It has added barely any new supply at all.
I think it didn't go far enough. Rezone for 4-10 story apartment buildings, and now you're getting somewhere.
This single family home thing just doesn't work in cities with as much demand as San Francisco and Vancouver.
If you want to tackle the problem from the supply side, you need to be more aggressive about it. You need for the potential profit to be great enough to justify buying multiple adjacent homes, tearing them down, and combining the lots.
Even then, it might not be enough to solve the problem, but it's a start.
I'm also of course seeing nimbys against tower development at commercial and broadway, which would have the biggest short term impact imo. They want to protect their scarcity.
Ugh. We have to put a stop to that if we don't want to end up like San Francisco. The Tokyo model is the one to emulate.
I'm not one for completely favouring towers, but in this particular neighborhood, there's basically no new buyable housing stock. If people want to live here, they're either renting or buying one of the endlessly appreciating massive houses. That need to rent and the scarcity drives up the big house value further, and the only people who can get ahead are the ones who cam buy something for 1.7m.
If they're rental units, that's also ok, more supply brings down rents and lower rent causes more landlords to sell. Extra supply does add downward pressure on prices one way or another.
I don't see where the "value destroyer" is.
You buy condos, you own them, and you can get a mortgage on them. I think you don't know what a condo is.
People say that on here all the time, but I have never seen that happen. Do you have an example where increased housing supply lowered prices aside from a natural or market disaster? Maybe, Detroit where people simply abandoned their homes with no intent to sell.
> While the cost of housing is climbing in many global cities, the average middle-class family in Tokyo can still afford to buy a new, single-family detached home for $300,000. That’s right. The typical Tokyo starter home is a brand new three-bedroom.
Their national zoning rules allow supply to meet demand without city-level meddling. Houses there sell for roughly the cost of construction.
The reason housing is so nuts in SF is because the city added half as many new houses as required to meet demand over the last say 30 years. [2]
[1] https://archive.curbed.com/2017/2/3/14496248/tokyo-real-esta...
[2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
We need small 3br houses and apartments. That doesn't mean we can't also have large 3br houses.
[1] https://www.zillow.com/homedetails/139-Steiner-St-3-San-Fran...
This is not quite the same thing as an immediate increase in supply, but instead a large drop in demand. The net result is the exact same thing: a large increase in the vacancy rate, which resulted in a rapid and dramatic decrease in median rents.
https://www.bloomberg.com/news/articles/2020-12-08/san-franc...
Has the decrease at about 22% at one point. Lowest rents since 2013. They seem to have gone back up somewhat since, but that is a big adjustment and reflects excess supply.
Is there some effect in real life that prevents it from working the way the theory predicts?
I don't think so. I would put the burden of proof on you, if you want to go against a solid theory. It seems self evident that more housing supply means houses stay on the market longer (there is lots of evidence for that) and that means sellers have more incentives to lower the price to get a quicker sale (lots of evidence for that too.) Look for historical real estate inventory reports that include prices and you should see the effect when time on market increases.
It's important to note that prices would only fall if the change in supply overwhelmed the change in demand. In cities like Vancouver the demand is increasing at such a rate that increased supply only means prices don't rise as much as they would have otherwise. Time on market is always short. There was a brief dip in prices early in the pandemic and then things compensated back in the other direction.
Guessing at some 9th grade economics theory aside, what does the actual data say?
Ignoring data like this is the only reason I can think of why people are willing to pay 10x more for a house of half the size that I paid.
https://www.sightline.org/2017/09/21/yes-you-can-build-your-...
Isn’t that exactly the point? These are the people that can’t afford to live in the city now.
First you make things legal then you streamline them.
> You would need to find a developer willing to take a risk on a minuscule profit and an architect who enjoys brain damage," he said. "They are complicated little projects. It's the absolute opposite of economy of scale."
Once you’ve gotten the streamlining part right, new actors can come in to make this cheaper. Those developers just want to keep the code complex so that only 100 unit projects are viable so that huge firms are the only ones who can execute projects.
Strong disagreement.
The best thing for developers would be minimal zoning, Houston style.
As the Bay Area built to expand from 7M people to, say, 20M in a decade, enormous fortunes and livelihoods would be made from all that construction work.
It's like in many industries; the interests of the group as a whole push towards deregulation, while the interests of the biggest, politically well-connected firms is to increase regulation that will be harder for competitors to deal with and will allow them to get or maintain a stranglehold over the market.
A big lie spread under capitalism is that the wealthy and powerful actually like growth.
The rich and powerful "don't like" growth? Well, they've been failing spectacularly for quite some time: maybe they aren't so powerful? It makes no sense.
