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Comment by zinssmeister | Hacker News Reader

blaming the "rich" techies for the over priced rental market in SF and the rest of the Bay Area is terrible. The real reason rent is sky high in my opinion is because SF is acting like a small city when it's not. Real estate development is pretty much kept flat. Yes they are adding units but if you look at the expected growth, we will stay flat at best. This results in bidding wars for rentals and real estate purchases, because frankly there isn't enough for everyone. Builders would like to buy up more space and crank out energy efficient/modern housing, but no sir, no permit for you.

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I can tell you that my SOMA apartment's rent went up 1k because Google wanted to rent some units in it. This pushed me out of San Francisco. I don't think most of these Embarcadero/SOMA startups are interested in high rises in the Sunset or in West Portal, they want high rises in SOMA, which is where they're being built.

How does this change the fact that if you allow more high rises in SoMa, you can accommodate both the existing tenants and the new techies moving in, all without raising rents?

The landlords can see more money, so they're likely trying to maximize profits.

Do you know how supply and demand works? Profit maximization occurs within the context of supply and demand. Please study some basic economics before commenting further.

What on earth are you on about?

Okay, hypothetical from someone with an advanced degree in Economics, not because I'm bragging, but to save you the snark and insults:

Developer gets the green light to demolish 30 unit building and build a large high rise at say, 6th and Howard. Many of these people are on the lowest end of the income spectrum.

So you demolish the units and build a 150 unit, 15 story luxury apartment building, because you know Square is a block away and their employees can afford to pay ridiculous rents. As the owner of the building, how many units are you building to occupy the old, lower income tenants, and how many are you building to occupy the Square tenants, who will often be able to afford 3x the price?

This is the problem the article is pointing out. No matter how you build "more housing", it very certainly will be first built for the highest income people, thus pushing the lower income teachers, firefighters and policemen, out of San Francisco proper.

> No matter how you build "more housing", it very certainly will be first built for the highest income people, thus pushing the lower income teachers, firefighters and policemen, out of San Francisco proper.

Clearly your "advanced degree in Economics" hasn't taught you any common sense.

Is anyone saying that the housing that is built first has to go to lower income people? Is anyone saying that you cannot just build more housing? Do you understand that there is not an infinite supply of tech workers looking to move into expensive apartments?

I don't think it'd be that inaccurate to model the supply of tech workers looking to live in SF as "very large" relative to demand, i.e. not likely to be meaningfully diminished by a dozen or two condo towers. Plus, demand itself depends on housing stock, and good new housing stock tends to produce more demand: people's friends move to SF, they hear about a new condo tower, the whole area gets more desirable. If you modeled Manhattan redevelopment that way, you'd have good results: the construction of new condos in Manhattan has not appreciably diminished the remaining outstanding supply of people wanting to move to Manhattan. If anything, the opposite: the "cleaning up" of Manhattan from redevelopment has increased the demand to live there by more than the new apartments have provided, so the supply/demand imbalance is actually worse than before! Now that might still be good for other reasons, but not if your goal is to lower prices.

I mean, assuming we're not talking about putting in 500,000 new units or something, Stalinist-apartment-blocks style: that would really produce enough supply to soak up any excess demand (which was precisely the point of Stalin's building programme). And their unattractiveness might reduce demand, too...

> It's reasonably accurate to model the supply of tech workers looking to live in SF as not likely to be meaningfully diminished by new construction, i.e. demand >> condo_size.

Based on what exactly? I don't think you can compare Manhattan to SF in this regard. Manhattan has general appeal and is well-known worldwide, whereas this issue with SF is specifically due to tech workers.

And I am not convinced that there are so many tech workers that you cannot accommodate everyone else as well. They definitely aren't going to be "pushed out of SF" if you allow high rise construction in all parts of the city.

Oh hey back to condescending dickhead mode, you seem great at interacting with other humans...

Anyway, all those theories are fine, but I don't believe the development that could physically be done in the next 3-5 years would outpace tech employees and I believe that it would, as the article says, push lower income SF residents out. This is the entire point of this article, and seems to be going over your head. Not to mention that the article actually addresses the idea of building high rises all over and talks about how poorer high rises will be crime ridden while the upper class high rises would push all the locals and culture out. But hey, why use common sense or rational thought or even bother to read when you can just act like an insufferable condescending asshole? Really, I'm never usually this harsh on people, but your path to "winning" an argument, seems to be hearsay and insulting people versus logic and reason. Fuck that.

Part of the stated problem was "and the city only allows high rises in SoMa" I was under the impression SoMa was the only place where you could build high-rises and didn't think the restrictions were very tight.

Also, I don't think if someone demolished a lower-class apartment in SoMa they will do anything but build the highest cost apartments (If your options were to build apartments that cost $1500/mo for locals or $3500/mo for new tech employees, which would you build?) and push those lower income people out, which is basically the problem we are discussing, so no, I don't agree with the above assertion. Sounds good in theory, wouldn't work that way in practice.

Do you understand that demand is finite? You cannot go on building apartments for new tech employees forever. If you allow widespread construction of new housing, then at least some of that housing must target lower income people.

Moreover, I don't agree with the restrictions on high rises to SoMa. Why not allow them to be built elsewhere? And who says that you have a right to live in SoMa anyway? If it were allowed, high rises would go up in other parts of the city, and you could live there instead.

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