You sort of just explained why the State of California decided it knew better than every incorporated city, in your first sentence.

That also has not gone well. Check the adoption of SB9.

It's going fine. Housing isn't intended to be fixed by a single bill, there's new ones every year and SB9 will be easier to strengthen now that it's actually passed.

Some significant legal victories too: https://www.yimbylaw.org/the-general-plan-rules

"going fine" vs "Despite uproar, few seek to use California’s new housing-density law. What’s stopping them?"..."In San Francisco, 14 property owners have applied to build SB9 projects"

https://www.sfchronicle.com/politics/article/California-hous...

The very opening of the story you just pasted explains why: because San Francisco charged someone trying to use the law a $98,000 fee.

Which tell’s me it’s not “going fine”…

The entire YIMBY project is what's going fine. A specific bill about ADUs is nice but not expected to solve everything.

It'd be going better if parking minimums and the social housing agency get through.

Sunnyvale, not SF. I would be shocked if SF charged that much to deter ADUs.

Why do you keep replying to yourself with single sentences?

You seem to be completely ignoring how NIMBY policies like Marc's led to our current and increasingly bad housing crisis.

What housing crises? We have a declining population and double digit vacancies in commercial real estate.

Here you go. Here is actual data showing that housing is expensive which in turn leads to not many people being able to afford them which then leads to a "housing crisis".

https://www.longtermtrends.net/home-price-median-annual-inco....

You have cherrypicked the time period making your point without showing the 2020 spike driven by Covid has been zeroed out most and oblivious to the point the knife is still falling fast.

Random Spot check on a single family home in highly impacted San Mateo. Surprise, list price is $2.08mm($2.2MM Zestimate) down $600k from March 2022 Zestimate of $2.7mm for a 22% drop from peak in less than half a year. https://www.zillow.com/homedetails/4241-Bettina-Ave-San-Mate...

Cherrypicked 70 years of data? up until 2 months ago? So take that May data that I posted, reduce it by 22%, you're still at 1.5 TIMES the 50 year average, or ~7 times the median income. That house needs to go down A LOT more than ~20% to get back to the "cherrypicked" > 50 year average.

If you have those two most recent months (June, July) that I left out of the 70 year picture please link to some data that includes them

Even before covid we were over we were over the average. This is national average btw. Not "a random sample" in SF that also proves my point because most people cant afford a ~2 million dollar home.

I feel like if you're index on 2 million dollar homes no wonder you don't think there is a housing crisis. You can afford anything you want

Payments have spiked 50%+ in about the missing time period thanks to rate raises. And that 1.5 times average about in line to well below the delta in money printing average in the same time period.

The story here is NIMBYism, California Real Estate, Tech, and the "housing shortage". Your data is honed in on the Nation Average and emphasizes the 2020 spike in prices that reflects an exceptional supply constraint in conjunction with a massive(exceptional) migration driver and breakout money printing(none of which speak to a localized housing shortage which would interface conflicts with NIMBYism in a material way). NIMBYism is primarily focused on affluent communities, so low income communities and national averages are fairly irrelevant in arguments pertaining to such(most communities can't lawyer up for long property battles). Most arguments conflating NIMBYism to other issues are calls for Government housing support.

Unfortunately most of the data I'm working on is derived from Zillow, which is specific to markets, lagging, and not open for export. Look at the Zillow charts of the average homes in most of the real NIMBY markets(San Mateo, San Francisco, Orange County, Marin, Etc) and you will see a fast dropping Zestimate that is well above the average transaction prices actually conducted in the last few weeks. All while supply is accumulating well outside averages. Debt bubbles pop fast. This one is the beneficiaries of government pumping debt with low interest rates into homes surrounding the growth companies that rode its wave. Tides out, so boats are hitting the shore.

The median house price in my city is $3m, that’s pretty absurd based on prices 10/20/30 years ago. And that’s not even the issue, when a house does go on the market it’s sniped by the ultra rich - like Zucks housing complex he’s built from single house properties to get around planning rules.

That's an anomaly that has probably worked out pretty well for you right?

Depends on "working out" means personal financial gain on a single asset, or "working out" means a good community that is welcoming to new people. Sounds like this poster is more community minded and less greedy.

And this is not an anomaly, it's the norm. The $3M communities are just the leading edge, and every area with any economic opportunity will be there soon unless we do something to address this desperate shortage of houses.

The mathematic improbability of 1% of US communities with "any economic opportunity" reaching an average home price of $3mm in the next few decades is <1% without a total collapse of the dollar, thus likely any economic opportunity it brings.

Not if they're renting... And that's kinda beside the point, isn't it?

