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Comment by ScottBurson | Hacker News Reader

While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to actually bring prices down, instead of just slowing their rate of increase. It's a lot. I don't recall all the numbers, but I believe I saw something suggesting that we need to increase the rate of housing starts by a factor of 4 just to stabilize prices. To actually bring them down would require even more than that. Again, we should absolutely do it, in my opinion, but if we were to only double construction — difficult as that will already be, politically — and prices didn't plateau, people might conclude that it doesn't work. We need to make sure they know what it's going to take.

It's not so much induced demand as it is pent-up demand. Lots more people would already love to live here — indeed, many have moved away solely because of housing costs.

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Yes, I unironically want 4 million new homes in San Francisco.

The housing shortage in the Bay Area might be the single largest drag on American prosperity.

I think it makes sense. There is absolutely space.

BUT you couldn’t move the people through the city and bay area with current infrastructure.

Money (in big amounts) needs to be taken away from roadwork and poured into public transport.

moving 4 million people here would create the money to allow the infra changes

"Yes, I unironically want 4 million new homes in San Francisco."

Why would any SF resident care even a little bit what non-residents think of their housing situation?

"The housing shortage in the Bay Area might be the single largest drag on American prosperity."

Have you considered that someone's home, their life is not a function of 'industrial prosperity'? And that they're not interested in having their neighbourhood turned into a bunch of skyscrapers hosting Facebook Engineers?

It's possible they do - but it's entirely up to the residents to decide.

Facebook engineers are not the ones being forced out of the area.

Most new housing in the Bay will go to higher than average income earners, not poorer people, unfortunately. The Bay is a very dynamic city there vastly more people who would like to live there than actually do, given the right conditions. The Bay may have to contend with paying 'regular people' simply a lot more and contemplate actually sharing more of that wealth being created.

Why do you assume the person you’re replying to isn’t a SF resident? Their profile indicates they are, in fact.

I'm not assuming the residency of the commenter, my comments are directed to commenters in general. Everyone seems to have a strong view of how many homes SF ought to have, moreover, most are making false assumptions about the nature of the problem, and the unassailable civic virtue of their own motivations without respecting the valid lamentations of 'the other side'.

In particular, tech people, or even the intelligentsia in general, tend to have an odd disregard for cultural issues and tend to see 'housing' as entirely an economic or civic function (i.e. numbers, pricing, density, affordability) while disregarding the nature of the fact that these are communities and homes. (Witness the fact that everyone on this thread, and in most reference articles tend to talk about issues such as 'price')

I watched in my lifetime the city of Vancouver get bulldozed over and replace with a zillion apartment buildings. The money is nice, but otherwise, it's a brutally garish city, the architecture is thoughtless, it's just another 'pop up' city of the theme of the New Millenium / Pacific Rim. It will not age well. What's more - even as Van has evolved towards this super-high density Hong Kong / New York physicality, costs have skyrocketed and affordability has plummeted. This should be of no surprise of course, as almost everyone in the Western world, more density generally implies less affordability and certainly 'less space'. Have a look [1]. Texan cities like Dallas are considerably more affordable and considerably less dense.

Bulldozing most of a beautiful city possibly against the wishes of its citizens to drive some kind of risky civic/industrial experiment is ... an extreme view.

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

It’s also up to the residents to pay property taxes, and owners not to horde empty housing units as investments. Also, I’ve been a resident here for over a decasde, and I’m sick of paying small fortunes to landed gentry.

Bay area housing is a ponzi scheme, and younger families have to choose between their careers and buying in at nonsensical pricing.

Local governments suppress housing starts and intentionally snarl the roads to keep the house of cards standing.

Sooner or later the older residents will be outnumbered by people that moved here, and the reckoning will probably be swift and severe. As you said, it’ll be up to the residents to decide.

A few years back, there were signs in Cupertino saying “no four story apartments”. I agree. If you’re within 0.25 miles of transit, it should be illegal to build (or improve) anything that short. I’m guessing this isn’t what the NIMBYs had in mind though.

>housing shortage in the Bay Area might be the single largest drag on American prosperity.

