SF Is the Third Least Affordable Major City in the World | Hacker News Reader

SF Is the Third Least Affordable Major City in the World

modernluxury.com

37 pointsDanielRibeiro21 comments

Articles need to link to the actual survey: http://www.demographia.com/dhi.pdf

Yes, San Francisco is unaffordable, but 3rd least is an exaggeration:

-This does not include the entire world, just cities in English-speaking (+Japan for some reason) developed countries with metro areas exceeding 1M people.

-By most measures (http://www.theatlantic.com/business/archive/2013/07/china-ha...), Shanghai, Shenzhen, and Beijing have worse housing affordability than the English-speaking #1 of Hong Kong.

-This is using the SF-Oakland MSA (http://en.wikipedia.org/wiki/San_Francisco%E2%80%93Oakland%E...), which is far broader than San Francisco itself.

-Comparing different MSAs is not exactly apples and apples. The New York MSA extends to Pike County, 80 miles from Manhattan. Under this definition, you could start including lower-cost Sacramento and Stockton with San Francisco.

I was just going to comment...Beijing is way more unaffordable than Hong Kong when median income is considered! Also, both Vancouver and Hong Kong (and to a much less extent, SF) are being invaded by mainland speculators, so the problems are all quite related.

Rents are much more reasonable though, so the term "affordable" based on property speculation is quite weird (though HK is quite expensive in rent also).

> both Vancouver and Hong Kong (and to a much less extent, SF) are being invaded by mainland speculators

I always thought it was Chinese government officials looking to invest their embezzled funds or bribe money. Paying in cash looks sketchy to me.

The banking system isn't that developed and people are used to paying in cash, even if you buy a house here your downpayment is likely to be 50% of the house's value.

There is a lot of gray money flowing into foreign, some of it actually corrupt, but much of it just very gray. Some of it is real money, with no other way to invest RMB domestically (domestic real estate is a basket case, stock market...ha!), many just look abroad for investment opportunities and aren't too creative about it.

When this was in the news in NZ, there was a good series of posts on a local blog with some criticism of the way the survey is constructed: [1] [2] [3]

Demographia itself has a certain ideological bent (go read the introduction to the survey!). NZ readers will also recognize both NZers represented as current and former members of the right(er)-wing National Party.

The impression I get is that these statistics are constructed to support existing policy, not in order to inform the development of policy.

[1]: http://transportblog.co.nz/2013/01/23/demolishing-demographi... [2]: http://transportblog.co.nz/2013/01/24/demolishing-demographi... [3]: http://transportblog.co.nz/2013/01/27/demolishing-demographi...

3rd least is NOT an exaggeration, it is straight from the paper you linked to (bottom of page 10.) It is third in the AUTHOR's chosen metric: "Median Multiple" which compares raw price to income.

A valid criticism would be that this is really measuring debt/rent tolerance in the target markets, but I digress.

"3rd least in the world" is an exaggeration. "3rd least among Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, UK, and USA" would be valid.

ah, i re-read the paper and you're absolutely right.

"The researchers used a metric called a median multiple, which compares the average home price to the median yearly income for an urban region"

Wouldn't it be better to compare medians? (Median home price to median yearly income). It seems to me that you want to be robust to outliers in home price (Danielle Steele's mansion) in the same way that you're already robust to outliers in income (Mark Zuckerberg's paycheck)

From the original report (http://www.demographia.com/dhi.pdf), it appears that they do actually compare medians as you suggest: "The Demographia International Housing Affordability Survey uses the 'Median Multiple' (median house price divided by gross annual median household income) to assess housing affordability" (p. 7).

Booming economy, affordable housing, development restrictions and NIMBYism: pick two.

I'm surprised the Pittsburgh scored so well. I have a friend who is buying houses to flip to rentals, and he says that houses stay on the market for less than a week. He suspects it's because of people moving into the area due to the popularity of Marcellus shale fracking. I expect that both of those would push prices up. Every week, I see tons of nice subdivisions being built like there's no tomorrow.

What's interesting to note in the survey is that Atlanta is the 5th most affordable city in the world. I wonder why that is?

In the South you're allowed to build things.

Its probably related to supply and demand.

Something to do with Georgia's extremely high poverty rate perhaps?

http://www.bizjournals.com/atlanta/news/2012/11/08/georgia-p...

To be fair, it was weighted to median income. So if everyone was poor, that would drive the "affordable" price way down.

In other news, the sky is blue. News at six. Why is anyone surprised by this?

I think they missed number 4 there? Or i missed it?

Sydney, followed by Melbourne: http://www.cnbc.com/id/101349774

Finally Australia finishes outside the top 3 in something and I can be happy about it!

EDIT: Although that article says San Jose is the 5th even though the source disagrees. Confusing.

The actual source (http://www.demographia.com/dhi.pdf) gives San Jose 5th. Melbourne takes 6th, with Auckland at 7th.

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