Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Average Rent in San Francisco Has Dropped $1k This Year

socketsite.com

Post reply on HN
Print view View original

181–190 of 562 posts

Re: Average Rent in San Francisco Has Dropped $1k This Year

#181

Post by Redoubts »

WhompingWindows wrote: post #166
xyst wrote: post #40

If the city would rezone all of the single family homes into higher density buildings, this wouldn't be a problem. Flood the area with supply and the cost will go down to reasonable levels. This is a problem all across the nation. Everyone wants a single family home, so this leads to two things: outrageously high costs of homes, or people moving out to the suburbs and thus worsening the rush hour traffic and smog iss…

I live in a rural area, so I'm no expert...but how do you weigh the value of private property of San Fransiscans vs. the communal good of more apartment units? Surely you wouldn't "knock down" old houses, or would you? Just curious as to your thoughts.

Zoning is necessarily an infringement of property rights, by the by.

> surely you wouldn’t “knock down”

I suppose that’s up to the owner. Though the question is about no longer making it illegal for owners to do so.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#182

Post by BurningFrog »

jjoonathan wrote: post #164
daniellarusso wrote: post #140

Earlier quoted context omitted.

So, the infrastructure can handle double its current utilization? Aren’t the sewers in SF literally over a century old? No issues with adequate water supply and sewage treatment?

Well, here's the thing: pipes can be built. Big pipes can replace small pipes. Plant capacity can be upgraded. Shocking, I know, but it's true.

SF is so ossified that people don't even consider the possibility that infrastructure can be built...

Re: Average Rent in San Francisco Has Dropped $1k This Year

#183

Post by sokoloff »

cogman10 wrote: post #142
itchyouch wrote: post #123

Earlier quoted context omitted.

How would that be done? If an address wasn’t claimed for a personal tax return for an owner or tenant, it gets a big tax bill?

This would be specifically to fix the problem of a builder making a bunch of apartments and slowly letting them into the market to artificially inflate home values. Presumably, the building company would be the owners for all the empty apartments which would make it easy to find and tax. It would be more difficult to detect someone buying a home/apartment as an "investment".

At what point do they become apartments though? When the Certificate of Occupancy is issued? "No problem; those units aren't finished yet. [They need a smoke alarm to be legal units and somehow we haven't found the time to get around to it yet.]" Or whatever the threshold is between "this is a vacant lot" and "this is a taxable unoccupied unit", you're just providing incentive to stay on one side of that line if there is a glut of builders using this strategy.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#184

Post by dredmorbius »

AmVess wrote: post #91
cwilkes wrote: post #80

Earlier quoted context omitted.

But they are using land productively as they are making $3100 a month off of a small studio. Also I doubt if raising taxes will result in anything more than them passing that cost on to the renters.

Raising taxes on the land owner will result in increased rents. Land owners are not in the business of giving money away.

False.

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

Land supply is inelastic

Re: Average Rent in San Francisco Has Dropped $1k This Year

#185

Post by imtringued »

ambicapter wrote: post #70
SllX wrote: post #66

Earlier quoted context omitted.

> Saying "it's about supply and demand" is not technically wrong but it glosses over the toxic systemic changes which brought us here and exculpates the people who deliberately fought for them to create this mess. I am happy to discuss all variables which inform the price, so long as we agree to give supply and demand top billing. We can even discuss the variables which inform supply if you like.

Is Supply and Demand really the end-all, be-all of economics? Don't things like Veblen goods demonstrate that there is some nuance to the topic.

Land is a rivalrous good but housing isn't. Sprawl is just the most conflict free way of giving everyone what they want but it's not the only way. You can always build more housing on the same piece of land.

Supply and demand is pretty obvious because of the basic physics behind it. If you have a world with 10 houses and 20 people then 10 people will be without a house. It's not very difficult to see the problem and how to respond to it. We first have to establish that we want every human in our country to have shelter. That means what we don't want to happen is the allocation of housing to a subset of the population, be it via the free market, a lottery or an application process where you are vetted by an interviewer according to some criteria. We don't want any of that. So the obvious solution is to just build more housing, regardless of the economics.

