It's called rezoning them and letting the market handle it. Land value explodes, owners sell, developers bulldoze and build apartments.

You only have to do three things. Rezone, expedite permits, and encourage investment dollars to flow into development.

Sadly most cities that have this problem are failing on all three counts.

Which, more or less, is exactly how Paris became Paris.

https://en.wikipedia.org/wiki/Haussmann%27s_renovation_of_Pa...

You raise the tax rate so that land has more value/return having multi-storey buildings than single-storey ones.

Toronto (Canada) used to have a lot of flat parking lots, but they're basically all gone now. Gas stations downtown are getting hard to find (not that you have to drive far to kind one out of the "core"):

* https://www.blogto.com/real-estate-toronto/2020/11/last-gas-...

Edit: it should be noted that Toronto didn't actually raise rates. Land just got more "inherently" valuable/expensive, and even with one of, if not the lowest property tax rates in the province, you get a large resulting product when you do the multiplication.

I think some of the best development in urban areas I've seen happens when there's appropriate valuing of the "blight" associated with already developed land. That is, the apartment complexes aren't developed by buying up residential properties, it's in rezoning failed commercial or business land, or parking lots to support a planned redevelopment involving multiple building projects. The biggest tensions I see are when cities take over perfectly fine single-unit residential property areas to benefit multi-unit building developers, while leaving older multi-unit buildings or commercial properties that repeatedly fail. Replacing or renovating old warehouses, or manufacturing areas that are decrepit, makes a lot more sense to me even though things often don't proceed that way.

I guess what I'm saying is just eliminating zoning and land development restrictions isn't really a good solution a lot of time either imho (that's not necessarily what you were pointing to but I think it's a common idea).

>"Toronto (Canada) used to have..."

Toronto used to have life where one could work and buy house and enjoy various things. Now for most young people you have to pay fortune for a rathole, become a slave and have nothing else left to live normal life. Welcome to a new American dream.

Not to mention, Toronto's housing stock is full to the brim of extremely cheaply-built condos. I have family that work in various levels of the construction industry there, and the story is the same everywhere: Buildings thrown up with as little cost as possible, high-end fixtures and fancy washing machines in-unit, but all of the guts are just cheap garbage that will cost the condo-owners quite a bit long-term.

Considering the condo companies have no incentive to care about the long-term (once they sell-out, they easily extricate themselves from basically any repercussions of their stinginess), it's unsurprising.

Not to mention, the buildings are almost all ugly as hell.

So happy I don't have to live in Toronto.

Not the first time that happened...

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

In B.C. alone an estimated $4 billion in damage has occurred to over 900 buildings and 31,000 individual housing units built between the late 1980s and early 2000s, establishing it as the most extensive and most costly reconstruction of housing stock in Canadian history.

Yeah and now nobody I know except software developers can afford a house here. All my friends have degrees, some multiple, and they are never going to own.

Toronto's housing bubble is different. Look at Toronto's house price to rent ratio, which has risen from 98.9 just 6 years to 136.2 now. Like many bubbles, speculation is driving it further upwards.

Sorry dumb question , but is that the ratio of home price to monthly rent ?

annual

> You raise the tax rate so that land has more value/return having multi-storey buildings than single-storey ones.

The problem in SF is just that housing construction is effectively illegal.

So it doesn't matter how valuable the house you can't build would have been.

Seems a little unfair to existing home owners though. This is how you get people voting down tax increases for any reason whatsoever.

Frankly, I think as long as you change the zoning the market should work itself out.

The issue is complicated, not just economically but morally and ethically too.

Point Reyes isn't very dense for example. Should I be petitioning the government at Point Reyes Station to raise taxes so high that people have to give up their current homes so I can have a cheap condo to buy? I mean that's basically what we're asking to be done in San Francisco, it's just not covered in baggage.

Another alternative is that if prices become too high then companies won't be able to attract workers to the area, or they'll be paying so much it's like well, fine then.

Idk. I have a hard time with this because I don't view skyscrapers (or any building over around 3 or 4 stories) as good development, but I also don't like actual suburbs either. It's two ends of an extreme spectrum and both are bad/good for their own reasons.

I also don't think you can really satisfy the demand for living in San Francisco either. The more you build the higher the prices will go. It's counter-intuitive but when developers go off and pay exuberant prices for these single-family homes, they'll have to make up for that somehow. So they'll build higher-priced units which will create higher rents. But the previous units aren't going to drop in price. If you're a landlord or property manager that's not good for business and it messes with your investment forecasting models. But unlike a typical supply/demand relationship that you may think of, what ends up happening is that this current price point is just filled by other workers who previously wouldn't have lived in San Francisco and they come in at that rent price.

So what happens then is that the higher-rent people want higher wages to maintain their previous COL. More people move in, more developers build, etc. etc.

And you can see this in Manhattan right?

I think often people assume that the demand is stable. But it's not. It is just increasing and further supply does nothing to change that. People are willing to pay any price to live there, they just change how much they're making.

I'm sure there are examples, but I can't recall a major city like San Francisco where rent prices have gone down over time as a result of building new developments. Maybe someone has a link or anecdote. I mean, prices in Manhattan haven't gone down have they? Maybe Chicago if people have actually been leaving the city.

Idk.

Tl:dr

New units increase prices.

It gets even weirder sometimes based on how properties are leveraged. It's sometimes why you see places stay vacant for long stretches at high prices rather than rented or leased at lower prices just to generate some revenue.

If an owner/developer has their properties as backing collateral, and they recognize revenue on the books at significantly less than the projections/models of the property value that's been collateralized, then a whole weird cascade of things can kick in. Like statutory insolvency, etc. So, in certain circumstances and certain markets there's a very, VERY strong local incentive not to adjust prices down in the short term.

I agree. I think too often people just think about simple supply and demand but the reality is much more nuanced than that. You even provided another good example and to add to it, that may also exist in the long term depending on the situation and time horizon.

It seems to me that there is a breakdown in price elasticity.

-edit-

Sorry to see cowards downvoting you without even commenting. Idk what you said that was so worthy of that. Sucks it's hard to even have a speculative conversation without "this doesn't fit my worldview click".

They don't need to do anything to most of the city just let people build skyscrapper the whole length of missionbay to the end of the dogpatch. Every empty warehouse could be a massive amount of high density.

Rezone the area, allow houses to be bought and redeveloped into denser housing. Destroy or move the victorian houses, preserve any of especially notable significance.

The payment and expertise is the easy part, if the law allows it. The hard part emotionally is allowing the city to change.

But any growing city has destroyed much of what came before. Manhattan has been a city for hundreds of years, current buildings were not what was there before.

I suppose it's either that or have streets and jails littered with homeless people