That's not the full story. Commercial property is much more profitable for a city than housing, so every city in the peninsula is trying to build office space, and trying to offload the cost of actually housing those new workers onto other cities. The tax code needs to be fixed to realign incentives. One proposal I heard was to make it so that the state shares the income tax of the employees that live in the city with the city. That might disincentivize low income housing, though.

This is why I've always been in favor of Hybrid zoning. Hybrid structures are even better in my opinion. You can have a building where the bottom floors are commercial space and the upper floors are residential space.

Or you can zone an area where both commercial and residential development are permitted. Sure, living right next to a metal shop or something isn't the most pleasant thing, but it's really nice if you work at that metal shop.

This is something I saw being developed in my home town before I moved away. Along the main "downtown" strip they built several new 2 story structures where the bottom floors were shops like whole foods and such. On the top floor were various types of apartments. These particular apartments were a bit on the expensive side mostly due to it being a kind of swanky neighborhood right along the beach. That said, the concept can be expanded upon to apply to more affordable areas.

In Japan, zoning is hybrid (includes all zones up to a given level, so you can have mixed residential/commercial), and height limits are based on shadow projection instead of some city commissioner. It seems to work better than America's obsession with suburbanization and having all your housing in a giant clump a 10 minute drive from all your shops.

http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html

Yep. Japan leads as a great example in this case.

> This is why I've always been in favor of Hybrid zoning. Hybrid structures are even better in my opinion. You can have a building where the bottom floors are commercial space and the upper floors are residential space.

Interestingly in the mission bay area there's a lot of unused commercial first floor space below residential apartment buildings. Some of it empty since the buildings went up 2012/2013.

Mission bay San Diego?

Why do you think that is?

San Francisco, sorry, should have mentioned that. I've really no clue, I'm kinda curious. They're still building new buildings with commercial ground level floors. Besides being empty and presumably not making money that way, they're also not particularly pretty...

I wonder if they're trying to predict the future. Perhaps they foresee business moving in in the future.

For CA, those housing units are negatives on the budget because of prop 13. It doesn't really matter where they are built.

Yes prop 13 is basically the reason behind the differential. And because it is a political non-starter it's misplaced incentives are baked into the CA real estate market.

I would be strongly in favor of reforming that law then. I have not seen anything regarding it come up on any of the recent ballots.

A repeal is hugely unpopular amongst many, since it would destroy house values and immediately make houses unaffordable for many owners on borderline incomes. You could try phasing it in, but housing values would take the change into account quickly, depending on how it's structured. Would be great for renters looking to buy, but catastrophic for recent buyers. That said, property taxes are very important as a feedback loop to discourage nimbyism that drives up prices.

Keep going up the chain of causality. Property Owners are so NIMBY because there's an economic incentive to behave that way. This is only the case because Prop 13 caps their property taxes. If California had property taxes that, like other states, could increase as the assessed value of your home increases, the incentive to oppose new building would be significantly lessened and it would then be in everyone's best interest to keep housing costs low, not just those who rent or are looking to buy.

Prop 13 is immoral and has not only wreaked havoc on real estate market in the state but has also gutted the state's public education system. It needs to be repealed before any progress on these housing issues can be made. There can be provisions to ensure that people don't lose their homes to rising property taxes...Texas, IIRC, has one that allows property taxes to accrue and only need to be paid when the title of the property changes hands, which seems like a good compromise. But the state's population is going to go up which means we're going to need to build a lot more housing, and our laws need to create an environment where that can happen.

> There can be provisions to ensure that people don't lose their homes to rising property taxes...Texas, IIRC, has one that allows property taxes to accrue and only need to be paid when the title of the property changes hands, which seems like a good compromise.

So it's not OK for rising rents to force property elderly owners to sell and move away, but it is OK for rising rents to force elderly renters to move away?

You can't defend property tax deferments for the elderly without also defending rent control for them. Either way you have the same problem of local residents thinking it's OK for everyone else to suffer lower supply and higher costs, as long as they aren't suffering.

> If California had property taxes that, like other states, could increase as the assessed value of your home increases, the incentive to oppose new building would be significantly lessened and it would then be in everyone's best interest to keep housing costs low, not just those who rent or are looking to buy.

That might make rational sense but it is not how homeowners actually behave.

I'v seen this extensively in multiple upper-middle income communities on the east coast. Houses that have tripled in relative value force their now retired owners to sell because they can't afford the higher property tax. Developers can buy above market because they demo the house and put down 2 houses that each sell for 75% the original home's value.

This scales for quite a long time, and is generally how suburbia transforms into, well, east San Jose.

It's not that homeowners make rational choices as a result, it's that over time they are pushed out and the rational choice is made by the larger market.

It seems like if you're retired and having trouble with property tax a reverse mortgage would be pretty attractive.

The Texas approach does sound like a good compromise. I'd be curious to know if this was proposed during the Prop 13 debate and what the public reaction was.

I wonder if a deal that removes Prop 13 but reduces state income taxes can be put on the ballot. That way you keep overall revenues same, but just change how it is collected.

Perhaps income and sales taxes could go down...California has some of the highest rates in the nation for both. But it would be a good idea to not have it net to zero considering Prop 13 originally resulted in deep cuts to public education in the state and the quality of schools has dropped significantly from pre-Prop 13 levels.

