Data show rich cities are failing the Bay Area on housing | Hacker News Reader

Data show rich cities are failing the Bay Area on housing

goldenstatswarrior.substack.com

29 pointsDecade72 comments

I'd classify myself as a progressive and I don't see why every Bay Area city has to make some "contribution" to increased housing.

An acceptable approach would seem to be to have the "center" becoming more dense over time while the outer rings stay less dense.

The problem is that current geography has resulted in natural centers being the ones that refuse to build and that is problematic. Palo Alto and the rest are happy to have Facebook and etc's business but won't make room for Facebook employees.

And the apparently illogical behavior comes out of proposition 13's logic. Cities can tax businesses but property values are immune.

Which is to say that prop 13 needs to be repealed or annulled before any other sort of sanity is going to happen (and maybe that's not happened but, hey, there you go).

This just leads to pronounced NIMBYism. You see it in all of the community groups in the Seattle Suburbs - we have an agreement that each city must build new housing for X thousand residents in each decade. Every single suburb - Redmond, Bellevue, Kirkland, Woodinville, Bothell, and probably ones whose community discussion groups I don't monitor as well - all ask "why does it have to be here? Why can't people just move further out?"

People want to live throughout. Not everyone works in the canonical centers. Plenty of businesses are among the other cities too, particularly service workers who can't currently afford to live there. ALL of the cities need to build to keep costs under control. No one has any right to have their town stay small forever.

If your city requires minimum wage workers for a significant part of basic infrastructure it should be possible for them to live in your city. Otherwise you're getting subsidized by your neighboring cities that have to pay for the infrastructure to support employees of businesses that only pay taxes in your city.

That's why every city needs to contribute. The ones that aren't are literally leeching off of neighboring cities.

The center is getting denser too though, its just not enough. You can only fit so much housing in SF. The suburb cities dont need to be filled will 20 story apartments, but every city should be building similar percent increases. SF/ oakland/ SJ are all building up and building lots of new units.

Why does only the center have to take on the burden of becoming 10% more dense? Why can't every city increase its housing supply by 10%?

You can only fit so much housing in SF.

That's literally not true. Human density can go far beyond what SF has. In fact, you could fit a lot more people in SF with only part of the city getting higher density.

The idea that each city should "do it's part" has no basis in sane urban planing. We know the current distribution of density isn't useful and this more or less just makes it permanent.

I remember there was a huge discussion about Prop 13 on HN. IIRC, people passed Prop 13 because 1. California government double taxed; 2. Inflation was crazy and people believed that it was cruel that retirees had to leave the home they had been living in for many years just because they couldn't afford the property tax.

What beats me is why Prop 13 applies to commercial properties and investment homes.

Even more surprising we tried to repeal prop 13 for just commercial real estate last election and it failed.

It failed at least in part because of the timing. A global pandemic that was destroying small businesses was a pretty unpopular time for something that is perceived as damaging to small businesses. Maybe when things are booming and prosperous we could pass that.

Perhaps taxes are too high?

There are ways to do revenue neutral tax changes, where you raise one and lower another one somewhere else, at the same time.

Maybe, I'm guessing a prop 13 repeal attached to a corresponding reduction in income tax to make it revenue-neutral would have a better time passing.

The issue is that these same cities are constantly increasing their office space capacity, e.g. trying to have the cake and eat it too.

But has COVID fixed this (we just need time to distribute the fix). Facebook employees don't need to be anywhere near Facebook HQ anymore.

You don't really need an article to point out the Bay Area is failing people.

The crazy amount of "sleeping rough" homeless mixed with people typing on phones inside their auto driving Teslas going by without lifting an eyebrow. If you are not from the US and have learnt to think that is "normal" it's pretty confronting.

Well, I think you have 2 factors colliding together.

1) As people moved here and got good jobs, made a life for themselves, they (you and I) inevitably become more sympathetic to and desiring of middle class values. Stability, some measure of comfort, concern about taxation, their local neighborhood. It's understandable, it's natural.

Yet this is in conflict (especially when growth needs to happen) with:

2) The people who have not yet moved here (or become voters, or homeowners in particular), don't get to have a say in the policies that govern a place, yet at some point are the ones who have to live within policies that others decide.

So, a lot of the policies around here favor those who "got theirs" already, and there's very little incentive to fix this. Because the people who it benefits aren't here yet!

I think the question is, what do you do about this conflict, and what do you want a region's population/demographic renewal policy to be? How do you turn over property, wealth, a city/region to the next generation in a way that's sustainable, especially if you want it to grow?

