Earlier quoted context omitted.
Both. I spent the last decade having these conversations with people who also grew up here and can’t afford to remain here without staying with their parents, with some of the stranger conversations devolving into my counter parties brainstorming ways to kick tech people out of the City and stop new people from moving in altogether, as if freedom of movement in the United States wasn’t really a thing. It’s not “suppl…
Exactly -- there's a pervasive belief in the bay area that high rents are solely due to the evil cabal of landlords who meet every week in a dimly lit room and agree to charge sky-high rents while cackling maniacally and twirling their perfectly-waxed moustaches. The sudden COVID-related rent price drop indicates that this theory is nonsense, and that the high rents are solely a function of supply and demand, but I'm…
Except your own example demonstrates that it's not. If it was "solely supply and demand", then rents should drop far more dramatically than they have, down to levels comparable to other cities that used to be equally unpopular. Yet there's a literal pandemic and even though demand for San Francisco housing is at a ~20-year low, with newly-empty units everywhere, San Francisco still remains one of the priciest cities in the nation. Short of like, an earthquake wiping SF off the map or similar sized event, demand for SF housing will never get lower than this, and it's still not enough to bring rents remotely back into the real world.
Supply and demand have an impact on housing prices, but are definitely not the "sole" source of them. Landlord behaviour, city tax goals, investment banking demands, private equity involvement, and much more all dramatically impact the price of rent far more than "supply v demand" or any "regulation" does.
This is hard to understand for folks used to megacity pricing, where "high demand" (i.e., a small-but-consistent influx of new residents) is until recently, an automatic given thing you could just always point to as blame for any problem. For those of us out in the midwest, where demand is regularly falling in many places, where new construction always outpaces population growth every single year, and yet the housing prices still always rise, the disconnect between prices and supply/demand is quite a bit more obvious.