True, but new housing wouldn't be needed if there wasn't such a high influx of people moving into the Bay area. Sure tech isn't the only player in the game, but they're surely one of the biggest. If less people were moving there for high paying jobs - rent wouldn't rise as quickly or as drastically.

> new housing wouldn't be needed

Bay Area housing supply has been growing less than demand for the last 30 years. New housing is needed, regardless of who is employing whom.

California building codes are pretty extreme from what I've seen, they go as far as measuring the pull force required to open a door for example. This seems like a place where a little deregulation would go a long way.

Building codes aren't the problem, it's zoning. If a developer had an empty acre in SF or Palo Alto, or permission to replace low rise housing with skyscrapers, they'd build.

The cost of building probably does have an effect on the margin, but it is so much less of a factor than restrictions on what can be built.

A recent article about building in Millbrae mentions developer fees of 26k per unit being build. I'm all for deregulation to make it easier to build, but the code compliance and fees are also part of the problem.

http://www.smdailyjournal.com/news/local/millbrae-bart-stati...

From the National Association of Home Builders, it looks like "average" is approximately $9,400 per unit in "fees". Not sure if that's apple to apples with the Bay Area, but in either way that fee just seems kind of crazy. Rows A-C, summing fees, on the Construction Costs table here: https://www.nahbclassic.org/generic.aspx?genericContentID=24...

The price of land dwarfs the cost of construction. Outside of the Bay there are huge housing developments underway and although I am sure property developers would rather have less regulation they do not seem to be struggling to build homes. In a state with active fault lines and environmental pressures from much of it being in the desert deregulation is not going to help our long term prosperity or safety.

This is kind of part of the problem. Housing developers are enabling large hub cities to offload the cost of housing to smaller outlying towns. Of course, the developers aren't doing this willingly.

The other problem is that housing developers in California have a tendency to build huge, sprawling suburban communities. This just increases sprawl.

Imagine a 1 sq. mile tract of land. Assuming a housing developer builds a ton of two story, single family homes here, each on a 1/4 acre of land, we can calculate that they can build 2560 homes +/- 500 based on topography and landscaping etc. There are no reliable numbers as to the average of units in an apartment building. Therefore, we will have to make some assumptions. Let's go ahead and say that that the developer decides to build apartments instead of tract-homes. Each apartment building will be 2 acres in area. Even if the apartments are huge: 1500 sq ft +, we can calculate that a 2 acre apartment building can have about 20 units per floor. Lets say that these apartment buildings are a modest 2 stories tall. 20 * 2 = 40. That means, covering the same 1 sq. mile of land with modest apartment buildings could create 12800 residences. That's a 500% increase in residences.

In urban centers, zoning laws allow for much taller structures. Structures can be hybridized to allow for both commercial and residential tenants.

Building large, hybrid-use, multi-tenant structures will alleviate some of the pressure on the housing market and lead to shorter commutes for most people. This is because you can fit more people into a smaller land area. It's common sense I'm sure. So, why aren't developers building these structures? The short answer is that they can't. City zoning laws, angry property owners, and the lack of open land in desirable areas all get in the way.

When zoning aggressively blocks dense housing, I don't think it's the little code details that matter.

You are correct, I was conflating zoning and building codes a bit there. Zoning should take the lions share of blame when it comes to costs.

I didn't really understand zoning until I witnessed a bunch of Southern middle-class white moms agreeing with their middle-class black mom neighbor about how they all hoped that the new construction on the [formerly agricultural] lot next to the subdivision would be restaurants instead of apartment buildings, because the latter attracts "the wrong kind of people".

Then I looked at the zoning map for the municipality, and read the zoning codes.

From outward appearances, it's to keep the poor people away from the rich people. And not just at night when everyone goes home, either. All the time, everywhere. Jobs, schools, commutes, shopping, entertainment. It's the new age of redlining, with a global substitution of bank account sizes for skin colors.

I couldn't tell what degree of intent was there, but on the ground, the zoning board has reinvented the ghetto. The poor folks get to live next to the railroad tracks. Rich folks get to live next to the zone marked as protected wetland/watershed, so that it can never be developed.

The kind of behavior is the status quo everywhere not just the south. It's a byproduct of people only getting involved in these things when they think it's going to affect them in a negative way. I.e. Only the people who associate apartments with black people and don't like black people care about the issue.

That's a nice idea, but this is a region where the ground you build on is your enemy.

Counterpoint: Tokyo.

I am highly confident that the regulation in Tokyo is stricter, not less strict

Isn't the door pull thing for handicapped accessibility?

Municipalities can choose that! But they don't, because the tax revenues from having jobs there is too lucrative.

Every year, you'll see parts of the bay area add xx,xxx new jobs but only x,xxx new homes.

This is what I would so much like Sacramento to legislate.

Severely limit commercial development in any municipality with less than a certain ratio of houses to jobs.

Google tried to build housing in the bay area for their employees, and were denied permits by the municipality.

I don't understand what your point is. The Bay Area is a desirable place to be and demand isn't going to magically shrink.

A very similar thing is happening here in Los Angeles. Luckily, the Mayor and city officials are fighting back to push through more multi-family housing. It's still going to take a while before housing prices stabilize though.