Naive question maybe, but if demand is that high, why don't prices rise even higher to balance it out a bit? Presumably most landlords would prefer another hundred or two a month at the cost of a few extra days on the market?

Why hold out and continuously interview potential tenants, when multiple people are literally asking you to take their money?

Cash today is better than cash in a few days.

It's not always legal to charge more in San Francisco.

(SF rent control does not apply when you're bringing in a new tenant)

It’s not “supply and demand”, it’s “selfish rich techies and landlords”. I mean you can read that as supply and demand restated, until you get to next steps like solving the supply problem, and apparently building one more apartment building will irrevocably ruin the character of the City.

Saying "it's about supply and demand" is not technically wrong but it glosses over the toxic systemic changes which brought us here and exculpates the people who deliberately fought for them to create this mess.

If land were closer to being in a liability in SF then the NIMBYism would be a pale imitation of what it is now and the land would be used much more efficiently and property wouldn't be as astronomically expensive.

However, land owners need an economic incentive to develop that requires them to lose money if they use land unproductively.

That means taxing the value of the land - preferably directly (via LVT) but failing that by raising property taxes.

NIMBYism is a result of people who really want to protect the value of their land. Some of these people will be quite desperate to do this because they're highly leveraged. Negative equity is a good incentive to turn up to your local planning meetings and inhibit development.

I think the fundamental problem here is that the people of SV people do not believe in property rights (e.g. the right to develop property you own as you see fit) to such an extent that they are willing to put their money where their mouth is and codify it in the form of (restrictive zoning and other shenanigans that hinder development) even though this inhibits growth and limits their upside.

Edited for clarity

There are two types of people in SF:

* People who have watched their property appreciate in value by 4-10x for basically doing... nothing.

* People who have taken out an eye watering loan for well over a million dollars and are kept up at night by the idea that theyll owe a million dollar loan on a $750,000 home.

Of course they're going to be conservative! Of course they're going to try to avoid anybody rocking the boat! Of course they'll be NIMBYs!

Why on earth would you think that the one thing that keeps them ludicrously wealthy - property rights - is the thing that they'd stop believing in??

It makes zero sense.

SF homeowners of course believe in the kind of property rights you're talking about, but mostly do not believe in the latter. Most homeowners here want (and unfortunately mostly have) absolute veto right over any kind of construction or development that their neighbors want to engage in, whether it's as simple as reasonable cosmetic changes by a resident homeowner, or as complex as a denser rebuild by a housing developer.

(But I mostly agree with you in your characterization of the two types of SF homeowners. There also are some who are nominally in your second category but wouldn't be catastrophically financially impacted if their mortgages went under water, but they're definitely in the minority.)

If they care so much about property rights then why is it so hard for people there to do build on their own property that increase the value of that property?

Saying SF cares about property rights is like when the person who creates drama says they don't like drama.

The house-as-residence aspect makes them fearful that you won't make your mortgage payments, or your mortgage will end up under water, and the bank will foreclose on you and you'll be homeless. The house-as-investment aspect makes them fearful that they'll take a loss or even break even come sale time, and then their retirement nest egg will be weak.

So I agree that fundamentally yes, people are buying a house to live in, but it's a lot more loaded than that.

If housing costs were more reasonable, perhaps we could turn the tide against this "primary-home-as-investment" attitude, which I believe to be counterproductive.

Not true at all, look at Detroit, Gary, or any midwest "rust belt" town. Abandonded properties everywhere, can't find buyers even at tax sale prices.

I think Prop 13's incentive not to redevelop is actually more significant here than its incentive not to sell.

I am happy to discuss all variables which inform the price, so long as we agree to give supply and demand top billing. We can even discuss the variables which inform supply if you like.

EDIT: While I’m inside the edit window, let me throw in another big variable as an example. Costs are another factor that inform a price, and a big one. You could make a case that it deserves higher billing than supply and demand, but if your costs are $X but you can only sell your widget for $X-1, and not $X+>=0, then $X-1 is your price ceiling. Your business is unprofitable and losing money.

I’m trying to be careful with my words but I still seem to be leaving some people with the impression that I think supply and demand is the only variable that informs a price. It’s not, but it’s still incredibly important and often dismissed as a non-factor when discussing San Francisco rental and real estate prices with San Franciscans.

If landlords can make a killing by constraining supply politically, they will. So the primary cause is the incentive system and the political environment which makes it possible for them to do that.

It's all about how the reward functions are designed. So of course if you reward scarcity and profiteering that's what you get - as a secondary outcome, not a primary cause.

In cities with zoning constraints, developers are the only natural predators of landlords. They are entirely different skillsets, building new units requires managing an extremely difficult political process for permits, raising capital, working with contractors and labor, etc. Being a landlord requires very different analysis and skills.

There may be a few landlords with the capacity to cross over to development too, but it isn't many of them.

If you have a bunch of left wing groups who are anti-development fighting to keep supply constrained even while complaining the rent is too damn high and the character of the City is changing and yadda yadda yadda, who are you[1], as a landlord, to take the wind out of their sails when you are profiting from their protests?

[1] The general “you”, not you specifically.

I've literally never seen it dismissed as a non factor - not even once.

Supply and demand is pretty obvious because of the basic physics behind it. If you have a world with 10 houses and 20 people then 10 people will be without a house. It's not very difficult to see the problem and how to respond to it. We first have to establish that we want every human in our country to have shelter. That means what we don't want to happen is the allocation of housing to a subset of the population, be it via the free market, a lottery or an application process where you are vetted by an interviewer according to some criteria. We don't want any of that. So the obvious solution is to just build more housing, regardless of the economics.

Now lets just add a thin layer of economics.

It turns out that the free market has this interesting property that in the case of demand exceeding the supply the cost of housing increases until it becomes profitable to build more housing. It's a self balancing system if you make sure that it's not getting stuck somewhere.

Turns out if you make it really difficult to build more housing then people decide to pack up and leave because that's the only option left. For the sake of the argument 20 people can't live in 10 houses so 10 people will have to go build housing somewhere else.

Now here is the perverse thing. The same people who made it difficult to build more housing also made it so that they get to stay where they are by removing the pressure to leave the location. What we get is 10 people living in housing and 10 people living in misery. You don't need an economic resource allocation mechanism like the free market to cause misery. The misery already exists in the real world and the economics merely summarizes that misery as a price signal.

So why care about supply and demand? Because it's the closest thing to physical reality but what people fail to grasp is that you have to change physical reality to change the economics. No, messing around with prices via rent control or prop 13 does not solve the underlying problem.

You can only pass on so many costs before demand drops because the price you're asking just isn't feasible.

Non-resident landlords in SF, to my knowledge, aren't really anti-development. They recognize that 2x the number of units on the same parcel of land won't cut the per-unit rent in half, so higher density is still a better deal.

The problem, from the individual landlord's perspective, is that they can't redevelop their own land without triggering a tax reassessment, which can easily turn any profit into a loss, even after adjusting rent for the newly-developed property. The landlords who are making out like bandits right now are the ones who have owned their properties for decades. I wouldn't buy a duplex or a quad-plex in SF right now with the intention to rent it out; the cost of the property, plus 2020-assessed property taxes, would mean I'd barely break even at market rates (pre-pandemic market rates; current market rates might be a solid operating loss).

