an alternate location breaks out which offers amore compelling economic option for employees and employers, and the entire regional market implodes.

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.

> We should buy housing to live in, not to extract rent from the suckers that were too late

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.

Why should it be an investment? And why should we prioritize current winners' investments over the possibility of new entrants into the field?

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."

> 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."

> I also don't understand why so many people in San Francisco want to own a home.

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 get that return but also face a huge income tax payment unless you invest right into another home hence driving prices up more. Convincing someone to give away hundreds of thousands of dollars in taxes isn't easy.

The broader market hasn't gone up anywhere near 118% in 15 months so when you see an anomalous sale like that it usually means something else was going on. For example a below market sale to a relative, extensive renovation, or some kind of fraud.

Of course people don't want their investment to decrease in value, that's why they have to invent bullshit arguments to bolster their case and discourage development.

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.

There are tons of cities in the rest of the U.S. to start a company or invent something hence why the economy is moving there. I'm not saying I agree with the home owners, I just don't see how their vote is going to change.

> I'm pretty disillusioned at not probably not ever being able to ever afford a place to live in the place I call home.

You don't have to live in the Bay Area. Developers are employable all over the world and remote work is gaining popularity.

Not exactly.

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.

> 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.

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.

The economics are being strongly skewed by an overly-enforced artificial scarcity. It's the government's job to regulate housing. But, the government is letting itself be pushed around by the land-owning minority to inflate that minority's assets at the expense of everyone else.

It's the government's job to serve its _current_ constituents. And those constituents want things a certain way. I don't know what the demographics are like today given the big influx of transplants over the last 10-15 years, but at some point the "land-owning minority" was not a minority, but the primary constituency the local government served. Given their investment in the community (by virtue of putting savings into houses), I would argue they do have a greater right to implement laws that protect their interests in how they want the city to look/feel/operate.

It's unfortunately this. Not earthquakes, not hills, not technical problems, but almost 100% due to balkanized city councils. The state needs to step in more. They already have a little bit.