Yet this crazy capitalist rent system allows people from anywhere in the world to come rub shoulders with their billionaire neighbors of 1/999,999th the investment and possibly make immense fortunes while changing the world, while both wear sweats. The tragedy of it all. Duped of the opportunity to live happily and congruently in somewhere like North Korea where they would certainly find the same opportunity and influence.

I’m definitely renting!

Commercial is not easily reusable for residential, the requirements are totally different.

FWIW, this is also an own-goal caused by dumb zoning policies. Regardless, the point that "we need to legalize the construction of residences to bring down prices" stands.

Residents want self contained units with kitchens, bathrooms and probably laundry.

Offices want large, flexible open-floor plans with the only plumbing being floor-wide mega-bathrooms. The two just aren’t compatible.

I live in a condo complex that used to be a high school.

We all have electric heating and cooking, because there wasn't gas connections (which is annoying, but tolerable). We all have 14 to 16 foot ceilings (which is actually kind nice). The bathrooms were all somehow renovated and some plumbing rerouted. We have shared laundry downstairs (which sucks, but not as much as living in a tent city).

Someday there should be an actual HN article by an expert breaking down what's involved to renovate an office into apartments. It's clearly not impossible.

Nothing is impossible given enough money. But on the whole, it is much easier to convert hotels, motels, and I suppose high schools given that they are already subdivided into rooms of a decent size and each room has natural light.

The issue with commercial offices is that the buildings have gotten larger and larger, but residential building depth will max out at around 45 feet, leaving a massive unusable interior.

This all screams building shortage to...? "Downtown Oakland’s vacancy reaches 32%" https://therealdeal.com/sanfrancisco/2022/07/27/downtown-oak...

That's CRE vacancy. $300k will barely get you a condo in Oakland; $200k won't, it'll only get you random patches of dirt.

CRE vacancies are unsurprising. You may not have noticed, but we just had a huge multi-year pandemic that moved huge amounts of work out of offices and into homes.

"Not easily reusable" What does this even mean? Will settle for even a rough rounded up ballpark conversion cost that we can break down on a square foot basis.

Here’s an analysis from Moody’s:

> The cost to convert offices to an average apartment building is about $100-$200/SF[4], although that cost could be significantly inflated now. If we assume $150/SF of hard and soft costs plus a 15% profit margin of $23/SF, a developer will need to seek offices available at $262/SF. Exhibit 1 below shows that the median New York office transaction price was $542/SF in 2021, with about 20% traded at $262/SF or lower.

> First, we looked at office rent per SF. The median apartment asking rent is $55/SF in NYC[5]. As Exhibit 2 shows, about 36% of NY office properties fall below or meet the median apartment rent per SF. A developer would likely seek offices with rents much lower than $55/SF because of the amortized cost of conversion, but again this is a rough exercise to broadly understand potential scale of the conversion trend. We also considered vacancy rate. Typically, developers would seek prospective office building conversions with above average vacancy, both because it’s easier to buy out or relocate fewer office tenants and high vacancy may reinforce that office space isn’t the highest and best use of a property. Of the 1,066 tracked NYC office properties, only 12% met our vacancy rate threshold of 30% or higher. When apply the two limits of $55/SF rent and 30% or higher vacancy rates, only 0.7% of Class A buildings and 6% of Class B/C buildings make the conversion reasonable.

> The size and shape of typical office buildings also limits potential conversions. Office buildings typically include deep floor plates and limited natural light for interior offices and storage rooms. However, natural light throughout is essential for dwellings, so apartment depths tend to max out around 40-50 ft. Much of the office building may be rendered unusable (or of very low value) with deep floor plates beyond 100-120 feet wide, after accounting for elevator and mechanical cores.

> An office building with a floor plate of less than 14,000 SF may be a good candidate for conversion, depending on the building shape. In the worst case the building is square (where both sides are equally as deep), the floor plate will be roughly 120 ft by 120 ft, resulting in just about the absolute maximum depth of 50 ft of apartment on one side and 50 ft on the other, with at least 20ft of elevator core and mechanical between. Of course, there may be other orientations of buildings (and creative solutions of designers and developers) that either allow or preclude profitable conversion, and that can even vary up and down a building’s stacking plan. But once again, this is a “rough justice” analysis. Without detailed information on all NYC offices’ floor size and shape up and down the buildings, we assume a convertible building to have an average square floor plate size of 14,000 SF. Layering in the 14,000 SF floor plate threshold on top of our vacancy rate and asking rents limits, only about 3%, or 35, of NYC office properties would be convertible via our (crude but reasonable) methodology.

35 converted office buildings is hardly a dent in housing demand for all of NYC.

https://cre.moodysanalytics.com/insights/cre-trends/office-t...

