Edit: The reason is because homeowners are competing with developers, so their own asset depreciates when supply increases. I was just thinking from the perspective of renters.
If you had an idyllic childhood in a sleepy town not unlike Mayberry, it is entirely reasonable to want the same things for your kids.
None of that is realistic anymore--the world is a changed place. But these are not irrational preferences to have.
It's not realistic when you have unrestricted immigration, as the US states have between each other.
Ah, surely there is nothing open interpretation there.
It's incredibly selfish to use PTSD or noise-sensitivity as a justification for contributing to a situation where tens (hundreds?) of thousands of people have 3-hour commutes when they could otherwise live closer to work.
People whose wealth is in company stock say that people whose wealth is in other asset classes should give it up, for their benefit.
How about we pay for all this new housing by a 90% tax on RSUs? No?
It's not just tech-driven...housing is expensive across the nation and taxing RSUs may help in SF, but doesn't really get to the root of the problem which is zoning restriction, high development costs, increased homeowner rights enabling NIMBYism
But a primary home is not an investment. Many many many people mistake it for one, or try to treat it like one, but it's not. Often it works out in the end as if it was one, but it's not. There's a reason why we call non-primary homes "investment properties"... because your primary home is not that.
It's a liability. It ages. It requires costly maintenance. It requires upgrades and renovations. In most jurisdictions you have to pay ongoing taxes simply to own it.
The main reason housing prices often rise faster than inflation is because of scarcity, much of which is often artificial and due to zoning and other legal tricks.
Opposing housing in high-demand areas is one of the most selfish things a person can do.
I don’t know how you can say this because for 9/10 people their primary home is de facto their single biggest asset and a significant part of their retirement planning. This is how it actually is in the real world outside the bubble.
It’s easy to sneer at nimby-ism but what you’re actually proposing is to make ordinary people destitute so techbros can have an easy ride. That’s why voters are pushing back and why tech is hated.
Do you have any examples of this? The Bay Area housing market has had a nice run, but it hasn't grow 666% percent in the last 12 years.
My parents bought a house on the Peninsula in the SF Bay Area for $500k in 2000 and it is now worth at least $2m.
Condos I saw for $400K in 2010 are going for about a million. Homes that were about $1.1M in 2010 are about $2.4M. The sibling comment describes homes bought for $500K in 2000 that are now $2M; this is not out of line with what I'm heard from some founder friends I have that are pushing 50. IIRC my wife's parents bought their home for $130K or so back in 1986 and it's now worth $3M.
So it's gonna be that much harder for a "regular" person to buy anything in the short term.
1) there is a 100 single family homes somewhere.
2) there are 300 people looking who need to live in that somewhere
3) on top of 100 single family homes now we have 400 units built
..
Can it be that price of the units for sale may get reduced for competitiveness?
https://www.latimes.com/business/real-estate/story/2020-01-3...
Here's an agent discussing this happening right now:
> Traditional sales comping remains relevant, but it should no longer be the single factor when determining price. Recent legislation allowing additional dwelling units (ADUs) is a game changer, as savvy investors and agents understand that accurate comps should now include not only neighborhood sales prices but also potential revenue from future ADU development.
> Gov. Gavin Newsom recently signed a slew of bills that will allow property owners to build a backyard home of at least 800 square feet or convert a garage, office or spare room into an additional living space. Single-family zoning effectively evaporated on Jan. 1 when the new laws went into effect.
If NIMBY's only cared about money this would be a fucking gold mine for them.
But the opposition to upzoning here in LA and the Bay Area is largely coming for qualitative reasons instead of quantitative reasons. And that's lost when you reduce your argument to "they only care about their property values" so you lose any chance to convince them...
Let's say you live in a neighborhood of mostly single family homes. A new law is passed changing the zoning to allow higher density, and other barriers to building up are reduced or eliminated.
A few people near you sell their homes; they're bulldozed and are replaced with multi-family units. Sure, over the short term, your home value might drop because of greater supply helping to meet demand.
However, over the long term, or even medium term, two things may happen:
1. Your home value goes up because single family homes are less available, and are more desirable.
2. Your home value goes up because developers want to buy your home in order to build a multi-family dwelling there.
Meanwhile, more people are able to live nearby, more affordably, likely cutting down their work commute and increasing their quality of life. I guess the incumbent owners really are that selfish that they fight tooth and nail to prevent others from increasing their quality of life.
Also, it is quite often the case that when you build, it is either: 1) made for high-income dwellers, thus not reducing prices, because the high-income and low-income housing markets are often effectively separate markets, like cars and semi-tractor trailors. ...or... 2) the people living nearby, do think it will drive down prices, including the price of their own house, which is their only effective form of savings. If their $400,000 house becomes a $300,000 house, yeah their property taxes may go down, but they lost $100,000 in savings they intended to sell and live on elsewhere after they retire.
This is really a misnomer (and it is the linchpin of NIMBY arguments, especially in the Bay Area). If high income housing is not built, then high income people will inhabit and buy up the middle income housing, who in turn will inhabit and buy up low income housing, if they can find any at all.
You can see this clearly in the Bay Area. You have tiny houses going for like a couple million dollars.
In such an environment it's impossible to build stuff (at least, legally) that ISN'T high income housing as high income people are the only people who can afford any kind of housing in the area.
"But it's only made for high income dwellers." Build a cheap (but code-compliant) 600sqft studio in the Bay Area? Around $900/ft^2 would be the market price. It's only affordable to high income folk. A studio. This 161sqft studio in San Fran is $2300/month: https://www.businessinsider.com/smallest-apartment-for-rent-...
