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Comment by w1ntermute | Hacker News Reader

> with as many architectural challenges (seismic, geographic, etc.) the limiting factor for new construction is land and materials, not red tape

Are you kidding me? There are plenty of other cities in seismically active regions where they've built upwards with great success. All of you people who blame earthquakes for SF's inability to build upwards should put your money where your mouth is and get rid of all the red tape - then we'll see what really happens.

> But really, the best response for the people who keep asserting that "building up" is the magical solution is to point to Manhattan: it's the densest city in America, yet it's just as expensive as San Francisco, if not more so.

Wow, how is it that so many people forget basic economics whenever the topic of Bay Area housing comes up? Prices demand both on supply and demand. You are making the (false) assumption that demand is the same in SF and Manhattan.

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> There are plenty of other cities in seismically active regions where they've built upwards with great success

For example, Tokyo.

...and the last time I checked, Tokyo real estate is amongst the most expensive in the world. Which was my point.

Oh, I thought your point was what you actually wrote:

> with as many architectural challenges (seismic, geographic, etc.) the limiting factor for new construction is land and materials, not red tape

"Wow, how is it that so many people forget basic economics whenever the topic of Bay Area housing comes up? Prices demand both on supply and demand."

Excellent question!

Because "supply and demand" is a lot like "correlation does not equal causation" in the lexicon of internet debate: most people are parroting something they heard once but don't quite understand.

The econ-101 supply/demand curve requires a perfectly competitive market for a homogenous product -- neither of these applies to the SF housing market. The products are not homogenous, and the current landowners have dramatically more influence on the prices than the consumers.

So yeah, how is it that so many people forget basic economics? And what does it have to do with housing prices here, anyway?

> Because "supply and demand" is a lot like "correlation does not equal causation" in the lexicon of internet debate: most people are parroting something they heard once but don't quite understand.

While I admire your attempt to recycle the "refute a commonly used argument on the basis of its commonality" strategy, that simply doesn't cut it when you're making fallacious claims.

While you can try making dubious arguments regarding economics, you can't hand-wave away the fact that buildings in SF can be much taller than they currently are while adhering to safety codes for a seismically active region.

> The econ-101 supply/demand curve requires a perfectly competitive market for a homogenous product -- neither of these applies to the SF housing market.

Which "econ-101 supply/demand curve" are you referring to, exactly? I hope you're not referring to the perfect competition supply/demand curve, because that's irrelevant here. Price is influenced by supply even if competition isn't perfect.

"I hope you're not referring to the perfect competition supply/demand curve, because that's irrelevant here."

No kidding. That's exactly what I said: homes aren't commodities, the market isn't anywhere near "perfectly competitive", the demand is inelastic, and the supply is primarily constrained by the availability of land. Thus "building skyscrapers" is not an axiomatic solution to any of this: it costs more to build upward, which exacerbates the non-commodity nature of the good; landowners have even more competitive power in the market; availability is still constrained by an extremely limited natural resource (land).

What happens is that prices go up, landowners build upward until prices stagnate, then landowners stop building. When prices go up again, landowners build upward again. All building happens in response to rising prices, so it's never a force for downward pressure on prices unless demand declines unexpectedly.

> demand is inelastic

There you go again, making fallacious claims. Demand for housing is definitely not inelastic.

> What happens is that prices go up, landowners build upward until prices stagnate, then landowners stop building.

Wrong again, landowners will build upwards until the cost of building upwards outweighs the gains in terms of expected rent. There is no reason the rent couldn't decrease and still result in a net increase in profit for the landowner. After all, you would be renting out more units on the same land.

> Are you kidding me? There are plenty of other cities in seismically active regions where they've built upwards with great success. All of you people who blame earthquakes for SF's inability to build upwards should put your money where your mouth is and get rid of all the red tape - then we'll see what really happens.

You mean the "red tape" meant to ensure that buildings don't collapse on you while you work, or in your sleep as the ground the building is built on turns into quicksand?

Or maybe the "red tape" that exists to ensure that there is adequate transportation and services to support increased density.

I think what would happen is a lot of shitty housing would be built that would kill a lot of people and bring the city to a halt during the next sizable earthquake.

> You mean the "red tape" meant to ensure that buildings don't collapse on you while you work

No, I mean the red tape that allows anyone to block the construction of a new building just because they don't like how it will look. Work on your reading comprehension, I have no problem with building codes to ensure safety.

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