The Whole Problem Is That There Is No Housing Boom In Silicon Valley
slate.com
slate.com
http://www.amazon.com/The-Rent-Damn-High-ebook/dp/B0078XGJXO
After reading his book, I am convinced that overpriced rent is a massively important problem that makes countless aspects of society worse.
I've read that people spend roughly 1/3 of income on housing, 1/3 on food and 1/3 on everything else. The long term trend in the U.S. has been to greatly reduce the % of our income we spend on food (due to agricultural and tech innovation). We need to do the same for housing prices over the next 20 years. A small space to live for one person in NY or SF should simply not cost ~30% of your annual income! The materials are very cheap to build a square box! And there is lots of vertical room in our nicest cities to build square boxes. The issue is solely constrained supply due to building regulations (many at the local level).
For tech leaders in SF, this seems like it should be the next big political fight (after immigration).
http://www.huffingtonpost.com/2012/03/06/andrew-breitbart-fa...
Speaking of which, that rule will probably force me to get a job that I don't need just to rent an apartment as a student.
We have fantastic technology in many aspects of life, but housing seems practically unchanged. I mean, buildings are constructed by teams of men placing pieces of wood by hand. Is that really the best we can do?
Dear VCs, you think a billion dollars is cool? How about a trillion dollars? Housing is that big.
For instance: http://gizmodo.com/5045863/concrete+jet-printer-gets-caterpi...
If Caterpillar, a hyper-conservative, risk-averse organization can fund this kind of stuff, surely VCs can.
The conceptual 3d printed type homes are interesting but they are limited in scope in that seismic and load issues require materials and configurations that are not per say printable. (In other words you would likely not want to live in a 3d printed home in SF).
That's simply not true. The kind of high-intensity housing he is talking about is built by arranging large pre-fab pieces on steel frame. In modern tower buildings, the pre-fab pieces are built on an assembly line and actually finished and furnished before bringing them on site and placing them on buildings. It's a much more efficient industry than concrete jet printers ever could be.
Whether we're talking about one and two story constructions, or tall towers, I still feel that there must be room for "more, better, faster, cheaper" through technology here. I won't be satisfied until everyone can afford (but not necessarily chooses to purchase) their own mansion-sized living space, cheaply.
I don't get why Americans pay top dollars for "houses" made of wood, plastic, etc, and with crappy construction (I've lived in several all around the US).
I'd take EU-style bricks, concrete, stones, etc any day of the week.
Most people that died in the Christchurch earthquake a couple of years ago were killed by falling bricks and stone, and a couple of collapsed concrete block buildings.
Think of it as a lego type snap-together system
Edward Glaeser's The Triumph of the City covers the same ground in a more academic tone and is available in the UK.
BART is the single largest provider of off-street parking in the USA. CalTrain seems to be trying to match it.
In New York, the commuter rail stations are surrounded by retail/residential. I live ~20 miles from Midtown in the suburbs, and I haven't driven my car in two months. I can go to the Costco, 27 miles from downtown, entirely on the train and walking (it's right next to the station).
In Chicago my wife would bring a rolling suitcase. You can also use something like this: http://www.walmart.com/ip/Whitmor-Rolling-Utility-Cart-Blue/....
We have these black rolling carts where I work for carrying around litigation documents. I'd imagine something like that would work too, and look less bag lady-ish.
Sunnyvale has a bunch of apartments near the CalTrain station that will come online this year so that will be interesting.
(Also the hardware industry has gone down significantly in the past 20 years. san jose will never have the 70's and 80's again)
http://www.houselogic.com/home-advice/green-living/public-tr...
http://www.realtor.org/news-releases/2013/03/home-values-per...
i think the key is that outside of a couple of key stations in industrial areas (bridgeport, scott road and a few of the north burnaby stations) there is almost no street parking. the rail stations aren't sited and designed as collection points to funnel people downtown or to the airport. they were placed to encourage development of neighborhoods
Where parts of San Francisco are jammed with houses, every nook occupied, not unlike parts of Manhattan or Boston, there are large swaths of the Valley with nothing but parking lots.
