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

San Diego rents declined following surge in supply

kpbs.org

Post reply on HN
Print view View original

51–60 of 253 posts

Re: San Diego rents declined following surge in supply

#51

Post by darksaints »

abdullahkhalids wrote: post #28

Lots of people quoting basic supply and demand. People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down. The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc…

We don't need to know how much. We just need to know the direction, and stop caring so fucking much about rich people going underwater on their home.

Re: San Diego rents declined following surge in supply

#52

Post by pydry »

exabrial wrote: post #10

Incredible. So what you're saying is... we should just build more housing? Who would have thought that was the answer?

The trick is in creating new supply when faced with:

* Existing land/property owners who dont particularly want to give up their land.

* Property developers who would rather flog one ultra luxury unit to a foreign buyer than 3 to somebody on a median income.

* NIMBYs with multimillion dollar mortgages terrified that denser housing will push them into negative equity.

Re: San Diego rents declined following surge in supply

#53

Post by wahern »

ViscountPenguin wrote: post #37
abdullahkhalids wrote: post #28

Lots of people quoting basic supply and demand. People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down. The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc…

I don't think the predominant factor causing pollies to shy away from increasing housing supply is a lack of understanding that supply decreases prices, it's a lack of political will to decrease prices. It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.

In a city like San Francisco, relative to the status quo ante easier development is more likely to result in slower growth in home prices, not a reduction in home prices.

But that's not the reason most San Franciscans oppose development. The primary reasons are 1) they're convinced more development will raise prices, 2) they believe affordability must be mandated through price controls or subsidies (e.g. developers dedicating X% of units for below market prices), 3) they insist on bike shedding every development proposal to death, 4) they're convinced private development is inherently inequitable (only "luxury" housing is built).

Pretty much the only group of people in the city worried about housing stock increases reducing prices are developers trying to sell-off new units. But developers are repeat players, and they're generally not the ones lending support to development hurdles. Though, there is (was?) at least one long-time developer who specializes in building "affordable" housing--mostly at public expense, of course--who did aggressively lobby for development hurdles, but carefully crafted so he and only he could easily get around them.

Re: San Diego rents declined following surge in supply

#54

Post by seanmcdirmid »

darksaints wrote: post #48
exabrial wrote: post #10

Incredible. So what you're saying is... we should just build more housing? Who would have thought that was the answer?

I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?

If demand picks up because supply increases, you will reach the previous equilibrium even with more supply. It isn’t rocket science, there is a price people are willing to pay to live in SD, and the market will keep gravitating to that price unless demand is somehow limited. The price people are willing to pay can even increase as density makes brings in things (eg culture, job opportunities) that make the city more desirable (eg see Hong Kong).

Re: San Diego rents declined following surge in supply

#55

Post by abdullahkhalids »

epistasis wrote: post #35
abdullahkhalids wrote: post #28

Lots of people quoting basic supply and demand. People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down. The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc…

We don't need quantitative models if we want the rock to fall. It might be nice to have them, but one of the great things about market economies is that we don't micromanage according to overly complex estimates, and get better results. Zoning and homeowners are holding on to the rock with a death grip, all while saying "the rock won't fall if we let go, that's fake science, it's far more nuanced you see" as they lie…

The quantitative model will tell you whether building housing of type A of quantity B results in more of a decrease in rent than building housing of type C of quantity D. Then you choose the policy that results in the desired decrease in rent. Otherwise, you risk wasting time in pursuing a policy that only results in a 0.1% decrease.

Re: San Diego rents declined following surge in supply

#56

Post by WillPostForFood »

darksaints wrote: post #48
exabrial wrote: post #10

Incredible. So what you're saying is... we should just build more housing? Who would have thought that was the answer?

I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?

If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.

Re: San Diego rents declined following surge in supply

#57

Post by tbrownaw »

ViscountPenguin wrote: post #37
abdullahkhalids wrote: post #28

Lots of people quoting basic supply and demand. People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down. The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc…

I don't think the predominant factor causing pollies to shy away from increasing housing supply is a lack of understanding that supply decreases prices, it's a lack of political will to decrease prices. It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.

> It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.

The only thing they can exchange it for is another house or an alternate form of housing. Because you have to live somewhere.

But what I have seen is worries about social class and sharing space with new neighbors who act like they're from the next rung down on the ladder. Which isn't all that different from the usual objection to short-term rentals.

Re: San Diego rents declined following surge in supply

#58

Post by abdullahkhalids »

dghlsakjg wrote: post #43
abdullahkhalids wrote: post #28

Lots of people quoting basic supply and demand. People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down. The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc…

Most rent payers aren't concerned with the exact function that will describe the shape of the curve for decline in cost of rent. They are mostly interested in "rent go down", or at least "rent not go up". That said, there are people who have studied this. You don't need Newtonian level math to calculate elasticity. Hell, we can look at how rents rise in a constrained market and make a pretty good guess what would hap…

Lots of places in the world have legally mandated percentage by which rent can increase for a unit per year. It might be 2% or 3%, but it is a fixed number that is fought over politically before being decided. That is the function that you are claiming rent payers don't care about. But they do, as evidenced by elected officials enforcing the number they think will get them the most votes.

Re: San Diego rents declined following surge in supply

#59

Post by pydry »

darksaints wrote: post #48
exabrial wrote: post #10

Incredible. So what you're saying is... we should just build more housing? Who would have thought that was the answer?

I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?

If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.

If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.

So no, supply and demand doesnt really work for land the way it works for everything else.

Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.

Re: San Diego rents declined following surge in supply

#60

Post by darksaints »

WillPostForFood wrote: post #56
darksaints wrote: post #48

Earlier quoted context omitted.

I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?

If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.

For the same reason that NIMBYs care so much about urban trees or spotted owls. They don't actually give a shit about them, they just are willing to say or do anything to sabotage the process of increasing housing supply.
Post reply on HN