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Comment by abalone | Hacker News Reader

Do you have sources for these claims? I feel this narrative is often repeated on HN and it becomes kind of an echo chamber. Then I read in the SF Chronicle that there’s permitted and approved projects that developers are not moving forward with, like around the new hospital off of Van Ness, due to the “tightening of capital markets” and “soaring construction costs.”[1] Not NIMBYs or government regulations.

And then I dig a little deeper into the “it’s just supply and demand, dummy” narrative and find articles that document how luxury housing development actually is associated with a rise in rents for the working class.[2] Who would have thought macroeconomics is complicated?

I feel the narrative here is highly politicized around are particular market-driven philosophy, so much so that people feel comfortable posting unsourced polemics. In the spirit of HN I would like to steer us toward a real analysis of the facts in the ground.

[1] https://www.sfchronicle.com/bayarea/article/Turns-out-SF-s-b...

[2] https://www.washingtonpost.com/business/economy/in-expensive...

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Not OP, but Seattle is almost as big as SF [0] (825,000 people in SF compared to 775,000 people in Seattle), Seattle has 2.5x the number of cranes up compared to SF [1] (65 cranes in Seattle compared to 26 in SF), Seattle rents have actually gone down recently because of so much new supply [2], and Seattle's average rent is only 57% of SF [3]. I'm not going to say it's just NIMBYism, but whatever they are doing, they are a prime example of what not to do.

[0]: https://en.wikipedia.org/wiki/List_of_United_States_cities_b...

[1]: https://www.seattletimes.com/business/real-estate/seattle-to...

[2]: https://www.oregonlive.com/business/2019/01/apartment-rents-...

[3]: https://www.investors.com/etfs-and-funds/personal-finance/hi...

Ah, thank you for the sourcing. I shall read them but I was wondering if you have a response to this critical analysis, "Seattle — A Cautionary Tale for Supply-Side Housing Advocates."[1]

It notes how Seattle is often cited by deregulation advocates, but that "in spite of decades of indisputably strong development, Seattle’s share of cost-burdened renters has barely budged." And "by overbuilding housing for the wealthy, Seattle has achieved some short-term improvement in affordability for the middle class, at the expense of substantial displacement and continued upward pressure on the most vulnerable."

This I think is at the heart of what in SF some call the YIMBY vs. PHIMBY[2] debate. YIMBYs tend to skew towards more privileged techie types (happy to dig up sourcing on this.. I recall the YIMBY national meeting being called overwhlemingly white). Whereas the PHIMBYs or whatever you want to call them, the deeply affordable housing advocates, see flaws in that simplistic trickle-down economics model based on lived experience in working-class neighborhoods undergoing gentrification.

[1] https://knock-la.com/seattle-a-cautionary-tale-for-supply-si...

[2] https://yahbayarea.org or https://twitter.com/YahBayArea

Careful, you’re bringing facts to an opinion fight.

The parent is wrong, and is cherry-picking data. Seattle rents may have gone down “recently”, but they’ve been amongst the fastest-rising rents in the US until about a year ago. They’re far higher than they were a few years ago, let alone a decade ago.

Also, saying that prices are lower than San Francisco is utterly meaningless. San Francisco is a different economy. It was more expensive than Seattle twenty years ago, and it’s more expensive now. You can’t make the comparison without controlling a bunch of variables.

I'm genuinely confused as to why you're being downvoted. I live in Seattle, having bought a couple of houses in the last 10 years, watching the market pretty carefully and you aren't wrong. This is one of the most expensive markets in the country.... fourth or fifth. It's kind of ridiculous. The "drop" is in the last 3 years after a 12 year steep rise, and it's not even really a drop, more of a leveling off instead of a continued steep incline. A lot of that has to do with over investment in companies buying properties for apartment complexes, on speculation that population growth would continue at a steady rate instead of curve like real world models.

Starting a comment with a put down like the parent did is not well-received by the community.

I started mine by politely thanking for the sourcing and I still got downvoted. I think there are politically motivated downvoters on this topic.

You have more reason to be "genuinely confused" than the parent, who I was responding to.

The phrase “bringing facts to an opinion fight” is no more or less an “insult” than saying that your argument has no factual basis. People just don’t like to be told that they’re wrong, they really don’t like to be told so in a pithy way, and pearl-clutching provides an easy way to justify censorship.

You need to argue the counterfactual. You can build housing and have rents increase because demand was still greater than supply. None of your links show that rents increased more than they would have without building housing.