Prime example is oil wealth. With their massive coffers, fossil fuel companies could be leading the transition to renewable energy, massive increasing human wealth as they drive the cost of energy down and drive their former competitors out of business by acquiring all the new renewables startups that will become the large companies of the future.
Tech, and the HN crowd in general, pursues a strategy of generally increasing the pie size, of disrupting themselves before somebody else disrupts them. But that is not the case for the majority of the economy in developed countries. And in undeveloped countries it's painfully easy to see so many wealthy people maximizing their own position in society over maximally growing their wealth.
Why are they NIMBYs when they could make much more money redeveloping their best-positioned neighborhoods as massive apartments they rent out?
Why did they not let wages grow, when the resulting increase in consumption will make them more profit?
If rich people as a class really were interested in max growth, they would have stayed Fordist-Keynesianist, but that did not happen. And indeed growth, while still present, hasn't been what it was in the past.
Developers who are entrenched enjoy the fact it is hard to get a permit. Then, the specialty becomes navigating the system (which the surviving developers are de facto good at). It is hard for the best developers from other cities, who may be amazing at cheap/efficient/quality construction to challenge the incumbents in SF.
It is like saying that government contractors who build websites want the bid system to be simpler. In some ways they do, since on paper they would save a lot of money if they could get rid of their dozen employees who specialize in navigating it. At the same time, most government website contractors probably are not the best web developers - jsut the best at navigating the system.
The post you reply too says "we need minimal zoning". You say "its hard to work because of too many restrictions".
Am I reading it wrong, but you disagree but seem to agree on the main points: Government needs to get out of the way to allow progress.
Imagine how much a developer with Coastal Commission expertise could charge. That's probably a specialty in itself.
The handful of developers who are working in the current environment? No.
You see this with every regulated industry. The people who pissed away a ton of time and money to get into the club don't want the club to fall apart.
Even if it did, remote-work-driven sprawl would be terrible for humanity. We should still congregate for environmental reasons, whether that means 5 story walkable towns, or 20 story city. No where does SFH fit in the picture. Li-on will not save us.
They're political similar, economically as similar as you'll get (silicon forest in Hillsboro and Seattle's whole tech scene rivals SF), and geographically similar in terms of climate to parts of the bay area.
Neither comes very close in terms of climate, although that argument is muted lately due to California being on fire for 4 months out of each year now. But Portland and Seattle are already experiencing their own climate-change-related impacts.
And no, neither measures up economically either. Comparing the tech industry in Portland or Seattle to the Bay Area (Apple, Facebook, Google, Twitter, and basically all of the startup scene) is a joke.
I could go on, but really, there is no competition.
> Neither has a world-class orchestra or opera
Seattle Symphony is fantastic and has multiple Grammy awards. The one that stands out to me is the 2014 premiere of John Luther Adams' work, Become Ocean. Not everyone's cup of team, but a phenomenal performance nonetheless.
> to say nothing of the early-music scene in the Bay Area, which is easily the best in the US
Grunge is very distinctly Seattle. I have a feeling you are incorrectly attributing certain bands with California because they moved there after they became famous.
> And no, neither measures up economically either. Comparing the tech industry in Portland or Seattle to the Bay Area (Apple, Facebook, Google, Twitter, and basically all of the startup scene) is a joke.
Google is heavily in Seattle. You are ignoring the powerhouses of Microsoft and Amazon which are headquartered there. Additionally, the startup scene is thriving. Vulcan Ventures (Paul Allen's firm) has a major presence.
> Neither measures up to the Bay Area in the art scene
I can't speak to the art scene but the Seattle Art Museum was pretty cool, not sure how it ranks. I do know that Seattle attracts a lot of artsy types from personal experience.
> Or the wine scene
If you look at Seattle in a hyper-focused fashion, yes there is no wine, it's a city and Bay Area is an area. But wine in Washington state is also thriving (extended family operates a small vineyard for fun). The climate issues have ironically made Washington a better place for wine in the past years
I could go on, but really, there is quite a bit of competition ;)
But no, the Seattle Symphony is not a world-class orchestra. The SF Symphony is, though.
I mean, do five minutes of research. At least Google it.
Also, if you think a random "classic" [sic] music station in your car teaches you anything significant about this topic, please do think again. Classical music radio station are almost universally awful.
https://www.gramophone.co.uk/features/article/the-world-s-gr...
And speaking as an experienced professional musician who has performed a lot in both places, I'd take the Bay Area over LA, at least for classical music, overall.
If we blow it in the US there are plenty of people ready to work for TikTok or whatever other overseas company takes over.
Though I am surprised NYC doesn't have more tech jobs
If someone said you could live in one of the most desirable places in the entire world on an 'ordinary' job but you had to share a room (which TBH could just be your significant other anyway) that would seem like a great deal right?