Any time I've asked a local why the densities aren't higher, why a ten story apartment building is such an anomaly, I get some vague grumbling about earthquakes. San Francisco has a number very tall buildings with a few even built on the side of a literal mountain, and all of these have survived several significant quakes, so I doubt this is the actual reason.
It's absolutely surreal the amount of under-utilized real-estate one must drive past or around simply to get where they're going.
Manhattan has incredible population density, and residents have some of the lowest environmental impacts in america. What's bad about that?
The same slate columnist wrote about SFO real estate earlier: http://www.slate.com/blogs/moneybox/2013/04/11/san_francisco...
[1]http://pandodaily.com/2012/12/01/san-francisco-can-become-a-...
Compare that to, say, Palo Alto, where housing is in strong demand (due to Stanford and startups) and yet they've only allowed density to reach a paltry 2,500/sq.mi. If they allowed high-density housing near downtown Palo Alto and Stanford, it'd not only improve things on the peninsula, but also reduce some of the pressure on SF housing from people who currently reverse-commute.
See my calculation here, for Chicago (using 2000 numbers): https://docs.google.com/spreadsheet/ccc?key=0Ak1exuXV7898dDR...
As of 2000, about 871,000 people (one San Francisco) lived in Chicago neighborhoods cumulatively as dense as the Mission (~25k/square mile). About 2.4 million people (three San Franciscos) lived in neighborhoods cumulatively as dense as San Francisco (~17K/square mile). Put another way, if San Francisco (~47 square miles) was as dense as the densest 47 square miles of Chicago, it would have 23,500 people per square mile and 1.1 million people.
Chicago is officially much less dense than San Francisco because the way the boundaries are defined, the city proper stretches 20 miles along the lake shore, two-thirds of the way to Gary, Indiana. San Francisco, meanwhile, ends quite abruptly part-way down the Peninsula. But if you look at the population density weighted by the populations of neighborhoods, Chicago is more dense.
Interestingly, Chicago has no reason to be so dense. Aside from the lake, it's flat, easily-built land as far as the eye can see. It's just that historically Chicago has had lax zoning regulation and that has resulted in more density.
It depends on what you're trying to measure, really. If you're talking about space constraints driving up housing prices in the core city, I think it's useful to look at density in the core city and whether it could be higher to create more supply.
Oakland is very much not the geographical equivalent of Brooklyn (you might be able to make some sort of argument for the Bronx or Staten Island). San Francisco is not more densely populated than Manhattan, neither is, by a long stretch LA.
San Francisco has half the population density of Brooklyn and less than Queens or the Bronx. It's also less than Somerville, Massachuetts or West Hollywood in LA county.
People talk about having more people in San Francisco and they think of Manhattan, but there's actually a lot of room for increased density without looking like Manhattan.
One problem is that density is much lower in places like the Outer Sunset, in part because there's no cross-town subway. Total SF population could be increased significantly if the western half's population density could be brought up to what's already the case in the eastern half.
Which will beget the subway.
As it is there is neither the political will, nor the practical population, to support such a thing.
Call me crazy, but that's what I love about SF. It feels so much more (friendly? approachable?) than other cities because of the architecture and height of buildings. It's quite unique and I'd hate to see it go.
I lived in SF for a year, and to be honest I found it to be somewhere between "cool" and "intolerable". The city is filled with transplants who, the moment they set foot in the fair city, turn around and try to slam the door shut behind themselves as hard as possible, and this has so many negative effects.
San Francisco is a city devoid of pragmatism - it is a fairy tale theme park run amok. Instead of getting more people to and from work faster, it is hostile to most forms of mass transit. It is hostile to the population growth necessary to un-fuck the city's transportation disaster (aka MUNI and BART).