Because right now, it's a "here's what I want for me right now" policy landscape. And that favors old people who own houses in the Bay Area to the detriment of young/poor/up and coming people who want to find a place in the area. The only thing to do is wait for the few % of people to die or move out from frustration, and face high housing prices that preserve everyone else's interests.

It gets masked in terms like "neighborhood preservation" or "local control" (or even using some minorities as a headline grabber, when in the end it actually favors mostly the rich property owners).

It's a big problem.

> The people who have not yet moved here (or become voters, or homeowners in particular), don't get to have a say in the policies that govern a place, yet at some point are the ones who have to live within policies that others decide.

Same story for global warming. The current developed nations got rich (and still getting richer) by burning fossil fuels. But the ones that are trying to grow now are stuck.

Four options: 1. We’re doomed and stuck where we are, 2. Power struggle, 3. New tech provides an out, 4. Voluntary improvement via negotiation.

I’m hoping 3 and 4 work fast.

It's a hot take but you seem truly interested and educated in this matter, have you ever read this?

http://editions-hache.com/essais/pdf/kaczynski2.pdf

Very depressing take on things, but ultimately I believe it proves that #1 is the only possibility. When it was written perhaps #2 was possible.

Is this the same Unabomber guy? If so, please don't spread.

I think your analysis is spot-on. Those existing NIMBY's bought their house with an expectation, and they vote accordingly.

I don't think there's really a way forward without torching rule of law. They don't want the place to be amenable to new/young people, and they make the rules.

It's unfortunate that big tech decided to make this place their home, perhaps with covid and remote work it will go back to a dreamy boomer-land.

These selfish NIMBY assholes have been borrowing from their cities future as they both condemn newcomers, tax them extra (prop 13), refuse to build new housing for them, and then profit off the induced housing demand.

The selfish assholes that think they can tell people who live in other communities what those communities ought to be - are the the root of the problem.

There are vast, open, free spaces for people to build and live in communities as they so choose.

If people want to live in homes and not high rises, it's absolutely their choice, and visa versa. Anyone who wants to live among them, in homes, is free to do that. If they want to live in high rises, they can go to where there are high rises, or where there are those who want to build them.

Are there situations where the people in control cannot even change the system if they wanted to, based on the interests that have been set up? And situations where a minority's interest in preserving the status quo prevent what could be an overall better situation for everyone else?

Also, this sounds a lot like, "As long as you're under my roof you'll follow my rules, young man". Which is not always reflective of a healthy situation.

You generally have to be 18 to move to another city.

An interesting proposal I've seen that attempts to still save the retirees from being forced to move out for not paying their taxes vs houses locked at a certain rate for too long would be to recover the FMV rate owned taxes upon selling.

Currently, not only does the existing homeowner have to pay less taxes (if prices increase over 2% YoY), but later when they sell their house they can cash in the entire difference. That doesn't seem fair if the entire point of Prop 13 was to protect retirees from being kicked out of their house. So instead, make it so that when the house is sold they have to pay in backtaxes all the difference between the FMV based tax and what they actually payed from any profit they are making on the house. Also stop all means of being able to pass the house between generations without re-assessment (that is currently possible in many states in CA).

I heard this is done in some parts of Texas actually (?).

Property taxes go up in a more sane way, and if you can't afford it, you get it tacked on to the sale of your home at the end...

The way forward is not to 'torch the rule of law'.

There are plenty of ways to do things. Oregon just passed a housing law (HB 2001) that re-legalizes "missing middle" housing for instance, by right, in all our cities.

In other words, you take some of the zoning control away from hyper-NIMBY local jurisdictions.

So "torch the will of local citizens" instead? Why should the rest of the state get to decide what they do in their neighborhoods?

As long as you agree with the majority of the state, it works out for you, but it's a bold power grab that may not end well in other situations.

Larger political entities can consider more than the narrow, selfish interests of a few "I've got mine" NIMBYs, such as future residents, the racist history of zoning, and the impact on the environment of forcing people to commute a long ways.

Local control in places like Palo Alto is two wolves and a sheep voting for what to have for dinner.

Perhaps the new residents could consider moving literally anywhere else?

Some of us would like our children to be able to live in the place they are growing up. And we value what newcomers and immigrants bring to the table in terms of hard work, new ideas, energy, and so on.