When many categories of essential workers start to be priced out of living locally and need to commute long distances from undesirable far-flung suburbs, it is (a) a grossly inefficient use of resources, and (b) makes the city much less pleasant and effective. A city where all of the residents are wealthy professionals with other workers as second-class commuters is not a very nice place to live, more like a theme park or resort hotel than a real city.
i.e There is pressure for people living in that area or moving into that area to find a SO or something similar.
We do need to get rid of stupid zoning, but also cannot rely on a housing market to do the right thing. We need to force a shift to anti-car rather than pro-car development (and it really is a dichotomy, with the midpoint being a highly unstable equilibrium).
The fact that they are talking about 4-plexes shows they really don't get the scale of density that is needed. Everything should be 5 stories minimum. Maybe some shorter Victorians can be grandfathered in, but the Sunset and western half more broadly needs to be almost entirely redeveloped.
The headlines will read "Poor Betty was forced from her home by the evil mayor and money grubbing developer".
They set the table when they built it, and to undo all of that is going to be crazy expensive and difficult.
Some people dream of a car free utopia. Some people like their SFR. Those things may not be compatible.
Things like the Miami tower collapse will make things worse. A lot of people don't want their life dictated by their neighbors. HOAs are well known to be horrendous. And the Miami disaster just goes to show that not only can your HOA affect your sanity, but also your life safety.
> No one wants to move, no one wants to change.
A large percentage of the people living in my R-1 neighborhood are retired now. They could sell their houses and "cash out", but what would be the point? Money is no substitute for a lifestyle. We chose this lifestyle because of the attractions it offered. A couple of my neighbors have moved away, but for every one that moved, there are ten who have stayed. Once we retire we aren't making that long commute any more, and most of us don't leave our neighborhood during the week because we have almost everything we need within a mile or two. For the people who are working in tech, a lot of them used to have WFH days, but now most of them expect to have more regular WFH days - perhaps even a majority. That's pretty much the utopia that people want to achieve through dense development, namely living locally.
I think there is one major issue that doesn't get mentioned, namely the fact that companies have chosen to site themselves in areas where there was a shortage of nearby housing. The south bay areas are the best example of this, with so many of the employers being north of 101 but almost no housing north of 101. This is not a new problem - I remember people commuting long distances to Lockheed and other defense employers north of bayshore in the 70s. As employers have continued to pack more and more jobs into tight spaces, they have exacerbated the problem.
There is a severe problem with affordability of housing, but that is caused by increased demand as much as limited supply. We worship at the altar of economic growth, and refuse to consider the consequences of that growth. Urban planning is about maintaining balances, in much the same way that we seek to strike balances in our lifestyles. Would anyone accept that employment growth is constrained to not exceed housing supply? It's hard to imagine.
> The reason they are talking about 4-plexes is that's the reality of redeveloping a single family residence one at a time.
I wish they could at least talk about 2 lots at a time!
> If you could do it city block by city block there would be huge savings, and WAY more developer interest.
Amen.
> The problem is it's too hard and expensive to assemble that much land to make such projects actually happen.
If only we could do just one, and then for the next one give people units and free moving in the prior one. That can become a virtuous cycle.
> No one wants to move, no one wants change.
Very true, but for all those perks and a nice cache out people can be persuaded. We would need some eminent domain for the stragglers, however.
> The headlines will read "Poor Betty was forced from her home by the evil mayor and money grubbing developer".
Just gotta talk about how Better is getting $5M, a condo, and the elevator she will need anyways as she gets older.
> Some people dream of a car free utopia. Some people like their SFR. Those things may not be compatible.
They aren't! Spineless compromises as described in https://pedestrianobservations.com/2019/09/18/cars-and-train... (pork for both sides!) is spineless politics that will diffuse outrage now, but at the cost mutually-undermining investment that just makes people disrespect government more later.
> Things like the Miami tower collapse will make things worse.
:(
> A lot of people don't want their life dictated by their neighbors. HOAs are well known to be horrendous.
The irony is suburbia is full of annoying HOAs. Just like the fact that without more broad economic growth homeowners will have a hard time paying off their mortgage in their lifetimes means that it is a lot closer to paying rent than they would like to think.
The government shouldn't be telling people what they can or can't build (beyond safety)
It’d be great if this was done parametrically (Eg setting max noise output at your property boundaries, particulate output, etc,), but I guess it’s been historically more convenient to do it via broad zoning instead. Japan’s max-use zoning seems like a good compromise.
The Bay Area cannot hope to cancel all the car subsidization done at the state and national level. More active measures are needed.