Now lets just add a thin layer of economics.

It turns out that the free market has this interesting property that in the case of demand exceeding the supply the cost of housing increases until it becomes profitable to build more housing. It's a self balancing system if you make sure that it's not getting stuck somewhere.

Turns out if you make it really difficult to build more housing then people decide to pack up and leave because that's the only option left. For the sake of the argument 20 people can't live in 10 houses so 10 people will have to go build housing somewhere else.

Now here is the perverse thing. The same people who made it difficult to build more housing also made it so that they get to stay where they are by removing the pressure to leave the location. What we get is 10 people living in housing and 10 people living in misery. You don't need an economic resource allocation mechanism like the free market to cause misery. The misery already exists in the real world and the economics merely summarizes that misery as a price signal.

So why care about supply and demand? Because it's the closest thing to physical reality but what people fail to grasp is that you have to change physical reality to change the economics. No, messing around with prices via rent control or prop 13 does not solve the underlying problem.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#186

Post by nelsonenzo »

diveanon wrote: post #167

Does this mean that cost of living will stop being the everyday boilerplate conversation I have with every bay area resident I have ever met?

Doubt it. I moved to SF in 2001 and that conversation had already existed for 20 years and continued forward for 20 years.

The second prices become reasonable again, tons of folks will happily move to SF because of the weather, parks, pleasant social norms, etc. And once those folks move in, the price goes up again. It's a never ending cycle.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#187

Post by onei »

aqme28 wrote: post #138
robbyt wrote: post #99

Dear SF, More apartments built will not help make housing more affordable for normal people. Learn about the NYC real estate market- even pre covid apartment vacancy was extremely high, and the true numbers are unknown because building developers are manipulating the market by releasing units slowly. With all the excessive inventory in NYC, you'd think that a normal person (defined by median income) could afford to b…

Consider Tokyo. They have kept supply up with demand, and as a result prices have stayed relatively flat. https://www.wsj.com/articles/what-housing-crisis-in-japan-ho...

Isn't it common for Japanese apartments to be super tiny though? As in enough space for a mattress and not much more.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#189

Post by sokoloff »

renewiltord wrote: post #127
AmVess wrote: post #91

Earlier quoted context omitted.

Raising taxes on the land owner will result in increased rents. Land owners are not in the business of giving money away.

Land owners are not in the business of giving money away. That's precisely why increased taxes will not result in increased rents. After all, if they could increase rents and the market would clear it when there's a tax, why wouldn't they when there's no tax? They're not selling at cost-plus, they're trying to maximize profit.

Because renting in SF trades off in part against buying in SF at the margins (and against renting nearby to SF and against moving out of SF entirely). If buying in SF becomes more expensive due to an LVT, then renting becomes more competitive on the margin.

I find it to be strangely magical thinking that land-value-taxes will precisely and surgically extract 100% of their value from landlords with no players in the game altering their behavior in any way that would result in the effects being shared across many participants in the real estate markets in a city.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#190

Post by epistasis »

matwood wrote: post #125
cogman10 wrote: post #109

Earlier quoted context omitted.

Taxing unoccupied homes and apartments will fix things real fast.

You mean add additional taxes? Presumably they are already taxed. Does SF have homestead property tax exemptions? Where I live property taxes are quite high, unless the property is owner occupied. The second homes and rentals subsidized the taxes of those who live here.

SF, like all of California, has the worst possible property tax scheme. They passed "homestead" protections but did it for all property tax, not just homesteads.

Any property tax, from vacant lot to strip mall to vacation home to industrial plant, can not rise above 2% per year. Meanwhile property values rise 5%-10% per year. The only way for property to get reassessed at market value is to build on it or sell it.

This subsidizes speculation. If you own a vacant lot since 1970, and pay an effective tax rate of 0.05%, and building on it raises your taxes to 1%, you're taking a huge risk by deciding to enter the market now. Similarly, that super old 6-unit apartment building from 1930 has a ridiculously low tax basis; upgrading to 20 units hugely increases taxes.

Post reply on HN