Also, one of the easiest ways to make people better off is to let them move to where the jobs are. That used to be very common in the United States. That has been stunted in some part by rigid land use laws that pull up the ladder behind the people who got in while the getting was good.

There is a lot of work in economics showing the benefits of clustering, rather than having a talented up and coming person move to, say, Cyanide Springs Oklahoma because it's cheap.

If you want your children to live there, perhaps allowing newcomers isn't the best idea? Our housing prices go up up up as does our population, and the only approved solution seems to be to lower our quality of life.

Unless you think living in an apartment with no garage, no yard, no storage, and no way to stockpile food (save costs) is a quality of life increase?

Our children will probably not have children if forced to live this way at this price.

Personally I don't really get it, but I don't live in San Francisco.

> Our housing prices go up up up as does our population

That's not true, though.

https://www.sightline.org/2017/09/21/yes-you-can-build-your-...

> Our children will probably not have children if forced to live this way at this price.

Maybe check out some other parts of the world where this is the norm, and people have plenty of kids, once the pandemic is over.

And it's not a given that that happens in any case. People might not choose to live quite so densely, but if they want to, the option is there.

Look at the 'Montreal' option in that article for instance. That'd add a lot of people without having Big Towers.

And I actually lived in Italy, in a flat, with no yard for a while. It was great - we'd go to the park with my kids where they'd almost always see friends. Way better than our big yard here in the US where "there's nothing to do".

> as you agree with the majority of the state, it works out for you

So democracy?

https://www.pewforum.org/fact-sheet/changing-attitudes-on-ga...

Look at this chart. The majority should not always control the few.

edit: never thought I'd see anti-gay-marriage on HN but here we are.

Bad faith response. But I'll clarify to be clear:

I'm Not from the US, but from a country with overwhelming support for same-sex marriage. I'm also from a country that has a proper democracy where voter turn out is 98+% and first-past the post isn't a thing.

What is the alternative you suggest... you hope you get a ruler who agrees with you? Good luck with that.

Glad to hear you live in a country like that, I wish I could say the same. But these are core difficulties with the United States that aren't going away any time soon.

The nation is very divided and there's no hope of overthrowing first-past-the-post here.

And when the nation doesn't agree on things, allowing the majority to rule can be terrifying.

That's not true, I'm quite certain a number of states have started removing first-past-the-post in favour of preferential systems. (Sorry I don't know the states nor what the term for the above is in the US).

I agree democracy has its flaws... but what's the alternative? (This is highly off topic sorry). But complaining that minority rule to protect a "Happy Neighbourhood" is morally equivalent to "gay rights" seems like a dishonest argument to me.

My point is that these things can be morally ambiguous depending on the society you talk to. There are many places on earth that don't allow gay marriage to this day (or anything gay at all).

One of the main problems with democracy is that it incentives politicians to buy voters, rather than use principled judgment. Everything becomes "politicking" to the lowest common denominator, because they have the most votes, and are most influenced by emotion.

Every system has it's flaws, and ultimately, I believe the problem is the people, not the government. If people were more principled, they wouldn't be susceptible to this emotional rhetoric. Monarchies are not inherently unjust, although many of them have been.

One additional problem with democracy, at least in the US, is that it sells out to the highest bidder. The masses are easily manipulated with TV and other propaganda, and they are the ones who elect the winner. It's like an oligarchy - the politicans are beholden to big money.

But people blame the politicans, not the oligarchs. They vote out "bad" politicians, only for new puppets to take their place, protecting the true masters (business interests, wall street, etc).

In a true oligarchy, people eventually go for blood. It's a joke to think that the riots on Jan 6th would do anything - kill the puppets, and the puppeteer brings in a new prop.

If you find this topic interesting I highly recommend Plato's Republic available free: https://www.gutenberg.org/ebooks/1497

But effective democracy limits financing, which solves the buying votes problem.

Investment in education solves a lot of the manipulation problem.

You are Using one of the most dysfunctional democracies as your standard and then pointing out how bad that standard is. The US is a pathetic excuse for a democracy. It’s got some really great ideas that are stifled intentionally.

But you haven’t provided an alternative...

And back to the original point... you would like a monarch to rule The Bay Area?

Please don’t stop at Plato, Aristotle expanded on it and specifically made some key observations around democracy relating to “the wisdom of the masses”.

"It's unfortunate that big tech decided to make this place their home"

Big Tech was established when much of that area was literally little bits separated by fields and farmland.

I think our living spaces are more important than industry, if we need more housing for Googlers etc. well, there's tons of room in Cali. There are even many areas amenable to more density, it's just not SF or Palo Alto.

