La bohème
May 17, 2016 5:58 PM Subscribe
What is actually happening with San Francisco rental prices?
From mefi's own urban planning, history, infrastructure, transit and walkability obsessed blogger, Eric Fischer.
Some interesting take-aways:
- Overall, they went up 6.6% every year. Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago.
- The 95th percentile apartment always rents for about 2.2 times the price of the median apartment, and the 5th percentile apartment for about 1/2.2 of the price of the median apartment.
- ...the quantity of housing stock alone does not provide an explanation for the median rent in any given year, because it has only increased since 1906, while prices have gone both up and down (but mostly up). It can only be understood as an adjustment to the other economic factors
- Housing, it appears, gets expensive either when people get paid more or there are more people getting paid, and more steeply than simple linear increase
Data here. Replication here. And a sort of lay person's summary and another.
From mefi's own urban planning, history, infrastructure, transit and walkability obsessed blogger, Eric Fischer.
Some interesting take-aways:
- Overall, they went up 6.6% every year. Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago.
- The 95th percentile apartment always rents for about 2.2 times the price of the median apartment, and the 5th percentile apartment for about 1/2.2 of the price of the median apartment.
- ...the quantity of housing stock alone does not provide an explanation for the median rent in any given year, because it has only increased since 1906, while prices have gone both up and down (but mostly up). It can only be understood as an adjustment to the other economic factors
- Housing, it appears, gets expensive either when people get paid more or there are more people getting paid, and more steeply than simple linear increase
Data here. Replication here. And a sort of lay person's summary and another.
Plotting that data on a logarithmic axis makes the situation look far less catastrophic than it is.
No, but it definitely is the right kind of graph to show that the percent rate of change did not accelerate OR decelerate in relation to the establishment of rent control. Rent control is definitely a red herring in the affordability debate.
posted by chimaera at 6:12 PM on May 17, 2016 [8 favorites]
No, but it definitely is the right kind of graph to show that the percent rate of change did not accelerate OR decelerate in relation to the establishment of rent control. Rent control is definitely a red herring in the affordability debate.
posted by chimaera at 6:12 PM on May 17, 2016 [8 favorites]
Wages have been increasing exponentially, just like anything else that compounds yearly. A logarithmic graph is the only way to capture this properly(in a way that humans can quickly comprehend).
posted by Yowser at 6:17 PM on May 17, 2016 [1 favorite]
posted by Yowser at 6:17 PM on May 17, 2016 [1 favorite]
One of the findings though looks like that higher wages equate to even higher rents:
a 1% increase in wages means a 1.74% increase in rent
The more people get paid, the more of it goes to the landlords.
posted by Zalzidrax at 6:23 PM on May 17, 2016 [13 favorites]
a 1% increase in wages means a 1.74% increase in rent
The more people get paid, the more of it goes to the landlords.
posted by Zalzidrax at 6:23 PM on May 17, 2016 [13 favorites]
My personal take away is we need a super high tax rate on the top earners. Use those taxes to subsidize housing and you're both lowering average income for the region (thereby lowering average rents) and paying for housing stock for the people too poor to afford anything in a high-priced market like ours.
posted by latkes at 6:31 PM on May 17, 2016 [5 favorites]
posted by latkes at 6:31 PM on May 17, 2016 [5 favorites]
This may be a really profound -- and empirical -- argument against Universal Basic Income, since it appears that any extra income will simply be diverted to property owners in the form of higher rents.
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters. Naturally, this will have tremendous side effects.
Regardless, it probably won't happen, so oh well.
posted by Tyrant King Porn Dragon at 6:33 PM on May 17, 2016 [31 favorites]
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters. Naturally, this will have tremendous side effects.
Regardless, it probably won't happen, so oh well.
posted by Tyrant King Porn Dragon at 6:33 PM on May 17, 2016 [31 favorites]
My personal take away is we need a super high tax rate on the top earners. Use those taxes to subsidize housing and you're both lowering average income for the region (thereby lowering average rents) and paying for housing stock for the people too poor to afford anything in a high-priced market like ours.
posted by latkes at 6:31 PM on May 17 [+] [!]
Maybe. It also provides landlords a tremendous dis-incentive to build new housing. Why should they build an $80 million apartment complex when (say) two-thirds of their income from the property is just going to be taken away? It would make more sense for them to just stuff the $80 million in an overseas hedge fund.
Then, if you want to solve that problem, you've got to start talking about currency controls, and then you've got Venezuela on your hands...
posted by Tyrant King Porn Dragon at 6:36 PM on May 17, 2016 [2 favorites]
posted by latkes at 6:31 PM on May 17 [+] [!]
Maybe. It also provides landlords a tremendous dis-incentive to build new housing. Why should they build an $80 million apartment complex when (say) two-thirds of their income from the property is just going to be taken away? It would make more sense for them to just stuff the $80 million in an overseas hedge fund.
Then, if you want to solve that problem, you've got to start talking about currency controls, and then you've got Venezuela on your hands...
posted by Tyrant King Porn Dragon at 6:36 PM on May 17, 2016 [2 favorites]
It's a heroic work of data collection. But it's important to note (again) that correlation is not the same as causation, so please don't take any of the causal claims seriously.
This model offers zero information on the effects of changing the employment rates, wages, or available housing, etc.. So while I applaud the data collection and modeling effort, the post and its interpretations for the future have zero grounding in the actual data.
posted by honest knave at 6:37 PM on May 17, 2016 [1 favorite]
This model offers zero information on the effects of changing the employment rates, wages, or available housing, etc.. So while I applaud the data collection and modeling effort, the post and its interpretations for the future have zero grounding in the actual data.
posted by honest knave at 6:37 PM on May 17, 2016 [1 favorite]
It's fun to say, again and again (as people do) that correlation is not the same as causation. But is there any way for humans to determine causation except by careful and targeted correlation of factors? No. Correlation is the only tool we have. honest knave: do you have other data that could help narrow down the correlations so we can be more sure of trusting them?
posted by koeselitz at 6:42 PM on May 17, 2016 [12 favorites]
posted by koeselitz at 6:42 PM on May 17, 2016 [12 favorites]
San Francisco has made it's bed: they refuse to build more than a pittance of new housing -- affordable or otherwise -- even though the population would triple in a decade if they did. Same goes for Palo Alto, etc... Silicon Valley, from Golden Gate Park to San Jose should be packed full of people. Instead it's full of suburban tract homes and people stuck in traffic. The place is a hellscape and if it all fell into the San Andreas Fault the world could finally move on from the myth that sourdough and mobile apps are only good when made within 20 miles of Moffett Field.
posted by mikewebkist at 6:43 PM on May 17, 2016 [37 favorites]
posted by mikewebkist at 6:43 PM on May 17, 2016 [37 favorites]
Tyrant King Porn Dragon: "It also provides landlords a tremendous dis-incentive to build new housing. Why should they build an $80 million apartment complex when (say) two-thirds of their income from the property is just going to be taken away?"
