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San Diego rents declined following surge in supply

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Re: San Diego rents declined following surge in supply

#201

Post by rootusrootus »

imtringued wrote: post #155
rootusrootus wrote: post #50

Earlier quoted context omitted.

I have to guess it’s along similar lines to the claim that additional road capacity leads to more congestion.

The problem with roads is that cars are really really inefficient and drivers don't have to pay for the road, so a driver can extract government subsidies by driving more. You run into the same problem with free or heavily subsidized public transit. The trains were crowded in Germany when the government instated a temporary 9€ ticket for all public transit (buses, subway, tram, regional trains, etc) in all cities.

> drivers don't have to pay for the road

It is more complicated than that, for sure. I definitely pay for the roads in my city. And I pay for the mass transit in my city despite almost never using it.

It does not seem controversial that if you raise the cost for something, less people will make that choice. That does not mean that the underlying demand actually did not exist to begin with. If you made the cost zero, you would find the real demand.

Re: San Diego rents declined following surge in supply

#202

Post by rootusrootus »

bombcar wrote: post #139
rootusrootus wrote: post #50

Earlier quoted context omitted.

I have to guess it’s along similar lines to the claim that additional road capacity leads to more congestion.

The concept of "pent up demand" seems to be incomprehensible to some.

Yeah it seems like there is a widely held belief that people are freeloaders looking for any opportunity to take something they perceive to be free, so they go do things they would not otherwise do. A much simpler explanation is that when the cost is low they do what they wanted/needed to do, and when the cost pushes the ROI too low they do without something, or find a workaround. The demand is still there, just unmet.

Re: San Diego rents declined following surge in supply

#203

Post by TheCoelacanth »

underlipton wrote: post #187
vkou wrote: post #86

Earlier quoted context omitted.

Easily. Many of those people have a correct observation in that new construction is just luxury housing, which is obviously unaffordable for people struggling with rent. What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.

This is the common refrain, however, consider: There were two shitty, cheap units. The people in the first were forced to move out when a developer bought it, tore it down, and built the luxury unit. They have been homeless/going into debt renting a third slightly-less-shitty third unit. Without the first shitty, cheap unit, the second's competition was that third slightly-less-shitty unit; they raised their prices c…

Where do you see developers buying up units to tear them down and replace them with the same number of units?

When I see properties getting redeveloped it's usually a tiny house getting replaced with an apartment building. Often it's a strip mall or surface parking lot that wasn't housing anyone getting replaced.

I don't think I've ever seen a redevelopment that doesn't significantly increase the amount of living space.

Re: San Diego rents declined following surge in supply

#204

Post by klooney »

xtiansimon wrote: post #182
bombcar wrote: post #135

Earlier quoted context omitted.

Frisco (come at me) rent and housing prices have way more to do with the valuation of the latest startup darling than with much else.

SF (only acceptable abbreviation) is 7x7 miles square surrounded by water on three sides—the only way to grow is up, right after you knock down the 100 yro Victorian homes and historic buildings, and gut the neighborhood charms. This from someone who once paid rent 1300/mo for a two bedroom in Potrero Hill.

Just turn SOMA into Hong Kong

Re: San Diego rents declined following surge in supply

#205

Post by TheCoelacanth »

wallst07 wrote: post #168
mcdeltat wrote: post #146

Earlier quoted context omitted.

God most of the "discussion" around housing is such copium by obviously-biased people trying to convince everyone that we shouldn't have access to high quality housing. Yes, in the year 2026, despite all of humanity's achievements, it's of course IMPOSSIBLE to configure any type of society such that housing is decent and fair for all. IMPOSSIBLE, did you hear? Nope, it just won't work. Whatever your reason, you're wr…

You say this like it is such a obvious problem to solve, and from a naive point of view, maybe so. But each of the reasons why things the way they are isn't just stupidity. It's backed by people's preferences for living. EVERYONE is extremely opinionated on housing because it affects us the most (air/food/water/shelter...) . We all have something to say about where we live or have lived and the pros/cons.

It is. It's incredibly obvious that building more housing increases the amount of housing available.

Re: San Diego rents declined following surge in supply

#206

Post by bombcar »

klooney wrote: post #204
xtiansimon wrote: post #182

Earlier quoted context omitted.

SF (only acceptable abbreviation) is 7x7 miles square surrounded by water on three sides—the only way to grow is up, right after you knock down the 100 yro Victorian homes and historic buildings, and gut the neighborhood charms. This from someone who once paid rent 1300/mo for a two bedroom in Potrero Hill.

Just turn SOMA into Hong Kong

At the density of Kowloon Walled City SOMA could house 2.2 million!

And we could probably do it comfortably with what we've spent on AI datacenters.

Re: San Diego rents declined following surge in supply

#207

Post by dghlsakjg »

abdullahkhalids wrote: post #58
dghlsakjg wrote: post #43

Earlier quoted context omitted.

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.

That’s completely distinct from increased supply driving down rents through market mechanisms. That process is completely independent of supply and demand in open markets.

People don’t give two shits about politically determined rent caps if rents are dropping through supply increases. I’ve lived in those places you describe and that mechanism creates market distortions that paradoxically drive rent way above the market clearing price for new entrants. In any case, none of those places place restrictions on lowering rent due to competitive pressure.

Re: San Diego rents declined following surge in supply

#209

Post by dghlsakjg »

tbrownaw wrote: post #57
ViscountPenguin wrote: post #37

Earlier quoted context omitted.

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…

Yes, but many people use geographic arbitrage to exchange their house in a supply constrained area for a house elsewhere and enough money to never have to work again. Notably, the more you can work to restrict supply once you already are in the market, the sooner you can move to Costa Rica.

If I could lobby my government to restrict other people’s use of their property in a way that would give me enough money to create a generational wealth in exchange for moving somewhere with cheaper houses, I would be very tempted to be that asshole.

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