The words "luxury housing" are designed to make you think that it is taking up space that could be used by non luxury housing. Like the only reason a new apartment is so expensive is because it has a gold-plated toilet or something, and if only the developer had built an apartment without a gold plated toilet you could afford it. But in Minneapolis, for example, a 2 bedroom apartment in the nicest building in the city, with a built in pool, car wash, and cigar lounge, is $2000 per month. That barely gets you a spot in someone's living room in SF.
This proves that it is not luxuries that make "luxury apartments" expensive in SF. The only luxury is having a roof over your head.
In practice, "pushes down the prices" is an overstatement, and what actually happens is that once demand pressure reaches a certain point new luxury supply only opens up higher pricing tiers. It potentially stabilizes older construction, which is not bad, but doesn't seem to provide downward pressure. The only thing that seems to do that is non-marginal demand dropping out of the market.
And if you follow it through that's how the incentives seem to be aligned. Capital examining opportunity in construction will want to chase the highest return it can and if you have capital the marginal cost on luxury construction over non-luxury at the same unit scale is usually less than the return. On top of that, at certain scales of operation vacancy is apparently less of a drag on nominal property values involved in the accounting and financing, which means prices tend to float down when the fall rather than plummet. Though of course, any potential developer doing the math is going to look at vacancy rate and will make their decision about whether/what to build targeting points short of outright surplus.
There are some types markets where I think you can drive down pricing market-wide by coming in from the top (consumer tech sure seems to work that way) and that's my guess why so many seem think the same must apply to housing. Perhaps housing could indeed work the same way if the actual manufacturing techniques and costs were being iterated with the same speed and scale.
But that's why there are specific drives for affordable housing: building at the top slows/stops price increases but only lets people on the verge of being priced out tread water.
Personally I think there needs to be vacancy taxes proportional to the market segment being operated (probably also correlated to tightness of supply) so that prices clear on the falling side more easily, but who knows how that would change people's construction calculations.
I liken it to the California of the Midwest. Its nots the cheapest, its more middle of the road (though, I think in absolute terms there are places around Chicago that outpace the cost of the highest cost parts of Minneapolis-St. Paul Metro last time I looked, granted that was a few years ago).
Its culturally though, very liberal (from my own experience, tends to also be very much a democrat state). One thing I will say is Minnesota's public school system is great, and the collegiate system is both affordable and high quality, on average.
It's still cheaper than California, New York, Seattle, Portland etc. paying 2000 a month for a place to live in Minnesota is still very much not the norm, even in nice parts of the Twin Cities.
If you're willing to live up North a bit, Duluth is amazing, its mostly a college town now, and you can surf in the summers!
The downside is always the snow, though if you live in the Twin Cities there are upscale parts of downtown that have miles of indoor walkable paths that take you all over the city.
I really love the state. I've contemplated moving back several times. I just don't think my tech industry connections would carry over as well, so it would limit some of my job opportunities, even with this big push to work from home by a lot of companies. That will have to shake out for me personally first before I would consider moving back.
Though, they've done a decent job netting progressive employers and have in large part been able to avoid the economic collapse that hit much of the Midwest (the rust belt, in places like Ohio). I know a lot of people out there employed in highly trained manufacturing jobs (highly skilled CNC work, maintain automated manufacturing facilities etc.) and those jobs are the only ones in that sector that aren't leaving the USA in droves yet, plus there are a lot of medical technology companies there. Also, a lot of enterprise software companies have HQ or large presence in the cities as well.
It's not a startup scene like SF, but its changing. When I was a kid the state had these huge policy pushes to try and get people entering college to focus on technical degrees (be it 2-year technical school at a community college doing CNC machining and the like or 4-year degrees in engineering/cs). It's also one of the most educated populations in the country [0][1]
Now I just feel like I'm selling it. Though I want to mention one quirk about the population that stands up to everyone I know who has visited. Minnesota Nice [2] is alive and well still. People tend to just be more friendly there than anywhere else I've lived or travelled, and I've been through more than a dozen states from coast to coast. It's just a general demeanor thing. Thats not to say that everyone is nice all the time though, of course. I'd say on average you're less likely to have small confrontations though, than anywhere else I've been.
[0]: https://www.kare11.com/article/news/local/outreach/back-to-s...
[1]: http://www.ohe.state.mn.us/fc/2108/pg.cfm
[2]: https://en.wikipedia.org/wiki/Minnesota_nice#:~:text=Minneso....
If a community says 'we'd rather be homes and don't want to turn everything in to high-rises' then that's entirely their discretion.
It's definitely not any individual townships moral or civic responsibility to change their community to accommodate either state/national strategic planning, especially for the benefit of people who do not even live there.
There's plenty of physical space in Cali, if anything, the opportunity might be in Sacramento and in-between. If the FAANGs having trouble with salaries and bringing in people want, they can be part of this strategy.
I bet there are thousands of G staffers who'd live to live somewhere south of Morgan Hill, away from the city.