I'll bet that in Oakland it's much more possible to build semi-high buildings and fairly dense, modern 4 story buildings for the middle class, it's just that fewer people want to live there.

I wonder if Apple and Google get together and bought a large plot of land south of Morgan Hill, they could build a mini city to house 500K people and frankly run the gauntlet of whatever they wanted in terms of setting the rules, and there are at least 500K migrants who'd be happy to live there.

Imagine 'Facebook Campus' but now, your home as well. What's Orwellian to you and I would probably be fine for others. And of course, less cynically, it wouldn't need to be like that either.

I am surprised that they don't do just that.

But, they do something similar - they open offices in other cities until the cost of living rises to match San Francisco (see Portland and Seattle). It's just not in California.

Clarification for anyone else not familiar with Bay Area geography: There are 101 cites included in this regional study.

There’s a lot of data here I think is stitched together in support of a presumption presented as a conclusion, but one question:

> According to estimates from the US Census, the Bay Area’s population grew by about 10% from 2010 to 2019 [...] Yet of the ten richest cities of the 101 cities in the Bay Area, not one of them grew faster than 5%.

By how much did the area’s population of the richest grow? That is, if it grew at a rate of 10%, did they move elsewhere? If 5% - is there any point to the rest of the article? If less, wouldn’t astronomical property value explain why poorer groups didn’t move to these specific areas?

As with so many political issues, this is about economic class - and the differences in characteristics between them:

https://www2.census.gov/programs-surveys/demo/tables/fertili...

> Rich communities should want to welcome more residents, particularly those less fortunate than them. Sadly, in the Bay Area, that doesn’t seem to be the case.

Is that the case anywhere in the world? Why single out the Bay Area.

100% agree, the Bay Area isn’t even that bad. If you want to see real exclusion try going to a gated community in Beverly Hills or Miami.

One difference, as highlighted by the YIMBY Action lawsuit against the California Department of Housing and Community Development, is that both Beverly Hills and San Bernardino are included in the Southern California Association of Governments, and thus they are considered together while planning for housing needs.

Whereas Stockton is excluded from the Association of Bay Area Governments. The housing shortage in the Bay Area is not accurately assessed, and not accurately planned for.

https://www.sfweekly.com/news/yimbys-sue-for-even-more-housi...

Yes: https://news.ycombinator.com/item?id=16704501

I'm particularly fond of this article showing different ways of accomplishing "more housing":

https://www.sightline.org/2017/09/21/yes-you-can-build-your-...

Because the residents are Bad(tm) and need to be punished.

These standards only seem to apply to America and Europe.

Does anyone have a counterexample outside of America or Europe where the underclass is allowed to live side-by-side with the rich? I've never heard of one but perhaps I'm ignorant. Most countries seem dead-set on rejecting any and all immigrants that don't bring $500k+ along with them.

So no counterexamples before my post turns to dust?

To give someone an idea of how bad the difference between neighbours living in the same type of house (same lot size, same floor plan) can be because of Prop 13 in CA, check out this site: https://www.officialdata.org/ca-property-tax/

Feel free to zoom in in any residential neighborhood in San Jose or Palo Alto. You can see 10-20x difference in yearly property taxes payed.

I mean Palo Alto and Mountain View have sued to prevent more housing.

Is it really failing if it’s intentional?

Or maybe the people that live in low density neighborhoods don't want to live in high density neighborhoods. So they stop developers from changing the density of their town.

That's fine if you want to live in low density. But at the same time, these cities, like Palo Alto, are building office space left and right and welcoming businesses into town. (At least that was the MO pre-COVID.) You shouldn't be able to welcome businesses in without building requisite housing units to support the employees.

> But at the same time, these cities, like Palo Alto, are building office space left and right and welcoming businesses into town.

Because said cities cannot get enough tax money from property tax (blame Prop 13) so they need to get it from businesses. But then those businesses attract people in the area and then those people need a place to live in but they can't get a place because nobody has the incentive to sell when your tax rate is locked in (well, growing up to 2% per year), on the contrary, you don't want to sell and then buy somewhere else and have to pay more taxes than you were paying at the old place, even if the new place is much smaller.

One of the countless negative consequences of Prop 13.

As someone not familiar with Californian/SF local legal matters. What do they need the tax $ for if there aren't many residence?