Your premise here - that higher upper-income taxation disincentivizes growth and prompts wealthy would-be developers to drop their plans and just invest in hedge funds instead - is not well supported by data. Even aside from the fact that people who tend to develop land are likely to keep developing land, simply because that's what they've found success at, regardless of the tax rates, especially if they're already wealthy - generally speaking, there is no data to firmly support the view that taxation in general harms growth, or that dropping taxation prompts growth. Yes, if we taxes the upper bracket at 90% or something, we'd probably see some disincentivization (and probably more tax finagling) - but within the bounds of reason and relatively normal increases in upper-bracket taxes, there is no historical precedent for increases in taxation stifling growth.
posted by koeselitz at 6:59 PM on May 17, 2016 [12 favorites]
Your premise here - that higher upper-income taxation disincentivizes growth and prompts wealthy would-be developers to drop their plans and just invest in hedge funds instead - is not well supported by data. Even aside from the fact that people who tend to develop land are likely to keep developing land, simply because that's what they've found success at, regardless of the tax rates, especially if they're already wealthy - generally speaking, there is no data to firmly support the view that taxation in general harms growth, or that dropping taxation prompts growth. Yes, if we taxes the upper bracket at 90% or something, we'd probably see some disincentivization (and probably more tax finagling) - but within the bounds of reason and relatively normal increases in upper-bracket taxes, there is no historical precedent for increases in taxation stifling growth.
posted by koeselitz at 6:59 PM on May 17, 2016 [12 favorites]
koeselitz: great question.
>> Correlation is the only tool we have. honest knave: do you have other data that could help narrow down the correlations so we can be more sure of trusting them?
It's not an issue of narrowing down the correlation. This method simply is not capable of offering causal knowledge, however we might yearn for or need that knowledge. It's the wrong tool for the job.
Fortunately, in statistics and economics, we actually have a wide range of techniques for estimating causation. Here's why it matters.
Let's start with this particular model. It predicts median rent based on the number of housing units, employment numbers, and wage information. The model is arguably rather good at predicting median rent. But does that mean that the number of housing units, employment numbers, or wages CAUSE the rent? Certainly not. It just means that they go up and down together -- some other factor may be influencing all of them at the same time, or they may be in some kind of feedback loop that this model doesn't explain.
There are a few other weaknesses. Firstly, it only looks at one city. Secondly, the basic linear model he uses assumes that every year is independent from the other years, which is false. Thirdly, even within San Francisco, it doesn't account for geography. We know that regional differences are important, and that economies have geographic spillover effects; surely wages, housing supply, and employment in the bay area as a whole is also connected to housing prices in San Francisco.
Most importantly, the model doesn't test any theories about what would happen if you artificially changed one of those factors by force. It simply has no information about that possibility.
In statistics, we have two basic techniques for inferring causality.
- An experiment, where you actually force a change in several cities and see what happens. Such experiments should be randomized, to deal with the possibility that some unobserved factor was actually shaping your results
- A natural experiment
--- 1) where something independent in the world (like weather patterns) accidentally forced certain towns to change housing availability (an earthquake or hurricane might do this)
--- 2) where someone did force the change onto some cities, but not randomly, and where you're able to build a comparison group that is identical in every way to the cities that got the change
Without some external force actually changing these things independently from everything else, it's just not possible to make causal claims.
posted by honest knave at 7:02 PM on May 17, 2016 [9 favorites]
>> Correlation is the only tool we have. honest knave: do you have other data that could help narrow down the correlations so we can be more sure of trusting them?
It's not an issue of narrowing down the correlation. This method simply is not capable of offering causal knowledge, however we might yearn for or need that knowledge. It's the wrong tool for the job.
Fortunately, in statistics and economics, we actually have a wide range of techniques for estimating causation. Here's why it matters.
Let's start with this particular model. It predicts median rent based on the number of housing units, employment numbers, and wage information. The model is arguably rather good at predicting median rent. But does that mean that the number of housing units, employment numbers, or wages CAUSE the rent? Certainly not. It just means that they go up and down together -- some other factor may be influencing all of them at the same time, or they may be in some kind of feedback loop that this model doesn't explain.
There are a few other weaknesses. Firstly, it only looks at one city. Secondly, the basic linear model he uses assumes that every year is independent from the other years, which is false. Thirdly, even within San Francisco, it doesn't account for geography. We know that regional differences are important, and that economies have geographic spillover effects; surely wages, housing supply, and employment in the bay area as a whole is also connected to housing prices in San Francisco.
Most importantly, the model doesn't test any theories about what would happen if you artificially changed one of those factors by force. It simply has no information about that possibility.
In statistics, we have two basic techniques for inferring causality.
- An experiment, where you actually force a change in several cities and see what happens. Such experiments should be randomized, to deal with the possibility that some unobserved factor was actually shaping your results
- A natural experiment
--- 1) where something independent in the world (like weather patterns) accidentally forced certain towns to change housing availability (an earthquake or hurricane might do this)
--- 2) where someone did force the change onto some cities, but not randomly, and where you're able to build a comparison group that is identical in every way to the cities that got the change
Without some external force actually changing these things independently from everything else, it's just not possible to make causal claims.
posted by honest knave at 7:02 PM on May 17, 2016 [9 favorites]
"It also provides landlords a tremendous dis-incentive to build new housing." or "people who tend to develop land are likely to keep developing land".
Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing.
posted by mikewebkist at 7:06 PM on May 17, 2016 [3 favorites]
Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing.
posted by mikewebkist at 7:06 PM on May 17, 2016 [3 favorites]
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters.
it's called communism.
posted by ennui.bz at 7:07 PM on May 17, 2016 [10 favorites]
it's called communism.
posted by ennui.bz at 7:07 PM on May 17, 2016 [10 favorites]
Yes, if we taxes the upper bracket at 90% or something, we'd probably see some disincentivization (and probably more tax finagling) - but within the bounds of reason and relatively normal increases in upper-bracket taxes, there is no historical precedent for increases in taxation stifling growth.