Obviously HN skews towards tech but let’s not fall into the trap that SV is either representative or the center of “American prosperity” for the average citizen

This is definitely a fair point. There's also - in my mind, living in a smaller town - the idea that it'd be nice if everyone coordinated to catch up mostly at the same time, so that it's not just Portland or Seattle or Boulder or San Diego or wherever... but everywhere.

The bigger point is that today allowing housing construction is a burden for cities. You hint that it would be good if all cities shared that burden.

This is especially true in California, due to Prop 13.

If we reformed the relevant rules, so cities profited from allowing new housing, I think a lot would change in this area!

Yeah, Prop. 13 is such a disaster.

Supposedly, the big selling point was that seniors on fixed incomes were getting priced out of their homes. But that would only happen because they have a substantial, appreciating asset. These aren't poor people who deserve our sympathy; they're relatively well-off people with a cash-flow problem! We could have solved their cash-flow problem without destroying our cities' tax bases by allowing them to defer some of their taxes [0] until their property was sold.

Here's a great article from 2014 that talks about it: https://techcrunch.com/2014/04/14/sf-housing/

As for cities profiting from allowing new housing, this might interest you: http://www.henrygeorge.org/pcontents.htm

[0] For example, the amount of tax due immediately could be allowed to grow at 2% annually, following the Prop. 13 formula. Also, the tax due at sale could be limited to, say, 70% of the gain on the sale. That limit would probably never take effect, in practice, but I've learned from previous occasions where I've proposed this that people tend to get hung up on the possibility that one might owe more in tax than one stood to make on the sale. In fact, if you run the numbers, it takes some very strange assumptions to make the deferred tax even approach getting that large; but this rule should assuage that concern. (Basically, you'd need several years of strong price growth followed by a sudden, huge collapse.)

Here’s a simple compromise that most people I know support:

Eliminate prop 13 for all but one property, both for individuals and for businesses. This would eliminate the current tax loophole for investment properties, and demand that tech companies that have scaled to more than one campus pay their fair share to the communities they are located in.

Also, have prop 13 valuations reset whenever the property changes hands (including inheritance, and, for commercial real estate, this would get rid of the “sell via a holding company” loophole).

Yeah, I’ve seen a lot of “we’ve been building a ton and prices are still high” comments on Nextdoor and heard the same in person. Not sure if it’s all in good faith, but some people at least seem to be persuaded by what you’re talking about.

"We've been building a ton" is false though. That's the error there.

the issue is the reference frame. We are building a lot relative to 2009 to 2013, but that time period was a historic aboslute low point in new housing starts, the "boom" that were in now has less new housing production that the majorith of previous "busts" since WWII

Yep, I think that has a lot to do with it.

You will just increase the number of unaffordable apartments. The added units will come with added traffic from the new wealthier residents, and higher prices on everything. It doesn’t seem like a win to me, unless you have very narrow goals.

These "wealthy residents" are poorer in their hometowns. They don't migrate out of fun. In middle of nowhere they may get 40k per year and in the bay area it may be 160k or more.

Your point is the same one I’m making. People come here because FANG and tech generally subsidize that movement. It’s great for tech profits and great for that one guy from Russia or wherever who can make 140k salary, but it’s a net negative for society. The housing crisis is the result. A greedy growth at any cost business culture, not senior citizens trying to avoid displacement in their golden years; that’s what caused the crisis. If those businesses all went belly up like in the dot com bust, we’d have the opposite problem, a housing glut and falling prices. Yet, if you removed all forms of nimbyism, things would remain almost exactly where they are at now. The housing problem is a problem of demand- the whole world can’t move to San Francisco just because that’s what a bunch of tech companies want. Nor can the whole world move to Manhattan or Tokyo or any other place with high housing prices and too many people.

> The housing problem is a problem of demand

Prices are set by the balance of demand and supply. The demand isn't going away. The supply is what we can do something about.

Even building expensive luxury apartments helps, unless no one can afford them at all (which is not what the builder wants to happen). The people who rent those aren't taking up spaces others could have afforded.

Demand is mediated by policy. Tax corporate real estate to create incentives for companies to locate where it’s beneficial to citizens. That’s one way to better manage demand. And we have to manage demand or we create a lot of failed cities like Detroit. Boomtowns are avoidable with sensible policy. We need those policies to keep people from exploiting humans herd like instincts for profit.

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