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Comment by capkutay | Hacker News Reader

San Francisco has bigger issues with class/job sector warfare instigated by city politicians.

"The tech industry has come like a train wreck into this neighborhood and into this city," [0]

Theres this backwards mentality purporting the idea that market-rate housing development will drive out long-time residents. In reality, its the lack of market-rate development that leads to tech workers out-bidding low-income families for apartments (especially in areas like the mission).

0: http://www.sfexaminer.com/sanfrancisco/campos-to-propose-mor...

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Real estate everywhere is entirely backwards and will only incentive siphoning as much money as possible though such a limited supply side market.

Low income developments only happen as mandated by local municipalities, and even so developers do so reluctantly only to qualify for the tax breaks on their larger maximum market rate brand new condo in the freshly gentrified neighborhood developments.

That's only true in large cities which are effectively at 100% land usage. Meanwhile where I grew up in rural Tennessee not only are the houses cheap but the materials used to build them are lesser than anything you'll find within 50 miles of downtown Seattle (where I now live).

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.

> limited supply side market.

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.

> here's a hint; a 150-year old facade isn't historic

Eh, anything older than 1906 in SF is historic.

You say 'historic', I say 'old, decrepit, and due for a teardown'.

So when is David Campos up for reelection? How quickly can we mobilize to eliminate him?

ETA: Next year, 2016, so we have about a year and a half.

I don't want to turn this thread into a political debate, but I'll just leave this here:

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

It takes less than five minutes to register to vote by mail in San Francisco, and doing so means you're a lot more likely to vote, and to do so while carefully reading a voter guide.

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

And remember: for any position where there's a primary, the Democratic Primary is the election, so if you want to count, register accordingly

That's not the case anymore; it was changed via ballot proposition several years ago, and now the top two vote-getters face off, regardless of party. That's why last year's big David Campos vs David Chiu battle happened twice: once on primary day (registered Democrats only, and just for practice), and then once again on Election Day (all voters, and this time it counts).

He's termed out in 2016. May try to run for state office again like he did in 2014.

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

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

It is the same in Stockholm, or worse even. Because of rent control, nobody builds rental apartments because it isn't profitable. Most rental apartments have been sold due to unprofitability and have been turned into owners apartments. The few rental apartments that still exist are rent controlled and you pay with a different type of capital to get those -- social capital. Or you can spend 15 years of your life in the housing queue. There literally is no rental market, rental agencies don't exist.

As a result, Sweden has the world's largest housing bubble and by some measures the highest private debt of any country.

You can not find a more segregated, class-based society in the developed world.

I recall running into a pensioner at Akkurat on my last visit. He was complaining about his 350 euro rent controlled apartment in Gamla Stan. I just shook my head - one the low rent; two he was drinking and eating at Akkurat which isn't the cheapest place.

Even if this person was not rich as measured by capital, he is somehow privileged in other ways. Like running in the right social circles and knowing the people who hand out these rental contracts. Typically, people in media, the culture sector, and politics, know each other and do each other these kind of favors. It's how corruption works in a society where power and influence have been consolidated over decades.

Me, I moved to China.

> Because of rent control, nobody builds rental apartments because it isn't profitable.

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?

Yearly property taxes.

> 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

One explanation is the huge upfront investment. The median apartment goes for $900k in NYC these days [1]. According to google's mortgage calculator[2], a 30 year mortgage for $900k will mean a monthly payment of $4.2k.

That means somebody buying an apartment on mortgage will have to rent it for $4.2k a month just to break even.

Then there's also opportunity cost. If there are people willing to pay X for something, you are technically losing a lot of money by selling/renting for less than X.

[1] http://www.nytimes.com/2015/01/18/realestate/what-750000-buy...

[2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...

Fun fact: The average mortgage repayment time in Sweden is 120 years.

A landlord has to cover several things out of your rent: interest on the underlying mortgage, property taxes, maintenance.

Note that landlords rarely buy the underlying property in cash. It's an extremely inefficient use of capital. Having a mortgage allows you to increase your leverage.