Also don't ignore the value of disincentivising the upper bracket. Let the lower brackets have some of that opportunity. The rich not only soak up all the money they soak up almost all of the opportunities to make money. If they decide to stop taking them up those opportunities don't vanish. Other people will take them until they decide the return isn't worth it and then someone else will and so on.
Bill Gates may not pick $100 bills off the ground because it's not worth his time if he is going to pay $90 in taxes but I certainly will even I only get $10.
posted by srboisvert at 7:11 PM on May 17, 2016 [15 favorites]
Also don't ignore the value of disincentivising the upper bracket. Let the lower brackets have some of that opportunity. The rich not only soak up all the money they soak up almost all of the opportunities to make money. If they decide to stop taking them up those opportunities don't vanish. Other people will take them until they decide the return isn't worth it and then someone else will and so on.
Bill Gates may not pick $100 bills off the ground because it's not worth his time if he is going to pay $90 in taxes but I certainly will even I only get $10.
posted by srboisvert at 7:11 PM on May 17, 2016 [15 favorites]
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters.
If two people are bidding up the price of one house, the solution is not to take money from the seller . The solution is to let someone BUILD A SECOND HOUSE.
posted by mikewebkist at 7:12 PM on May 17, 2016 [7 favorites]
If two people are bidding up the price of one house, the solution is not to take money from the seller . The solution is to let someone BUILD A SECOND HOUSE.
posted by mikewebkist at 7:12 PM on May 17, 2016 [7 favorites]
I will never understand the common American dislike of 4-6 story apartments buildings when those same people will spend thousands of dollars to go to Paris, and wish they could live like that.
I mean, yeah, institutional racism, but still.
posted by Automocar at 7:28 PM on May 17, 2016 [17 favorites]
I mean, yeah, institutional racism, but still.
posted by Automocar at 7:28 PM on May 17, 2016 [17 favorites]
mikewebkist: "Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing."
Ha. Silicon Valley, eh? Tipping our hand a bit, aren't we?
Regardless, as the linked article points out, housing has grown in San Francisco every year since 1906, so it's clearly not true that it's flatly "not allowed." So do you disagree with the linked article that there must be some factor besides supply that accounts for rising prices? Or do you take issue with its facts? Or are you so weary with the argument and so sick of dealing with pointless regulations and silly rhetoric that you don't want to wade through another piece about it? (Which would be admittedly understandable.)
posted by koeselitz at 7:29 PM on May 17, 2016
Ha. Silicon Valley, eh? Tipping our hand a bit, aren't we?
Regardless, as the linked article points out, housing has grown in San Francisco every year since 1906, so it's clearly not true that it's flatly "not allowed." So do you disagree with the linked article that there must be some factor besides supply that accounts for rising prices? Or do you take issue with its facts? Or are you so weary with the argument and so sick of dealing with pointless regulations and silly rhetoric that you don't want to wade through another piece about it? (Which would be admittedly understandable.)
posted by koeselitz at 7:29 PM on May 17, 2016
Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing.
This is ignorant and just plain false. Redwood City, pursuant to its General Plan and Downtown Precise Plan, has added hundreds of units of housing (and several major, transit-accessible businesses) in the last ~5 years, and is in the process of adding several hundred more. One low-rise building is being demolished right now (I can see it from my office) to be replaced by a 6+ story building with both housing and street-level businesses.
It's obvious you don't like this place but at least get your facts straight.
posted by Joey Buttafoucault at 7:33 PM on May 17, 2016 [3 favorites]
This is ignorant and just plain false. Redwood City, pursuant to its General Plan and Downtown Precise Plan, has added hundreds of units of housing (and several major, transit-accessible businesses) in the last ~5 years, and is in the process of adding several hundred more. One low-rise building is being demolished right now (I can see it from my office) to be replaced by a 6+ story building with both housing and street-level businesses.
It's obvious you don't like this place but at least get your facts straight.
posted by Joey Buttafoucault at 7:33 PM on May 17, 2016 [3 favorites]
but within the bounds of reason and relatively normal increases in upper-bracket taxes, there is no historical precedent for increases in taxation stifling growth.
posted by koeselitz at 6:59 PM on May 17 [2 favorites +] [!]
Are we talking about generic "growth" or growth in specific industries?
Because if you tax income derived from widgets at 80%, it's reasonable to expect people will make less widgets and try to find other avenues of income.
Now just replace "widgets" with "rental property".
"Growth" tells us nothing about the usage of specific products under specific taxation regimes.
posted by Tyrant King Porn Dragon at 7:34 PM on May 17, 2016
posted by koeselitz at 6:59 PM on May 17 [2 favorites +] [!]
Are we talking about generic "growth" or growth in specific industries?
Because if you tax income derived from widgets at 80%, it's reasonable to expect people will make less widgets and try to find other avenues of income.
Now just replace "widgets" with "rental property".
"Growth" tells us nothing about the usage of specific products under specific taxation regimes.
posted by Tyrant King Porn Dragon at 7:34 PM on May 17, 2016
But nobody said anything about taxing top earners in certain industries - we've only been talking about taxing top earners across the board. This is, in fact, how income taxes in the United States work, and as long as we're talking about income taxes (as far as I can tell that's what latkes meant) it's probably not going to be industry-specific. Are you thinking of a tax on real estate development or something like that?
posted by koeselitz at 7:39 PM on May 17, 2016 [2 favorites]
posted by koeselitz at 7:39 PM on May 17, 2016 [2 favorites]
Real estate has always enjoyed extraordinary tax advantages. A nice detail from Mad Men for the tax nerds was when Don mentioned offhand that his accountant had him buy property when the firm was sold.
Real estate has always been a tax shelter, so I don't think we can look at past marginal rates for evidence that high rates don't suppress real estate investment.
posted by jpe at 7:42 PM on May 17, 2016 [2 favorites]
Real estate has always been a tax shelter, so I don't think we can look at past marginal rates for evidence that high rates don't suppress real estate investment.
posted by jpe at 7:42 PM on May 17, 2016 [2 favorites]
So do you disagree with the linked article that there must be some factor besides supply that accounts for rising prices?
Of course! Detroit isn't building any new houses either, and their prices are dropping! The other factor is that people want to move there! The heart of the most vibrant, high-paying, high-status industry in the world has like 10% more people living there today than it did in 1950. Demand is outstripping supply by orders of magnitude.
