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Shaken by the latest digital gold rush, San Francisco struggles for its soul.

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Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#51

This just in: economics applies to San Francisco. If demand rises faster than supply, prices go up. Demand is rising fast. Supply is being held down. Prices go up. I come from Darwin, a wonderful little city clinging to the northern edge of the Australian continent. About 10 years ago a confluence of factors (expanded Defence presence and the early stirrings of the resources boom) meant that property prices took off.…

> Opening space at the high end of a market can have a disproportionate effect on a total market by removing massive amounts of bidding power. Are there studies on this bit playing out in practice? My impression so far, mostly looking at Manhattan redevelopment, is that building high-end condos typically does not reduce prices for other buildings in the area, but rather raises them: the presence of new high-end housi…

> But probably not good if you want to lower the prices.

The thing I'm thinking of is the city-wide market, rather than in a particular locale. One way or the other, though, the wealthy will get to live where they want. The best thing you can do is to try and save the furniture by putting them into golden ghettos, rather than having them fan out and drive off people in multiple districts.

> Good statistics either way would be interesting, though: are there cases where opening new high-end housing actually lowered the other prices in an expensive urban area?

Good on you for calling me out on numbers. I'd be interested to see that too.

NYC is a poor case study; you have the confounding factor of widespread rent control. It both creates an artificial limit on housing supply and distorts your official statistics because people have a strong incentive to behave deceptively.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#52

Earlier quoted context omitted.

What on earth are you on about? Okay, hypothetical from someone with an advanced degree in Economics, not because I'm bragging, but to save you the snark and insults: Developer gets the green light to demolish 30 unit building and build a large high rise at say, 6th and Howard. Many of these people are on the lowest end of the income spectrum. So you demolish the units and build a 150 unit, 15 story luxury apartment…

> No matter how you build "more housing", it very certainly will be first built for the highest income people, thus pushing the lower income teachers, firefighters and policemen, out of San Francisco proper. Clearly your "advanced degree in Economics" hasn't taught you any common sense. Is anyone saying that the housing that is built first has to go to lower income people? Is anyone saying that you cannot just build…

I don't think it'd be that inaccurate to model the supply of tech workers looking to live in SF as "very large" relative to demand, i.e. not likely to be meaningfully diminished by a dozen or two condo towers. Plus, demand itself depends on housing stock, and good new housing stock tends to produce more demand: people's friends move to SF, they hear about a new condo tower, the whole area gets more desirable. If you modeled Manhattan redevelopment that way, you'd have good results: the construction of new condos in Manhattan has not appreciably diminished the remaining outstanding supply of people wanting to move to Manhattan. If anything, the opposite: the "cleaning up" of Manhattan from redevelopment has increased the demand to live there by more than the new apartments have provided, so the supply/demand imbalance is actually worse than before! Now that might still be good for other reasons, but not if your goal is to lower prices.

I mean, assuming we're not talking about putting in 500,000 new units or something, Stalinist-apartment-blocks style: that would really produce enough supply to soak up any excess demand (which was precisely the point of Stalin's building programme). And their unattractiveness might reduce demand, too...

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#53
post #29

Earlier quoted context omitted.

After a building boom in the 70s-80s the city passed anti-Manhattanization laws.[1] [1]: https://en.wikipedia.org/wiki/Manhattanization

So the government passes laws to limit housing stock, then passes laws to artificially keep rent low, then people complain about prices going up and a lack of housing stock? Has anyone in SF read an Economics 101 textbook?

I'm sure they understand that, but they understand 'elections' and their constituencies even better.

Allowing building upwards would be seen as 'pandering' to 'special interests' by lots of locals --specially people who like to call themselves Xth-generation Franciscan.

SF is always about the short-term but made to look long-term so as to seem forward looking and progressive. The only thing SF is progressive about two things, sex, and some minority causes (both of which are good things but hardly encompassing of the term 'progressive'.)

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#54

Earlier quoted context omitted.