I'll go with Palo Alto, since that's what I'm most familiar with. It's still a city with >65,000 residents. You need tax revenue to support a city that large, along with all the services and maintenance that comes from supporting a 3-4x larger daytime (pre-COVID) population of people coming in to the city to work.

Prop 13 limits the % you can raise property tax each year, unless they sell the property (at which point the property tax resets to the sale value). That leads to a lot of people not moving and holding onto their old, low tax property.

It’s not just a California issue. Pretty much all of post-war (World War II) American development is functionally insolvent. Actually, not having enough residents per square mile is a leading driver of the need for more tax $.

https://news.ycombinator.com/item?id=3090385

Most likely they chronically overspend, just like any other organization with chronic budget issues. The people there seem to think that everything comes for free, and as long as the city can secure additional debt, they're right.

But it's not sustainable, and imo, downright evil.

Spending. Endless spending.

There is no amount of money that is enough.

Not spending fast enough? Maybe a high speed train would solve things!

Grew up there. Been traveling country since. Shocking how well states do with a lot less money.

And if you block the housing that would let these employees walk or bike to work, they'll have to drive in from out of town, increasing traffic (one of the primary arguments made against new housing).

> Whether it’s to protect their property values, exclude Black people, keep down traffic or protect their city’s physical environment, these cities make it hard to build new housing.

Stopped reading at this part. What an ignorant thing to say.

Ignorant? Not at all.

These cities DO make it hard to build new housing. There's no question about that. It's an ongoing political issue, and all the reasons listed have been used to attack or defend that policy.

What flaw (other than "ignorant") do you find in what it says?

Well, it’s pretty dumb to suggest that these are the main reasons we don’t build housing. How about government corruption and special interest groups as big factors in the problem? Most of the time housing projects are blocked by people who want to “protect minorities” or “stop gentrification” or get a kickback from some developer. It’s quite the opposite of wanting to exclude minorities or raise property values.

Most of the time? People definitely want to stop gentrification in working class neighborhoods, but if you live in the Marina or Silicon Valley, there’s already been gentrification. Wealthy homeowners absolutely do block new housing in wealthy neighborhoods.

I voted in my Bay Area city's local election in November. Property values, traffic, and environmental concerns were ALL policy justifications for curbing new housing.

I think the article accusation of racism is misplaced, they just don't want poor people in their fancy city.

Oh not racist at all then. Stop a group of people from accumulating wealth then just segregate based on wealth. Not Racist at all.

Economics is like the "race by proxy" get out of jail free card.

why? they deliberately sue to stop almost any new housing construction.

The prevented BART from going down the peninsula to stop "undesirables" coming to their cities.

They were historically redlined to explicitly exclude any PoC.

They have a deeply ingrained prejudice, which may be less racially motivated now, but to claim that that prejudice isn't present is ignorant.

Even San Jose had police trying to stop BART from reaching due to it allowing the "criminals" from Oakland for some reason using one of the least reliable public transit systems to go to SJ and commit crimes, the flee back to Oakland.

> The data show that middle income cities have, on average, grown at a much faster pace than the region’s poorest and richest locales.

I'm not a housing expert, so take everything I say with a grain of salt.

Middle income cities grow faster because there was more growth in middle income demographics. The most common demographic with a lot of growth is the "senior software engineer" at tech company X. As tech companies exploded, this was the segment that grew the most.

As a result, this is the segment that is most competitive when it comes to housing, because that's where all the people are. This "middle class" income bracket for housing in the Bay Area translates roughly to the $1.25m to $2.5m range for single family home purchases depending on whether you have 1 or two tech incomes in the household.

There's no getting around it: wherever most of the people are will be the most competitive for housing, and when it comes to essentials like food and shelter, people /will/ compete. Want less competition? Buy a house in Vallejo for under $1m, or go above $3m, and there will be fewer people in those brackets who can compete with you.

Either increase the supply or decrease the demand, there's no way around the physical reality of housing.

P.S. It never fails to make me pause and think when people accept $200k jobs without asking, or trying to find out: "What's the distribution graph of incomes within a 30-min commute distance of the job, and where do I land on that bell curve?"

There's no getting around it: wherever most of the people are will be the most competitive for housing, and when it comes to essentials like food and shelter, people /will/ compete

That's not true at all: https://news.ycombinator.com/item?id=16704501

We know how to build as much housing as people want to live in. We make building said housing illegal.

> The most common demographic with a lot of growth is the "senior software engineer" at tech company X.

This isn’t middle income. Entry level FAANG is already high income, never mind senior software engineer.

Reply on news.ycombinator.com