It's right there in the article: "Maybe we should be trying for 1995 [price levels] instead, when CPI-adjusted rent was half what it is now...but a 30% increase in the housing stock is not much easier to imagine."
It's only hard to imagine because the entire Bay area is under the delusion that people don't need places to live.
posted by mikewebkist at 7:50 PM on May 17, 2016 [11 favorites]
Of course! Detroit isn't building any new houses either, and their prices are dropping! The other factor is that people want to move there! The heart of the most vibrant, high-paying, high-status industry in the world has like 10% more people living there today than it did in 1950. Demand is outstripping supply by orders of magnitude.
It's right there in the article: "Maybe we should be trying for 1995 [price levels] instead, when CPI-adjusted rent was half what it is now...but a 30% increase in the housing stock is not much easier to imagine."
It's only hard to imagine because the entire Bay area is under the delusion that people don't need places to live.
posted by mikewebkist at 7:50 PM on May 17, 2016 [11 favorites]
Even at 90% tax or whatever, you're still making money. What we have been indoctrinated to believe is that the rich deserve not only to make a profit, but to make vast profits. And they should never take a loss, that is for the rest of us--the rich are surprisingly socialist in that regard.
posted by maxwelton at 7:52 PM on May 17, 2016 [16 favorites]
posted by maxwelton at 7:52 PM on May 17, 2016 [16 favorites]
In statistics, we have two basic techniques for inferring causality.
- An experiment, where you actually force a change in several cities and see what happens. Such experiments should be randomized, to deal with the possibility that some unobserved factor was actually shaping your results
- A natural experiment
In epidemiology, a largely observational statistical science, we still draw causal inference. It just takes more data, more caution, and more flexibility.
This may be a really profound -- and empirical -- argument against Universal Basic Income, since it appears that any extra income will simply be diverted to property owners in the form of higher rents.
Only if you think that the point of income is to be saved instead of spent on shelter, goods and services.
posted by gingerest at 7:57 PM on May 17, 2016 [8 favorites]
- An experiment, where you actually force a change in several cities and see what happens. Such experiments should be randomized, to deal with the possibility that some unobserved factor was actually shaping your results
- A natural experiment
In epidemiology, a largely observational statistical science, we still draw causal inference. It just takes more data, more caution, and more flexibility.
This may be a really profound -- and empirical -- argument against Universal Basic Income, since it appears that any extra income will simply be diverted to property owners in the form of higher rents.
Only if you think that the point of income is to be saved instead of spent on shelter, goods and services.
posted by gingerest at 7:57 PM on May 17, 2016 [8 favorites]
I'd quibble with the economy section of the article. He compares total wages paid in the SF with median rent in SF, and draws conclusions that rent is tied to total wages paid. He then follows that up with this statement:
Still, it's hard to argue with his conclusions:
Total wages essentially represents the product of the number of people who need housing and their average ability to pay.Maybe at a high level that's true, but it's hard to make any conclusions about SF rents based on wages paid in SF. Wages paid in the SF are not fully reflected in the people who live in SF. Highly paid employees of companies and businesses down the peninsula, into San Jose, and across the bay live in SF because they can afford it, and because of the prestige. On the flip side, service economy workers, teachers, nurses, transit employees, etc who work in SF often can't afford housing in SF. Plus, it's evident that rent as a proportion of total wages paid is climbing year on year, eating a larger and larger share of wages.
Still, it's hard to argue with his conclusions:
In the long run, San Francisco's CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably.posted by Existential Dread at 8:08 PM on May 17, 2016 [2 favorites]
By far, I think the weakest argument in the SF housing debate is the sanctity of peoples' views. I'm just not very sympathetic to the point of view that sightlines are an essential part of the city's character.
Say you live in a beautiful rent-controlled apartment in the heart of the Mission District. Say someone erects a highrise across the street from you, destroying your once-lovely view of Twin Peaks. Yeah, it would suck, but you'd still live there. You're not going to move.
SF is a textbook case of preservationism gone wrong. It's like yeah, great. You've preserved some pretty-looking buildings with enviable sightlines. But now only the richest people can afford to live there. So, congratulations, you've saved some buildings. Yaaay.
I wouldn't be opposed to a general increase in the density of the city. Say they adjusted the height limit along Mission Street from 3 stories or whatever to 8. Say you required developers so set aside a adequate portion of their units for below-market-rate rents. The buildings along Mission Street are not architectural marvels. They won't be missed. And don't get me started on the seismic shoeboxes that comprise much of the Richmond and the Sunset.
It's the people that make the city, not the buildings.
posted by panama joe at 8:13 PM on May 17, 2016 [9 favorites]
Say you live in a beautiful rent-controlled apartment in the heart of the Mission District. Say someone erects a highrise across the street from you, destroying your once-lovely view of Twin Peaks. Yeah, it would suck, but you'd still live there. You're not going to move.
SF is a textbook case of preservationism gone wrong. It's like yeah, great. You've preserved some pretty-looking buildings with enviable sightlines. But now only the richest people can afford to live there. So, congratulations, you've saved some buildings. Yaaay.
I wouldn't be opposed to a general increase in the density of the city. Say they adjusted the height limit along Mission Street from 3 stories or whatever to 8. Say you required developers so set aside a adequate portion of their units for below-market-rate rents. The buildings along Mission Street are not architectural marvels. They won't be missed. And don't get me started on the seismic shoeboxes that comprise much of the Richmond and the Sunset.
It's the people that make the city, not the buildings.
posted by panama joe at 8:13 PM on May 17, 2016 [9 favorites]
SF was the original stomping grounds of Henry George.
http://www.wealthandwant.com/themes/The_Cat.html
Things were pretty bad real estate-wise, even 150 years ago. Real Estate does that, it pushes you out to the margin, takes all you can afford, and then more.
The 19th century -- outside of the brief "Greenback" era -- didn't have (wage) inflation to bail out borrowers.
The 20th century did:
https://research.stlouisfed.org/fred2/graph/?g=4pfp
but 5%+ annual pay rises only lasted from the late 60s until they put Volcker in charge.
http://qz.com/169767/the-century-old-solution-to-end-san-franciscos-class-warfare/
posted by Heywood Mogroot III at 8:14 PM on May 17, 2016 [4 favorites]
http://www.wealthandwant.com/themes/The_Cat.html
Things were pretty bad real estate-wise, even 150 years ago. Real Estate does that, it pushes you out to the margin, takes all you can afford, and then more.
