Tech Boom Hits San Francisco Rental Prices

See also Taipei 101 -- designed to withstand seismic events and typhoons through some rather interesting "hacks".

San Jose has been building condos and apartment buildings near the Diridon Caltrain station, so that's something. But much of the rest of the Valley between SJ and SF is extremely anti-development. Try to get approval to put in a condo tower in Palo Alto! I don't even mean that jokingly: given the demand created by the Palo Alto tech businesses and Stanford, it could easily support several condo towers near the downtown area. The fact that the city government bans them means that that demand is displaced elsewhere, e.g. to SF.

San Francisco is desirable as location convenient to jobs and transportation.

Not having more housing in Beverley Hills has no real impact on the rest of LA. Not having more housing in San Francisco means the extra demand spills over into a variety of other places.

Higher Density housing does not necessarily result in a location being less-nice. Vancouver BC has made a point of choosing trading density over suburban sprawl with supposedly nice results:

http://en.wikipedia.org/wiki/Vancouver#Cityscape

As far as I'm concerned the lack of cheap housing in San Francisco is no more of a problem than the lack of cheap housing in Beverley Hills.

See Edward Glaeser's Triumph of the City for more about why this is a problem. For example, he cites an array of research that comes to this conclusion:

"Cities enable collaboration, especially the joint production of knowledge that is mankind's most important creation. Ideas flow readily from person to person in the dense corridors of Bangalore and London, and people are willing to put up with high urban prices just to be around talented people, some of whose knowledge will rub off.

Rousseau famously wrote, 'Cities are the abyss of the human species,' but he had things completely backward. Cities enable the collaboration that makes humanity shine most brightly. Because humans learn so much from other humans, we learn more when there are more people around us. Urban density creates a constant flow of new information that comes from observing others' successes and failures" {Glaeser "Triumph"@247}.

In other words, having a large concentration of smart people leads to new ideas and "the joint production of knowledge." Preventing people from moving to cities through price restrictions means less knowledge and has an array of negative environmental consequences.

You could adjust the timing of the traffic lights to ensure that the rail line always (or usually) has priority and cross the whole city in ten minutes.

Developments typically appease the loud-voiced locals by either pulling out of development plans or modifying their original proposals to lower heights (and thus lower density).

It seems some voices SF, while urban, would prefer to keep SF a quaint victorian town. I mean, we're in the 21st century, allow the city to grow like a city.

That hasn't stopped the MUNI subway expansion north under 4th Street and Stockton.

http://centralsubwaysf.com/

More necessary is taxing landlords and owners of large amounts of real estate (anyone owning real estate at more than 12 times the average pre-tax income in an area qualifies) at very high rates and using the funds to build the best public transit system in the world-- a long-term solution that obviates the need for stabilization in the first place.

I don't really have a worked-out position on the question, but I'd tentatively think that stabilization that doesn't amount to de-facto freezes would avoid some of the worst problems, since prices would track the market, just with a lag, as opposed to never doing so. For example, the problem with CA's Prop 13 isn't that it limits the y-on-y assessment increase for property-tax purposes, but that it limits it to 2% per year, not accounting for inflation, which is such an absurdly low limit that assessments will never track market prices, even in a delayed sense. Esp. since in years with >2% inflation it actually mandates a cut in real valuation. (Also, if I had my way, I'd remove the inheritability of rent-stabilized rents and Prop-13 valuations, to avoid any weirdness crossing generational lines.)

Also, these economists appear to be ignoring a simple practical matter.

The idea behind most rent regulation is to avoid pricing low-income-but-necessary-to-basic-function people out of an area. These are, basically, the garbagemen and janitors and cooks and such, who can quickly find themselves priced out of anything within a reasonable distance of the city.

This results in a corresponding shortage of those services in the city, and prices for those services increase until even the wealthy -- who can still afford the higher rents -- are not willing to bear those costs to remain in the area, and begin leaving.

This can happen surprisingly quickly. In modern environments where many lease agreements come up for renewal at essentially the same time, it can happen frighteningly quickly, far more quickly than new construction can hope to "correct" the housing shortage.

Besides, price booms are the natural result of demand outstripping supply. If rents don't go up to reflect this fact, then how do you cope with the fact that the number of people who want to live in San Francisco outstrips the number of people who can fit into San Francisco?

How about if you own a start-up? Was Instagram guilty of "predator" pricing when Facebook bought them?

What people don't seem to understand is that in a free-market system, there is no free lunch. Look at the rental market in SF. People pay "key money" to secure a place. Or the landlord rents to their friend, not the best tenant because if he can't get fair market value in terms of a rental rate, he'll get it someway else (and buyers will pay, because they value it the same way).

Depends what part of the East Bay, of course. West Oakland is the closest BART station, but it is in some serious ghetto. Lake Merritt, Berkeley (esp North Berkeley) and Rockridge are your first good options, but they'll take a little longer to get to. My advice would be definitely to check out Rockridge, it's a surprisingly nice part of town.

Moving into an older, but more sturdy unit is the most sensible thing we have ever decided to do.