> The government shouldn't be telling people what they can or can't build (beyond safety)
I really fundamentally disagree. Even if we accept liberatarianism for individual and business choices by default, land is a public good in finite supply in fixed position. Isolated actors developing land as they please can cause public harm because the utility of land is based on how surrounding land is used.
We need to collectively agree cars and single family homes hold the bay area back, and then collectively work to move away from both, to replace wholesale self-perpetuating car culture with self-perpetuating public transit apartment culture.
SF and adjacent cities need to both reduce the approval process and encourage higher density.
1. https://www.texasmonthly.com/the-daily-post/as-if-you-needed...
I’m not alone in this - several cities have already banned AirBNB.
In the case of San Francisco, they also need a centralized, online planning/permits database. They are still doing things on paper, and they've got a backlog of thousands of permits. It can take years and hundreds of thousands of dollars simply to navigate the permitting process.
Wow. That means they can get away with one staircase in San Fran. Wouldn't fly where I'm from.
His material point is correct though. Real estate development is about money. Where I live, you can generally only make money on fourplexes where land prices are low enough. I don't know much about San Fran real estate, but from what I've heard, land is not very cheap.
I would think in San Fran larger apartment complexes would be more profitable. Of course then there are all kinds of other headaches, like getting all the lots you need in the exact same contiguous area. Which also doesn't sound cheap in San Fran. So maybe what I meant is luxury condos instead of apartments? Point is that however it happens the money math has to work.
Changing the zoning is a good first step, but not the only (or even the most significant) obstacle.
Between California and Bay Area regulations it is very challenging to turn a profit on demolitions except at the highest echelons of the housing market.
We need Land Value Taxes.
Dodd Frank made speculative financing so difficult, that the industry either scaled up, as was mentioned in the article, to make it worth the trouble of pacifying HUD, or scaled down and run a business that essentially relies on clients to finance the projects. Most builders (and others in the industry) were forced to scale down.
These were the builders that might have considered 4-plex or other small multifamily projects, but they've essentially been barred from the market.
They should have pulled their heads out of their butts and respected people's property rights 20, 30yr ago when the problems were becoming obvious. But they didn't so they're gonna have to pay up.
Repealing some zoning is a small step in the right direction but they're gonna continue hemorrhaging money until they start tackling the other ideologically driven inefficiency (of which the person you are replying to has named a few types) before they really start seeing improvement.
An opposite example might be, in the East Bay hills, on a steep area of dense old vegetation, a developer wants to bulldoze the entire thing, add heavy landscaping and drainage, and built four dozen "premium" homes. If the city council member is looking at the hundreds of millions of dollars that will change hands, over an are that is literally no dollars now, then the plan gets approved. You might guess, this is a true example and a developer from Hong Kong put their name on the project and it was built.
The case of a beach is also not-obvious, as it is world-scale irreplaceable.
I'm not sure if you are referring to the big tacky mansions on Highland Terrace in Fremont, but if you are those are now the most heavily-assessed properties in Alameda County.
Also, small elevators are definitely something that could benefit from an economy of scale, and anyway make a big difference in accessibility for any building above one story. Likewise, the possible designs of multi-unit homes on small lots could become more standardized. And the regulations could improve, and the regulatory institutions could gain more experience handling these kinds of projects.
All of that starts with the zoning.
They built a duplex by me and the combined units went for less than what a SFH would have gone for. Plus I imagine it was more expensive to build.
I think it only makes sense where the lot is big enough to fit 2 essentially full SFHs as a duplex.
Sean Kieghran, president of San Francisco's Residential Builders Association, said he supports getting rid of single-family only zoning but doesn't think it will result in many new units. Kieghran said that building fourplexes requires either two staircases or a staircase and an elevator, which takes up too much of the site.
And, unless the city streamlined the process of building a fourplex on a single-family lot, builders would run into too many bureaucratic obstacles, Kieghran said. "With how long it takes to get through planning and fire and DPW and all the other red tape it's not likely we are going to see anybody building fourplexes anytime soon," he said.
...
One of the few architects to design fourplexes on single-family sized lots in the last few decades is Daniel Solomon, who has worked on three such projects...
"These are nifty little projects, but they won't make a big dent in the housing need," Solomon said. "That zoning is a tool to create housing production is a widely held and completely fallacious idea. Just because something is permitted doesn't mean it happens. It's very hard to find a vacant lot or tear down at a price that would work."
He said the fourplexes he designed and built were profitable, but barely. And they took as much time to design and execute as the 100-unit complexes his firm, Mithun, is known for.
"You would need to find a developer willing to take a risk on a minuscule profit and an architect who enjoys brain damage," he said. "They are complicated little projects. It's the absolute opposite of economy of scale."