The 19th century -- outside of the brief "Greenback" era -- didn't have (wage) inflation to bail out borrowers.
The 20th century did:
https://research.stlouisfed.org/fred2/graph/?g=4pfp
but 5%+ annual pay rises only lasted from the late 60s until they put Volcker in charge.
http://qz.com/169767/the-century-old-solution-to-end-san-franciscos-class-warfare/
posted by Heywood Mogroot III at 8:14 PM on May 17, 2016 [4 favorites]
My personal take away is we need a super high tax rate on the top earners. Use those taxes to subsidize housing and you're both lowering average income for the region (thereby lowering average rents) and paying for housing stock for the people too poor to afford anything in a high-priced market like ours.
I am inclined to agree. For lack of better opportunities to invest in, capital ends up getting funneled into real estate, which is a low-productivity investment, and ends up further monopolizing wealth of a limited resource (land). That itself them compounds upon itself because incumbent owners then have an incentive to restrict development.
Housing is one of those things that needs to be treated like a public utility: it can be private, but the idea must be that it has to be available to all people at all times at an affordable price.
Housing, like education, is a low-productivity, non-scalable industry. You're never going to be able to house 10 times the people at 1/10th the cost in 1/10th the amount of time, but everyone will always need it. Private capital buys up real estate to make money by (literally) collecting rents and will always try to capture of much of their tenants' incomes as is possible. The interests of current owners and future residents are always going to be in conflict, so we need a solution that will probably be a combination of public infrastructure building and private investment that provides steady, but limited and capped returns on their investments.
posted by deanc at 8:23 PM on May 17, 2016 [16 favorites]
I am inclined to agree. For lack of better opportunities to invest in, capital ends up getting funneled into real estate, which is a low-productivity investment, and ends up further monopolizing wealth of a limited resource (land). That itself them compounds upon itself because incumbent owners then have an incentive to restrict development.
Housing is one of those things that needs to be treated like a public utility: it can be private, but the idea must be that it has to be available to all people at all times at an affordable price.
Housing, like education, is a low-productivity, non-scalable industry. You're never going to be able to house 10 times the people at 1/10th the cost in 1/10th the amount of time, but everyone will always need it. Private capital buys up real estate to make money by (literally) collecting rents and will always try to capture of much of their tenants' incomes as is possible. The interests of current owners and future residents are always going to be in conflict, so we need a solution that will probably be a combination of public infrastructure building and private investment that provides steady, but limited and capped returns on their investments.
posted by deanc at 8:23 PM on May 17, 2016 [16 favorites]
It's obvious you don't like this place but at least get your facts straight.
Yes but there are dozens of municipalities in "Silicon Valley" and what is needed is not for RWC to build a few hundred units, it is for every tiny little fiefdom down there to build thousands of units for the thousands of jobs that they are happy to take in but not build any housing for. They are offsetting their responsibility to build housing for the people who work down there onto SF, which is surrounded by water on 3 sides, and the East Bay, which is closed in by the hills. And for what? So these tiny city councils can protect their voters property values and pastoral suburban lifestyles? Fuck 'em.
I'm glad they are building housing next to Caltrain stations but it is not nearly enough.
I'm not saying SF shouldn't build more, but this is a regional problem, not a San Francisco problem. It is a lot easier to editorialize about lol-crazy-liberals-and-their-regulations than it is to address this.
posted by bradbane at 8:25 PM on May 17, 2016 [24 favorites]
Yes but there are dozens of municipalities in "Silicon Valley" and what is needed is not for RWC to build a few hundred units, it is for every tiny little fiefdom down there to build thousands of units for the thousands of jobs that they are happy to take in but not build any housing for. They are offsetting their responsibility to build housing for the people who work down there onto SF, which is surrounded by water on 3 sides, and the East Bay, which is closed in by the hills. And for what? So these tiny city councils can protect their voters property values and pastoral suburban lifestyles? Fuck 'em.
I'm glad they are building housing next to Caltrain stations but it is not nearly enough.
I'm not saying SF shouldn't build more, but this is a regional problem, not a San Francisco problem. It is a lot easier to editorialize about lol-crazy-liberals-and-their-regulations than it is to address this.
posted by bradbane at 8:25 PM on May 17, 2016 [24 favorites]
How come Google and Apple don't build housing on their campuses?
posted by latkes at 8:58 PM on May 17, 2016 [1 favorite]
posted by latkes at 8:58 PM on May 17, 2016 [1 favorite]
How come Google and Apple don't build housing on their campuses?
They don't want their employees going home.
posted by Automocar at 9:00 PM on May 17, 2016 [5 favorites]
They don't want their employees going home.
posted by Automocar at 9:00 PM on May 17, 2016 [5 favorites]
Didn't Google propose building on-site housing and Mountain View shot it down?
Last I heard they had some big new plan for North Bayshore, but it's still a giant maybe for some time far off in the future.
posted by bradbane at 9:04 PM on May 17, 2016 [4 favorites]
Last I heard they had some big new plan for North Bayshore, but it's still a giant maybe for some time far off in the future.
posted by bradbane at 9:04 PM on May 17, 2016 [4 favorites]
If the reason that rents keep increasing in cities is that cities provide the best access to jobs, then universal basic incomes would absolutely help with this problem - because people could blow off the cities entirely, move to rural Nebraska, and get by on their UBI, Medicaid, and a big garden.
It kinda seems like the most magnetic cities are reaching an "induced demand" tipping point, with more capacity (lanes, apartments) immediately filled while the burden to users (traffic, rents) stay basically the same.
posted by McBearclaw at 9:24 PM on May 17, 2016 [7 favorites]
It kinda seems like the most magnetic cities are reaching an "induced demand" tipping point, with more capacity (lanes, apartments) immediately filled while the burden to users (traffic, rents) stay basically the same.
posted by McBearclaw at 9:24 PM on May 17, 2016 [7 favorites]
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters. Naturally, this will have tremendous side effects.
This sounds to me like it's about to go to Georgism.
For my part I've wondered for a while if real estate ownership simply shouldn't exist, only a market of public leases/property taxes of various kinds (with some kind of discount increasing over time for primary residences). Do it right and you could possibly remove a significant amount of rent-seeking behavior from the system and maybe even reduce or replace income tax.
