Construction cost a mere $50k? These guys should be promoted to top management in SF public servants, with that kind of money management they could house all the homeless.
> For a mere $42,000, Navarro allegedly installed a kitchenette, shower, plumbing and security cameras [to an existing office].
Doesn’t sound cheap or impressive when you are doing it yourself instead of hiring someone and still managed to spend $42k.
> “Doesn’t sound cheap or impressive”
Let me introduce you to the glory of construction experience in San Francisco[0] and how ridiculous it gets.
Direct quotes from the article:
* “It takes 523 days, on average, for a developer to get the initial go-ahead to construct housing — and another 605 days to get building permits.”
* “And after spending five years and more than $500,000 to design bespoke trash cans — with the prototypes costing more than $12,000 apiece — the city has shelved a plan to put 3,000 of them on street corners because of a budget deficit.”
* “The toilet project broke down the minute taxpayers realized the city was planning an event to celebrate $1.7 million in state funds that local politicians had secured for the lone 150-square-foot structure. That’s enough to purchase a single-family home in San Francisco — with multiple bathrooms.”
What I am getting from this is that the whole mini-apartment cost the construction workers in the OP about as much to build as it cost for the city to produce 4 trash cans (that all got shelved anyway). Or about 2.9% of how much it cost the city to build a single 150sqft public bathroom (or, in other words, you could build around 34 of those mini apartments for the cost of 1 public bathroom).
Not going to lie, at this point, I would much rather see the people responsible for those spending decisions to be charged, as opposed to two random construction dudes who dont even own that mini-apartment they built.
0. https://www.nytimes.com/2024/01/24/us/san-francisco-toilet.h...
edit omg it didn't. that city is so f'n corrupt that a guy trying to build affordable housing was eventually forced to sell to a hotel magnate. That's hilarious.
Plus they didn't pay for the land either.
From locking up permits in CEQA reviews to blocking pre-fabricated structures, they are one of the driving factors behind a housing unit costing $700k at the very minimum. This puts housing out of reach for anyone making less than $150k/year.
It’s a 3rd rail issue for anyone in the democratic machine, which is why we won’t see meaningful progress in housing or homelessness under the current incumbents.
I’m actually pro union in most other contexts, especially when workers are underdogs. But in CA there are some unions which are quite powerful, exclusionary, and have negative effects on society.
Even if the problem is real, why is the solution prohibition? Put liability on the manufacturer for regulatory non-compliance, the same as we do for cars or appliances or any other prefabricated product.
Because the problem for the union isn’t the safety concerns, it’s the fact that labor from outside was used to make it.
The premise of unions is "bargaining power". Bargaining power comes from having alternatives. Nobody can make you take a deal worse than your next best alternative, so the way to get a good deal is to have a lot of alternatives. The best way to get it for labor is to have lots of prospective employers for people with your skill set, i.e. for your industry not to be a monopoly.
Unions nominally do this the other way around. Instead of giving employees more options, they try to give employers less. But most of the time that doesn't work. You can unionize some baristas or something, but then you go on strike and the company hires different baristas and doesn't care.
By contrast, if the employer is a monopoly, then they often have to hire most of the people with that skill set. If they're all in the union, the employer can't just replace them because there are no more. This is when unions can behave like a monopoly themselves and dictate terms.
But monopolies are bad. When a union has a monopoly, they do exactly the sort of things which are happening in this case, which is terrible for society and especially anyone who needs the product the union makes.
The correct solution isn't unions, it's to break up monopolistic employers so that individual workers -- and customers -- have bargaining power. Which is to say, alternatives, not their own adversarial monopoly.
Indeed. And the primary method employers use to gain monopolistic leverage is limiting competition by barring new entrants through government regulation, licensing, permitting, etc. Anytime we give government bureaucrats power to regulate, license, permit, etc, that power becomes a highly desirable target for crony capture, either legal through lobbyists, campaign donations etc or illegal through bribes and revolving-door influence peddling.
Like you, I have no problem with unions in concept. Employees should be free to organize and choose who to work for (or not to work for) as they see fit — as long as employers also have the corresponding freedom to choose who to hire (or dismiss) as they see fit. When everyone is free to opt-in or out, everyone has an incentive to find mutually agreeable terms. This creates a naturally sustainable market-driven balance between the parties.