Large developers that are coming in and wanting to build apartment or condo complexes essentially have to build so-called "luxury units", because the economics won't work out otherwise, when you take into account high initial property taxes and the high, drawn-out cost of just building in SF.

which is why i think property taxes are a stupid form of taxation. The property's income should be what's taxed - not the "value" of the property. And that income should be taxed at the marginal tax rate of the owner.

They're not selling at cost-plus, they're trying to maximize profit.

I find it to be strangely magical thinking that land-value-taxes will precisely and surgically extract 100% of their value from landlords with no players in the game altering their behavior in any way that would result in the effects being shared across many participants in the real estate markets in a city.

Compare that to a conventional property tax where you have to pay more tax for each unit of housing you build. You also have to pay property taxes for home improvement meaning old properties won't be renovated ahead of time and therefore won't be rented them out. Instead the house will only be available for sale with the hope that the buyer will renovate the property.

Imagine that the US government would buy you a bicycle, any bicycle, at any price, reallocating from things that you don't care about, so long as you tell it how important a bicycle is to you. You are likely to describe it as being a matter of life and death.

The amount any human would pay for a view is different from the amount they require someone else to pay to obscure the view. Economic efficiency is not a goal in any sense. And any incentives such as the ones you provide would be struck down in the court of popular opinion because it is the outcome that is not desired, not the process.

Based on the one prior attempt at LVT in the U.S., landowners don’t seem to understand its intent:

https://www.washingtonexaminer.com/the-short-life-of-pennsyl...

I do agree that an LVT has psychological issues when proposed to voters. It's a massive change to how we currently do things (that's the point!), and it preferences groups who don't currently have political power (future developers, tenants, future residents) over those who do (land speculators, retirees, existing homeowners). I think the most likely scenario for its adoption is in the aftermath of a cataclysmic war that destroys all the existing infrastructure and redraws political boundaries. Likely one successor polity might try it out (since everything's dead & destroyed anyway), and then their pro-development advantages would draw lots of displaced immigrants to them, and eventually they'd amass more power than their neighbors through that economic dynamism. Much like how the U.S. became the pre-eminent global power through an innovative politico-economic system + immigration friendly policies + near complete genocide of the native population.

It's also invaded a crap-load of countries and defacto taken their natural resources And slavery.

See Japan, a de facto US vassal state after WW2 and what they've grown into. Similarly, Korea and Israel. Also, Germany and France. They are just smaller participants in an alliance.

United Fruit style things still happen but the dominant style of US hegemony is different from VOC or EIC style imperialism.

The value of LVTs is in aligning incentives so that landlords have an incentive to build more housing and use it more efficiently. It makes vacancy & speculation a money-losing endeavor (the same way that inflation makes holding cash a money-losing endeavor), and creates political pressure to repeal zoning laws and create smart public improvements, ones that will increase the value of the land more than their cost. Its value as a revenue source is secondary, and many proponents (of the geolibertarian sort) actually support lower tax receipts and smaller government.

Maybe this is the point to its proponents. However:

> Its value as a revenue source is secondary, and many proponents (of the geolibertarian sort) actually support lower tax receipts and smaller government.

Statements like this muddy tax discussions.

The primary reason for any tax at all, regardless of type or preference is to raise revenue for government. That fact shouldn’t be lost when discussing which kinds of taxes and what percent to raise them at is discussed, even when optimizing for political outcomes.

If the government were raising more tax than it needs for example, tax revenue is too high. If the government is spending more than it is collecting, then tax revenue is too low. Effects on market behavior are always secondary considerations.

It's much like how to a physicist, vectors are real objects that live in the abstract concept of a vector space, while to a mathematician vector spaces are fundamental axioms and the existence of vectors is just a consequence that falls out of these axioms.

Taxes are paid on money earned, whether through labors, investments or rents. They are a taking, a legal one, of something that rightfully belongs to someone else, so if you are going to take it, then it had better go back to government services.

Economists have found ways to reinterpret taxes and exploit their second Order effects, but this does not change what a tax is or how it should properly be used, nor excuse the misuse of surplus revenues.

Now the reason I bring this up is because if a tax were enacted for the express purpose of shaping public behavior and the resulting revenue was greater than what the government needed, what ought to be done with the surplus revenue? Should the tax be lowered to match expected expenses? What if lowering it to that level negates the benefit of shaping public behavior? These are the conflicts I would expect to see come up.

This is one of the reasons why the discussions around taxes tend to fall along the lines of what is taxed, how much, and where the burden should proportionally fall. Leading with second order effects muddies the waters and hinders productive discussion.

IMO a LVT holds up (relatively) well under this sort of moral reasoning. I'm sure many arguments can be made around what's fair, but it's intuitive that income from labor, investments, etc should naturally go to who performs the labor, who makes the investments etc.

The (unimproved) land itself is a bit different. It can't go to who created the land, since no one did. In the US, the closest thing is maybe who first took it from the Native Americans. The moral argument for strong property rights (on the land without improvements) to begin with seems weaker than the other cases, since there's no contribution to society tied to making the land (of course switching from one tax regime to another is another matter, since people certainly buy land that is valuable under our current system with their hard-earned money).

That also leads to its (relatively) small effects on incentives for a tax. Taxes on labor and investment income of course discourage labor and investment, but the amount of land does not decrease no matter how much it is taxed. Even a huge tax probably does not affect the monthly payments to use land very much (since the supply and demand still remain similar), it would probably just lead to lower land values and more of the monthly payment going to taxes instead of interest.

> Now the reason I bring this up is because if a tax were enacted for the express purpose of shaping public behavior and the resulting revenue was greater than what the government needed, what ought to be done with the surplus revenue?

I think this is an interesting question especially with things like carbon taxes being considered seriously. It seems like two natural things to do would be to either reduce other harmful taxes that exist only to raise revenue, or to distribute the funds to everyone equally. I could see an argument for the latter if the incentive-shaping tax was something that would raise living expenses for most people (for example, a carbon tax that increases electricity costs), since otherwise it would negatively affect people living off savings or others with low incomes.

There's actually an economic theorem (the "Henry George Theorem", discovered by Joseph Stiglitz in 1977 [1]) that states that under conditions of democracy & perfect information an LVT will exactly "right size" the government, spurring investment in only those public goods that pay for themselves in increased citizen welfare. That's because the tax revenues from public good expenditures come back in the form of increased rents: a playground nearby, a subway stop, better schools, low crime, stable currency, a strong military, etc. all increase the amount of rent that a landlord can charge for a property within their jurisdiction. That rent then comes back to benefit the exact same people who are paying the tax, which removes the principal-agent problem inherent in most taxes (where you pay the taxes but it benefits your neighbor). Landlords have an incentive to raise taxes on themselves right up to the point where the public improvement fails to raise rents by more than its cost. Tenants have the same incentive - as long as the cost is less than the public benefit, they get to enjoy the benefit, their rent will raise by the cost (as landlords pass along the tax), and they end up better off. When costs rise more than benefits (as they seemingly have in SF), people leave the expensive jurisdiction and move to areas that have more smartly allocated their tax dollars.

The main problem in practice is that you can always direct people's attention to small problems that don't raise their welfare in aggregate much - saving the burrowing owls, for example, or banning abortion. The economist's answer is that this will eventually even out across many people and many municipalities, but I think we have pretty ample evidence that people are not necessarily rational beings, and an LVT isn't all that robust to irrationality.