"However, natural light throughout is essential for dwellings, so apartment depths tend to max out around 40-50 ft. Much of the office building may be rendered unusable (or of very low value)" sounds like that problem is actually the solution to these arguments to me.

Given the high cost of conversion, those interior spaces will not command the rent to cover their conversion costs. And to leave it alone would force rents in the rentable areas up even higher.

"developer would likely seek offices with rents much lower than $55/SF" we can easily see some at $25-35/SF given ~25%+ a yielding $0/SF. Depress the building costs as well. Too many models hung up on the pandemic and tech bubbles.

Additionally, Moody's, not exactly the guys you want to stand on for downside real estate projections.

Commercial real estate in SF is in its worst straights yet.

Let's see how all these numbers average out after valuations continue to reset in both forms of real estate, tech, local construction, etc. Commercial owners are on course to paying people to sleep in buildings to look occupied.

The bottom-line is the sheer volume of commercial square footage, rapidly dropping residential values, tech layoffs, will eliminate the "shortage" story butting up against NIMBY'ism and Socialism faster than cases with high power attorneys and rich landowners will give up legal ground in California.

It's not even about the law, we just don't put kitchens or showers in commercial buildings, and retrofitting them in would be extremely impractical.

It's not impractical to tear down a house and put down a perfectly building code compliant apartment building.

Would love to see this argument quantified.

No, you wouldn't; it's been quantified for you on this thread, and you ignored it.

Noted and refuted.

Guess where the epicenter of the inventory build up is folks. Unfortunately for some, real estate is bound by reality.

https://www.bloomberg.com/news/articles/2022-08-09/homes-for...

https://www.bloomberg.com/news/articles/2022-08-09/home-list...

"Now, a new report released by the city's(San Francisco) budget and legislative analyst estimates that there are more than 40,000 units sitting vacant." https://abc7news.com/san-francisco-vacancy-tax-apartment-vac...

A "vacant building" means nothing; there is no reason to believe it's in the right location, will still be vacant next week, or is even habitable. Under construction and condemned units are both considered vacant. You gotta build.

https://darrellowens.substack.com/p/vacant-nuance-in-the-vac...

From your article:

> David says of those 40,000 units, about 32,000 of them fall into categories that would most likely be exempt from a vacancy tax.

> For example, properties that have been recently bought or sold and the new tenants haven't moved into yet, or ones where landlords are currently doing renovations or upgrades.

> "It will not move the needle on our affordability or displacement crisis in any meaningful way," he said.

> David says what the city really needs to do is build more housing.

> "In order to keep the cost of housing to just be increasing at the same rate as inflation, you need to be adding about two percent to our housing stock per year," he said.

> David says that comes out to about 5,000 new units a year.

> But for the past 30, we've only built an average of 1,800 annually, leaving us in a 100,000 unit deficit

Sounds like we need a loooooot more vacancies, like maybe 100,000-150,000 in San Francisco.

The only vacancies that are a problem are all the vacant, unbuilt units above small, 1-2 story single family homes all throughout San Francisco. Those are the vacancies that are killing the city.

If the population is declining so fast and no one wants to live here, why do housing prices continue to rise?

Embarrassing comment. Do you not live in California? Or are unaware of the state of the housing market there? From homelessness, to the average cost of a house, to the declining population because middle class people can't afford to buy or event rent...

Conflating NIMBY'ism and homelessness is self defeating if you actually want people sleeping in rooms with beds and keys; in California.

Call the right Marc(Benioff). He can house the majority of the SF homeless population in the open space in his tower... "Salesforce Giving Up 350K SF In Downtown S.F. In Latest Blow To City's Office Market" https://www.bisnow.com/national/news/office/salesforce-west-...

Life long. Real estate values are in freefall. Many areas in the Bay Area are down 19% in 30 days. RTO is failing. Tech layoffs are ramping up.

A 19% decrease in housing prices, even assuming that that number were true (it's not even close to that for the SF property I own, for example), is not nearly enough to make SFBA affordable. Your argument was stronger when you were simply expressing your aesthetic preference for lower density instead of denying the existence of the housing crisis.

If it happens in again next month, maybe it will.

May arguments stem around letting communities make their own decisions and abiding by the laws, as silly and antiquated and biased as they maybe, make their own decisions. I am heavily pro-building, but I don't want a jail built next door. There are nuances.

But we don't have a housing shortage in California, any longer.

> But we don't have a housing shortage in California, any longer.

You keep saying this, and yet home prices are still unaffordable for a median earner. What magical economic factor aside from demand greater than supply do you think is driving these high costs?

> I am heavily pro-building, but I don't want a jail built next door.

And no one I am aware of is seriously promoting changing zoning to allow something like that.

How about we go one step further and allow individuals to make their own decisions about the land that they own? Perhaps individual freedom is an alien concept for many Americans?