The problem comes in those states which don't have "right to work" protections. In those states a union can legally force an employer to hire only union members (or the government sends police to shut the business down). It can also force an existing employee to join the union (ie give the union part of their paycheck) or they lose their job, even if the employee sees no benefit to joining the union (which happened to a friend of mine). As you'd expect, once any party in a transaction loses their freedom to choose, this imbalance is eventually exploited and abused.
Maybe what you mean is that we need better unions.
But how does that help them?
Suppose a corporation needs a mechanic to service their vehicles. There are a thousand such corporations and they each have a billion dollars. Meanwhile the individual mechanics have no resources whatsoever. But what they do have is a thousand different employers they could work for, so they pick the one offering the best compensation and working conditions.
How is a corporation supposed to use its billion dollars to gain an advantage here? Anything they do to make themselves less attractive to workers would just cause the workers to pick one of the other thousand prospective employers. To do otherwise would require some kind of deception or collusion, which are illegal.
> Maybe what you mean is that we need better unions.
This is like saying "maybe we need better corporations". The reason the cable company sucks isn't that their leadership is uniquely malevolent -- I didn't even have to specify which cable company it is. The reason is that they aren't under sufficient competitive pressure, and that's what happens then. Unions are not exempt.
Meanwhile the remaining "good" things a union is supposed to do can be served just as well by e.g. hiring an agent or buying certain types of insurance, which anybody can do individually regardless of what anybody else is doing.
> How is a corporation supposed to use its billion dollars to gain an advantage here? Anything they do to make themselves less attractive to workers would just cause the workers to pick one of the other thousand prospective employers. To do otherwise would require some kind of deception or collusion, which are illegal.
This line of thinking assumes that corporations are unwilling or unable to use economic and political leverage to avoid the consequences of their actions or to change the law to let them do what they want. I don't think that stands up to scrutiny.
We should have better corporations AND better unions. Cable companies are good examples of corporations that get away with collusion by working with municipal governments to create exclusive contracts.
Everything is always asymmetric. The same thing happens when you go to buy something. You're some individual and the seller is Amazon, a trillion+ dollar corporation. And yet you get competitive prices and free two day shipping with Prime and no hassle returns etc., because they have competition.
> This line of thinking assumes that corporations are unwilling or unable to use economic and political leverage to avoid the consequences of their actions or to change the law to let them do what they want. I don't think that stands up to scrutiny.
But now you're talking about an entirely different battlefield. The premise of a union is negotiating with employers for employment terms. If your issue is lobbying, what you're looking for is a PAC or, if we could ever replace first past the post voting with score voting and thereby stop having a two-party system, a political party.
Sometimes labor unions get drafted into that role, but if that's the only good they're doing then they should just be a PAC and stop trying to do the things they're bad or harmful at, like negotiating collective employment contracts.
> We should have better corporations AND better unions. Cable companies are good examples of corporations that get away with collusion by working with municipal governments to create exclusive contracts.
Unions are good examples of organizations that get away with collusion by working with national governments to carve out an anti-trust exemption for themselves.
The way you make organizations better is by subjecting them to competitive pressure.
Then more labor sectors should unionize! Make the wealthy pay the true cost for living in their communities. Not live with all this government protection and regulations, then outsource production to a free state a thousand miles away. If regulation and taxes are the problem, then fix the problem. You can't have it both ways.
Suppose that land is extremely expensive. A single acre of land is ten million dollars. How much is a housing unit? An acre is 43560 sq ft, so a building that allocates half the size of the lot to housing units could have at least 10 housing units of 2000 sq ft per floor and a 50 story building would have at least 500 units making the land cost per unit $20,000.
You can't get a 2000 sq ft condo in San Francisco for anywhere near $20,000. The difference is attributable to zoning and construction costs.
But it's worse than that, because if building tall buildings wasn't inhibited then the land wouldn't cost as much because the inability to make space-efficient use of the land drives up its scarcity.
Plus at most only about 2/3 of the floor plate is saleable square footage.
So $300,000 of land cost per 2000 sq ft condo.
Realtor fees, taxes, surcharges, local improvement fees, etc., and everything else legally mandated is another $250k on top. Builder overhead, insurance, interest on the bank loan, a margin for delays, etc., is at least another $200k.