[1] https://en.wikipedia.org/wiki/Henry_George_theorem

That's a political statement speculating at intentions. For instance, the number one purpose of a carbon tax is to disincentivize carbon emissions. This is exemplified by the fact that carbon tax proponents generally support returning the money to all taxpayers as a 'green dividend', i.e. it's a net-zero redistributive policy.

Raising government revenue isn't that important compared to the prime purpose of the carbon tax.

Institute an LVT and those competing landlords may become cashflow negative, forcing some of those units off the rental market entirely (typically to sales to owner-occupants, sometimes to landlords with better financing or lower overheads, sometimes to short-term rentals or other higher cashflow uses).

An extra $100/mo of LVT may not result in an extra $100/mo of market-clearing rent, but it's far from obvious that it results in $0/mo change.

Thought experiment: if the LVT for that unit were $3500/mo, what do you think the offered rent would be? If that's the case for $3500/mo, what part of that doesn't hold for $3000/mo, $1000/mo, $350/mo, or $35/mo?

Put another way, I think the main thing that is going to take hit as the LVT % increases is not renters or landlords, but the land value itself.

A piece of land that rents for $3100/mo may have landlords willing to pay $2000/mo for the land so they can break even after construction, overhead, etc. Absent any taxes, maybe they could pay the whole $2000/mo in interest on a loan to buy the property. As the amount of land taxes increases, the budget to make the loan payments decreases, which should reduce the property value (since the same logic should apply to all the potential purchasers).

It gets more complex once you add land speculation but I think the core logic remains the same - instead of being willing to pay $2000/mo for the property the developer might be willing to pay $2200 anticipating a speculative land return (without LVT, so higher property values), but that shouldn't change in general the market rental rate or if construction is viable, so I think the main difference with or without LVT would still be the land values.

Well, LVT is always meant to be a replacement for conventional property taxes so depending on how it is implemented it can be roughly the same as the previous property tax or it could be significantly lower because only the land is taxed and not the whole property.

You would be describing parts of Detroit wherein land is abandoned and the city limits shrink as the cost of providing services increases.

https://en.wikipedia.org/wiki/Land_value_tax

Land supply is inelastic

Also taxing income progressively discourages landlordism.

On top of that, taxing income in order to build public public housing lowers rents even more.

This doesn't happen because those who have a political say don't actually want more housing. My proposed idea would force the government to actually solve the problem after all. If there is not enough housing the government would be forced to build it as a last resort and if the government can't do so because of the laws it has enacted then it can change those laws but that's exactly what must be avoided at all costs if you were to ask existing homeowners.

However, it's a generally popular idea, that if put to a majority vote could pass. It's individual small groups that would stop it, because city politics are highly undemocratic and controlled by small factions.

However, there's hope at the state level to make this possible. I'm hopeful that in the coming legislative session there will be some serious attempts at state-level public housing to alleviate our desperate shortage.

> Also I doubt if raising taxes will result in anything more than them passing that cost on to the renters.

Only new buildings in SF pay substantial taxes, and only new buildings have rents that are close to their carrying costs. The landlords that are getting huge property tax subsidies due to Prop 13 are enjoying market rents that are far far above their carrying costs. This is why SF landlords are economic leaches, their profits come from a supply shortage not from productive activity.

If they coludn't afford to pay the tax, would rents have dropped? No, they would sell if they couldn't cover their costs with rent.

According to pretty much any economic model, the LVT can't be passed on to tenants. Having a hard time finding a concise, and to the point explanation of that, but maybe check out the answer here:

https://economics.stackexchange.com/questions/24352/why-cant...

This is what it's like:

"San Francisco Man Has Spent 4 Years and $1 Million Trying to Get Approval to Turn His Own Laundromat Into an Apartment Building"

https://reason.com/2018/02/21/san-francisco-man-has-spent-4-...

The sudden COVID-related rent price drop indicates that this theory is nonsense, and that the high rents are solely a function of supply and demand, but I'm sure that won't stop anyone from believing in it.

I mentally couple the way that rent control works with the pretty common opinion that the city was great until “they” came, and would be excellent again if they’d just leave. While the “they” changes from place to place and time to time, the attitude seems to be pretty common. You even see this attitude here on HN, with occasional assertions that those who moved there for tech jobs should move and let rents fall for those who have always been there.

You can usually tell. They'll say that the culture has changed because the desirable people left. That's right. But the groupies are still there. They just don't know where the desirable people went.

> If the city won't allow enough housing to keep your area affordable, you have a right to feel aggrieved

The city is not the one preventing more development. It's overwhelmingly these xenophobic residents that are responsible for that. I don't have much sympathy for people aggrieved by shooting themselves in the foot.

Actually that is a the result of an incredibly skewed tax policy. Prop 13 means that the government cannot derive any significant tax income from residential property. It is forced to allow commercial property because it brings in tax money. This means you will always have more commercial property than residential property. Land owners want this because it raises their property values. The government wants this because it's the only way to fund itself.

When you look at the reality of what you are doing you are actually incredibly selfish. You are creating jobs and moving them away from rural places but at the same time you are not building enough housing so that people can live near those jobs. You do this because you want the value of your property to go up. Then once those people are coming because you moved all the jobs to your city you start complaining because they want to work there.

There is this misconception that it's "rich people" who want to live there when the reality is that those people only became rich after they arrived in your city. It's you who created them.

>, and then being told that the community no longer has room for you because the rent is too high.

Well, that's exactly what you wanted. You wanted more jobs meaning more people but you did not want more housing which means someone has to go. If you call this unfair then you have no one to blame other yourself.

Price gouging laws themselves don't solve the problem.

If anything, the government can pretend that the problem has been solved and block any potential resolution. They can make the problem far worse.

I'll say it over and over again. If you want to fix the economics then you must fix physical reality.

Why does the government guarantee work? Because it will be the government's responsibility to fix the problem. If the government created laws that caused the problem then it will be forced to change those laws.

The classic price gouging example is the mask shortage where people will constantly say that manufacturers can't expand their supply fast enough so price gouging is inevitable and the duct tape fix is the only way to solve the problem. If you introduce a government price guarantee the government will be forced to buy existing masks off the private market and sell them for a lower price. Effectively subsidizing the manufacturers of the mask. The manufacturer can charge an increasing amount of money for the masks until it becomes profitable to expand production capacity immediately. What if greedy manufacturers gouge the government? The obligation to provide masks doesn't disappear because of a little greed. In fact, the government can just buy the manufacturers and build its own factories and completely remove the need for uncompetitive mask manufacturers. If anything, there is now immense pressure for private industry to stay relevant by offering prices lower than what the government is guaranteeing.

In a disaster situation that's not so easy to do.

Next, the idea that landlords are a unified group with a common set of designs is itself a premise that requires a little bit of legwork. Here's one. What are landlord expenses versus their expenditures. Are they large or small landlords. etc. To hell with nuance, let's create an Us v Them type of discourse, and see who bites.

It's interesting to see how little things have progressed over the last few decades. For example, check this study [1] from fourty years ago.

TL;DR: "A recent survey of local land use policies in the Bay Area identified the important role that land-use controls play in limiting developments. The suburban land squeeze is not the exclusive result of immutable natural constraints. It is the outcome of the restrictive land use and development regulations imposed by many of the region's 100 land governments. A new mood has emerged in the suburbs; land use controls now place severe limits on where, when and how the region can develop. Continued suburban land conversion is now viewed as undesirable, and efforts to limit residential development are well organized and effective."

