Housing is often viewed as a San Francisco problem, but really it's an area-wide problem acutely and a state-wide problem more broadly. I.e., areas outside the policy of San Francisco, such as peninsula, south bay, etc, are not significantly cheaper. And entire other metros, like Los Angeles and San Diego, have had similar percentage cost increases (and those metros are actually more "unaffordable" since incomes are lower there).
But I have a hard time reconciling that with the relative pricing in other equally desirable coastal areas that do not have prop 13 (or anything like it).
I am simplifying greatly, but in a broad sense, SF housing is as expensive as Boston housing is as expensive as NYC housing ... and certain hot-or-not inspired pic sites[1] lead me to believe that Vancouver beats all of them.
Are you suggesting that, all else being equal, if prop13 was not extant, SF housing would be markedly lower than the aforementioned areas ?
I can't imagine it would be ...
That said I don't think the current issues with housing in the bay area have much to do with Prop 13. It's why your schools suck. It's why the prices are high, because the carrying cost is 1% lower than you'd expect because property taxes are too low.
Real issue is the deranged FIRE based economy we have. FIRE Finance, Insurance, REal estate. Combined with low growth and income inequality. Means you have a lot of money pouring into 'hot markets' like SF, Boston, Vancouver etc. Same time there is collusion between the people that sit on the boards of large companies to suppress wages.
I don't think that's true even in the "broad sense". San Francisco rents may be roughly comparable to to NYC, but are significantly more than Boston: https://www.zumper.com/blog/2016/04/zumper-national-rent-rep...
It may not be true, but I think the argument would be that in the absence of Prop 13, SF rents would indeed be comparable to Boston rather than 50% higher.
I wouldn't be surprised if like for like, Boston is indeed more expensive than SF... I just checked Redfin for properties in core of Boston (Back Bay, Beacon Hill, Downtown, etc) built since 2000 and roughly average square foot price was $1200. Did the same thing for SF (focusing on SoMa area) and it looks like it's more like $1000/sq ft...
Although, if housing in Boston tends to be of lower quality than SF housing, might that not put extra demand on the more recent and presumably nicer housing?
I do know I have seen a lot of commentary and postings right here on HN about the prohibitive cost of housing in Boston - perhaps it is just certain desirable areas in the center, or Cambridge ...
Different areas just have different issues, but I think in both cases they come from the same source (issues related to supply and demand). Prop 13 creates a supply problem, new housing stock needs to be built because it's not beneficial for people to move or sell their homes due to the tax lock in. That happens in some areas, but the output is sprawl, increasing people's commute times.
Boston's issues are different, and it's based more on new stock not being built due to zoning issues and the MBTA not growing fast enough to make other areas more accessible to the city as the city has grown and attracted more business.
That said the costs in San Francisco are on another level compared to Boston. San Francisco is more comparable to NYC with regards to rent.
In a nutshell, our current housing paradigm was born of the soldiers returning home from WW2. Thus, the entire infrastructure is geared towards supporting single family homes designed for the nuclear family with 2 parents, a stay at home mom and 2 to 3 kids. Thus, in the decades since then, housing has kind of converged towards that standard while population has diverged away from that norm. We are having kids later, we are living long, we are having fewer kids etc etc etc. We need far more housing geared towards the demographics and lifestyles we currently have, not geared towards the demographic and lifestyle of what, for many people today, is their grandparents in their youth.
As long as house prices rise faster than inflation, then that’s nice for the people who manage to buy a house, but it’s common-sense unsustainable.
A soldier returning home from WW2 could buy his first house with a few years of savings. No mortgage necessary.
A few decades later, housing prices rising faster than inflation, and a Gen X yuppie needs a 30-year mortgage to afford a house. Not ideal, but still affordable.
A few more decades, and Millenials face a world where you need to be making bank to even think about paying for the mortgage. No wonder we are having kids later, etc., etc., etc.
I don’t know how net worth and housing will be decoupled, but it has to happen. When only the bank can afford your home, that’s an ingredient for social unrest. All I know is that it’s really going to suck for the people who’ve pumped so much money into their house, when it all comes down.
These comments may also be useful: http://www.metafilter.com/contribute/activity/153873/search?...
Especially the first one:
http://www.metafilter.com/157297/I-cant-afford-to-buy-grocer...
When you say, “you need to think bigger than that. In fact, we need changes all the way up to the federal level,” I agree. The government up to the federal level has been using policies, tax benefits, and direct subsidies to promote detached single-family homes. I think that your solution of reorienting building priorities in favor of individual housing is not incompatible with my idea of removing homes as a long-term investment. Indeed, I think they are aligned: The most economical way to live by yourself is to live in an apartment with a whole lot of other people.
The suburban ideal has cost the country tremendously. Roads, sewers, air pollution, mental disturbance from the isolation, extended emergency vehicle response times, to name a few aspects that come to mind right now. Even perma-camping would destroy the environment if everybody did it. If we want to reduce our per-capita environmental impact, we are going to have to live in dense apartments, and we are going to have to make them affordable for everybody.
For cities to be affordable, we need to overrule the NIMBYs and allow the housing prices to go back down.
Where I’m least sure I agree is with the primacy of single living. A good solution will involve a diversity of housing stock, and we do need more single housing, but any society who want to survive long-term must encourage people to breed and produce a next generation. And once you’re done breeding, outcomes tend to be better if you’re involved with the next generation’s progeny, too. For the long-term health of society, we need plenty of large houses.
That needs to change. If we could get that resolved, you and I would both be happier, even if we still disagreed.
Peace.
Prop 13 is a problem, no doubt. It would deserve a very long essay -- some of them exist as sub-essays within Kim-Mai Cutler's writings. I tried to focus on policy ideas that, more-or-less, San Francisco could implement themselves.