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Employment, construction, and the cost of San Francisco apartments

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Re: Employment, construction, and the cost of San Francisco apartments

#141

Post by DrScump »

rtpg wrote: post #106
DrScump wrote: post #69

Earlier quoted context omitted.

Boosting housing by building vertically is virtually unlimited. The trickier part is supplying the added people with water, electricity, gas, food, and other supplies without augmenting infrastructure (which is failing left and right as it is) and convincing them to never travel out of or into the city using its already-at-capacity freeways and rail.

For the last part, having mixed-zone development is essential. Put housing above supermarkets! Offices inside apartment complexes! Make it easy for people to walk around. I think that people don't need convincing not to use their cars... it's more that the space needs to be built in a way to where cars are not necessary.

Sure, that's the ideal and gradually becoming more common. (Heck, the Two Worlds development in Mountain View -- ground-level retail with residences above -- dates to the 1980s.)

But again, the trick is figuring out a way to force people to only take jobs within their building and/or move to the building where their job is (and move both when either changes). It just doesn't work that way in the Real World.

Re: Employment, construction, and the cost of San Francisco apartments

#142

Post by DrScump »

bluejellybean wrote: post #133
Aeolun wrote: post #129

Earlier quoted context omitted.

Like Tokyo?

Or for a more American example. Denver has been doing a good job with their new construction over the last few years. While I haven't looked into actual codes, the majority of new buildings I've seen have work/live offices or full-on commercial zoning on floor 1 and dense luxury apartments on 2~20; Denver is also investing quite heavily into public transit, specifically they've been working on a fairly impressive lig…

It's a sad commentary on the state of public transit in the USA that a system which (using its most optimistic projections) hopes to achieve a 21% farebox return by 2021[0] is "fairly impressive"... or, if you count capital expenditures (like the private sector has to), less than 5% (meaning 95% subsidized). But that's a hell of a lot better than VTA here in Silicon Valley.

[0] http://www.rtd-denver.com/documents/financialreports/strateg...

Re: Employment, construction, and the cost of San Francisco apartments

#143

Post by timr »

tptacek wrote: post #134
gech wrote: post #93

Earlier quoted context omitted.

Can you promise that

Only in the same sense that you can promise that an apple released from your hand will fall to the earth and not hover in mid-air.

Oh, come now...if it were that certain, the article wouldn't have gone out of its way to explore the question. There's actually no guarantee at all that the markets for high-end and low-end goods are linked.

The price of Lamborghinis doesn't have much to do with the price of Kias.

Re: Employment, construction, and the cost of San Francisco apartments

#144

Post by tptacek »

timr wrote: post #143
tptacek wrote: post #134

Earlier quoted context omitted.

Only in the same sense that you can promise that an apple released from your hand will fall to the earth and not hover in mid-air.

Oh, come now...if it were that certain, the article wouldn't have gone out of its way to explore the question. There's actually no guarantee at all that the markets for high-end and low-end goods are linked. The price of Lamborghinis doesn't have much to do with the price of Kias.

What a strange analogy. There's no scarcity to Kias at all; the car is built to command a particular price point. There's a huge surplus of drivable cars. That's not the case with SF real estate, even a little bit.

Re: Employment, construction, and the cost of San Francisco apartments

#145

Post by rtpg »

DrScump wrote: post #141
rtpg wrote: post #106

Earlier quoted context omitted.

For the last part, having mixed-zone development is essential. Put housing above supermarkets! Offices inside apartment complexes! Make it easy for people to walk around. I think that people don't need convincing not to use their cars... it's more that the space needs to be built in a way to where cars are not necessary.

Sure, that's the ideal and gradually becoming more common. (Heck, the Two Worlds development in Mountain View -- ground-level retail with residences above -- dates to the 1980s.) But again, the trick is figuring out a way to force people to only take jobs within their building and/or move to the building where their job is (and move both when either changes). It just doesn't work that way in the Real World.

but empirically it works in many other cities in the Real World. Something something Europe Japan.

I stated this but if you ask most people whether they'd want their office to be moved close to their house, I imagine most people would want their office to be close by. And people are willing to pay a premium for this.

Even if they don't take jobs in their building, at the very least this will cause other people in nearby residential zones to be closer to other jobs. Of course people will still use cars (and traffic will probably suck! But that's what you get for driving). But you'll reduce how much people need to drive.

Re: Employment, construction, and the cost of San Francisco apartments

#146

Post by timr »

tptacek wrote: post #144
timr wrote: post #143

Earlier quoted context omitted.

Oh, come now...if it were that certain, the article wouldn't have gone out of its way to explore the question. There's actually no guarantee at all that the markets for high-end and low-end goods are linked. The price of Lamborghinis doesn't have much to do with the price of Kias.

What a strange analogy. There's no scarcity to Kias at all; the car is built to command a particular price point. There's a huge surplus of drivable cars. That's not the case with SF real estate, even a little bit.

The metaphor is fine. You're making my argument: there's no inherent reason that the prices of luxury products should influence the prices of commodity products. In fact, barring exceptional circumstances (i.e. shortages) they usually don't. It isn't safe to assume that "construction" will lower rents for everyone. Even here.