How is it even possible to build housing that isn't for high earners in San Francisco?
The only way to change is to build a LOT more and keep building. Or, I guess, destroy the entire local economy.
That doesn't seem right to me. Sure, the develpoers will have incentive to build the largest profit earning housing, which right now (because of a huge housing shortage for all pricing ranges) means building high-income housing. But a high-incomer earner that buys those stops competing for the fixer-upper middle income housing so that's good for other price ranges too. What's more, at some point you run out of high-income earners that will buy your expensive newly built property which requires dropping prices on existing built property _or_ starting to build the next most profitable housing, which is less profitable than before but you don't have a choice.
Now arguably, for all that to happen it takes time and the ability to build a large number of housing units, both of which may not be an option so I'm fine as a compromise to require for certain percentages of new housing to include tiers for lower pricing levels, as a requirement for the housing permit.
> 2) the people living nearby, do think it will drive down prices, including the price of their own house, which is their only effective form of savings.
There is a point where, as a society, you need to decide what's more important: giving existing owners 50%+ returns on their property or supporting new families moving in. As usual the answer is somewhere in the middle but I'm willing to bet it would go a lot against the current situation that the existing owners enjoy. After all, owning a house provides a lot of other benefits so as long as the increase in value covers for the cost (interest + taxes + maintenance) it seems fine to me.
That's certainly not true in SF. Housing quality certainly runs the entire spectrum here, but in the last decade I've seen low-income renters forced out of ok-ish buildings, and replaced with several high-income renters who do the roommate thing in order to afford it all.
Over time, even building "market rate" (which some people erroneously call "luxury") housing in SF will start to free up the older housing stock that's being occupied by people who in any other market would be considered high-income, and return that housing to its former middle- or low-income renters.
Regardless, with the exception of subsidized housing, it's not even possible to build low- or middle-income housing in SF right now. If you build anything at any size, it will immediately price out of budget for any low-income renters, and most middle-income renters. Part of that is just because landlords and sellers charge whatever the market will bear (which is a lot), and part is because new housing development gets so much opposition that it costs developers way more than it should to actually complete a project (it can take years and countless lawsuits and legal fees to even break ground), and they need to recoup their costs and make even a modest profit somehow.
Also from Texas: In Texas, developers building households generally happens on empty land in the suburbs, or in unused non-residential land.
In LA or the Bay Area, it would happen by replacing single family homes with multi-family housing. Something that would also be anathema in most well-off Texas communities. It's already sprawled about as far as geography permits.
Lots of people don't want to live in those places and would rather keep their existing neighborhoods than invite a lot of new residents and a larger, denser population. Hence their creating those laws.
It's not obvious to me why we should take the desires of the people who want to move there more seriously than the desires of people to keep what they have similarly.
But in that case, we need to stop building a ton of office space in those "full" cities to import a bunch more jobs than we have housing for...
The way I look at it is that the incumbents are there due to mostly accidents (of birth time/place) or of luck. Why should newcomers be disadvantaged due to accidents and luck?
Land is a finite resource, desirable land even more so. This is why we have things like property taxes, to reinforce the idea that property ownership is a privilege, and you have to pay for that privilege by contributing to the common good. We have zoning laws to attempt (though we often fail) to collectively make the best use of the limited land we have.
And from the other side, I just see it as just incredibly selfish to oppose reasonable housing development because people don't like change or are afraid that their home's 400% appreciation in value might drop to only 300% or whatever.
Most things are accidents of time/place/whatever. Including whatever resources those newcomers are bringing to a city. Is migration and density growth a strict good? A strict bad? Somewhere in between? Lots of ink have been written on that, I'm fairly personally neutral, but I'm very skeptical of the "this is a simple problem with a simple solution" crowd. I'd love to see a decentralization of high-end high-paying jobs. Right now if I wanted to live back near my family, I'd have to work on problems that are less interesting to me for quite a bit less money.
There's nobody exactly being unselfish in this debate... People who want more density or to save their own money argue one way. People who want to live a (different) way argue another... it's basically all wants considering we have so many other cities in the country with plenty of space.
I'm closing next week in SF on my first ever home purchase (after renting for 10 years here, and 6 years prior elsewhere in the Bay Area). Sure, I would like for it to be worth more (outpacing inflation) in 10, 20, or 30 years. But I am not buying a lifestyle, or a guarantee of value increase, or a neighborhood frozen in time at this point forever. I'm buying some floors, walls, and ceilings. I'm buying into a community that I know needs to grow and change if it's to survive and flourish.
There are also less visible efficiencies in having people living close to their work, like roads that aren't crammed with cars because people don't have to spend three hours behind the wheel every day getting to and from work, and the additional productivity that comes with all that extra time.
What I'm not seeing here is a way for increased housing supply to make the prices go up, as opposed to down, but not as much. Network effects, maybe: increased density of a city could make being in that city more valuable, thus making more people want to live there at any given price, which means that prices would rise.
In a vacuum, no, I don't think simply adding housing can meaningfully drive up prices. But (as you say) obviously it feeds into organic urban growth, which does increase demand, so you have to keep building housing. It seems that the problem we have in our big tech hub cities is that we let that growth happen for a while and then decided that there would be no more housing.
I can imagine an induced demand effect as whole new classes of people realize that they can actually now live close to where they work, and come flooding back into the city. But like I said, that's an artifact of artificially constrained supply.
(I suppose increased supply could drive up price if providing that additional supply increased the overall costs but you'd presumably still be constrained by the overall supply/demand curves of the market.)
The burbs however....