I upvoted you, although I disagree with you. You made an argument, deepened the discussion and offered some sources -- it's more than most people do.

Regarding the second site that you linked, and the PHIMBY idea in general -- if it's summed up by "housing is a human right", then there is a certain weakness built into it from the start. If you do not have a house, can you sue someone? Can you sue the government, for example? That is an important part of what a right is -- it provides a "cause of action", a basis for suit, when it is abridged. If it doesn't provide that, then it is not a right.

Freedom of movement within the United States, guaranteed by the Privileges & Immunities Clause of the Constitution, is a right. When someone writes something like "by overbuilding housing for the wealthy, Seattle has achieved some short-term improvement in affordability for the middle class, at the expense of substantial displacement and continued upward pressure on the most vulnerable.", they seem to be operating from a frame where it is the government's responsibility to provide housing, but it's not clear where the government gets that charter. Not every nice or good thing needs to be effected by government agency. However, respecting the right of people to move in -- to buy or rent property on the same terms as non-residents -- would seem to be completely in line with a broad commitment to the equality of all American citizens, regardless of their place of birth, before the law everywhere in the country.

The essential view of PHIMBYs is that government should invest in housing, which is the mechanism by which the postwar generation achieved housing security (HUD had a huge budget).

Thanks for the upvote. Allow me to critique your argument. You focus solely on interpreting the term “right” and suggest that it is beyond the charter of government to provide housing, which is just completely and utterly ahistorical.

When you say my argument is ahistorical, do you mean that in the past, people have generally been able to sue for not having a house?

Calling housing a right is extreme and inaccurate.

I have lived in both places and I think Seattle makes for an interesting, worthy comparison. However, also worth noting that Seattle has a larger land mass. Also, that 57% rent comparison is less impressive when you consider that Seattle has been cheaper than SF for decades - both places have spent most of the current decade raising rents, Seattle starting off at a lower point in the beginning of the trend.

> I read in the SF Chronicle that there’s permitted and approved projects that developers are not moving forward with, like around the new hospital off of Van Ness, due to the “tightening of capital markets” and “soaring construction costs.”[1] Not NIMBYs or government regulations.

No doubt that construction costs exacerbate the problem. But there absolutely are people deliberately blocking housing construction. There was a proposition to outright block private housing construction in the Mission that got ~40% yes votes. For further examples, see the infamous case of the developer that wanted to replace a laundromat with an apartment building:

https://www.youtube.com/watch?v=ExgxwKnH8y4

> And then I dig a little deeper into the “it’s just supply and demand, dummy” narrative and find articles that document how luxury housing development actually is associated with a rise in rents for the working class.[2] Who would have thought macroeconomics is complicated?

This is a fundamentally dishonest objection. New housing is "luxury" housing because the housing market is so expensive that even 1 bedroom apartments rent for $3-4K. Blocking "luxury housing" is blocking all housing, because the market is so expensive that even the smallest units are expensive enough to be considered luxury. Seriously, even 300 sq foot studios rent for 2.5K: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-immacul...

Of course "luxury housing" is correlated with rising rents. When rents rise, newly constructed units get more expensive too and get pushed into the "luxury" price bracket. This is essentially a tautology, and it is not at all indicative that building more housing increases rents.

Soaring construction costs are in no small part due to government regulations and NIMBYs. Labor shortage is partly to blame, but labor is short partly because of the housing shortage. [1]

[1] https://www.bizjournals.com/sanfrancisco/news/2018/01/24/sf-...

Actually your source says "A lack of construction workers is a legacy of the 2008 recession, when many people left the industry as development froze." I.e. a meltdown of the unregulated market was a major factor in the shortage -- again, your source.

Additionally the Chronicle article I posted concerns approved projects still facing delays due to labor and tightening capital markets. That undercuts the "it's just due to NIMBYs & regulations holding up approvals" narrative.

Regulation, in particular rules on sourcing along with uncertainty of permit timelines, are a driver for labor expenses: https://ternercenter.berkeley.edu/uploads/San_Francisco_Cons...

Intuitively, how is it that Seattle can afford to build high rises while San Francisco cannot even though the selling and rental prices of a high rise is meaningfully greater than that of Seattle? Shouldn't all that Seattle capital just move to developing in San Francisco instead?

I read your citation and it does not appear to support that claim with respect to approved projects. In fact it leads by referencing the slow rebound from the recession for skilled labor vs all the demand as the primary driver in labor costs. Where it mentions permit delays it’s only in reference to delayed projects being at a disadvantage, not approved ones.

