Marjan Philhour, a pro-housing candidate in District 1, lost by 1000 votes. If she won, pro-housing SF Supervisors would have had a 6-5 majority on the board. We were 1000 votes away from a much better housing situation in SF.
If you live in SF, the way we change this is by electing better Supervisors and kicking off the NIMBY's. Sandra Lee Fewer (the "progressive" candidate who wants zero new housing) had volunteers on every Geary street corner the day of the election. Get involved in your local races, donate money, volunteer to call people. Also, call/write your Supervisor when they try to pull crap like this: http://missionlocal.org/2016/11/in-stunner-city-strikes-down...
There's nowhere near enough public funds to subsidize that much BMR housing, so in theory she would have to support mixed developments. In practice it might just be lip service.
In the most basic sense of economics for prices to fall supply has to increase more than demand. If demand increases more than supply the opposite is true. There's nothing saying that a more supply can't also increase demand or even increase demand more than supply.
When more wealthy (or ambitious) people move into an area it often leads to that area becoming more attractive (schools, restaurants, entertainment get better) increasing demand.
Therefor there's nothing particularly strange about arguing that luxury condos could lead to higher rents as the op makes it out to be.
Manhattan is a particularly stark example because not only did its 20th-century building boom go along with long-term price increases, but it also went along with decreased population density. Compared to year 1900 Manhattan, year 2000 Manhattan had more square feet of residential space and fewer people living in it! (The reason for that is that wealthier families demand more square feet of living space per person, and in the case of Manhattan this effect outpaced the net increase in residential space.)
If you don't construct luxury housing, it's not like you can keep people from moving in. Witness all the tech employees living in genuinely terrible Mission apartments. All that happens is you end up with gentrification that works around construction laws: old single-family homes being converted into hacker houses, run-down houses being rented by well-paid tech workers, with lower income people being forced to move ever further away.
Objectively, most San Francisco housing is really not attractive. Yet rents are still extremely high because there is demand despite the poor housing. It makes far more sense to construct efficient luxury housing which can soak up the luxury demand so high-income earners don't end up taking over the traditionally affordable housing.
Now that the construction pipeline is finally coming through, we're seeing this effect and rental prices are starting to fall. If your theory were true, we'd expect rents to be rising now that construction has finished—the exact opposite of what has happened.
It might be possible to make an area unattractive for gentrification, but I think it's pretty damn hard. Construction bans certainly don't do it. Not even violence does (though crime as an affordable housing strategy is significantly under-researched).
This has me convinced that people might be right that new housing could lead to higher rent in some cases, but at the same time those people are wrong for arguing against basic supply and demand. Sure, supply increased and prices went up. But it could be that demand increased more than supply did, as pointed out by the parent comment.
I usually just dismiss these types of arguments as "this person doesn't understand economics".
But your argument essentially is that housing has a Network Effect that increases in value as more people join the market. (or perhaps can be described as some sort of two-sided market?)
Supply and demand also works for buying. Because central banks have ran with ultra-loose monetary policy since forever credit supply is huge and prices detach from wages.
What a total mess these guys have created. Easy on the way down, chaos on the way back up.
I think with the existing situation in SF where you have a lot of young people with high wages who will live in a run-down place in the mission and pay $2-5k, if you build a bunch of luxury condos and need people to fill them, those people will move out of the mission and into a luxury condo. As buying pressure for lower quality housing e.g. off Mission St. is released into the luxury market, prices come down and schoolteachers can once again afford the Mission, or Lower Haight, or wherever.
One valid point I see coming from the anti-development camp is that the new surge in tech jobs is caused by a credit bubble, and once that crashes, you'd have all this excess supply, and it will tank the SF housing market, making the NIMBYs worse off than if expansion happened gradually.
I guess it comes down to whether you "believe in" the sustainability of bay area tech.
It's disguising of this NIMBYism as looking out for low-income renters that is ridiculous.
Are you implying that there's some sort of grand-scale collusion on rent prices? If most rent takers think "hey, the median salary is X so I'll just charge X * 0.33" then what's stopping another rent taker from drastically undercutting that price?
I have no reason to believe that either home prices or rent are set by wages.
Only to a certain extent. Loaned capital is still limited by wages (no one is going to give a $1 million mortgage to someone who makes $40k per year). But again, I don't think wages has hardly anything to do with house prices; it's all about supply and demand. Sure, most people might only be willing to pay 1/3 their salary on housing. That doesn't mean that the price for housing is that number. If a huge supply of housing for less than that price floods the market, then why would everyone continue to pay 1/3 their salary for housing when they could pay 1/4 or 1/6?
Someone should tell all the protestors who opposed construction of new luxury condos because they thought it would somehow increase rents.