It's certainly not an "evil cabal of landlords in a dimly lit room", but it'd be naive to ignore the systemic forces at play.

[1] https://escholarship.org/uc/item/0ds0q9q4

Except your own example demonstrates that it's not. If it was "solely supply and demand", then rents should drop far more dramatically than they have, down to levels comparable to other cities that used to be equally unpopular. Yet there's a literal pandemic and even though demand for San Francisco housing is at a ~20-year low, with newly-empty units everywhere, San Francisco still remains one of the priciest cities in the nation. Short of like, an earthquake wiping SF off the map or similar sized event, demand for SF housing will never get lower than this, and it's still not enough to bring rents remotely back into the real world.

Supply and demand have an impact on housing prices, but are definitely not the "sole" source of them. Landlord behaviour, city tax goals, investment banking demands, private equity involvement, and much more all dramatically impact the price of rent far more than "supply v demand" or any "regulation" does.

This is hard to understand for folks used to megacity pricing, where "high demand" (i.e., a small-but-consistent influx of new residents) is until recently, an automatic given thing you could just always point to as blame for any problem. For those of us out in the midwest, where demand is regularly falling in many places, where new construction always outpaces population growth every single year, and yet the housing prices still always rise, the disconnect between prices and supply/demand is quite a bit more obvious.

that just sounds wrong, and may be i can't see the whole picture from just your comments, but the price _can't_ be rising if demand is falling. Otherwise, these new construction will not sell at all. SO there _must_ be some sort of demand.

Let's not pretend this is Milton's economic utopia.

Progressives are not objecting solely on the basis of “character of the city” and in fact regularly poll in favor of development. What they fight for is affordable housing development.

Underlying this problem is a massive income disparity between techies and working class folks. Essentially the YIMBY position is if you build market rate housing for techies it will trickle down to the working class because “supply and demand didn’tyoutakeeconomics???” But Econ 101 has within it the concept of inelasticity that explains why increasing supply does not always move the price much under certain conditions. Like those of say a massive boom economy where tons of high income earners and speculators from around the world are waiting to snatch up new inventory. SF has had many experiences with such boom/bust cycles.

It’s a real estate developer’s dream and it helps us rich-ish techies (hence heavy YIMBY presence on HN) but it doesn’t necessarily translate into lowering rents for the working class. Thus, progressive supervisors are focused on public investment in affordable housing and taxing the rich to fund it, not just serving the needs of the wealthy.

YIMBYs absolutely hate this characterization because they like to claim they are on the side of the poor. But they are 100% aligned with and politically funded by the real estate industry, and that’s why they prefer to mischaracterize progressives who are actually prioritizing the needs of the most vulnerable.

Separately, developers are already required to build a certain number of affordable housing units in every development.

If you require developers to build units that are mostly or solely composed of affordable housing, those developers will not earn enough money to make it worth building the units in the first place. This leads to progressives holding up all kinds of development with endless planning meetings and environmental impact assessments. The result is no housing gets built - no affordable housing, no market-rate housing. They allow the perfect to become the enemy of the good.

We need to work with developers to build housing units of all kinds, including affordable housing, rather than demonizing the very developers who are going to end up building those affordable housing developments that I think we all want.

This is false. YIMBYs opposed the recent prop I to tax >$10M real estate sales to fund “emergency rent relief and permanently affordable housing.”[1]

[1] https://ballotpedia.org/San_Francisco,_California,_Propositi...

Instead, the >$10M real estate tax would mostly be paid by developers, not homeowners, because most property sales in San Francisco that are >$10M are apartment buildings rather than houses owned by rich people. Not only that, but it would be a tax paid twice by developers, because they have to buy the land and then sell the finished development.

The reason YIMBYs opposed that proposition is for exactly this reason. It wouldn't be a tax on rich people, but yet another obstacle to the construction of housing, both affordable and market-rate.

This is because the true position of Progressives is that any development has a chance to cause harm, and they prefer the current situation to any harm, in a messed up form of the trolley problem.

I would also urge you to capitalize the P, as the Progressive positions in SF are not really recognizable as progressive in most of the US or world. It's more of a factional battle in the culture war than about what are more generally agreed to be progressive values.

[1] https://twitter.com/uhshanti/status/1311469878604263424?s=21

Edit: from what I know of Preston, at least. I'm not in SF, just have to deal with the terrible politics there providing cover for conservatives in my area to be reactionary in housing. And this is the core reasons that the Progressives in SF are so bad, they say all sorts of regressive things (like seemingly supporting Prop 13?!) because they are too deep in a culture war to realize the policy that will support the progressive values they claim to support, but all too often, do not. For example refusing to make 100% affordable housing by-right.

To the extent that this means the freedom of poor people to get out of the way of rich people, you can see how some would not be excited. SF's black population has fallen by half in recent decades, for example.

Honestly, the geographic narrowness of the tech boom has always been weird. At the same time we've been selling the limitless power of the Internet to connect people, we've also been working for companies whose structures didn't demonstrate that, and in a financing ecosystem where physical proximity to VCs was a major advantage. So San Francisco got turned into a bedroom community for South Bay companies in areas that refused to build adequate housing for their workers.

Thanks to the pandemic, that is evaporating. We'll see what happens in 6-12 months, when everybody's vaccinated. But the people I'm talking to are unable to remember why commuting every day was ever a thing, and they're very reluctant to go back to it. In which case, we'll write SF's housing issues off as just another bubble.

When there isn't enough room for everybody, the rich get served first. So everytime somebody protests a new housing development which adds to the supply, they are advocating for the rich to stay, and to kick out the same number of people that would otherwise occupy those units.

In the 20th century, we declared housing a human right. But in San Francisco, we have declared that only the wealthy should be able to afford housing, and that the everybody else should leave.

An HOA might, I’m not too familiar with them, but as I understand it even they have legal limits on the restrictions they can place on people moving in, so maybe not. Someone else would have to chime in on that one.

Agreed otherwise.

It reminds me of this classic line: “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal loaves of bread.” -- Anatole France

Any human will, a rational agent won't.

But for a brief 40 years before the super-constriction of supply happened, it was a welcoming place to lots of people that couldn't find homes elsewhere, because there were at least some empty places to rent out.

What drives up the prices isn't that people with big salaries are there, they've always been there. What's driving up the rents is that the people with big real estate holdings have said that the people with paychecks can't build anything new. So instead of those big paychecks going to building more infrastructure and subsidized low-income housing, those big paychecks are going only to current landlords, and pushing out anybody without a big paycheck.

SF housing is a game of musical chairs, and all the people that found their chair in the 1970s and 1980s easily because there were lots of empty chairs have decided that there should be no more chairs. That provincial, close-minded, and ultimately xenophobic attitude is what makes the housing market so unfair.

Instead of your wealth being transferred to a laborer who has less wealthy, it was transferred to somebody who is likely quite a bit more wealthy. And instead of your wealth being used to improve the city, it was all used for the profits of somebody els.

good luck using labour to generate a piece of land to which you can build on that's near where you want it.

Please, for the sake of your good content, don’t go hyperbolic. It makes you sound less credible.

