Earlier quoted context omitted.
The very fact that such a a place like SF has such a high cost of living is the problem. I recently just came back from Tokyo, truly a world class city with multiple times the population density of SF and the highest city GDP in the world: http://en.wikipedia.org/wiki/List_of_cities_by_GDP You know what? Cost of living there is actually CHEAPER than here, food, transportation, hell, even housing is cheaper than the j…
Arguably, but that doesn't mean you can ignore it, or that the increase in cost of projects due to a higher cost of labor is a sign if mismanagement of those projects. If you would like to propose an intervention targeted at reducing the cost of living in SF, I'll certainly listen though I won't promise I'll agree.
After the 70s California voters voted against raising property tax, the government had to get most of their revenue from income-tax, thus the highest state income tax in the country. Due to this, California government income fluctuates a lot with the economy (as we saw from 2008-2009), but that's a different topic.
One thing about property tax law in California is that it's calculated based on how much one paid for property, not its current worth.
The problem with low property tax is that when combined with federal tax incentive for housing mortgage and a cheap rate, it makes sense to invest in housing, and having the value going up does not punish the home owners like places with higher property taxes or places that calculate property tax based on the current values of the properties.
The end result is that existing homeowners in California are very much against new development since they've got a "I've gotten mine, so fuck you" mentality since they want to keep their existing properties valuable, and this is ESPECIALLY true for owners that own multiple properties that can use it for rental.
Imagine you bought a few apartment complexes in SF right after the recession back in the 90s, the places would be worth multiple times as much now but your property tax has not gone up, but you can charge $3k for a small one bedroom apartment, then you'd vote with all your power to make sure new development and new supply for housing is stalled.
This is one of the reasons why direct democracy doesn't work, since people are very short sighted when voting for important issues that could have long lasting effects. A suggested solution would be lower income tax, but make property tax to be calculated off existing values of properties, thus thwart artificial inflation of property values. Of course things like this will NEVER get passed since no politicians dare to piss off existing homeowners.
To be honest, I am personally pessimistic about this state's ability to change for the better, a big reason being the state's obsession with direct democracy that resulted in many bad policies in the past.