Suppose a person buys a house to retire in, on a peaceful quiet little street with plenty of room to park. The neighbors then build: an 80-story apartment tower, a supervised injection place for IV drug users, an organometalic peroxide production plant, a hog farm, and a tire recycling plant.
Maybe we overdo it, but yes, we're going to curtail private property rights.
If this is financially viable, that land must be worth a ton. Retiree should sell the property and stop monopolizing such valuable land. They'll have plenty of funds to use to move elsewhere
> a supervised injection place for IV drug users
Very few people want one of these built near them, which itself causes huge societal problems. We'd be better off in aggregate if more services for the poor could be built.
>an organometalic peroxide production plant, a hog farm, and a tire recycling plant
Unlikely to be built on expensive residential land, but if they were it would help fight climate change by reducing commute times, since employees can now live nearby. The existence of actual property rights allows ample housing to be built in this high-demand area
The real prospects of the lack of zoning is something that nobody wants, which is why literally every civil place in the world has zoning.
The failure in the 'property rights' argument is that what's built on one property affects the other - there are externalizations.
What is built on one plot, affects the materiality (and value) of the others.
These arguments exist only on HN and other boards, thankfully.
Calling Houston uncivil is a subjective judgement I can’t objectively falsify, and so is calling its residents “nobody”, but the latter act strikes me as ironically uncivil, and IMO not in line with https://news.ycombinator.com/newsguidelines.html#comments.
But there are good reasons we ought to have governments, and fewer reasons we ought to have a State. I would sum those up as keeping the four horsemen at bay, adjudicating disputes and delivering justice. A few decent reasons too, such as accelerating R&D with their justifiable actions, but pretty much everything else is an abuse of power and tax authority.
Also your examples are ridiculous. There are few places in the world where you can just throw up an 80 story apartment building, and even fewer people who can afford to to spite their neighbors. A world where police powers are not abused to the extreme that they are is also not one without a quiet place to retire without an organometallic peroxide plant nearby, nor one without remedies if a neighbor chooses to break ground on such a project.
Zoning is an important and foundational aspect of civil governance, and works well for the most part.
If SF residents in any clear majority wanted to have zoning laws changed, they probably could, there's a fair component of democratic impetus here.
Most importantly - it's essential to recognize that points of property are not fundamentally discrete from one another.
The value of one piece of property depends a lot on what's around it. Large buildings vs small ones, noise vs quiet, density vs. green, sun vs shade, - there are major externalizations to every property, and zoning helps establish parameters for those things.
Go ahead and put a 50 ft flag pole on our front lawn with a flag on it and see how your neighbours react.
There are innumerable situations wherein tall towers would go up beside homes - they exist in droves in literally every city. Go to any North American city, go to where there are tall buildings - and find homes nearby. Those homes are likely there due to zoning.
There are even more instances wherein homes would be knocked down to put up all sorts of other things - office buildings, industrial facilities, retail outlets, clinics - whatever.
There is in general, no interest in that. Not even the folks wanting to build 80-story towers want it really, lets the autoplant be built across the street and destroy their own property value.
Where we disagree is whether it is an abuse, not the mechanism by which it is justified by the State.
We don’t disagree that what is around is a factor in our purchase and selling decisions, but to be frank, when the developer of your hypothetical skyscraper bought the land to build the skyscraper, he didn’t buy the lot across the street with it that would one day become this hypothetical autoplant, nor the use rights for the lot across the street. In fact, the developer probably didn’t buy across an empty lot because someone that is building an 80 story apartment building wants to attract tenants, and tenants want neighborhood amenities if they’re living in an apartment building.
You could still build across from an empty lot that might be an auto plant in the future, but you don’t build that big without a business case. Property doesn’t exist in a vacuum, we’re agreed on that, and I’m not even 100% against zoning, just maybe 99% of how it is used.
When you buy property, you buy property, not the rights to limit the development and use of all the other properties around you. That “right” comes from a simple tyranny of the majority using the State as their vehicle of power.
It has nothing to do with police powers, it's called zoning and it's absolutely a legitimate part of our governing structure.
If the residents of SF wanted to go Hong Kong style full on skyscrapers everywhere, they would have.
Bulldozing communities to create utopian/dystopian hyper density is one of the most short-sighted urban concepts going.
There's plenty of space, go elsewhere.
Also, I'll be even a hyper fast public transport system that connected the Bay Area with surrounding regions: imagine the Bart/Caltrain being 'one thing' running in a really fast loop around the bay, with quick buses LTRs as spokes - and then fast communter trains connecting them out to Sac, Modesta, Santa Rosa, that might work.
Especially if they build smartly around slight more dense centres instead of just pure suburban homes.
Zoning is a mechanism of economic suppression to appease the haves and separate them from the have-nots. They de-diversify and oppress.
> If the residents of SF wanted to go Hong Kong style full on skyscrapers everywhere, they would have.