Things that are horrifying: genocide, torture, slavery, famine, child abuse, elder abuse.

Things that are not horrifying: almost everything else. Maybe bad, really bad, destructive...but not horrifying.

Certainly not a personal view about The Zeitgeist of SF.

Calling the state of housing the Bay Area anything less than "horrifying" is sugar-coating it, and I would thank you not to tone-police others.

But if you think that building enough housing for the people means unending population increases, that's really in line with the garden variety xenophobic anti-immigrant thinking I grew up with in the Midwest.

The zero-sum philosophy of a newcomer arriving meaning that a current resident loses out, or that the newcomer is "extracting" from the community rather than contributing to it, is also gaining popularity in SF, and is also a very common xenophobic trope.

If you don't think that, then there's a certain density level where it's considered fine to oppose it, and there are certain things one could prioritize above population increases that could lead people to favor restrictions. Maybe some of the people favoring restrictions think the high point of density has been reached, or perhaps they favor restrictions because of what values they place above population growth. It's worth at least considering before we simply dismiss them all as xenophobic.

And for me, this isn't about more or less restrictions. This is about meeting the needs of the people of a city. Not just the wealthy, not just keeping buildings the same, not just the people that have lived there the longest. The needs of the entire people. Which includes people that don't yet live in the city but need access to the economic resources.

So I definitely think that there should be density restrictions, but rather than maximums there should be density minimus. It should be illegal to build a single unit on a 5000 square foot lot anywhere in San Francisco. When somebody tears down a tiny Victorian, they had better replace it with many homes rather than just one. And if somebody remodels those exclusionary Pacific Heights homes, they better be adding more units, IMHO.

Hopefully with Covid forcing more sane remote work policies across the board, fewer people are forced to live somewhere they don't want to.

But I'm extremely lucky that my financial situation is such that my home is not the bulk of my net worth. For most homeowners in the US, their home is not only the vast majority of their net worth, but it's the basis for their retirement nest egg (with the intention being to sell in retirement and trade down to a smaller home, keeping the difference in cash value). So while it grates on me, I can absolutely understand how homeowners will do everything in their power to not only protect their home values, but ensure they keep going up, year after year.

At the same time, though, it does feel a little greedy to see people who bought 20-30 years ago holding on to their obscene hundreds (thousands?) of a percent gains so jealously, to the detriment of so many others. But again... it's hard to blame them too much, considering how uncertain retirement finances can be in the US. Solving that problem decisively with a housing windfall is an attractive proposition.

I imagine there are some truly awful people who are very rich and continue to push policies that keep their home values high, even when they don't really need them to stay high to support their lifestyles. But I expect that's a small minority of people, if only because few people are that financially secure.

Perhaps there’s a similar process at play here. If land is incredibly expensive and one intends to eat most of their meals out, it doesn’t actually make sense to rent a full kitchen. Might as well either cut rent and get a half kitchen, or save that space for activities you’ll actually do.

When I was exploring listings to see how the pandemic affects prices earlier in the year, these “kitchens” I described were also the norm over in the Sunset and Richmond around... Septemberish? Why? I don’t know, in some cases the stove had actually been removed, but maybe the full sized fridge was left in.

When we moved out of Santa Monica, our craptastic unit was re-rented inside the 30 day window and occupied two days after we left. Why? Because it had a tiny sliver of outdoor space, which suddenly mattered a lot. I imagine that all of the tiny condos in the area are staying on the market longer because the idea of WFH from less than 500sq ft. sounds awful to pretty much everyone now.

I think it’s worth investigating later, but for now I’m inclined to say it is probably a little of column A and a little of column B.

If I hadn’t personally observed apartments renovated to remove features try and pass it off as a 1 bedroom prior to the pandemic, I might have considered that angle initially, but for now it is still coloring my view of what I saw in September. I think this is becoming more of a norm, and they were the norm as far as what was available at the time, but this could also have been that units with kitchens were getting filled faster at the same time I was making my observations.

What infuriated me personally wasn’t that there were so many, but that the asking prices were about the same as the asking price for an equivalent unit with a full kitchen. It’s a seller’s market, that’s what I’ve been more or less communicating all up and down the thread, but damned if that doesn’t peeve me.

It’s amazing how little actually changes after two millennia. At least we know people are still people. :)

It is hard to beat the economies of scale of a restaurant, as much as the "you only need to factor the cost of raw food" camp like to tell otherwise. From a purely economic perspective, a kitchen at home, when other sources of food are widely available, is tough to justify. From a wider point of view, a kitchen is easier to justify as a nice luxury, being that cooking at home is something that people enjoy doing. When land is cheap, it is a luxury that can be afforded. When land is expensive, it is not surprising that it's the first thing to go. Similar to why people are likely to maintain a garden at home when land is cheap, but not when land is expensive.

Subjectively, I don't think that cooking at home is a "luxury". Maybe being a foodie is an upper class thing given the extra cost and time investment associated with it, but historically huge chunks of the middle class have cooked at home for a large chunk of their meals. Generally speaking only the lowest economic strata of the working poor depend heavily on fast & packaged food, and that's largely a factor of both time and ingredient availability. If you're working two or three jobs or live in a food desert, you're not going to cook at home no matter what the unit economics are.

That being said, I do have a general theory about high COL businesses. After moving out of our high COL city (Santa Monica, for the record), we've started building out a home gym and programming our own workouts. What we realized is that while our old gym provided a lot of knowledge and social structure, the primary service they offered was land and equipment. They were able to charge a premium because we literally couldn't afford enough land to put the equipment. Now that we live in a lower COL city with a large garage, the financial balance points towards it being cheaper to just buy all the equipment rather than paying for a gym membership. At the extreme end of land cost, I can see this even applying to kitchens too, since a good kitchen takes up a fairly large portion of an apartment.

Please define “massively” for us. It sounds like you were eating larks tongue in aspic and are now buying year-old potatoes at the Latvian coop. Remember, some in an international audience may have done just that at some point. Is that what happened?

Wonder if a functional kitchen should be thought of as an expense-management device. No matter what the financial situation, in the US without a kitchen you can always find something to eat to keep body and soul together, but with a functional kitchen you can always eat something both tasty and healthy (if you can cook). You can choose to cook if you have the cash; you may need to do that if you don’t. The fact that you always can is a very consoling fact in rough economic times.

Whoops, my bad!

Due to the step nature of purchasing food, the break even points change depending on exactly which meals we're talking about dining out for. The more you eat out, the higher the cost per home cooked meals due to loss of economy of scale and spoilage.

My wife, the keeper of the budgets, calculated that the break even point for work lunches was $11 a lunch. This is doable, but it basically means relegating yourself to low end fast food. In the area where I lived (Southern California) that put even Chipotle out of reach for my preferred configuration. There are certainly places that can reliably deliver 800 calories for less, but that'll cost you in the long run in different ways.

> Wonder if a functional kitchen should be thought of as an expense-management device. No matter what the financial situation, in the US without a kitchen you can always find something to eat to keep body and soul together, but with a functional kitchen you can always eat something both tasty and healthy (if you can cook).

I think that's a pretty good way to think about it. As GP has pointed out you do need to purchase an actual kitchen too, but I think that the cost is fairly marginal compared to buying a home in most markets.

> You can choose to cook if you have the cash; you may need to do that if you don’t. The fact that you always can is a very consoling fact in rough economic times.

