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The Housing Market in San Francisco and Ideas to Fix It

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Re: The Housing Market in San Francisco and Ideas to Fix It

#131

Post by khuey »

muzz wrote: post #72
BurningFrog wrote: post #62

Earlier quoted context omitted.

...the houses would almost all be built for the very well off. The amount of houses you'd have to build before you started constructing truly affordable housing is immense. This is a common mistake. In reality, all added supply brings down price levels across the board.

Actual market dynamics are complicated. There are so many effects that happen when housing is built. New housing in SF is being sold to out-of-towners who don't actually live there. Building housing into a downtrodden neighborhood can improve it significantly and actually increase values, etc.

http://sfcontroller.org/sites/default/files/FileCenter/Docum...

"Market-rate housing probably has contributed to gentrification in many cities in the past. But the data shows clearly that, in San Francisco in 2015, market-rate housing development is not accommodating upper-income movers who would otherwise be somehow shut out of the city's housing market. On the contrary, the overwhelming majority of wealthy new residents do not live in new housing, and conversely, the vast majority of new market rate construction creates housing opportunities for existing city residents. For this reason, we find no reason to believe that either a temporary moratorium, or an indefinite prohibition, of market rate housing will reduce the number of upper-income residents in the Mission, or slow the process of gentrification that the neighborhood has been experiencing."

Re: The Housing Market in San Francisco and Ideas to Fix It

#133

Post by khuey »

pascalxus wrote: post #49
johndevor wrote: post #34

Earlier quoted context omitted.

> the ideal solution is to build lots more housing - it's the morally and ethically correct thing to do. What do you mean when you say "morally and ethically correct"?

Food, water and shelter are fundamental human needs that everyone should have. It's wrong for society to deny Shelter to individuals on the grounds of: traffic, population density, and countless other slight inconveniences that are not on the same level as the need for shelter. I say solve Shelter first, then deal with the other problems. Furthermore, since government owns all the land outside of the zoned areas, the…

The government does not own all of the land outside of the zoned areas (presumably "zoned" meaning zoned for residential). Plenty of it is owned by farmers and ranchers.

Re: The Housing Market in San Francisco and Ideas to Fix It

#134

Post by lubujackson »

I keep saying these same arguments put forth (add more affordable housing!) but the reality is that there are very specific laws that cause the crazy prices here and it ISN'T because of a lack of housing. It's lack of liquidity.

First there is Prop 13, which is the Ponzi scheme that let's older owners pay basically the same tax rate forever. This means that landlords have little reason to repair or sell properties. Which goes hand-in-hand with all the tenant protections that make it virtually impossible to vacate a tenant. And because landlords can't raise rents beyond a tiny margin each year (1% or so), they might have tenants paying 1/4 or less the going rate for an apartment, making it even less likely that they will reinvest in improving their building.

So what happens? Anyone who has been living in the same rental for the past 5 years is pretty much locked in to their apartment now, no matter what. Every single tenant in SF who hasn't moved within the last 5 years is NOT MOVING UNLESS THEY NEED TO. Because they are paying about 50% less than the going rate. So those people will not move, which means their apartment won't be available for others, which means the supply of housing is significantly lower than it should be.

Just as new homeowners in SF are paying some of the taxes that existing homeowners should pay, new renters are paying some of the rent that should be paid by existing renters.

Re: The Housing Market in San Francisco and Ideas to Fix It

#135

Post by khuey »

Maarten88 wrote: post #82

I visited San Francisco last week (for the Microsoft Build conference). Having read here on HN about the housing problems and high rents I was surprised to see quite a lot of poorly maintained buildings, if you go a bit outside the centre. From my perspective, there seems lots of room for building and improvement. They could take down blocks and build more densely while improving quality. As in all US cities, a lot o…

You can make a ton of money by renting your property regardless of whether the building is well maintained or not, so why bother?