> No matter how you build "more housing", it very certainly will be first built for the highest income people, thus pushing the lower income teachers, firefighters and policemen, out of San Francisco proper. Clearly your "advanced degree in Economics" hasn't taught you any common sense. Is anyone saying that the housing that is built first has to go to lower income people? Is anyone saying that you cannot just build…

I don't think it'd be that inaccurate to model the supply of tech workers looking to live in SF as "very large" relative to demand, i.e. not likely to be meaningfully diminished by a dozen or two condo towers. Plus, demand itself depends on housing stock, and good new housing stock tends to produce more demand: people's friends move to SF, they hear about a new condo tower, the whole area gets more desirable. If you…

> It's reasonably accurate to model the supply of tech workers looking to live in SF as not likely to be meaningfully diminished by new construction, i.e. demand >> condo_size.

Based on what exactly? I don't think you can compare Manhattan to SF in this regard. Manhattan has general appeal and is well-known worldwide, whereas this issue with SF is specifically due to tech workers.

And I am not convinced that there are so many tech workers that you cannot accommodate everyone else as well. They definitely aren't going to be "pushed out of SF" if you allow high rise construction in all parts of the city.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#55
post #46

I don't know. How does New York deal with people in finance and artists in the same place? Do all the artists just live in Brooklyn now, instead of Manhattan?

Yes, more or less. But there has been a number of areas getting gentrified before it. Meatpacking district, Lower East Side, Williamsburg. At least that's what I've heard, someone from NY could probably tell you if this story hadn't been flagged to death.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#56
post #6

Grrrr. Existing SF residents are facing an influx of newcomers, who are pushing out (pricing out) some existing residents. And somehow, it never occurs to them to just make room for more people, so that existing residents don't get pushed out. SF has plenty of opportunities to build upward , but as long as SF insists on being anti-development and anti-height, the housing supply problem is going to continue.

How are current residents being priced out? If they rent, then rent increases are limited by law and no-fault evictions are nearly impossible to get honestly. If they own, the no one can force them to move short of the city invoking eminent domain.

Its only true if you never move. Or if you were renting but now are ready to buy.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#57
post #35

Does San Mateo county (home of daly city, san bruno, south SF, milbrae, colma, etc) have such development restrictions too?

They have similar mechanisms in place, but this is more understandable because SM is composed mostly of small cities (under 100k inh), so any new development must take into account traffic impact and offer some way to mitigate that or in some way address the foreseen impact. In addition, each municipality (town, whatever) has relics of 1950s height restrictions reflective of their town sizes.

It does not help that back in the planning phases of BaRT, San Mateo co. in the late 1950s, opted out of the system. Now they are plagued by a mediocre public transit system and they're in a catch-22. They don't have the density to sustain a working public transit system, so one does not get built and they don't allow higher densities due to the adverse effects on traffic. Eventually BaRT will reach San Jose, via the East Bay.... the idiocy.

I think if SJ plays its cards right, it could take away the clout back from SF. Back in the 80-90s (the hardware days) SJ (the 237 triangle) was more or less the 'capital' of SV (as the peninsula was more amorphous and one could not annoint P.A. or Sunnyvale the capital of SV, for example)

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#58
post #4

I was recently contemplating moving to the bay area from Midwest. Then a few months ago i shared a hostel room in Edinburgh with a guy from Portland. When we got to talking he told me that he is originally from San Francisco but decided to ran away to Portland to escape nearly insane cost of living. I don't know how much of this is true but he was telling me that some dingy studio apartments have 10-15 people in line…

It's pretty normal, I've seen crowds of 10-15 people at each apartment in the city when I was looking for one myself. 3k/mo for a 1 bedroom is absolutely normal outside the sketchier areas at this point. These days the startup crowd who can't afford those prices and doesn't "know a guy" lives outside the city in places like Daly City, Oakland etc.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#59
Ugh. This city does have some bad housing shortages right now, but this kind of whiny name-dropping i-was-here-first essay doesn't help. Neither does this epic rant I am about to write, but I'm going to do it anyway...

My favorite quote so far:

"If San Francisco is swallowed whole by the digital elite, many city lovers fear, the once-lush urban landscape will become as flat as a computer screen."