A city is a naturally-arising conglomeration of people that will happen anywhere you combine places people want to live, with places where they can work. The key word here is people. The city has entirely forgotten that - zoning for new office spaces is onerous and slow. Zoning for housing developments nearly non-existent outside of Mission Bay. It has gone out of its way to act directly against the very basic interests of its constituency in favor of maintaining this picturesque, fairy tale backdrop of the 1930s frozen in time.
After experiencing the SF housing market first-hand I honestly have a changed view of the city. When you're just visiting, the old houses, the low density, the unique architectural style, it all feels so picturesque and lovely. Nowadays to me the city feels like a an embalmed corpse - superficially resembling some idealistic long-ago era while lacking any real semblance of function. It is utterly broken, mismanaged to absurdity, all so a small number of people can live in a slowly-crumbling fairy tale.
Nowadays I live in NYC, and frankly have no desire to go back to SF. It's cheaper (!!!), the city has done a remarkable job of preserving old architecture, mixing old with new (see: Hearst Building), and new development. There is a constant stream of development that keep both commercial and residential prices in relative check. And despite the loud cries of San Franciscans, the density and Manhanttanization has created no shortage of culture, interest, and unique neighborhoods.
Hardly surprising. After all, a city is primarily defined by its people, not colorful paints and period-architecture. Keeping people around, at the end of the day, is your best shot at preserving the spirit and character of a place than any sort of architecture.
Isn't the same complaint levied against Manhattan?
On the bright side, this is great for Oakland.
That is normally how these things work and I have frankly no idea why it isn't happening faster in the bay area.
On top of that the transportation on the Oakland side is also highly lacking, further increasing the friction for people working in SF but living in the East Bay.
On top of that the transportation on the SF side is also highly lacking. If you work within walking distance of a BART stop, power to you. For everyone else it means catching a transfer to the worst transit agency I've ever seen: MUNI.
In other words, the only commute that really competes with living in the city proper is one where you're living walking distance to a BART stop, and you work within walking distance to a BART stop at the other end. Any other use case becomes an irredeemable mess, substantially limiting the attractiveness for residents.
Transportation has, and is, and will continue to be, the Achille's Heel of San Francisco and its surroundings. The continuing utter failure to invest in transit infrastructure will be the city's undoing.
And the peninsula isn't really much better. They tend to be bigger, but nothing is within a half mile, nobody walks on the street, it's a miserable place to be. All that, for an apartment that's $300 cheaper? It makes no sense.
I'm rather against high-rise residential construction. Big buildings are fine for hotels, but for homes it leads to really shitty residential neighborhoods where people can't recognize their neighbors. I'm all in favor of three story limits. Just make thin row homes. God forbid people actually have to deal with neighbors and maintain sidewalks and so-forth. Maybe some people actually do like checking in and out of their concrete cell block on floor 50.
http://www.theepochtimes.com/n2/images/stories/large/2012/08...
Here's a fun example: http://www.mercurynews.com/breaking-news/ci_13512735. Palo Alto city council members falling all over themselves to stop LA to SF high-speed rail. They argued that the train should terminate in San Jose, no joke.
Also, Japan (after they set up seismic building codes, which was a decade or 2 before the Great Hanshin Earthquake, the number of older non-code buildings explaining the differences in destruction and life loss between the fairly similar Great Hanshin and Northridge quakes)
For whatever reason, very few people make the connection between supply, demand, and prices in metro areas, which is a point I wrote a lot more about here: http://jseliger.wordpress.com/2013/04/08/connecting-the-dots... .
(That's of course, if they're built to code and don't have things like a weak wall, like buildings with one open wall on the ground floor for parking. )
That's not to say that it can't be done, but 4 stories and below can be just plain old code compliant architecture, but once you get up into 10 stories, you're talking about structural engineering and all that goes with it.
San Francisco is not unique in this regard. Every urban area in America is like this, including Boston and NYC.
San Francisco has a number very tall buildings with a few even built on the side of a literal mountain, and all of these have survived several significant quakes, so I doubt this is the actual reason.