Yes my point is that they didn’t, and now they’re paying the ridiculous cost: $3000 for a bachelor. Do anything other than work for FAANG? Sorry, you don’t get to live here. Please bus an hour so you can serve me coffee.
> Bulldozing communities to create utopian/dystopian hyper density is one of the most short-sighted urban concepts going.
Bulldozing exclusive communities and replacing them with inclusive ones, which create more local business opportunities and reduce dependence on transportation. Calling high density planning short sighted in favour of single family dwellings is absurd.
> There's plenty of space, go elsewhere.
This mindset is what causes suburbia, which has an absolutely disastrous impact on the environment and local economies. And leads to class segregation (which is a proxy for racial segregation in the US.)
The above sentence could be said about building codes.
I sort of jest but also shudder to think: How soon will progressive SFBA thought leaders call out building and health and safety codes as pushing up costs and excluding homeowners (and potential homeowners) that cannot comply with them ?
Because they absolutely do that. God help us if we act on that knowledge ...
Dezoning is not an argument for deregulation, it’s about creating new economic opportunity in a very direct way. You don’t have to sacrifice building safety as a next step. Sure, you could. And you might be right that it is economically positive to do so. But that’s a sort of deregulation extremism.
This is a ridiculously false statement.
Everyone wants zoning laws, you can't put up a gas station or an industrial facility right in the middle of xyz residential neighbourhood, nobody wants that.
"Yes my point is that they didn’t, and now they’re paying the ridiculous cost"
So you're saying that people are making a choice, but because you're not happy with the choice, they should change?
Are you arguing for rights or not? Which is it?
SF residents wanting to keep zoning laws intact are making their own choices, and that's fine.
"Calling high density planning short sighted in favour of single family dwellings is absurd."
Just the opposite when in fact the citizens are adamant that their city not turn into Hong Kong.
"This mindset is what causes suburbia, which has an absolutely disastrous impact on the environment and local economies"
Total rubbish. Suburbs are some of the most peaceful, plentiful, conscientious, and safe places in civilization ... which is exactly why those types of people move there. They are downright boring in their concientiousness.
That they lack trendy cafes, and hipster fentanyl needle clinics is not a problem for some.
That’s not reality. It doesn’t make economic sense for a an industrial business to set up shop in a supposedly “residential area” - there will still be commercial clusters because that makes sense economically. And you can still define environmental regulations and build infrastructure where you want industrial commerce to happen. Zoning laws are mostly abused.
> So you're saying that people are making a choice, but because you're not happy with the choice, they should change?
The people who are making the choice are the ones who can afford to make the choice. Everyone else is forced out. So what you end up with is a bunch of entitled rich people who forced everyone else out of the market, bleeding the city of its charm and diversity.
> Just the opposite when in fact the citizens are adamant that their city not turn into Hong Kong.
You don’t reach the density of Hong Kong without need. For HK that need is to be included in the region of (former) autonomy. Naturally things aren’t going to get that dense. You can double the density of SF and it still won’t look anything near like HK. And once again, the people who are adamantly against densifying the city are not the ones who have to commute an hour by transit to work in it. They are the stakeholders because they forced their way in. What about people who used to work in SF but got forced out by rising rent, but who still work in the city. They don’t deserve a say?
> Suburbs are some of the most peaceful, plentiful, conscientious, and safe places in civilization
This is so painfully ignorant it’s hard to unpack. Do you understand the toll it takes on small business owners to not be able to buy commercial land where people live? Do you recognize the damage that daily mass commuting into and out of the city has on both the global and local environment? Do you understand that the “peace” is actually just economic segregation? Take a drive outside the gated communities and go on down to the economically segregated “suburbs” of the less fortunate. I believe they call those “ghettos” in the US. Not sure you’ll find much peace or safety there.
> That they lack trendy cafes, and hipster fentanyl needle clinics is not a problem for some.
Man you are a piece of work.
Nobody is arguing it’s not their discretion. I’m just saying it makes you a bad actor in the larger community of people who would like to benefit from the opportunity of living in a city that they otherwise might not get if they weren’t living in the city.
> especially for the benefit of people who do not even live there.
They don’t live there because they’re being systematically and economically excluded from living there by people of means who are unaffected by the damage they’re doing to their own local economy.
> There's plenty of physical space in Cali, if anything, the opportunity might be in Sacramento and in-between.
So... not in your back yard?
It’s the places that everyone want to live in that are crowded, and there are good reasons apartment blocks aren’t going up in farmland (this isn’t China where people are told to live outside the fifth or sixth ring road just because).
So if SF goes 'Hong Kong' style i.e. tears down all those homes and puts full on sky-scrapers everywhere, will the 'current' residents be happy, and will future residents want to be there as much?
'Everyone wants to live there' - which is why it's so expensive - this is an inevitability of a good culture whereupon the physicality is usually critical.
If SF went Hong Kong it simply wouldn't be SF.
Pay the price or live elsewhere - California is vast and beautiful.
Also - if some areas on the peninsula put their minds to it, they could be as cool and fun as SF.