19%, great. Only 81% too little to make things actually somewhat affordable. But even then only somewhat.

"Bay Area home prices see largest May-to-June drop on record" https://www.mercurynews.com/2022/07/26/bay-area-home-prices-...

That's nice. Go to Zillow right now and search for properties in Palo Alto. Set no minimum, and then set a $500k maximum (the lowest Zillow will let you set for Palo Alto). See what you get. Then try $600k. Still nothing! Keep dialing it up until you find something.

Why does every neighborhood and city have to have $500k houses? Is there some sort of right to live in Palo Alto that I’m not aware of?

Even well off people have neighborhoods they can’t afford to move in to - that’s the way it works.

We live in a democracy in which most people think that the government should step in to ensure commodities necessary for survival, like housing or food, remain affordable. Given that in California (and many other places) every community severely restricts multi-family housing, the state has to force some otherwise-unwilling municipalities to zone for denser residential. It would be unfair for the state to deliver mandates to some cities while letting the richest places, such as Palo Alto, off the hook.

In other words: it'd be one thing if it were just Palo Alto that were unaffordable, but because it's a statewide problem, fairness demands that every city should chip in to the solution.

" in which most people think that the government should step in " ! Really? Proof?

Housing is affordable; just not the housing you'd like. Food is inflating but starvation in the US is rare.

Considering California's housing costs are astronomical compared to the rest of the US, isn't its approach to restriction a sign of the model working? If not why is there so much market based demand driving up the prices?

And since many people can and do leave the state as a result of being priced out, where is the "statewide problem"?

This sounds more like an opinionated list of the way you wish things were. Also makes me curious how much you have vested in the state / community. As things are increasingly so, when in California, do as the ("Romans").

Horrible cherry picking. Take the average family income in the city and go from there. Also, there is an exceptional dirth of supply relative to the transactions as a result of rapid fed rate increases; with real estate always being a slow mover in reflecting market prices.

It's gone well beyond California at this point:

https://www.npr.org/2022/07/14/1109345201/theres-a-massive-h...

I'm looking at data projecting a very different reality for all, not partisan narratives looking into the past. Shoot the messenger.

Dear Annonomous HackerNews Misinformation Committee,

Myth Busted.

Sincerely,

SF Chronical and Myself.

"S.F. population fell 6.3% to lowest level since 2010" https://www.sfchronicle.com/sf/article/S-F-population-fell-6...

...What a revealing week in Bay Area Real Estate...

- SF has least competitive rental market in state, report finds Occupancy rates and rents are up, but the city has less demand than elsewhere https://therealdeal.com/sanfrancisco/

- Netflix puts Los Gatos campus up for sublease as growth slows https://therealdeal.com/sanfrancisco/2022/08/12/netflix-puts...

- ADP to close 63K sf office in Pleasanton https://therealdeal.com/sanfrancisco/2022/08/09/adp-to-close...

- Spec home developer slashes asking price on Woodside estate by 42% https://therealdeal.com/sanfrancisco/2022/08/08/spec-home-de... - SF home prices drop $370K from peak, per Compass report https://therealdeal.com/sanfrancisco/2022/08/11/sf-home-pric...

- Sand Hill Road reckons with its future Landlords of the iconic Silicon Valley office strip rethink strategies in remote-work era https://therealdeal.com/sanfrancisco/2022/08/09/sand-hill-ro...

- StubHub to close SF office as tech exodus continues Online ticket reseller to build up offices in LA and New York https://therealdeal.com/sanfrancisco/2022/08/08/stubhub-to-c...

- San Jose leads U.S. cities in falling home prices From April to June prices fell an average of $75K, or 5.1 percent https://therealdeal.com/sanfrancisco/2022/08/02/san-jose-lea...

You seem to be contradicting yourself here. If, as you claim, demand has dropped, home prices have dropped, and we no longer have a housing shortage, then there's no need for a crash, because everything is just fine.

I feel like the flawed consensus is mostly in your own head.

I don't think anyone really has much difficulty understanding his argument or why he's making it; the rank hypocrisy of his long-standing and consistent statements around building more housing is at issue.

[Bilal Mahmood](https://www.bilalforassembly.com/) (ClearBrain founder, YC alum and former Amplitude Head of Product) recently ran for state assembly. Some tech people are getting involved in politics, but most do not.

Sadly, most tech folks don't vote or have zero interest in local politics.

> Sadly, most tech folks don't vote or have zero interest in local politics.

It's more that transient populations usually don't bother. If your plan is to move to an area for 4-6 years in order to bootstrap a career, earn some money, build a resume and reputation, and then move out to somewhere lower-cost, then you're not going to see the need to get involved in local politics or even vote.