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

391–400 of 562 posts

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

#391

Post by packetlost »

djsumdog wrote: post #379
packetlost wrote: post #59

Earlier quoted context omitted.

Madison? State St. (the only real 4 blocks of downtown Madison has) still has a ton of boards up from the BLM protests, and last I heard the count for closed stores this year was almost 40.

Worse: Chicago.

Ouch. If you can put up with the winters, Madison is quite a bit nicer than Chicago, even in it's current state. But, it's not really a city. Aside from 3 blocks around the capitol, there's basically no density and you're driving a minimum of 10 minutes to get to anything worthwhile.

I grew up here, but I personally hate winter and can't wait to get out of this entire region.

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

#392

Post by kccqzy »

bradlys wrote: post #381

Apartments are getting cheaper. I’m not seeing houses getting cheaper in the rest of the bay. Renting a house where I live in the peninsula is about the same cost as it was a year ago. Maybe 10% less. Basically, anything sharing walls or space is going down but not the other stuff...

This is also what a realtor told me. People working from home means they need bigger spaces, and COVID means they need these spaces by themselves, not shared with other people. IIRC condos haven't been selling well but houses certainly are.

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

#393

Post by hardtke »

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…

The best land for high density construction in SF are the smaller rent controlled buildings, not single family homes. These smaller rent controlled buildings are near lively neighborhoods and transit, and are also often at the outer edge of their useful lifespan. I have yet to see a policy proposal to open up this land for development because nobody wants to give up rent controlled units.

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

#394

Post by epistasis »

imtringued wrote: post #241
eeZah7Ux wrote: post #157

Earlier quoted context omitted.

Taxing unoccupied homes lower rents, obviously. Also taxing income progressively discourages landlordism. On top of that, taxing income in order to build public public housing lowers rents even more.

The government could just guarantee housing for a fixed price. That fixed price becomes the upper bound and all private market participants would have to bid lower than this upper bound. This doesn't happen because those who have a political say don't actually want more housing. My proposed idea would force the government to actually solve the problem after all. If there is not enough housing the government would be…

This is a lot like Singapore's HBD, which builds lots of public housing. And you're right, it's the absolute nightmare of people in SF who say they want non-market housing, precisely because it means new housing and new buildings.

However, it's a generally popular idea, that if put to a majority vote could pass. It's individual small groups that would stop it, because city politics are highly undemocratic and controlled by small factions.

However, there's hope at the state level to make this possible. I'm hopeful that in the coming legislative session there will be some serious attempts at state-level public housing to alleviate our desperate shortage.

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

#395

Post by nostrademons »

SllX wrote: post #373
nostrademons wrote: post #364

Earlier quoted context omitted.

That depends whether you're a politician or an economist. ;-) Through a politician's lens the goal of a tax is to raise revenue for government and tax policy exists to do that efficiently. Through an economist's lens efficient trade and alignment of incentives are fundamental and governments exist only incidentally to ensure those. There are various schools of economics that suggest limiting government's role only to…

You missed out an important perspective that is neither purely politician nor purely economist: taxpayer. Taxes are paid on money earned, whether through labors, investments or rents. They are a taking, a legal one, of something that rightfully belongs to someone else, so if you are going to take it, then it had better go back to government services. Economists have found ways to reinterpret taxes and exploit their s…

I'm aware of the taxpayer perspective and it's a big problem with getting adoption for an LVT. It's the type of policy that makes most people better off but you can never really convince people to adopt, because it sounds worse than alternatives.

There's actually an economic theorem (the "Henry George Theorem", discovered by Joseph Stiglitz in 1977 [1]) that states that under conditions of democracy & perfect information an LVT will exactly "right size" the government, spurring investment in only those public goods that pay for themselves in increased citizen welfare. That's because the tax revenues from public good expenditures come back in the form of increased rents: a playground nearby, a subway stop, better schools, low crime, stable currency, a strong military, etc. all increase the amount of rent that a landlord can charge for a property within their jurisdiction. That rent then comes back to benefit the exact same people who are paying the tax, which removes the principal-agent problem inherent in most taxes (where you pay the taxes but it benefits your neighbor). Landlords have an incentive to raise taxes on themselves right up to the point where the public improvement fails to raise rents by more than its cost. Tenants have the same incentive - as long as the cost is less than the public benefit, they get to enjoy the benefit, their rent will raise by the cost (as landlords pass along the tax), and they end up better off. When costs rise more than benefits (as they seemingly have in SF), people leave the expensive jurisdiction and move to areas that have more smartly allocated their tax dollars.

The main problem in practice is that you can always direct people's attention to small problems that don't raise their welfare in aggregate much - saving the burrowing owls, for example, or banning abortion. The economist's answer is that this will eventually even out across many people and many municipalities, but I think we have pretty ample evidence that people are not necessarily rational beings, and an LVT isn't all that robust to irrationality.

