How New York and San Francisco's Tight Housing Markets Are Hurting the Economy

http://www.sfhac.org/stop-the-mission-moratorium/

Here's how: https://www.reddit.com/r/housingforsf/comments/22xoht/help_h...

http://www.sfbarf.org/front.html

(could really use a site update, but they're doing the right work)

My view is slightly more nuanced. Developing is expensive. Luxury properties, like all luxury goods, sell at a higher margin than non-luxury. Therefore developers will build higher margin luxury apartments until demand for luxury apartments is satisfied. At that point they'll build mid-tier. Which have lower margins but it's still profitable and better than not making money. Then, once the mid-tier is finally satisfied, the low end will be built. Margins are likely crappy but hey whatever.

Once you reach full land use there's another layer of complexity. You can't build out so you have to build up. And building up is more expensive. In fact each floor is more expensive than the one below it. It doesn't take long for simply breaking even to be too expensive for even the lowest tier when land costs come into play.

Just to keep up with the national US growth rate (0.7%), San Francisco alone would need to make housing for almost 6000 new residents per year. In the first decade of this century (2000-2009) there was a total of 2,500 added per year, or roughly a half of what's needed, and that's a simplistic calculation for what's needed.

Add in a renewed popularity of cities and urban living over the suburbs, and it's no wonder then, that housing is in short supply in San Francisco.

The reality that San Francisco doesn't want to face is that housing for at least 6000 people needs to be added EVERY SINGLE YEAR, just to keep up. All the challenges related to adding housing in San Francisco (here's a hint; a 150-year old facade isn't historic) add up to one thing - very limited supply, and any Econ 101 student could tell you the result. What happens when demand rises while supply stays the same (or even goes down, relatively)? Prices skyrocket.

From where I'm standing, the neighborhood groups preventing any new housing from getting built are the ones destroying the city.

Seriously, housing is one of the least elastic markets out there. Everyone needs exactly one home, everything else is secondary.

Out of all the places and times and people who've talked of building more housing as destroying the city, most of them were just rich, white landowners who didn't want immigrants, minorities, and jobseekers ruining their views.

I'm not saying you're any such person, but your position is objectively furthering the interests of rent-seeking landowners as the expense of the marginalized and the exploited. Real equality can proceed only when housing is available as close to construction cost as possible, or better yet, cheap as free.

Come on. Say what you mean. You don't want things to change, because then things would be different and you'd have to have Those People in your wonderful inclusive life.

And that would be bad. So down with inclusiveness!

I'd like to understand this better.

I live in a city of a quarter-million people in a US state that no one in tech cares about. There's no rent control here. I pay $400 plus utilities for a 1000-square-foot apartment in a decent location. Clearly my landlord is making a profit off of this and similar apartments at $400 a month. But I'm often told that, if my apartment was in New York, he'd be taking a loss even at $2000 a month. Why is that?

The only difference that has occurred to me so far is the initial cost of the land in a dense city, which could potentially be enough to tie up many years of profits. But that's still just a one-time cost. What am I missing?

http://www.laweekly.com/news/its-official-la-is-the-most-una...

http://projects.scpr.org/longreads/high-rent-few-options/

According to Wikipedia, based on the 2014 estimate of ~850k people, the per square kilometer density figure for SF proper is 7,000.

Is there room for growth in SF? Definitely. You'll get no argument from me on that. And I agree with you that Parisian style density is a fantastic thing. It also goes to show you that skyscrapers aren't essential for high density urban living.

By the same token, I do think people tend to underestimate the density of 3-story tracts in SF. The zip code I'm living in in SF, for instance which is dotted with 2-4 story buildings for the most part boasts a respectable 31,000 people per sq mile (and this is on the west side of the city). Many observers, without actually looking at the actual population statistics, would probably say this is a low density neighborhood when the reality is that it is anything but.

If we can achieve those densities with a mere 3 stories, imagine how many more people we could house if we upzoned to 6.

Btw, you can find neighborhood density figures for the 2010 US census by zip code here: http://projects.nytimes.com/census/2010/map (look under the "more maps" drop down)

EDIT: Looks like you corrected the SF numbers.

You'd never find something equivalent in the bay area, so overall I think the "density argument" has some validity. Even more so if there would be willingness to expand the public transit infrastructure.

When I moved here, people came here because this was the place where all the interesting technology happened. It was hard to keep up. But now, the number one reason to move here isn't the technology. It's access to capital.

Since Bubble 1.0, the Internet has become an excellent distributor of technology. But VCs still aren't interested in getting on planes.

The entire GDP of all of California combined is $2 trillion.

It's blatantly obvious that 9.5% GDP boost is a fraudulent number.

The actual paper[1] simply says that "lowering regulatory constraints in New York, San Francisco, and San Jose cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%", so whatever timeframe it would take to reduce those regulatory constraints. (In SF that sounds like a project measured in decades, although maybe the imbalance in supply and demand will cause a breaking point that forces the city to engage with real solutions to the problem.)

[1] http://eml.berkeley.edu//~moretti/growth.pdf

1. If SF had typical land-use policies, it could build enough homes to accommodate twice its current population

2. If they did that, they'd be able to fill those homes with people

3. Those people, upon arriving, would have approximately the same productivity as current San Franciscans

4. SF would thus double its contribution to the US GDP

For example, NYC is home to much of the publishing industry. But all those books go out to local bookstores where they are sold at a small profit, increasing the GDP of those local areas above and beyond NYC's publishing industry's contribution.