As for your second question I can only refer you what I’ve already cited on construction costs, tightening capital markets and other factors beyond mere permitting or “NIMBY” issues. Intuitively, approved projects would move forward if the math made sense.

I feel like we’re talking past each other. In the section about labor costs, it cites at least the following:

1. Slow uptake of skills, lower productivity. Related to recession.

2. Hard to get bids due to uncertain approval process. Entirely caused by city policy. Now you say let’s condition on approved projects: however, given that it can take up to half a decade to gain approval (infamous historic laundromat was just under 5 years), controlling for approved projects is misleading. In five years, construction costs doubled and a project that might have penciled out at inception may no longer. The developer would have to propose a more dense, taller, etc. building for the project to make sense, but that would be another half-decade round trip through city planning.

3. City rules about prevailing wage, local sourcing, etc. limiting the available labor pool which directly drives up labor cost. This is entirely a local control problem.

Are you saying 2 and 3 are not consequences of local regulation?

Additionally, most of what you’ve cited is true across the nation. What you fail to provide is a reason these macroeconomic factors seem to have a disparate impact on SF’s ability to build which is evident in, e.g., the number of new housing units per capita it has delivered vis a vis a comparable city such as Seattle.

I hear you on local sourcing but they mentioned it last and didn’t quantify the impact. The stalled project mentioned in the Chronicle article was approved in under two years, not five. So I don’t think these are strong points vs what the source clearly emphasizes as the primary driver of labor cost: “number of workers relative to the number of units being built is still below the historical average.”

Which would be exacerbated if workers cannot afford to live in the region. I once saw a map set that visualized where you could transit to in various metros in under an hour from an affordable neighborhood. Even in NYC you could get to most of Manhattan, from the outskirts of Brooklyn or Queens. SF really stood out. You could only reach a few blocks around the BART stops. The whole city is cut off from a labor supply. It’s affecting staffing at restaurants and retail too — Nopa advertises for cooks in its menu because who wants to ride a motorcycle to San Leandro at 3am.

Construction costs have also gone up due to the fires of last year: Paradise, Ojai, Malibu, etc. We're getting our house remodeled, and it was a royal pain to find architects and contractors. Most were booked up to a year in advance!

The amount of housing in the most expensive housing market in the world is going down because of lack of capital? That passes a sanity check for you?

Or maybe the regulations are so insane you spend millions in legal fees before you even have a glimmer of hope and eventually say “this isn’t worth it.”

See, this is what I mean. I posted sources that literally interviewed developers and researched the causes for construction delays on approved projects -- "project was approved in late 2016 as construction costs were escalating more than 10 percent a year and lenders were tightening their criteria for loans." And you responded with unsupported political talking points.

Let's bring this back to a fact-based discussion, ok? That's what HN is supposed to be about.

> “For-profit developers have predominantly built for the luxury and higher end of the market, leaving a glut of overpriced apartments in some cities,” said Diane Yentel, president and chief executive of the National Low Income Housing Coalition, an advocacy group.

I can't read the chronicle article, but your wapo article is mainly just the opinions of interested people like this. For example, nowhere does it give the actual number of "luxury" units built in Seattle, SF, or Portland -- those would be important numbers if you're trying to comprehend the argument being put forward.

The Chronicle article is worth reading but you can trust me that it points to capital markets and labor shortages as holding back approved projects.

Here is a deeper analysis of the Seattle market with specific housing construction figures.[1] It argues "there is no general housing shortage, that the catastrophic figures above are a product of the Great Recession and the normal lag in construction. Because the market appears to be duly responding to demand, efforts to 'free' the housing market are not as effective as efforts to shape the market toward more just ends."

This is consistent with the causes cited in the SF Chronicle article that hold back approved projects, as well as the SF Business Times(!) article pointing to the 2008 recession as a cause of the labor shortage, cited previously.

[1] https://www.theurbanist.org/2016/11/22/what-housing-shortage...

There’s such an enormous mountain of evidence on the other side I’m genuinely unsure where to start

Start with the early 70s. The housing problem started around then. Some years they went up by 20-30% in value. My parents were on track to lose their relatively modest 1800 square foot house in San Jose just 6 years after moving there despite being dual income tech workers at the time.

Note that it predates prop 13, so I hope that doesn't play a central role in this enormous mountain of evidence.

I find responses like this fairly patronizing. I think it’s preferable to not respond at all or substitute a link to an article like Kim Mai’s (in)famous TechCrunch piece instead of this veritable shrug.