[1] https://en.wikipedia.org/wiki/Henry_George_theorem

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

#396

Post by randomdata »

sofixa wrote: post #382
randomdata wrote: post #270

Earlier quoted context omitted.

It seems the average Big Mac meal is $6 these days. It provides approximately 1,000 calories, and the average person needs approximately 2,000 per day, so we'll assume you'll need to order two. That puts the food costs at $12 per person. The average cost to install a kitchen is around $60,000. If we assume a rate of return of 5%, that is $3,000 per year right there that the money needs to provide to justify it being…

> It seems the average Big Mac meal is $6 these days. It provides approximately 1,000 calories, and the average person needs approximately 2,000 per day, so we'll assume you'll need to order two. That puts the food costs at $12 per person Yeah, i assumed so. Eating Big Macs is... let's say suboptimal. If you eat only that, you'll probably have all sorts of health issues. When counting actual food, fresh and with vege…

> Around here, cheapest option for a decent actual meal is ~8-10/eur/person.

Same here, but always coupled with a value of entertainment at that price point. You cannot directly compare the entertainment experience to your home kitchen, as already mentioned. You, at least, would have to include some of the cost of your living room, TV, Netflix account, etc. or whatever analogs of entertainment you have in your home. At which point 10 eur is going to look pretty cheap.

> "starter" ( recommended if you're going to let or for first buy) are at 2k, everything included.

Whoa. I'm not sure you could even put up one wall of a kitchen for $2k in North America. Maybe if you're buying a stove and cooking under the stars you could get in for that amount. That's not what anyone I know would call a kitchen. Definitely not what is being referred to as a kitchen in this thread.

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

#397

Post by pjpweaver »

ashtonkem wrote: post #390
pjpweaver wrote: post #376

Earlier quoted context omitted.

Do you know of anywhere I can read more about this? I've been trying to understand this phenomenon in NYC for a while.

Here's a good comment covering it[0]. I got my summary slightly wrong; buildings aren't re-financed, but rather the owner has the ability to delay payment on any unleased units. Leasing a unit at a lower rate suddenly modifies the value of the building, which means signing a lower lease can put the loan underwater. The same basic motivation structure applies though, it is far better for the owner to leave a unit empt…

Thanks!

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

#398

Post by throwaway0a5e »

throwaway201103 wrote: post #342
throwaway0a5e wrote: post #119

Earlier quoted context omitted.

I think NIMBYism only looks financially attractive because everyone who bought a square of land in a "city" since the 1970s or so and held for at least a decade has won big regardless of where. That doesn't mean that SF/SV isn't forgoing a lot of money in order to keep its NIMBY policy. Think about how much just the squares of land those single family homes and low rise buildings in SV are on would be worth if the SF…

> everyone who bought a square of land in a "city" since the 1970s or so and held for at least a decade has won big regardless of where Not true at all, look at Detroit, Gary, or any midwest "rust belt" town. Abandonded properties everywhere, can't find buyers even at tax sale prices.

I live in one of those sorts of cities. Detroit is their own doing because of local tax code. There's a decent amount of "there was a falling down commercial building here so we bulldozed it and then just let it sit" type of lots kicking around in other cities but the lots have still increased in value (i.e. inflation has happened) enough that mostly nobody is underwater and anyone looking to get out can do so without losing money.

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

#399

Post by inglor_cz »

randomdata wrote: post #389
inglor_cz wrote: post #378

Earlier quoted context omitted.

"The average cost to install a kitchen is around $60,000." An ordinary home kitchen? That is ... quite a lot. I am in a different part of the world, but I still managed to equip a home kitchen with reasonable-quality appliances (no scraping the barrel, mostly Bosch and Whirlpool) for some 4000 dollars in 2019.

There is a lot more to a standard kitchen than appliances. Like walls, floors, counters, etc. None of that comes free, or even cheap.

Well, every room tends to have walls and floors.

Unless the talk is about some big ass mansion, I cannot imagine spending 60 000 USD on a kitchen, the very price of the materiel used does not add up to even tenth of that value even if you choose mid-range stuff.

You can have a nice 300 x 60 cm wooden counter for like 200 USD.

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

#400

Post by epistasis »

fortran77 wrote: post #377
zapita wrote: post #312

Earlier quoted context omitted.

This is true, and will remain true until prop 13 is repealed. The same dynamic is at play between San Jose and Mountain View/Cupertino/Palo Alto.

What does Prop 13 have to do with the fact that they're not building enough housing?

Prop 13 gives huge tax benefits to using land less than productively. Both selling land, and building on it will massively increase taxes.

Property values are rising at 5%-10% per year, but bulidings themselves only depreciate without dumping more money into the building. So that 5%-10% is all land value gain. As a property owner, why increase taxes by using the land more productively with new buildings, when you can continue to profit just as much without that? Also, attempting to build is hugely risky, because the permitting process is fraught, long, and likely to fail.

If we didn't have Prop 13, every single property owner would have a lot more incentive to actually try to build.

Post reply on HN