If one wants true consolation in rough economic times, buy a chest freezer. Nothing provides emotional security like a hundred pounds of meat and vegetables frozen in the garage.

Is that because, based on other comments here, you're already invested in a kitchen and, as a result, are forgetting to factor in that substantial cost? But that would be like if you owned your own silicon fab. You would no doubt also wonder how anyone could afford to buy their processors from Intel for hundreds of dollars when you can make your own for pennies. But you're not actually making them for pennies when you need to lay the capital upfront.

> Subjectively, I don't think that cooking at home is a "luxury".

The luxury isn't cooking. The luxury is being able to have a large room full of machinery dedicated to preparing meals for, on average, 2.5 people. These days, average people can barely afford living spaces as-is. That room adds to the cost substantially and is not likely to be recouped against eating out, unless eating out means eating at places that are selling entertainment alongside food.

It is true that the typical home kitchen can be more cost effective than food entertainment, but that's only because your home kitchen does not have to provide the entertainment portion. I do not see these being reasonably comparable when talking about the cost of prepared food. Once you add the cost of equivalent entertainment at home, the food entertainment restaurant looks pretty cheap again.

> Generally speaking only the lowest economic strata of the working poor depend heavily on fast & packaged food

Generally speaking, the poor have to buy used houses that already have kitchens for a lot of historical reasons. They have little opportunity to not become invested in the means of production, even when it is not ideal from a purely economic point of view. There are exceptions of places without kitchens, as mentioned earlier in the thread, but they are typically only found where land values are high, where the cost of keeping an existing kitchen is higher than repurposing it.

The wealthy, who are most likely to build new houses, that will one day be sold to the poor, want the luxury of having a kitchen even when it is not economically sound, and so the cycle continues.

So, my kitchen has a range, sink, dishwasher, and full-size refrigerator. It is small but it is a full kitchen. It is the smallest "room" in my apartment; I probably pay a few hundred dollars a month for it. The cost difference between cooking at home and eating out makes up for that in a couple of weeks for me.

Kitchens aren't that expensive.

You're right that ignoring the cost of a kitchen discounts the cost of cooking at home, but I think you're drastically overestimating the cost of purchasing a kitchen. In another thread you mentioned $60,000 for a kitchen, a number which I think is way too high. I suspect that this is a case of the average being dragged up by the outliers. After all, high end kitchens can get very expensive, but we're not looking at high end income earners.

So, let's look at it from the perspective of someone buying a used home. Let's assume that they're buying basic, at median prices and reasonable sizes.

A basic kitchen remodel is somewhere in the neighborhood of $24,000[0][1], including all new cabinetry, countertops, flooring, plumbing, and appliances. Presumably installing a new kitchen in a new building is significantly cheaper since that is less labor intensive than remodeling. The median house costs in the neighborhood of $100/sq. ft[2], with a typical small kitchen being anywhere from 70-100 square feet. Even assuming that the cost/ft doesn't already include the kitchen itself, we have a bare minimum price of about $34,000 for a basic kitchen fully installed.

(This does not account for the fact that the $103/sq. ft. number includes the kitchen that comes with the house, and thus we are double counting some costs).

A 30 year mortgage on $34,000 is $441.76, which is $5.89 a person a day for a 2.5 person household, or $2.94 each for lunch and dinner. So in order for a basic kitchen to pay itself off, each meal must be at least $2.94 cheaper than what you would pay dining out. This is obviously quite hard to do if you're buying the cheapest calories available, but trivial if your typical meal is more expensive than say, Chipotle.

And of course, this is a pessimistic analysis. As you've mentioned, your typical American is purchasing a used house, which absent a growing market means that they're financing the depreciated value of that kitchen.

Now if the cost per square foot was closer to $850 per square foot, a not unreasonable estimate for San Francisco proper, one would quickly question whether the $59,500 was worth it for the space of a small kitchen alone.

> The luxury isn't cooking. The luxury is being able to have a large room full of machinery dedicated to preparing meals for, on average, 2.5 people. These days, average people can barely afford living spaces as-is.

I would argue that if having a kitchen is such an obvious luxury as you propose, we'd see more housing move to eliminate it. Instead our evidence is that you have to be extremely far up the COL curve before having a kitchen is no longer worth the space. Even in incredibly crowded markets like NYC it is more common to see apartments give up a separate bedroom before falling back to a half kitchen.

SF is certainly the outlier in terms of cost, so if any place in the US was going to have a local trend of abandoning full kitchens or even half kitchens, it would be there.

> Generally speaking, the poor have to buy used houses that already have kitchens for a lot of historical reasons. They have little opportunity to not become invested in the means of production, even when it is not ideal from a purely economic point of view.

Yes, the poor do have to buy kitchens. But they also buy cheap kitchens, which continues to tilt the equation towards cooking being cheaper. Instead it appears like time and energy are actually what drives people towards dining out, not cost.

0 - https://www.homedepot.com/c/cost_kitchen_remodel

1 - https://www.homeadvisor.com/cost/kitchens/remodel-a-kitchen/

2 - https://www.fool.com/the-ascent/research/average-house-price...

I'm a salaried employ with no expectation of overtime, so my opportunity cost to cook for myself is essentially $0/hr, but even if I factor in a fairly reasonable $15/hr for my own labor, I'm still easily under 4x raw input cost for most dishes, which makes sense since I don't have to pay (or already pay regardless) other overheads like rent, taxes and FOH staff.

One is that $15/hr is a dramatic underestimate of the opportunity cost for many of the people who would otherwise be eating out. Minimum wage in Mountain View & Sunnyvale is $16.05/hour. My wife & my salaries, if converted to hourly, would be several hundred / hour. We cook at home because we're salaried and so don't actually reap that opportunity cost in cash, and because the transaction costs of finding a restaurant, driving to it, and waiting for food dwarf the food preparation time (indeed, if we're already in the car near food we're far more likely to eat out). Which brings me to...

Transaction costs for meals out are really high, largely because of the automobile. Restaurants in the U.S. are spread out, with large amounts of parking that the restaurant owner needs to pay for. Because you have to hop in the car to go elsewhere, you're far more likely to wait for a table rather than find a less full restaurant. That means restaurant owners need to build in waiting space (more rent), and host staff (more labor), and carefully predict staffing needed (more labor). It means patrons waste time waiting for a table, and then ordering, and they're locked into their choice of restaurant once they show up, which means that they're more inclined to research options carefully before picking where to eat.

I visited my in-laws in Taiwan last year, and the food culture & economics are dramatically different there. Restaurant meals out are the equivalent of $US4-5. Most restaurants are what we'd call fast-casual: you walk in, the menu is posted behind the counter, you order, get your food, and sit down at a small number of tables. When you're done you wipe up your area and bus your food yourself. The whole restaurant is usually family owned & operated; there might be 3-4 employees total. If the place is full, you walk next door to the equally-good restaurant there. ("Destination" restaurants like Din Tai Fung do exist, and they charge American-ish prices of $20-50/plate.) This is all within walking distance of your apartment, so when you're hungry you take the elevator down, walk outside, and find someplace, with minimal search or transportation costs. As a result, there's a big culture of eating out, and most people have just a kitchenette and don't use it for many meals.