This is of course utterly politically impossible in the United States; there's too much money in and to be made off of real estate rents, and there is too little ability or will to distinguish this from totalitarian communism (which, to be fair, it would resemble closely enough on a few points in order to make the case sealed for the large portion of the population).
posted by wildblueyonder at 9:39 PM on May 17, 2016 [2 favorites]
This sounds to me like it's about to go to Georgism.
For my part I've wondered for a while if real estate ownership simply shouldn't exist, only a market of public leases/property taxes of various kinds (with some kind of discount increasing over time for primary residences). Do it right and you could possibly remove a significant amount of rent-seeking behavior from the system and maybe even reduce or replace income tax.
This is of course utterly politically impossible in the United States; there's too much money in and to be made off of real estate rents, and there is too little ability or will to distinguish this from totalitarian communism (which, to be fair, it would resemble closely enough on a few points in order to make the case sealed for the large portion of the population).
posted by wildblueyonder at 9:39 PM on May 17, 2016 [2 favorites]
Wouldn't the market-y way to make sure that all of UBI doesn't go directly to landlords be a land value tax? Or on preview, hi wildblueyonder
posted by en forme de poire at 9:41 PM on May 17, 2016 [2 favorites]
posted by en forme de poire at 9:41 PM on May 17, 2016 [2 favorites]
How come Google and Apple don't build housing on their campuses?
Because who wants to live in Cupertino and/or Mountain View?
San Francisco is forty miles from the main Google/Apple campuses. People aren't spending all that time on the 280/101 because there isn't more housing closer to the office.
Also, Apple already has something like 70% of the commercial real estate in town. If Apple provided housing for employees, the city council might as well dissolve itself and just take orders from Tim Cook.
posted by sideshow at 10:20 PM on May 17, 2016 [1 favorite]
Because who wants to live in Cupertino and/or Mountain View?
San Francisco is forty miles from the main Google/Apple campuses. People aren't spending all that time on the 280/101 because there isn't more housing closer to the office.
Also, Apple already has something like 70% of the commercial real estate in town. If Apple provided housing for employees, the city council might as well dissolve itself and just take orders from Tim Cook.
posted by sideshow at 10:20 PM on May 17, 2016 [1 favorite]
Wouldn't the market-y way to make sure that all of UBI doesn't go directly to landlords be a land value tax? Or on preview, hi wildblueyonder
Or on review, Heywood Mogroot III apparently beat us both to the punch.
posted by wildblueyonder at 10:44 PM on May 17, 2016 [1 favorite]
Or on review, Heywood Mogroot III apparently beat us both to the punch.
posted by wildblueyonder at 10:44 PM on May 17, 2016 [1 favorite]
City Observatory draws some conclusions:
posted by vibratory manner of working at 10:48 PM on May 17, 2016 [9 favorites]
In fact, this brings up a point that is often elided when we talk about places, like San Francisco, where prices have gotten totally out of control: A rapid “correction” to those prices would, in many ways, be an economic crisis. Nearly every homeowner would find themselves tens or hundreds of thousands of dollars underwater on their home, probably causing a massive region-wide foreclosure crisis; renters would also be affected, as their landlords would also be underwater or even bankrupt, many stuck with mortgages based on valuations that anticipated rents three or four times higher than their new, more reasonable levels.As someone who lives in Seattle, *laughs nervously*
In America, no democratically elected government could ever propose, let alone enact, a policy with these consequences. Rather, San Francisco’s best hope is to build enough to prevent more price increases above inflation, and maybe even keep price appreciation below inflation, so that over the coming decades prices can float down to a more reasonable level without ruining every property owner in the city—and, in the meanwhile, produce as much non-market housing as possible. (Universal housing vouchers or housing tax credits would help.)
Fischer’s work, then, might best serve as a warning to other cities: housing crises, driven in part by supply shortfalls, build up over decades—and once they’ve been going on that long, the path back down the mountain is perilous and slow.
posted by vibratory manner of working at 10:48 PM on May 17, 2016 [9 favorites]
Redwood City, pursuant to its General Plan and Downtown Precise Plan, has added hundreds of units of housing (and several major, transit-accessible businesses) in the last ~5 years, and is in the process of adding several hundred more.
Wait. Your counter argument is that a city 45 min away from SF has added "hundreds" of units over *5* years?
According to some quick googling, just in 2014 SF alone added 26,700 jobs, but only 3500 units of housing. (FYI most of the new jobs are NOT in SF.)
posted by danny the boy at 11:20 PM on May 17, 2016 [9 favorites]
Wait. Your counter argument is that a city 45 min away from SF has added "hundreds" of units over *5* years?
According to some quick googling, just in 2014 SF alone added 26,700 jobs, but only 3500 units of housing. (FYI most of the new jobs are NOT in SF.)
posted by danny the boy at 11:20 PM on May 17, 2016 [9 favorites]
Look at any major international fast-growing city like Hong Kong and Singapore and you see high-rise housing. The entire San Francisco Bay Area is scared to death of it, though. San Jose's airport location means planes land right over the city, so you'll never see much height there. The rest of Silicon Valley is relatively recentlly converted farmland into one story tilt-ups, so it just isn't in anyone's conciousness to build up. There are only a small handful of buildings over 10 stories in towns like Sunnyvale and Santa Clara, when they should be building 100 story skyscrapers.
San Francisco and Oakland are about the only places with high-rises and even there it is very hard to get them approved, even if they are for housing.
posted by eye of newt at 11:20 PM on May 17, 2016 [3 favorites]
San Francisco and Oakland are about the only places with high-rises and even there it is very hard to get them approved, even if they are for housing.
posted by eye of newt at 11:20 PM on May 17, 2016 [3 favorites]
Meanwhile I just got back from Helsinki, who are NOT adding comparably enormous amounts of new jobs, and their city goal is 5000 new units per year. You know. Just because that's how real cities work.
posted by danny the boy at 11:22 PM on May 17, 2016 [3 favorites]
posted by danny the boy at 11:22 PM on May 17, 2016 [3 favorites]
BTW the population of Helsinki is 75% that of SF.
Meanwhile in the same year NYC added... wait for it... nearly 45,000 new units.
posted by danny the boy at 11:26 PM on May 17, 2016 [1 favorite]
Meanwhile in the same year NYC added... wait for it... nearly 45,000 new units.
posted by danny the boy at 11:26 PM on May 17, 2016 [1 favorite]
Because who wants to live in Cupertino and/or Mountain View?