I wouldn't call that class warfare, and it is certainly not instigated by the politicians. There have been anti-gentrification protests in SF long before David Campos was in office, and they will be happening long after.

Actually the issues are fairly interrelated.

San Francisco is currently getting the overflow from massively constricted housing market of San Jose and the Peninsula. Build high rises in East Palo Alto and you satisfy the demands of the "anti-gentrifiers" and make the labor more elastic.

Seeking to maintain a balanced economy, culture, and community isn't "class warfare"; it's just city planning with a view beyond the next MVP.

You can never build enough housing in a high-demand city without destroying the city; the demand is too elastic, the incentives between neighborhoods/culture and developers too misaligned.

San Francisco's problem is in the externalities levied by the immature VC-valley monoculture; significant increases in market rate housing density bring corresponding increases in the societal/cultural problems underlying this issue.

Sorry -- define "destroying the city", please, because my understanding is that cities are made of people, not buildings, and not building any new housing tends to prioritize buildings over people.

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

Housing density is only one attribute of a city; livability, open space, affordability, diversity, culture, safety, community -- these are often just as important to the people living in a city, and development doesn't occur in isolation from those issues.

Livability, affordabilty, diversity, culture and community are all adversely impacted when the housing supply is artificially constrained the way it is in San Francisco, and the notion that, for instance, building marginally taller buildings, or legalizing the construction of backyard cottages, is going to have even the slightest impact on open space is absolute nonsense.

There was a neighborhood meeting this week about building over 1,000 units of affordable housing on what is now a parking lot, and the majority of current neighbors expressed a preference for the parking lot. Please, convince me that a massive slab of asphalt is better for San Francisco than making room for 1,000 new working class neighbors.

More details on the parking lot: http://sf.curbed.com/archives/2015/05/08/at_balboa_reservoir...

I think Curbed is being really hard on the narrow streets proposal. City streets in America, and especially in bike-friendly places like the Bay Area, are absurdly wide. We would have much more livable cities without them.

I couldn't agree more. The most magical neighborhoods I've ever seen have had narrow streets that cater to pedestrians first and cars, like, fourth.

http://www.venere.com/blog/images/positano-streets-amalfi-co...

http://www.china-tour.cn/images/Lijiang/Lijiang-Nightlife.jp...

https://c2.staticflickr.com/6/5159/5889050432_4f8d86e07f_b.j...

Those places all look to have been built way before the automobile was a thing. And while I agree with narrow streets, because they're safer and more aesthetically pleasing etc, you can't ignore that transforming to that design will be a little disruptive in the near term.

My point is that some of the great and beautiful narrow cobble stone streets in, say, Boston or Philly, to use US examples, weren't built to handle heavy street traffic. Transforming high volume automobile streets to the walkable ideal is inevitably going to cause some headaches.

The automobile is rapidly becoming less and less of "a thing", especially in the Bay Area, and cities should get out in front of it.

Perhaps they are homeowners, who want the housing crisis to stay terrible because it keeps their property values high.

Indeed!

"The neighborhood is mostly single family homes, and the people there are very resistant to the idea of “renters” (the code word they use for poor people) living in the neighborhood."

http://sfbarf.tumblr.com/post/116593748570/balboa-reservoir-...

The people that live in a place shouldn't have a say in its future?

There is something of a difference between a neighborhood having a say in its future and a neighborhood having a dictatorial stranglehold on all changes within its bounds. Does the rest of the city have no say? The county? The state? The country?

Would you be OK with this principle if a white neighborhood wanted to enforce a "no black or brown people" rule? How about a "straight people only" rule? How about "no poor people"? This isn't a purely abstract question, but an actual question that has arisen repeatedly in the history of the US. Sunset Towns have been real things.

It's an absolutely silly question; there's a clear difference between zoning rules based on land use, and zoning rules based on discrimination against a protected class.

OK. Let's try again, without the silliness. This is a serious question that requires a serious answer.

There is a difference between a neighborhood having a say in its future and a neighborhood having a dictatorial stranglehold on all changes within its bounds. Does the rest of the city have no say? The county? The state? The country?

