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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

#241

Post by nathanaldensr »

array_key_first wrote: post #231
wallst07 wrote: post #168

Earlier quoted context omitted.

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.

From a cost perspective, it is solved. The communists solved it a long time ago. Build more, denser housing that is therefore much cheaper per-unit. We don't do that because of people's preferences, and more importantly their will to force their preferences on others. But, it is solved.

Unfortunately, housing is not merely treated as a cost issue for most people. Where we live is a social and even spiritual experience. We're not bugs that mindlessly perform our economic duty and then return to our hole. We're human beings who like space, freedom, and the ability to control our surroundings.

Re: San Diego rents declined following surge in supply

#242

Post by underlipton »

marssaxman wrote: post #221
underlipton wrote: post #187

Earlier quoted context omitted.

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…

The whole point of this article is that building tons of new "luxury" units actually did lower rents , moving the needle exactly as predicted. The zoning code in the location of your anecdote must be completely suffocating, or that developer would not have left so much money on the table by failing to add more units. Where I live, a developer recently tore down the cheap, shitty house on the corner and built not one…

See https://news.ycombinator.com/item?id=47858770

It's not traditional development lowering rates. Think about the math. You've replaced two cheap homes with twenty seven "luxury" homes. How would that lower the average price? You've weighted the average rate with an order of magnitude more samples on the top half of the range. The only way to see a drop is for there to be a precipitous drop in low-end rates, or a significant increase in low-end, non-traditional development. I think it's the latter, because California has uniquely supportive ADU policy, and implemented it on a timeline that tracks with the rate decreases.

EDIT: Also the end of ZIRP and refinancing finally coming around.

Oh, wouldn't it be funny if lower rates had nothing to do with building volume, and everything to do with landlords having to pull units out of warehousing because their interest rates increased recently?

Re: San Diego rents declined following surge in supply

#243

Post by underlipton »

TheCoelacanth wrote: post #203
underlipton wrote: post #187

Earlier quoted context omitted.

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 spa…

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

DC. And when there are more units afterwards, they're luxury. Building more units doesn't magically lower rates; it has to drive landlords of older units to lower their rates. Did that actually happen? You'd have to prove it. Something else could have, like increased non-traditional competition or the end of ZIRP and refinancing horizons coming to bear.

Re: San Diego rents declined following surge in supply

#244

Post by tharmas »

jareklupinski wrote: post #179
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?!?

you're not the one with stuff to reconcile simply ask the people on the vested side: "why do you want rents to stay high?" and stand back

A house next door to me sat vacant for 4 years here in Vancouver. The owner couldn't sell at the asking price. The owner never lived in the house himself ever. He couldn't lower the price because then he would be losing money (selling it for less than what he bought it for).

Over that 4 year period, immigration to Canada dropped dramatically.

It just recently sold for slightly lower than the asking price (but slightly more than what the owner had bought it for 4 years prior). It was sold to a new immigrant to Canada. At least the new owner is actually living in it.

Why would developers want to build so much supply that the price drops?

Re: San Diego rents declined following surge in supply

#245

Post by tharmas »

underlipton wrote: post #242
marssaxman wrote: post #221

Earlier quoted context omitted.

The whole point of this article is that building tons of new "luxury" units actually did lower rents , moving the needle exactly as predicted. The zoning code in the location of your anecdote must be completely suffocating, or that developer would not have left so much money on the table by failing to add more units. Where I live, a developer recently tore down the cheap, shitty house on the corner and built not one…

See https://news.ycombinator.com/item?id=47858770 It's not traditional development lowering rates. Think about the math. You've replaced two cheap homes with twenty seven "luxury" homes. How would that lower the average price? You've weighted the average rate with an order of magnitude more samples on the top half of the range. The only way to see a drop is for there to be a precipitous drop in low-end rates, or a si…

Thank you. Too many people genuinely believe it is a simple supply and demand problem. Housing is a much more complicated "commodity" than people want to concede.

Re: San Diego rents declined following surge in supply

#246

Post by TheCoelacanth »

underlipton wrote: post #243
TheCoelacanth wrote: post #203

Earlier quoted context omitted.