So even if construction cost was zero and the zoning process flawlessly smooth, the builder would need to charge at least $750k per unit to break even.
Even if land cost was zero as well, it would still be at least $450k per unit to break even.
The cost of land in SF is less than $10 million/acre:
https://www.statista.com/statistics/1376626/land-price-in-se...
> an acre near anywhere it makes sense to put a 50+ storey building
What is "makes sense"? Are condo units available in Palo Alto for anywhere near $20,000? It makes sense anywhere that the cost of land is high.
> Plus at most only about 2/3 of the floor plate is saleable square footage.
So actually more than the 1/2 used in the numbers above.
> Realtor fees, taxes, surcharges, local improvement fees, etc., and everything else legally mandated is another $250k on top. Builder overhead, insurance, interest on the bank loan, a margin for delays, etc., is at least another $200k.
Half of these aren't part of the list price and the other half are just other words for "zoning and construction costs".
> Even if land cost was zero as well, it would still be at least $450k per unit to break even.
You now seem to be arguing that the land isn't the primary cost.
If your confused about the terminology, $300,000 is a smaller number than $450k. “Saleable square footage” means net of elevator shafts, hallways, etc….
The premise of the post you replied to is that land isn't the primary cost. For a building that puts 500 units on an acre, the cost attributable to land is only $20,000/unit even when the land is $10 million/acre.
You replied trying to add in construction costs and regulatory requirements, which was the point -- that's where most of the cost is, because regulations make construction bureaucratic and labor-intensive, where they don't prohibit it outright.
> “Saleable square footage” means net of elevator shafts, hallways, etc….
Which is why I only allocated half of the footprint of the lot to livable area to begin with. If you could allocate the entire acre of footprint to living space, one acre of land could have more than 20 units of 2000 sq ft per floor and a 50 story building would have 1000+ units instead of 500+.
In the real world it is probably going to be a lot more complex as you mentioned.
Your method of calculating costs is also flawed. Things like loan interest, taxes and realtor fees are a percentage of the other costs, not a fixed amount. If construction and regulatory costs were lower then you could take out a smaller loan and pay less interest etc.
The dominant costs here are the premium on sites zoned for tall buildings, which is the cost of zoning rather then cost of land and could be alleviated with the stroke of a pen, and construction costs which are themselves significantly higher than necessary as a result of regulatory requirements.
Yes, as a thought experiment, you could build an infinitely tall building which pushes the per unit cost for land to zero. That’s not what’s happening in SF, and it has nothing to do with labor. Another obvious point: building tall buildings requires more engineering, more expensive materials, more difficult labor, and more safety than small ones.
Your argument is all pointless hypotheticals. Put up or shut up: show me the numbers that say labor is driving the price of housing in SF. You’ve done nothing to support the idea that labor is driving the actual costs of real housing built in SF.
That isn't the cost of the land, it's the cost of the zoning rules that prohibit density. And, more to the point, construction costs, because now you have a problem where the only place you're allowed to put multi-story buildings already have multi-story buildings and to be profitable you need construction costs low enough to justify replacing a 10 story building with a 20 story building instead of replacing a single-family home with a 10 story building for the same benefit. Which, as you point out, costs more because the building has to be taller, and also costs more because you have to knock down the existing building and do twice as much construction to add the same number of units. Multiplying the effect of any increase in construction costs.
> Yes, as a thought experiment, you could build an infinitely tall building which pushes the per unit cost for land to zero.
It doesn't have to be infinitely tall, buildings tall enough to make even high land prices irrelevant are routinely built in practice.
> You’ve done nothing to support the idea that labor is driving the actual costs of real housing built in SF.
Your claim was that the primary cost was land, but the primary costs are zoning, construction costs and their interaction.
Lumping zoning in with “construction costs” makes zero sense. Everything in some sense fits that definition. To be clear, zoning costs definitely are not labor costs. The way you are using these terms is incorrectly conflating things.
Again because you don’t seem to get it: the post I was responding to blamed (union) labor for the price of construction. Clearly incorrectly.
Does "enshittification" just now mean "I don't like it"?
Even some of the more broad usages wouldn't seem to involve a municipality.