You can’t say that your opportunity cost is $x and then also state you did not have a choice to earn $x. They are contradictory statements. Unless you are a robot capable of working as much as you want with no downtime, this type of calculation make no sense.

Not to mention the costs of eating out include unhealthy meals, among others.

The rest of my post was about specific ways that the behavior of individual firms (using myself as an example) may diverge from what the economic model predicts, specifically because of transaction costs. That and a counterfactual (Taiwan) where these transaction costs don't exist, to illustrate how behavior then converges on what economics would predict.

It really depends what one eats. If one is okay with eating widely available low cost foods, then yes, commercial kitchens are more efficient. For example, Burger King here will sell you a three whopper, three cheeseburger, and three fries family meal for $14.99 (silicon valley prices, likely lower in the rest of the nation). Pretty hard to compete against that if one considers the cost of making a burger from scratch and cleaning up the mess from deep frying at home.

But fast food is a low margin high volume business. Looking at higher margin items, like what you'd eat in a steakhouse, the economics of a kitchen change dramatically. For example, I recently bought four USDA prime tenderloins from Costco for roughly $58 total. Each one of them, plated and served, would be $35 to $50, excluding taxes and tip. Given that cooking those is pretty easy (either with just an inexpensive cast iron pan and oven, or using sous vide if one wants to get fancy) and takes a grand total of five to ten minutes to make, then the kitchen becomes a much better value proposition.

And that's saying nothing of people with restrictive diets, where oftentimes it's just easier to cook at home. Depending on which friend I'm dining with, the restrictions might be celiac (strict no gluten, not fad diet no gluten), low/no carb, pescatarian, vegan, religious dietary restrictions, nut allergies, and so on. Sometimes the combinations basically exclude most of the restaurants out there, and at that point, it's easier to cook at home than go out only to be restricted to a few items in the menu.

I'd be interested in seeing your math on the subject, and it probably depends on location and at what rate do you "bill" your time, but restaurants have a lot of overhead ( property, staff, taxes) that offsets economies of scale.

Even without going all-in with cheap foods ( like rice or potatoes), I can't imagine eating out in similar quality and quantity being cheaper than cooking it yourself ( again, depending on how you count your time spent).

Of course McDonald's cheapest items will be cheaper than making yourself lobsters, but that's not really a fair comparison.

The average cost to install a kitchen is around $60,000. If we assume a rate of return of 5%, that is $3,000 per year right there that the money needs to provide to justify it being invested in a kitchen and not invested elsewhere. That covers more than half of the individual restaurant cost right there and leaves only about $4 for everything else. Does $4 even begin to cover the time it would take you to make your own Big Mac meal (I agree that it isn't fair to compare with lobster) at home once, let alone twice? While the average home has 2.5 people, not just one person, we've only just scratched the cost of having a kitchen. We still have ingredients to pay for, the opportunity cost of occupying the land, electricity/gas, taxes, repairs and maintenance, etc. You're blowing your $30 budget in pretty short order. Okay, if you are one of those TV families with 14 kids, then perhaps you can gain some economies of scale at home.

Yes, if you've already invested heavily in having your own kitchen, then you can become more price competitive with a professional kitchen. Though that is true of a lot of things. After you've invested heavily in having your own silicon fab, you're going to laugh at how much Intel is charging for their chips as well. The means of production comes with a cost, though. And while it may be a sunk cost for most, it should not be ignored on that basis.

The real world is complicated, though.

1. If you're buying a used home, as most people do, they rarely come with silicon fabs but virtually always come with a kitchen, leaving you little choice in whether or not you want to invest in one. If land is cheap, it usually doesn't make sense to divest yourself from owning a kitchen. However, if land is expensive, then the calculus changes. When land is expensive, the land occupied by a kitchen can be put to more productive use that outweighs the investment you have already made.

2. Because most people are invested in home kitchens already, restaurants aren't optimized for providing food you want to eat on a regular basis. Eating a Big Mac twice a day, every day isn't sustainable. But at the other end, non-fast food restaurants focus on providing entertainment. Your kitchen can compete with them as your kitchen doesn't have to be entertaining. To be fair with them, we would have to include the cost of having a living room, TV, Netflix account, etc.

An ordinary home kitchen? That is ... quite a lot.

I am in a different part of the world, but I still managed to equip a home kitchen with reasonable-quality appliances (no scraping the barrel, mostly Bosch and Whirlpool) for some 4000 dollars in 2019.

Unless the talk is about some big ass mansion, I cannot imagine spending 60 000 USD on a kitchen, the very price of the materiel used does not add up to even tenth of that value even if you choose mid-range stuff.

You can have a nice 300 x 60 cm wooden counter for like 200 USD.

And every room would be equally judged against its economic value. It could very well be that having an maintaining your TV room is more expensive than going to the movie theatre as well. If you were designing a domicile based purely on optimizing cost, as posed earlier, it is very likely that it wouldn't be anything more than a small bedroom, with everything else more cost effectively provided by outside third-parties at scale.

But there is, of course, more to life than numbers. A small bedroom and nothing more does not seem like an overly desirable place to live. Being able to watch TV at home is nice. Being able to cook at home is enjoyable. However, the topic is what it is and as a result those factors don't matter for the purposes of this particular discussion.

Yeah, i assumed so. Eating Big Macs is... let's say suboptimal. If you eat only that, you'll probably have all sorts of health issues. When counting actual food, fresh and with vegetables and all that, it's slightly more expensive than Big Macs. Around here, cheapest option for a decent actual meal is ~8-10/eur/person.

> The average cost to install a kitchen is around $60,000

Seriously? In France fancy kitchens are at 10k, "starter" ( recommended if you're going to let or for first buy) are at 2k, everything included. I guess if you start from $60k, you need to cook quite a bit more to make it financially viable.

And that's if you have close to no dietary or allergic restrictions.

0 - https://www.homeadvisor.com/cost/kitchens/remodel-a-kitchen/

Same here, but always coupled with a value of entertainment at that price point. You cannot directly compare the entertainment experience to your home kitchen, as already mentioned. You, at least, would have to include some of the cost of your living room, TV, Netflix account, etc. or whatever analogs of entertainment you have in your home. At which point 10 eur is going to look pretty cheap.

> "starter" ( recommended if you're going to let or for first buy) are at 2k, everything included.

Whoa. I'm not sure you could even put up one wall of a kitchen for $2k in North America. Maybe if you're buying a stove and cooking under the stars you could get in for that amount. That's not what anyone I know would call a kitchen. Definitely not what is being referred to as a kitchen in this thread.

For quick and dirty estimates, it's reasonable to double your cost of materials to get a total job cost. Framing is going to be less than $1000 in lumber (probably a lot less) for an apartment kitchen and that's at today's historically rather high lumber prices. Electrical is going to be maybe $500 at most. I'm a lot less versed in plumbing so I can't estimate that off the top of my head, but lets say that it somehow comes out to as much as the framing and electrical combined. Adding all that up and doubling it brings us to $6000 in construction costs.

All in that's ~$10,000.

$2000 isn't realistic if you're counting all materials from the ground up, but $60,000 is a comical number. That might be the average cost of your typical McMansion kitchen with high end appliances, but it's not representative of what it's going to cost to build a kitchen in a small to medium sized rental apartment.

Kitchens certainly don't magically spring up from the ground after the spring rain. You naturally would have to count every last input cost for any kind of meaningful comparison. The restaurants certainly are when pricing their food.