As mentioned already Google has been trying to get developments going in Mountain View but the city has not been fond of the idea.
posted by atoxyl at 11:54 PM on May 17, 2016 [7 favorites]
As mentioned already Google has been trying to get developments going in Mountain View but the city has not been fond of the idea.
posted by atoxyl at 11:54 PM on May 17, 2016 [7 favorites]
Then, if you want to solve that problem, you've got to start talking about currency controls, and then you've got Venezuela on your hands...
That's a bit of a stretch, isn't it? I would have hoped for more nuanced discussion on meta, though I do look forward to having Venezuela used as a status quo boogeyman for the next fifty years.
posted by Beholder at 2:37 AM on May 18, 2016 [2 favorites]
That's a bit of a stretch, isn't it? I would have hoped for more nuanced discussion on meta, though I do look forward to having Venezuela used as a status quo boogeyman for the next fifty years.
posted by Beholder at 2:37 AM on May 18, 2016 [2 favorites]
then you've got Venezuela on your hands...
That's a bit of a stretch, isn't it
That's not just a stretch, that's 'land of contrasts' hand waving. However, people should be aware that there are lots of 2nd/3rd order effects when you try to mold markets. This doesn't mean we shouldn't continue to experiment. The current situation we have isn't 'free markets' at all, it's hundreds-of-thousands-of-pages-on-cabbage-trade regulated, just for, you know, not us.
But progressive policy experimentation does go on with useful results. And this should absolutely be the approach for urban planning and housing provision. Idk if it's time to try Georgist economics or what, but cities shouldn't end up as empty glass houses, either for money (London) or debt (China). They should be places for people.
posted by Reasonably Everything Happens at 4:39 AM on May 18, 2016
That's a bit of a stretch, isn't it
That's not just a stretch, that's 'land of contrasts' hand waving. However, people should be aware that there are lots of 2nd/3rd order effects when you try to mold markets. This doesn't mean we shouldn't continue to experiment. The current situation we have isn't 'free markets' at all, it's hundreds-of-thousands-of-pages-on-cabbage-trade regulated, just for, you know, not us.
But progressive policy experimentation does go on with useful results. And this should absolutely be the approach for urban planning and housing provision. Idk if it's time to try Georgist economics or what, but cities shouldn't end up as empty glass houses, either for money (London) or debt (China). They should be places for people.
posted by Reasonably Everything Happens at 4:39 AM on May 18, 2016
I will never understand the common American dislike of 4-6 story apartments buildings when those same people will spend thousands of dollars to go to Paris, and wish they could live like that.
I mean, yeah, institutional racism, but still.
This just came up in a Chicago Mag article about well off millennials flooding the market here and the dissapearnace of two-three-four flats in favour of larger developments.
It came down to financing and landlord income stability. Lose a renter in a small building and you've lost a big percentage of your total income so you're higher risk. Need financing? It's just as much work for the bank to finance your two flat as a larger apartment building so which do they prefer (hint: the one with bigger fees!)?
Additionally, there is no prevention of downzoning multiunit properties to single units but there are approval obstacles to upzoning.
So perverse incentives from multiple sources produce an outcome that favors extremes - mansions or high rises with nothing in-between.
posted by srboisvert at 5:46 AM on May 18, 2016 [2 favorites]
I mean, yeah, institutional racism, but still.
This just came up in a Chicago Mag article about well off millennials flooding the market here and the dissapearnace of two-three-four flats in favour of larger developments.
It came down to financing and landlord income stability. Lose a renter in a small building and you've lost a big percentage of your total income so you're higher risk. Need financing? It's just as much work for the bank to finance your two flat as a larger apartment building so which do they prefer (hint: the one with bigger fees!)?
Additionally, there is no prevention of downzoning multiunit properties to single units but there are approval obstacles to upzoning.
So perverse incentives from multiple sources produce an outcome that favors extremes - mansions or high rises with nothing in-between.
posted by srboisvert at 5:46 AM on May 18, 2016 [2 favorites]
Let San Francisco go wherever it may. The sooner it turns into a fossil, the better. Sure, it kinda sucks. Efforts to keep the place affordable have also been hugely preservationist and had the opposite effect, based upon the belief that people have a right to live in the city of their choosing without regard to regular supply and demand. And end up increasingly distorting supply and demand curves against newcomers. There is no fix for this as long as SF remains a desirable place to live.
posted by 2N2222 at 6:02 AM on May 18, 2016 [3 favorites]
posted by 2N2222 at 6:02 AM on May 18, 2016 [3 favorites]
I will never understand the common American dislike of 4-6 story apartments buildings when those same people will spend thousands of dollars to go to Paris, and wish they could live like that.
I mean, yeah, institutional racism, but still.
It's not even a common dislike. It's outright illegal to build that kind of housing in most places in the US.
Street-facing 4-6 story apartment buildings have been effectively banned by residential zoning codes in almost every American city since the 1950s, or have restrictions attached to them (particularly parking minimums) that make them virtually impossible to build.
This is sad, because medium-density housing is great.
Pretty much every issue in America boils down to two things: Cars and Racism.
By the 1950s, most cities had adopted housing codes and zoning plans that effectively made car-centric development the only kind of development that could be built. Densities were decreased, parking minimums were put in place, setbacks were increased, mixed-uses were prohibited, and neighborhoods were deliberately built to be inaccessible on foot.
Some of these policies appeared well-intentioned at the time. The Depression took a hard toll on most American cities, and it was thought that much of the older construction was fundamentally unsalvageable. While this viewpoint was definitely flawed, it's easy to see why it was popular at the time.
Meanwhile, the automotive industry dismantled public transit, and lobbied to change legal codes to further entrench automobiles in American society, inventing crimes like jaywalking along the way.
Today, under these post-war zoning codes (many of which have barely been amended over time), most of our most successful and desirable neighborhoods would be impossible to build.
Here in DC, we generally have a pretty good track record on urban issues (especially compared to San Francisco). But, we only recently jettisoned our 1958 zoning code, which was really just an astonishingly hypocritical piece of legislation. There's hardly a single block in the city that's ever been in full compliance, and the most desirable neighborhoods were ironically the biggest offenders. Under the 1958 code, you would never have been able to build a neighborhood that looked remotely like Dupont Circle.
Unfortunately, the rewrite took 9 years to pass, spurred many nasty arguments, and the version that passed is pretty watered-down. Also consider again that DC has a fairly tempered NIMBY contingent, and a good track-record on race and housing. Zoning and housing codes are politically toxic in most places in the US, and no politician with any ambition of reelection will even dare to go near them. Might as well propose reparations while you're at it.