Do you think it's OK for a city to tell a neighborhood that they need to accept a certain set of non-discriminatory zoning rules based on land use, even if it's not what the people there want?

> Do you think it's OK for a city to tell a neighborhood that they need to accept a certain set of non-discriminatory zoning rules based on land use, even if it's not what the people there want?

Residents answer to their neighborhood, neighborhoods answer to their district, districts answer to the city, state, and so on.

How to respect individuals, communities, and a plan for the future across all of those lines of responsibility isn't answerable with a simple "yes" or "no"; however, the onus should be on the individuals requesting the change to 1) justify its necessity and value, 2) quantify its cost to existing residents, and 3) recommend mechanisms for remediation or renumeration for externalities imposed upon the local residents by whatever project is imposed upon them to the benefit of the broader populace.

In other words, you don't believe a neighborhood has an absolute dictatorial right to control all changes within its borders. Thank you for your in-principle agreement!

Demand is pretty inelastic when the alternative is being homeless.

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

Everyone needs at least a portion of a home, not exactly one home.

Families and roommates are obvious examples where housing units and people are not 1:1.

No, the alternative is living somewhere else. This is obvious to anyone that has watched the rental and housing market in a city across economic boom/bust cycles:

- Bust: Demand dries up from the beleaguered economic sector (e.g., tech in SF after .com crash, finance in NYC post-housing bubble crash). Prices drop. Demand rises, fast, with residents moving in from the boroughs/suburbs.

- Boom: Demand is extremely high from the booming economic sector. Prices increase to match, unmet demand drops as those outside the boom sector move out to the boroughs/suburbs.

Austin and Toronto are both desirable world class cities that allow homes to be built for people. Neither of them seem to have been "destroyed". Having affordable housing allows community and culture to be preserved and built on.

Austin and Toronto are 250 square miles. Every time I go back to Austin, everyone is whining about how expensive it is and how bad the music scene has gotten, while half of them want to turn 6th Street into a kid friendly zone.

SF is maybe 35 square miles, once you take out the parks.

Why don't we build new housing in Palo Alto? Or better yet, rezone Stanford or Atherton?

I guess affluent monocultures must be protected.

Why don't we build more housing in all those places?

You can't get housing built in SF, Palo Alto or Atherton for the exact same reason. Using one as a reason to oppose housing in the other is a red herring.

Atherton is about as conservative as it gets. They're the reason BART doesn't run through the peninsula.

>You can never build enough housing in a high-demand city without destroying the city;

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.

It's insane to think there's a "right" to live wherever you want.

I live somewhere that's 1) expensive, 2) low-density.

The expense is because the low density makes this a nice place to live; more people want to live here than can fit here.

If we simply allowed development to meet demand, then this place wouldn't be a nice place to live anymore.

The solution is to pay a living wage such that everyone that works here can afford to live here. The solution isn't to socialize housing.

How does your plan address the problem that there isn't enough housing here for all the people who work here to live here? Are you assuming that if there are living wages all around, that there will be enough construction?

Or do you expect people to just live somewhere else nearby?

Supply/demand. If there's not enough housing, companies will either need to pay more, people would need to commute farther, or people will need to choose other cities.

What do you think happens when many cities adopt the same approach? Fix supply, increase incomes, and let markets take over?

Have you considered the possibility of region-wide consequences when supply and demand set in, companies pay better, people commute farther, and live in other cities too?

> You can never build enough housing in a high-demand city without destroying the city; the demand is too elastic, the incentives between neighborhoods/culture and developers too misaligned.

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!

In many places, yes, density would objectively and significantly decrease the quality of life of all existing residents, and that would be bad.

Fortunately for us all, precious few of those places are in the Bay. The vast majority of San Francisco can't even be reasonably called mid-rise neighborhoods.

But let's not get caught up in that yet. In what way would density "objectively and significantly decrease the quality of life of all existing residents"? From your phrasing, you clearly have solid evidence and objective metrics for your rather strong claim about both significance and universality.

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