Re: The Housing Market in San Francisco and Ideas to Fix It

#136

Post by baddox »

rsync wrote: post #112
baddox wrote: post #24

Earlier quoted context omitted.

> I expect what would really happen if SF just went all in building new housing, is that prices would drop in the city slightly, allowing people to move back into the city, thus increasing demand and increasing prices back to where they were. That seems unlikely to me, based on intuition and my admittedly elementary understanding of economics. It seems very unlikely that a significant increase in the quantity of hous…

It would indeed cause the pricing to drop, but just temporarily until all the new housing stock was filled. Basically, the author is suggesting that (within practical bounds) the demand for housing inside SF is unlimited. I think it's a fair assessment.

I really don't think so. If demand is effectively unlimited, then I highly doubt it is only unlimited at exactly the current housing prices. Some significant portion of the housing is not under rent control (most people I know don't live in rent controlled units) and some portion of the supposedly effectively unlimited demanders should be willing to pay more than the current prices.

Re: The Housing Market in San Francisco and Ideas to Fix It

#138

Post by coroutines »

mahyarm wrote: post #81
coroutines wrote: post #74

Earlier quoted context omitted.

Prop 13 is really great and really bad. My grandparents own a home in Livermore they've had from 1925. Livermore is now a very costly place to live in, and modern property taxes would make it impossible for them to live in a city they saw grow up around them. I do think Prop 13's protection should be eliminated for businesses - most definitely. If you're a landlord, perhaps it would make sense to allow up to 2 x Prop…

Then make prop 13 a 65+ only law that can only apply to your main residence.

Final answer: Residential only, not commercial/business property.

Seniors aren't the only ones who need this.

I also want to add that what sucks so hard about businesses being protected by Prop 13 is that businesses can live much longer than people. Disney might keep its decades-old fixed property tax for more than a hundred years.

Re: The Housing Market in San Francisco and Ideas to Fix It

#139

Post by floatrock »

Grishnakh wrote: post #128
Renevith wrote: post #97

Earlier quoted context omitted.

> If you have a job that pays $100,000 and the taxes on your $250,000 house is $7,500 (3% property tax) and the tax quadruples to $30,000 in five years; why would you want the market fluctuations to be able to force an individual to leave their house? I shed exactly zero tears for someone whose $250k property quadruples in value to $1m in five years. Sell the house and dance with joy at your (untaxed!) $750k capital…

>I shed exactly zero tears for someone whose $250k property quadruples in value to $1m in five years. Sell the house and dance with joy at your (untaxed!) $750k capital gain. Ok, now where are they supposed to live? All the other properties cost just as much, so now they're forced to not only move out of the city, but now they have to quit their job too! How is this productive? You're penalizing someone for living in…

Being priced out of their home is one option.

The other option is to ease pressure on home prices by laying down the NIMBYism and letting more housing be built in your community in a sustainable way!

This is the whole the point of self-corrective market forces: sure, you can choose to keep your low-density housing in a region that is attracting demand with great weather and strong industry, but prices are going to appreciate if you keep your doors closed to newcomers. Keep the door closed long enough and your self-defeating actions will force yourself out as well (see palo alto, where they now need to subsidize housing for anyone making under $250k/yr so they can have people like teachers and firefighters still live in the community).

The fact that taxes DON'T increase with demand distorts the self-corrective market forces that would otherwise stop people from closing the door to affordability.

Re: The Housing Market in San Francisco and Ideas to Fix It

#140

Post by avatar299 »

Blaming Prop 13 is silly. Look at the rest of the state, housing prices are relatively sane in places like san diego, and downright cheap in the inland empire, orange copunty, anaheim, etc etc.

Oh, all those places have to deal with Prop 13 as well.

San Francisco(and the bay area overall) has consistently chosen to restrict their supply for housing for years. Obviously this would culminate into higher prices in the future, but to many people live in denial. They would rather pretend that AirBnB is the real problem, or that Prop 13 is distorting the market(but of course, rent control is not rolleyes)

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