http://www.slate.com/articles/business/moneybox/2012/05/face...
"San Francisco—one of the most expensive cities in the United States—added just 418 new housing units in 2011, the fewest since 1993. What’s more, 149 existing units were removed, leading to a nearly nonexistent increase in housing supply."
There is clearly something massively dysfunctional in San Francisco. High prices should create the incentive for drastically increased supply. San Francisco should look like Toronto does, with dozens of high rises under construction trying to cash in on the high rents. See: http://www.canadianbusiness.com/blogs-and-comment/what-toron....
superficial explanation for the outrageously high housing
prices in the Bay Area is that that there’s not much
developable land, especially on the peninsula between San
Francisco and San Jose. In fact, the major reason is
the NIMBY (“not in my backyard”)
Not surprisingly, the existing people with 3 or more story houses have seen their property values shoot up since those large houses can no longer be built there.
http://www.bizjournals.com/sanfrancisco/print-edition/2013/0...
> There is clearly something massively dysfunctional in San Francisco. High prices should create the incentive for drastically increased supply.
They have and do.
Meanwhile in New York, you pay a broker $10,000 for the privilege of paying $2500 a month to sublet a room a family of cockroaches only uses at night.
The first, as others have pointed out, is NIMBYism. SF has the most stringent zoning laws I've ever seen. Furthermore, lots of the deep-pocketed residents and real estate developers have been successful in fighting off verticalization.
The second major factor is instability. SF is famously overdue for "The Big One" and is known to be seismically unstable. But what a lot of people don't realize is precisely why it's so unstable: because a large portion of it was basically built on wet sand and landfill. If you look at topographic or seismic maps of SF, you'll see that much (most?) is built on areas of liquefaction. It can be unsafe to build highrises on shaky ground.
The first problem can be solved, albeit not easily. The second problem is a time bomb waiting to go off. Perhaps in our lifetimes, or perhaps in the next generation's.
This canard keeps getting repeated on HackerNews.
It's not 2011 anymore, when housing construction was at its lowest because of the overhang due to the massive real estate bubble.
It's 2013 and a construction boom is under way that is so large that in the next 2 years more housing will be built than in the past 15 years combined.
http://www.bizjournals.com/sanfrancisco/print-edition/2013/0...
That said, it's great news that so many rental units will be made available in the next few years.
How many units were built in 2006, 2007, and 2008?
figure 3 on page 11 illustrates the point I was making:
http://www.sf-planning.org/ftp/files/publications_reports/20...
Look at the price of housing from 2007 to 2011, and if you understand the role of price in marketplaces, you'll understand why construction was so low.
Most people that visit think it's 'cold', they're expecting the hot weather of SoCal
Personally I like seasons, but there is a huge contingent of people for whom some form of California weather is their idea of perfection whether that be LA, San Jose, or San Francisco.
The city is ugly as hell. The food here costs a fortune. The bars are full of pretentious douches.
The real problem is European density needs European public services. San Francisco is enormously less livable than London, unfortunately...
"demanding they make it just like the overbuilt sprawl
that they came from."
There are entire parts of SoMa that have a parking lot or a 1-2 story auto body shop when a 6-8 floor apartment building could easily occupy that space.
The other problem cities have with new buildings is all the complexities that now exist with mixed use commercial/residential buildings. Back in the day, having a ground floor of stores and apartments above was rarely a problem, but the rise of HOAs/ROAs and the equivalent COA for commercial tenants, buildings often end up in litigation because most developments won't even begin until a certain amount of the commercial occupancy has been sold. This leads to a distorted balance between the COAs and the ROA/HOA that is established later after distorted agreements between the two have been put in place. This imbalance then puts buildings under litigation, hurting real estate values.