Exactly, which is why there is zero mystery here. This is an entirely artificial, legal challenge. We already know what happens if we let cities develop organically, because we've already built places like Brooklyn and Queens.
But then with NYC densities would NYC prices follow? Put it this way, do we have examples where higher densities didn't lead to unexpected higher prices due to critical population mass being achieved?
Because density and affordability aren't really related. The only thing that really affects affordability are supply and demand. As a proof of this, feel free to peruse the Journal of Housing Economics for empirical housing price models. Almost none of them show density as a significant factor, and almost all of them demonstrate the dominance of one single metric: the vacancy rate. Literally, the vacancy rate is the only thing that matters. And density is only related in the sense that it is one of the possible ways to increase the vacancy rate.
What it also shows is how open to changes a given market is; if there's too much vacancy (think Detroit) then it's clear that something went VERY wrong in the market.
If there's too little vacancy (think SF, Seattle, etc) then what went wrong is mostly NIMBY and regulations failing to pair jobs and housing increases together. The result is a lack of flexibility and skyrocketing prices.
Jobs create demand. Jobs bring skilled workers. The presence of skilled workers itself attracts more employers. Maybe the employers move in faster than upzoning happens. Maybe it happens slower. Whether or not this increases or decreases price is just a question of the coefficients on the various inputs. I'd still propose that the missing piece is geographic - cities that can absorb this by growing outward in a decentralized way will stay cheaper than ones that can't, where things get nasty.
But, to move the discussion along, let's just call it demand outrunning growth in supply, dropping the precise role of density (or replacing density in my original post with "geographic constraints which necessitate increased density" or something). Either way the result is the same thing. Do we have ideas that we could try to get turned into policy for stopping this sort of thing from happening? It's a really common pattern, not just in SF but everywhere that's ever seen someone complain about gentrification, so it would be a useful thing to have a politically feasible solution for.
EDIT: it's getting late out here, so I'll add one last bit then probably retire for now. I personally am not a fan of remote work, or cross-timezone collaboration. But I think the people pushing it need to win out in the long run. When it comes to massive density increases, or de-densifying the country by spreading work back out thanks to technology allowing better and better telepresence, I think the latter is far healthier in the end. It de-SPOF-ifies industries, which is good when considering natural disasters, potential climate impacts, or war/terrorism. It levels out costs - you now have the whole country (world?) to choose from - while also massively increasing your hiring pool. It evens out opportunity - you don't have to be able to afford to take a gamble on moving across the country to chase your dream job. It saves a shit-ton when it comes to energy used for commuting.
And if you ask me if a less dense, remote-friendly world is more likely than getting people to reverse course on a hundred-year-old car-powered trend towards suburbanization, I'd wager yes. Especially because the arguments for the latter are pretty unconvincing so far for people who don't want to live somewhere massively denser and who are able to afford their current living situation.
Induced demand, or something with a similar effect, seems to apply to housing at least as much as it does to traffic.
And before we dismiss it entirely as "coasts are more desirable than landlocked middle America," let's take a look at both various coastal cities of varying density in California[0] and various less-desirable (Houston is technically coastal, I suppose, but not in the "good weather" or "pleasant" way) Texas[1]. San Diego is cheaper than SF or LA, but also much less dense. Fort Worth is cheaper than Dallas, but also much less dense, and pretty much right next door in the middle of a bunch of flat land.
Maybe we should start knocking down a bunch of non-affordable housing, run off the people with enough money to move away, and watch that affordability go up? ;)
[0 ] https://www.apartmentlist.com/rentonomics/california-rent-re...
[1] https://www.apartmentlist.com/rentonomics/california-rent-re...
If Bay Area governments were as NIMBY about desks as they were about beds, we might not be in this mess. Now that we've built the desks, we need the beds to go with them. (Or burn down the desks? The sheer comedic value of a government on an explicit job-destroying program might be worth it).
Because affordability is inversely proportional to demand, and higher-demand areas tend to have more dense housing.
The same way "add another lane to the highway" doesn't fix traffic.