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 spa…

>Where do you see developers buying up units to tear them down and replace them with the same number of units? DC. And when there are more units afterwards, they're luxury. Building more units doesn't magically lower rates; it has to drive landlords of older units to lower their rates. Did that actually happen? You'd have to prove it. Something else could have, like increased non-traditional competition or the end of…

That's nonsense. DC has gone from 297k housing units in 2010 to 369k housing units in 2024[1][2].

Developments generally involve more units than what they are replacing.

[1] https://www.census.gov/data/tables/time-series/demo/popest/i...

[2] https://www.census.gov/data/datasets/time-series/demo/popest...

Re: San Diego rents declined following surge in supply

#247

Post by underlipton »

TheCoelacanth wrote: post #246
underlipton wrote: post #243

Earlier quoted context omitted.

>Where do you see developers buying up units to tear them down and replace them with the same number of units? DC. And when there are more units afterwards, they're luxury. Building more units doesn't magically lower rates; it has to drive landlords of older units to lower their rates. Did that actually happen? You'd have to prove it. Something else could have, like increased non-traditional competition or the end of…

That's nonsense. DC has gone from 297k housing units in 2010 to 369k housing units in 2024[1][2]. Developments generally involve more units than what they are replacing. [1] https://www.census.gov/data/tables/time-series/demo/popest/i... [2] https://www.census.gov/data/datasets/time-series/demo/popest...

Row houses often become more expensive row houses. It may not be the bulk of "new" housing in DC, but you asked where it happens, and that's where. So, chill.

In any case, gentrification, infamously kicked thousands of families out of projects, subsidized housing, and regular rentals, replacing them with... definitely not affordable housing. Rent has only gone up. And unless you're a builder, the goal is not building, it's only a means to the end of putting people in affordable homes. If building isn't doing that, it's a policy failure, and other avenues need to be pursued.

Re: San Diego rents declined following surge in supply

#248

Post by xtiansimon »

ProfessorLayton wrote: post #227
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.

>right after you knock down the 100 yro Victorian homes and historic buildings BS, there's ~400K housing units in SF, and only ~10k of those would be considered victorian. These units couldn't (And shouldn't!) be destroyed for new housing because they're protected, and that's not what NIMBY's or YIMBY's are arguing about anyway since almost everyone loves victorian homes. More than half of the city's housing was buil…

> “west side”

Build around Golden Gate Park just like NYC’s Central Park! Great idea.

Re: San Diego rents declined following surge in supply

#249

Post by ProfessorLayton »

xtiansimon wrote: post #248
ProfessorLayton wrote: post #227

Earlier quoted context omitted.

>right after you knock down the 100 yro Victorian homes and historic buildings BS, there's ~400K housing units in SF, and only ~10k of those would be considered victorian. These units couldn't (And shouldn't!) be destroyed for new housing because they're protected, and that's not what NIMBY's or YIMBY's are arguing about anyway since almost everyone loves victorian homes. More than half of the city's housing was buil…

> “west side” Build around Golden Gate Park just like NYC’s Central Park! Great idea.

Ah yes, Golden Gate Park, famously the only option for building new housing on the west side of SF!

Re: San Diego rents declined following surge in supply

#250

Post by array_key_first »

nathanaldensr wrote: post #241
array_key_first wrote: post #231

Earlier quoted context omitted.

From a cost perspective, it is solved. The communists solved it a long time ago. Build more, denser housing that is therefore much cheaper per-unit. We don't do that because of people's preferences, and more importantly their will to force their preferences on others. But, it is solved.

Unfortunately, housing is not merely treated as a cost issue for most people. Where we live is a social and even spiritual experience. We're not bugs that mindlessly perform our economic duty and then return to our hole. We're human beings who like space, freedom, and the ability to control our surroundings.

Some people like those things but it's a matter of perspective. The American point of view of sprawling suburbs and automobiles is just one perspective on freedom. To many, it is not freedom. Having to drive a car is not freedom. Having to commute huge distances is not freedom. Having to live in isolated homes is not freedom. Etc.

There's no right or wrong answer, and I take issue with the notion that however our culture is setup now is the correct way. Clearly, it's not, because many (most?) people are unhappy.

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