Lush urban landscape eh? Is that from all the feces on the sidewalks? Who are these city lovers? Are they the same NIMBY types who are trying to prevent any kind of night club or live music scene from being established in the city (google the "War on Fun" for fun). Well, that nameless person made up by the author is boring and terrible and they should probably move out to the suburbs to make room for someone who actually enjoys what this city has to offer now instead of what it was back when you couldn't take your kids to the park, a story which you told us yourself!

"When I moved to this neighborhood in 1993, just before the first dot-com boom, I avoided taking my two toddlers to the playground across the street from the café, because local gangs sometimes stashed their guns in the sand."

Yeah... soo.... that's bad, right? I didn't live here back then but I visited frequently and it was awful! Your fake nostalgia for the grittiness of urban life can go burn in a fire made from hobo shit.

Another stupid quote:

"The unique urban features that have made San Francisco so appealing to a new generation of digital workers—its artistic ferment, its social diversity, its trailblazing progressive consciousness—are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it."

Wait, aren't techie types usually considered to be sort of trailblazing and progressive and friendly to the arts? What the hell are you talking about dude?

Okay, rents have gone up in my building by 50% in the last 2 years. It's bad. The building, that is. It's basically been a slum apartment for a hundred years and 3 families do live upstairs from me in one unit. I WISH they'd move out, because I can hear everything that goes on up there. Ugh. We have new employees who are trying to move to the city and there aren't any good options, most of them have ended up in Emeryville or Oakland. I certainly wouldn't recommend my own building. I only stay here because the rent is cheap because I moved here before this current boom. So here I am taking advantage of the very upside-down rental market that's contributing to the whole problem! I don't know what the long term fix is besides building a LOT more new buildings, which seems to be happening... But it's only happening because rents are high enough to justify new construction, which is good for non-tech jobs and city property tax revenue in the long term, right? Would you rather have a bunch of fenced off city blocks with nothing but empty holes in the ground on market street? There's a new Draft House Cinema moving into a theater that's been empty for like 20 years two blocks away from McSweeny's. You don't think that's awesome?

Eventually this mini-boom will end and that's going to suck WORSE than what's going on now. Oh man, it's going to suck. Maybe rents will go down then, but only if a lot of people lose jobs and move away. That's not good is it? In fact, that's a worst case scenario for the city. The cafe you were sitting in when you wrote that article will probably go out of business too. Is that what you'd prefer? Maybe one of those techies who moves to SF this year will invent an alternate fuel generator that runs off baby boomer hand wringing and then we'll all be amazed when you single handedly save the city.

Still, until recently there were dozens of empty city blocks that had no development at all on them. Many stalled projects are in progress now, and it is all going to be high priced brand new luxury stuff. 3 new buildings have been built within a block of my current location in the Mission just in the last year. Sure, they're small and overpriced, and maybe only rich techie types can afford them but I'm FINE with that. When the people who can afford it move in to those places, they'll free up space in the dumps they moved out of and things will probably equalize in a couple of years, and that's probably the best case scenario.

Re: Shaken by the latest digital gold rush, San Francisco struggles for its soul.

#60
post #22

Earlier quoted context omitted.

"You could always build upward to house the rich people instead. I'm sure a lot of the incoming startup-types are young and would be happy to live in a high-rise" You have to remember that San Francisco is a prime earthquake zone. I'm not sure how many rich people would want to live in what is essentially a death trap if a major earthquake (which is supposedly long overdue) were to strike California. Also, gentrifica…

> You have to remember that San Francisco is a prime earthquake zone. I'm not sure how many rich people would want to live in what is essentially a death trap if a major earthquake (which is supposedly long overdue) were to strike California. Have you seen what Tokyo looks like? http://i.imgur.com/a4GQL.jpg Don't give me that bullshit.

Actually, that photo is a little misleading. Sure, there are some tall buildings in Tokyo, but for a city that size the number of skyscraper class buildings is actually quite low. Tokyo is more an endless sprawl of lowrises and single family dwellings.
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