The buildings on the hills are the ones that survive the quake. The buildings built on sand, like in the Marina or Mission Bay, are the ones that are vulnerable to earthquakes.
Phoenix? Cleveland? Kansas City? Denver?
They're parking lots with buildings sprinkled here and there. Density isn't even a priority. Land values are too low to promote higher density.
A lot of this has to do with the fact that Boston, Manhattan, and San Francisco are geographically constrained, they're hemmed in by water. Chicago is like this to a degree, but has sprawled enough that it's irrelevant for the most-part.
It is shocking how many cities view their landscape as worthless, paving it over instead of constructing something that contributes to the betterment of the city. Though when cars rule, concessions must be made. Nobody seems to care about the people who live and work in a city.
[1] http://www.amazon.com/Assembling-California-John-McPhee/dp/0...
There should be no zoning at all. None. Just look at the best cities in the world including pre-zoning America - their growth was dictated by pure economic need, not by nimyism. To use startup jargon, zoning makes it difficult and costly to iterate real estate to the 'highest and best use'.
Say you're buying a nice suburban house in Houston. It has no zoning, so you're worried your neighbors might sometime in the future replace their house with a loud bar, or a factory, or subdivide it into rental housing. An enterprising subdivision developer realizes they can get more money if they can assure you that none of these things will happen. So when they're building the subdivision, they don't just sell you the property unrestricted. Instead, they draw up a set of rules governing future use of the property, and they require anyone who buys a house in the subdivision to sign a contract agreement to be bound by them. Now they can promise you that your neighbor won't build a factory on their land, because the subdivision rules don't permit it, and your neighbor has signed a contract agreeing to the rules.
The rules you agree to typically along the lines of what you'd normally get from suburban, Palo-Alto-style zoning regulations: you agree not to subdivide the property, not to redevelop it into anything other than a 1- or 2-story single-family house, not to build a structure on the property that doesn't meet certain design and land-occupation percentage requirements, not to operate an industrial or commercial facility on the property, in some cases not to rent it to tenants, etc., etc.
In short, the market demands and produces zoning.
Houston uses building line setback rules, huge minimum parking requirements, street width minima, block size and platting rules, fire code regulations, and the whole panoply of laws that mandate sprawl everywhere else with the sole exception of Euclidian zoning. The result is mandatory sprawl.
Market based land use would not have built Houston. It would never have created $3000 basic studio apartments in Palo Alto either. Markets aren't a panacea but what we've mandated instead is a disaster.
Had this been the norm last century, Palo Alto would've been developed with these kinds of restrictions, and instead of the Palo Alto city government with its NIMBYism, you'd just have the Palo Alto HOA doing the same thing. You actually see that in one part of SF currently: the least dense neighborhood in SF, Forest Hill, is the least dense in part because it was developed by one of the country's early HOAs, the Forest Hill Association, which works hard to keep it suburban and "small-town".
From what I've seen, it's nearly impossible to change deed restrictions; even restrictions like "you can't sell to african-americans" stay on the books, but just become unenforceable. At least with zoning laws, it's possible (if hard) to de-clutter them.
Yea, that worked out great in West, Texas:
http://news.yahoo.com/why-did-west-texas-build-homes-school-...
I agree that some part of zoning is pure conservation (skewed towards status quo and the interests of the majority of current owners) whereas no-zone is closer to plain economical interests and favors individual cases.
On the contrary, make everything mixed use. Bottom floor (at the minimum) is business use, and above that is housing.
Some overbuilt cities in China or Eastern Europe have that issue.
The China and Eastern Europe ghost-cities are slightly different because the distinction between the zoning authority (government) and the developer is more fluid, but I still think it applies.
"As a lifelong resident of Silicon Valley, I can only laugh. Our patented brand of NIMBY liberalism married to Asperger's-induced libertarianism makes this plan an utter pipedream."
http://www.theatlantic.com/technology/archive/13/01/a-grand-...