Edit: After seeing your profile, I feel even more disappointed. Imagine if a Lambda School student asked a plausibly sincere question and they were met with a response which amounted to, “That is so stupid, I don’t even know where to start.” Let’s strive for better.

There’s a pretty big difference between chatting on a message board and a student asking a question of a school. I’m currently at Disneyland with my family and don’t believe the parent response was earnest, but here: https://techcrunch.com/2014/04/14/sf-housing/

I’ve learned a lot from HN, so perhaps I don’t view the environs as so different. I suspect the parent may not be entirely sincere, but perhaps it’s better to call that out directly. Enjoy Disneyland and best of luck with your company!

I found this to be a very interesting survey of the different things affecting the SF housing market. Whether you agree with all of the points brought up it's hard to deny that it's a complex issue.

I investigated into developing in Half Moon Bay, which is zoned by San Mateo County. There's wide swathes of land up for grabs, but the county or the council forbids development unless you buy enough land and come up with a proposal. This ends up costing in $5-$10 million of undeveloped land alone (no sewage line connection and no electricity). And these lands are planned unit developments, which in practicality means homes only for the wealthy.

San Mateo and Marin have always opposed development. It has given us great open spaces up 101 down 280 and along 1. Its an odd position to defend, no development in Marin and San Mateo, but increased developement in San Francisco yet thats my view

Even in the spaces that are not open space San Mateo opposes apartments.

Your first article attributes those quotes reasoning about the lack of construction to speculation by “neighbors”. There is also a traffic problem created in part by construction of a bus line that is 18 months overdue. It seems a bit quick to be using that as justification for SF housing policies, especially as they don’t seem to be working.

Your other article is paywalled, but I imagine that tightly planned cities introducing only new luxery housing is the same general situation and would be similarly vulnerable to the very arguments you’re responding to.

How much construction does a 'bus line' take exactly?

I live a couple blocks away from Van Ness. Here's the project: https://www.sfcta.org/projects/van-ness-improvement-project. They're moving to dedicated bus lanes, allowing the buses to load and unload safely without blocking other traffic. As with all significant projects, they've lumped in a bunch of other maintenance that has been put off for too long, like upgrading utility lines.

Construction generally blocks a lane of traffic on one side of the street, rerouting the other lanes and pedestrians, for several weeks at a time. Then they move on to the next block or to the other side of the street.

Just from a layman's perspective, it seems incredibly tricky to try to construct a housing development with that going on around it. The "bus line" construction has already put additional pressure on traffic up and down Van Ness, and it's got to be very tricky to get permits for parking spots, dumpsters, and other necessities with everything else that's going on. And anyway the city could probably just come through and close everything down for weeks or months so that they can perform another stage of "bus line" construction.

(I'm putting "bus line" in quotes because they haven't even really started on that part. This whole project is a pretty incredibly yak shave that's taking 5 years and hundreds of millions of dollars for a bus line.)

I think the onus is on you to disprove them, not just to merely question their veracity.

Anyone who has built a house in any urbanized area with an highly environmental conscious outlook can tell you that building a house is difficult - I think anyone can also tell you that San Francisco has a large amount of demand - I think there would also be universal agreement that San Francisco is also basically built out. Upmarket housing tends to get built first when market demand is high, and its expensive to build in a place, because its harder to recoup the costs on cheaper housing.

Without significant densification (which has proven untenable politically) no significant amount of new housing will be built - so you can pass all the affordable housing bonds in the world, but until you change the zoning (regulatory) construct - nothing will change.

> I think the onus is on you to disprove them, not just to merely question their veracity.

This generally is not how reasoned debate occurs. The onus is on the person making an assertion to provide facts supporting it, not on everyone else to disprove an unsourced claim.

As if it's possible that some other scenario is not at play. Do you think housing is being erected at a record pace and yet still can't keep up with demand? Is it possible that people just don't want to build in SF, because... reasons that aren't red tap?

I haven't made any argument one way or the other.

I will point out that there is an article on the front page of HN right now in which multiple economists argue that "it's supply and demand" provides an insufficient explanation for, and solution to, the problem of affordable housing in San Francisco: https://news.ycombinator.com/item?id=19872015

So arguing that we must accept the "it's just supply and demand" argument by acclamation with no sourcing seems flimsy. Educated minds are arguing otherwise, and providing evidence to back up their claims. It hardly seems unreasonable to expect the other side of the argument to do similar.

I think you're asking the GP to prove a negative?

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