> Adding all that up and doubling it brings us to $6000 in construction costs.

For, say, a 150 sq.ft. kitchen (the average sized kitchen)? Which means if we theoretically placed 10 of those rooms side by side, totalling 1,500 sq.ft., you could build what is essentially an entire house for $60,000? I realize that doesn't include all the fixtures, but it still seems quite low. Labour must be pretty cheap where you're from.

I don't know what to tell you except I have experience actually doing this. A full house needs a roof and foundation, which I neglected in my original estimate. I don't have time to work out an estimate on an entire roof and divide it to assign partial cost to the kitchen, but I doubt the roof and foundation together are going to add any more than anther $6000 for the kitchen alone. The overarching point is that we're still a long way from $60,000 for a kitchen.

Seems to be a lot of that going on around this topic. If you don't count every last penny, you're not being fair to what it costs to cook at home. I get it, if you only count the receipts of your rice and bean purchases, it will be pennies a day. That's not your cost, though.

> The overarching point is that we're still a long way from $60,000 for a kitchen.

I did mention that labour might be cheap where you are from. Prices can swing wildly from place to place. Labour is, by far, the largest cost in the construction, so it wouldn't be too surprising to see the cost of the final product swing widely alongside that.

The good news is that I'm not sure the exact amount matters much at the end of the day as if labour is cheaper, restaurants will also be able to produce food cheaper. No matter how you slice it, you're just not going to be able to compete with the economies of scale of a restaurant.

But ultimately it doesn't matter as people don't cook at home for rational economic reasons, they cook at home because it is an enjoyable activity. You definitely don't have to sell me on that. I love cooking. I would never trade my kitchen for an extra dollar in my pocket.

Could you expand on this? I have no idea what you mean. Aside from some niche restaurants like Benihana, I can't think of any sit down restaurant at any price point that provides any more entertainment than McDonalds.

None of that has to do with the food in any way. I assume this is what the parent poster means by “entertainment”: all the reasons you would go to a restaurant other than food.

To be fair, that is a Kitchen to a great number of people on this planet.

I shared a mini fridge, tiny sink, and a hot plate with 2 other roommates when I lived in Paris for a few months and the rent was not cheap their either.

Was about 2,000 Euros/mo 15 years ago iirc.

Most big European cities have huge rents as well but no Bay Area salaries to make up for it.

Either apartments outside of Paris are dirt cheap or minimum wage in France is really high.

A dev from Paris I met in Germany said he left due to how unaffordable housing was so something doesn't add up.

Depending on what you want though, it can indeed be very expensive - e.g. if you want an apartment in the city to profit from the night life ( after 1am the transport to the suburbs is only with buses and much slower), it is going to be very expensive to buy.

And that's just for "regular" people. Each city in France is required to have a minimum percentage of social housing, to which you can have access ( including to buy) if you're below a certain threshold of income ( so on minimum wage, you're there).

Though I'm a bit skeptical as 200k is enough for a house in Eastern Europe on the outskirts of Bucharest, but in Austria where I am now and average house outside of Vienna is way over 600K so the Paris suburbs you describe seem suspiciously cheap to me at only 200k since Paris is more expensive than Vienna.

What's the catch?

suburbs with massive ethnic populations (1st/2nd generation or immigrants) are dirt cheap but for some of them that means getting food at the hallal butcher,eating kebab, going to a hairdresser where the windows are closed so that you can't see women inside, high crime, dirty cities ran by leftist at best, communist at worst that deny high income to move in those cities (because high income votes right) which spiral into more crime and more diversity stomping away what makes france france.

Airbnb + rich tourists wanting a flat in paris also destroyed real estate in paris (which is a small city)

Oh and before the downvotes im a 2nd generation immigrant.

From what I can find, minimum wage is around €1500/m, before taxes.

Do you have a source on this? From what I've seen, Vancouver real estate (and Toronto) is still ludicrous (given Canadian wages).

I'd also like to see a vacancy tax or perhaps an even more directed law prohibiting foreign ownership of a certain level. Then again, I'd also like to see Prop 13 not apply to commercial property, not be passed on in inheritance, and not apply to non-primary residences, but these ideas all seem to be nonsensical in CA legislators and citizens' minds.

Foreign investment, is really not just foreigner in the traditional since. It also includes anyone from outside the city looking for a place to park their share of the fire house of liquidity the central banks are handing out to the ubber wealthy.

Sure you can stop foreign investors like a nouveau riche Chinese national that owns a successful business in China. But that stuff doesn't even slow down old money.

Foreign investment is demand. A rise in demand is much more impactful if supply is static.

demand for investing in the limited supply of apartments based on their profitability is not the same thing as demand for the actual product of housing, which is what supply and demand in the housing market is supposed to be about - you're basically proving the point that incentives here are perverse

There is lots of demand for housing relative to supply of housing.

There is lack of supply of cities with equivalent income opportunities and amenities of SF relative to demand for that type of city.

All various ways of discussing the supply and demand curves that cause prices. And multiple solutions to address each one, assuming the goal is to make prices go lower. Such as increasing income/wealth tax, vacancy tax, increasing property taxes, increasing supply of housing, increasing cities like SF with labor laws similar to CA, etc.

And buying a unit to rent it does not change the housing supply. It is new people moving to a city that fills up supply. Is that what you meant by profitability: buying an apartment to rent? Every city has landlords.

Personally I would be a bit embarrassed to just tell people to 'stop it' as to me it seems sort of childish, but apparently not everyone.

It's strange.

For people that actually live in San Francisco this is a real issue that affects our daily lives. Having some random person spreading more incorrect info is insulting and actually potentially harmful to the people that actually live here and have to pay those rents like I do.

Here’s 2020 data. Prices rose faster than inflation: https://assets.cmhc-schl.gc.ca/sites/cmhc/data-research/publ...

Not to be harsh, but your frustrations are yours alone. Nobody else is terribly motivated by your pet peeves, and when you snap at people with "stop it" their response is going to be less "they must be tired of something" and more "what an unreasonable <bleep>".

> For people that actually live in San Francisco this is a real issue that affects our daily lives.

Living in a city does not give you exclusive right to discuss its issues, nor does it give you a monopoly on information about that city.

And by your own theory, you shouldn't be talking about Vancouver, since apparently you do not live there.

> Having some random person spreading more incorrect info is insulting

"You're wrong and shut up" (paraphrased) doesn't stop people from repeating what you perceive to be misinformation. All it does is convince them that you're an unreasonable person to interact with. If you want to actually stop the "misinformation", provide arguments. Because I guarantee you that nobody here will respect your preposterous order to "stop it".

> and actually potentially harmful to the people that actually live here and have to pay those rents like I do.

I know that there's an increasing trend towards viewing speech as violence, but this is ridiculous. My opinion on rents in SF is not harming you, least of all because I have literally no power to affect policy in a city over 500 miles away from me.

And even if you still persist in believing that we're somehow hurting you by talking about your city, then a dismissive attempt to shut down the conversation is doing you no favors, because you haven't convinced anyone here that they're wrong. They'll just keep repeating what they believe after they've finished downvoting your complaints into oblivion.

So I don't think there's anything inherent to being a San Franciscan that makes one act like you did there.

I don't have an opinion on prices in any of these places, but when reading your posts I don't think your posts in this thread don't provide any information.