Despite conventional wisdom and lots of hand-waving justifications, there's actually very little evidence that building more luxury units impacts low-end housing prices on anything but the long term. Even the author of this piece is falling back to long-term averages to make his argument, and the results are...tepid. A 2% reduction in aggregate, long-term rents for every 1% of new housing built is not a screaming endorsement for indiscriminate construction.

If you have data that shows otherwise, feel free to cite it.

Re: Employment, construction, and the cost of San Francisco apartments

#147

Post by tptacek »

timr wrote: post #146
tptacek wrote: post #144

Earlier quoted context omitted.

What a strange analogy. There's no scarcity to Kias at all; the car is built to command a particular price point. There's a huge surplus of drivable cars. That's not the case with SF real estate, even a little bit.

The metaphor is fine. You're making my argument : there's no inherent reason that the prices of luxury products should influence the prices of commodity products. In fact, barring exceptional circumstances (i.e. shortages) they usually don't. It isn't safe to assume that "construction" will lower rents for everyone. Even here. Despite conventional wisdom and lots of hand-waving justifications, there's actually very l…

There are a fixed number of residential slots in the SF real estate market. There is undersupply at every level of the market. If a slot is labeled "luxury", lower-income people will not move in there. But the converse isn't true: higher-income people will take "low-income" slots (see: the Mission) if that's all that's available.

No part of this market in any way resembles the market for Lamborghinis and Kias.

Re: Employment, construction, and the cost of San Francisco apartments

#148

Post by timr »

tptacek wrote: post #147
timr wrote: post #146

Earlier quoted context omitted.

The metaphor is fine. You're making my argument : there's no inherent reason that the prices of luxury products should influence the prices of commodity products. In fact, barring exceptional circumstances (i.e. shortages) they usually don't. It isn't safe to assume that "construction" will lower rents for everyone. Even here. Despite conventional wisdom and lots of hand-waving justifications, there's actually very l…

There are a fixed number of residential slots in the SF real estate market. There is undersupply at every level of the market. If a slot is labeled "luxury", lower-income people will not move in there. But the converse isn't true: higher-income people will take "low-income" slots (see: the Mission) if that's all that's available. No part of this market in any way resembles the market for Lamborghinis and Kias.

Yeah, I understand what you're saying: there's a shortage of housing, and there's not a shortage of economy cars. But that's not a rebuttal to the argument I'm making.

The question is whether or not new luxury housing makes rents cheaper for poor folks, today. Even here, in the epicenter of a housing crisis, there's not a lot of evidence that it does. But there's evidence that preferentially building low-income housing does make a difference.

This isn't a controversial or irrational or counter-intuitive argument: there are a lot of great reasons that a rich person might choose to live in a cheaper apartment. It isn't a given that rich people will self-segregate to luxury buildings because "luxury". So at the end of the day, you're back to aggregate supply vs. aggregate demand. And if that's the case, why not build for low-income people instead?

Re: Employment, construction, and the cost of San Francisco apartments

#149

Post by tptacek »

timr wrote: post #148
tptacek wrote: post #147

Earlier quoted context omitted.

There are a fixed number of residential slots in the SF real estate market. There is undersupply at every level of the market. If a slot is labeled "luxury", lower-income people will not move in there. But the converse isn't true: higher-income people will take "low-income" slots (see: the Mission) if that's all that's available. No part of this market in any way resembles the market for Lamborghinis and Kias.

Yeah, I understand what you're saying: there's a shortage of housing, and there's not a shortage of economy cars. But that's not a rebuttal to the argument I'm making. The question is whether or not new luxury housing makes rents cheaper for poor folks, today. Even here, in the epicenter of a housing crisis, there's not a lot of evidence that it does. But there's evidence that preferentially building low-income housi…

Is there a coherent argument you can make that doesn't depend on upper-income people shunning lower-income neighborhoods in San Francisco? Because the evidence strongly suggests that they don't: that when luxury housing is unavailable, upper-income people in the Bay Area move on to claim lower-income housing.

(I lived in Bayview for a bit, and I was hardly the only tech person I knew who lived there.)

Re: Employment, construction, and the cost of San Francisco apartments

#150

Post by kelnos »

kbenson wrote: post #36
timr wrote: post #27

Earlier quoted context omitted.

"Building straight into the sky is easy." Except, it isn't. Construction costs of taller buildings scale non-linearly with every additional story [1]. Building skyscrapers costs upwards of $300 per square foot, whereas single-family homes cost a fifth or a sixth of that. It's so much cheaper to build low-rises, in fact, that virtually no developers will take on a high-rise project unless the property is so expensive…

An hour north of SF, my single family home cost me $216 sq. ft. Prices in SF are significantly higher. Trulia makes it look to be ~ $700-$1000 sq. ft.

I don't mean to belittle your choice as I assume you're happy with it. But please understand that, for a lot of people, living an hour north of SF is too far for their taste. Even to the point of being worth the extra money.
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