China has seen unbelievably explosive growth in its cities and has also seen 1 billion people lifted out of poverty during exactly the same time period. Coincidence? People flock to cities because they can get paid five times more than they could back in their home village – they're not cavorting, scheming millionaires. Trying to strangle your cities because cities are bad is the dumbest thing you could do in terms of economic growth other than than trying to strangle trade on the theory that those scheming foreigners are going to take all of our money away.
I'm sure downtown Shenzen is more expensive today than it was when it was a small fishing village. Would the world be a better place if it had been kept as a small fishing village?
Wait, you don't think China has been doing this too?
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The US has had decentralized economic booms in the past; even China's current one is based around several cities and regions, and China continues to build outwards, not simply make Beijing and Shanghai ever denser inside the same radius. They do it at a higher density than we do in the US, sure, but other than that the strategy doesn't seem completely unfathomable - I think the Chinese-style answer to the Bay Area is less likely to be "make SF denser" and more "move a bunch of development to the East Bay or Dublin or something and make new companies start up over there."
Expanding on what I said in a separate comment (sigh, I was headed to bed, maybe after this one), we are currently in the US letting many of our cities die while putting a ton of eggs into NYC/SF/etc baskets. I don't think further density in just a few places is going to fix anything price-wise or have any superior outcomes than reducing those bottlenecks would.
Rents haven't always been as high in NYC as they are now. It's not as though the city's history is one of inducing demand that it can't meet with adequate supply.
The city has always been expensive, but not in the ridiculous way it is today. I'll leave the inflation calculations to you, but this demonstrates my point:
http://www.millersamuel.com/change-is-constant-100-years-of-...
Sure the same pattern of induced demand may occur with housing development, but induced demand in urban development a bad thing? There is evidence that if actually accommodated that induced demand over the last half century, instead of suppressing it, that our national economic growth would have been 50% higher than it actually was.
That could very well be because growth in demand has outstripped increase in supply without any sort of feedback relationship, but that itself raises interesting follow-up questions. Is rapid growth undesirable for everyone not directly benefiting from higher salaries from the growth, which is probably most people? Do developers have an incentive to keep growth in supply lagging, since it means they can get a lot more return on investment for what they do raise funds to build? Even for homeowners, your property values go up, but so does everyone else's, so you're not relatively any better off/able to upgrade. What are the political implications of that, if so?
In the past, productivity was not so concentrated in a handful of cities, making me skeptical of that linked model. Big confounding factors there in the death of industries across most of the country happening at the same time as increased global prominence and money concentrating to more and more first-and-second-tier cities.
What that sort of model also misses is that you have at least as many people preferring low density to high density as the reverse (based on empirical trends in the post-car US), and you also have a lot of people who won't be happy with a solution to job distribution that's just "pull up your roots and move to a better city, sorry." It doesn't seem to result in constructive policy recommendations that have a snowball's chance of being welcomed.
What is the correct density? It's the exact density that existed when I bought in. That's what people -- incumbents, I mean -- are really saying.
The commonly perceived idea that land prices invariably increase when upzonings occur is only true in the context of how they occur today: very slowly, in extremely limited numbers, after years of lobbying the government for changes. Land prices are determined by their highest best use, and right now, with extremely scarce housing supply, that highest and best use will always be the most dense possible development imaginable. But that isn't guaranteed to be true.
What would happen if all of the land was developable at density? It certainly wouldn't be scarce, and with heavily increased competition it likely wouldn't be very profitable to build either. Seattle's 83 sq miles of land, at the midrise levels of central Paris, would accommodate 4.6M people, 25% more than the entire 8000 sq mile metro region currently houses. It would take an inward migration of several millions of people before the highest and best use of most land parcels would be to build extremely densely everywhere. There just would not be enough demand to justify midrises everywhere.
So while most centrally located land (like the handful of neighborhoods directly adjacent to downtown) might result in land price increases (because dense developments can actually attract enough demand to fill them), it would likely end up with lower land prices in neighborhoods further out like Beacon Hill or Ballard.
So if you want to lower the costs of affordable or transitional housing development, you gotta do the same exact thing that you would do to lower the prices of market rate housing.