Previous discussion of article here: https://news.ycombinator.com/item?id=5032555
When it comes to building things, yes, they are conservative.
I don't want mega city. I'm sure a lot of people who have made the Silicon Valley their home for many years agree. It's just the young crowd who has to live in apartments anyway that think more mega Apartment buildings would be great. I completely refuse to live in SF because of the density and turn down any job based in SF automatically.
Rezoning alone is "dumb planning". Rail, transit, bike friendly streets, greenbelting and farmland preservation all must be in place first in order for density rezoning to work.
Problem is Santa Clara County has been all about cars and freeways for as long as they have existed. Just last month they closed the San Thomas Creek bike trail for the convenience of the 49er stadium construction. Now cyclists at the Santa Clara Amtrak station are forced to ride on Tasman which has no bike lanes, Sharrows or shoulders. It's exactly this kind of dumb planning that allowed developers to demolish the downtown that Santa Clara once had and perpetuate the kind of auto-centric sprawl that characterizes Silicon Valley.
Its been self selecting for a long time. You will get a lot of opposition to high rise apartments in those areas especially since the existing residents don't 'need' or even want these developments.
You don't even have BART in middle to lower parts of the Peninsula. Where you do see Bart, you see a little bit of the developments that you speak of (Millbrae, South San Francisco, etc...)
There is increased demand. It translates into higher prices for the Peninsula and increasing development and somewhat higher prices in the outskirts (East Bay, South Bay, etc...). Also, see a bit more in fill in the Peninsula. Previously, subpar empty lots are being bought and built on.
http://www.amazon.com/dp/B0078XGJXO/?tag=dedasys-20
Which wasn't bad. Pay the ratings no mind - when it came out, he'd just written something that pissed off a lot of folks for some reason and so they got it into their heads to try and trash his book.
[1]http://www.nytimes.com/2013/04/26/us/farm-loan-bias-claims-o...
His racist obsessions (Sherrod comes to mind) are why people didn't take his "original reporting" seriously.
Exactly. Who is going to have a voice in community matters, particularly when it comes to eminent domain: local homeowners, or hordes of hypothetical people that don't live there yet?
At the same time, Santiago, while vibrant, requires you speak Spanish, and is not the Valley.
2. bribe zoning people to not allow more people to grab land
3. instead of building/managing lots and lots of buildings, put the price of the few ones high up.
it's basic pricing. if you can limit the demand and charge more, its much safer than lowering the price and trying to scale. you guys talk about that all the time here with digital goods and service. but now get impressed that people do that with real world goods since the dawn of time?!
To some extent, I would venture to say that the region suffers from a form of Resource Curse - nice location and weather, and a tech ecosystem that, these days, spins money out of "nothing." Lots of wealth, lots of idealism, but nobody with both the privilege and the responsibility to organize it all in a way that would fix the issues.
Nothing wrong with that at all, but if they aren't spending the money they have then its not helping the economy (at least in this respect).
The thing is, there are plenty of cheap housing in the outer-lying areas like Livermore, Tracy, Stockton, etc. They just need to invest in proper transportation options, like extending BART to those cities.
Everything will continue to get more and more expensive as the cost of basic services goes up and up - eventually you'll start losing a lot of good creative people because nobody can afford to take an entry level job and work their way up. The bar for living "comfortably" in the bay area has been rising extremely fast, and those who have bought a home 20 years ago can live fine, but for young people especially it will be really difficult to catch up. I've had 7 or 8 friends in their 20s and 30s move to the Seattle area for purely economic reasons - a few to colorado and a few to Texas as well.
This argument has been going on for as long as there has been a "Silicon Valley" to make housing expensive, so decades. Nothing will change, because the people who actually live there now like it the way it is.
I guess I wonder more about what could change to lower the cost of housing.
The problem here is not building costs, by any means. It's artificial restrictions on the market by local councils who refuse to support higher density living.
I am thinking something a little different than pre-fab, something more along the lines of plug-able module into building. More along the lines of cargo containers in a warehouse.