Speaking of racism....
Zoning.
American zoning laws were created expressly to promote segregation.
At first it was explicit. After that became illegal, those same policies were lightly reworded to accomplish the same goal. This is rarely acknowledged today, but is the elephant in the room that nobody wants to talk about.
Many of these 1950s housing codes seem arbitrary and pointless, because they are. Politicians at the time looked at existing segregation covenants, and figured out how to achieve the same thing under a different set of rules. Today, we just assume that those rules existed for a better reason, and homeowners crawl out of the woodwork to fight tooth-and-nail against any effort to change the status quo.
Zoning has been the ideal vehicle for citizens and politicians with bad intentions to push their policies, because it's really easy to look at demographic trends, and come up with housing rules that seem innocuous (and are therefore popular), while effectively driving away minorities. After a few years, well-intentioned citizens will be falling over themselves to fight any changes to those rules, even if the original intent becomes apparent.
tl;dr; Housing codes need to be fixed. Homeowners probably need fewer rights. Fixing any of this is going to be effectively impossible in the American political system.
posted by schmod at 6:18 AM on May 18, 2016 [35 favorites]
I mean, yeah, institutional racism, but still.
It's not even a common dislike. It's outright illegal to build that kind of housing in most places in the US.
Street-facing 4-6 story apartment buildings have been effectively banned by residential zoning codes in almost every American city since the 1950s, or have restrictions attached to them (particularly parking minimums) that make them virtually impossible to build.
This is sad, because medium-density housing is great.
Pretty much every issue in America boils down to two things: Cars and Racism.
By the 1950s, most cities had adopted housing codes and zoning plans that effectively made car-centric development the only kind of development that could be built. Densities were decreased, parking minimums were put in place, setbacks were increased, mixed-uses were prohibited, and neighborhoods were deliberately built to be inaccessible on foot.
Some of these policies appeared well-intentioned at the time. The Depression took a hard toll on most American cities, and it was thought that much of the older construction was fundamentally unsalvageable. While this viewpoint was definitely flawed, it's easy to see why it was popular at the time.
Meanwhile, the automotive industry dismantled public transit, and lobbied to change legal codes to further entrench automobiles in American society, inventing crimes like jaywalking along the way.
Today, under these post-war zoning codes (many of which have barely been amended over time), most of our most successful and desirable neighborhoods would be impossible to build.
Here in DC, we generally have a pretty good track record on urban issues (especially compared to San Francisco). But, we only recently jettisoned our 1958 zoning code, which was really just an astonishingly hypocritical piece of legislation. There's hardly a single block in the city that's ever been in full compliance, and the most desirable neighborhoods were ironically the biggest offenders. Under the 1958 code, you would never have been able to build a neighborhood that looked remotely like Dupont Circle.
Unfortunately, the rewrite took 9 years to pass, spurred many nasty arguments, and the version that passed is pretty watered-down. Also consider again that DC has a fairly tempered NIMBY contingent, and a good track-record on race and housing. Zoning and housing codes are politically toxic in most places in the US, and no politician with any ambition of reelection will even dare to go near them. Might as well propose reparations while you're at it.
Speaking of racism....
Zoning.
American zoning laws were created expressly to promote segregation.
At first it was explicit. After that became illegal, those same policies were lightly reworded to accomplish the same goal. This is rarely acknowledged today, but is the elephant in the room that nobody wants to talk about.
Many of these 1950s housing codes seem arbitrary and pointless, because they are. Politicians at the time looked at existing segregation covenants, and figured out how to achieve the same thing under a different set of rules. Today, we just assume that those rules existed for a better reason, and homeowners crawl out of the woodwork to fight tooth-and-nail against any effort to change the status quo.
Zoning has been the ideal vehicle for citizens and politicians with bad intentions to push their policies, because it's really easy to look at demographic trends, and come up with housing rules that seem innocuous (and are therefore popular), while effectively driving away minorities. After a few years, well-intentioned citizens will be falling over themselves to fight any changes to those rules, even if the original intent becomes apparent.
tl;dr; Housing codes need to be fixed. Homeowners probably need fewer rights. Fixing any of this is going to be effectively impossible in the American political system.
posted by schmod at 6:18 AM on May 18, 2016 [35 favorites]
This is something I've never really understood in terms of where people choose to live. I've never been to the Bay Area but it's something that happens in this country too, I think it's a general thing.
I've never lived in the Bay Area, but I did a similar(ly bad) commute like the one you describe for a couple of years in Chicago and I can speak a bit to this, or at least to a very demographically select part of this. My commute was from the city of Chicago to a suburb that was 35 miles away and about 1h15 each way by train and bus.
Unlike what Agenda 21 conspiracy theorists think, the US government is not trying to push everyone into Soviet-style apartment blocks served only by rickety trams. However, there is certainly a demand for an "urban" lifestyle -- read: walkable blocks, served by some form of transit, middling density, street life -- that is IMO significantly under-supplied in the US, due to a combination of zoning restrictions, automobile-focused transportation policy, veneration for the single-family home as everyone's ultimate goal, and a general perception of apartments/rental housing as socially very undesirable.
It's not that everyone wants to live in that kind of housing; but it is the case that there is a significant overlap between the kinds of people who want to work in Silicon Valley and the kinds of people who want to live in this kind of environment. (It also isn't even the case that people who aspire to "urban" neighborhoods want to live in luxury high-rises: I think a lot of them would be happy to live in middle-density 4-6 story apartment blocks, but this kind of housing is both undersupplied and barely being built these days.)
In the SF Bay Area specifically, this kind of housing/urban environment only exists really in the city of SF and parts of Oakland and Berkeley, painting in broad strokes. (And in the Chicago metro area it was basically the city of Chicago and a couple of close-in suburbs.) So if you move to the Bay Area and want to both work in tech and live in this kind of environment -- which many people do -- you've got basically very little choice except to live in SF, as Oakland and Berkeley are simply too far.
Of course, people make long commutes for many other kinds of reasons: in the US system, the quality of schooling varies drastically between different school districts and so it's a driving factor for many parents to move further out, and there's definitely been research done that people undervalue short commutes and overvalue extra space.
(Finally, I'd like to say that while that commute to the Chicago suburbs was hellish and I wish never to repeat it, if I were in the same situation I would absolutely do it again.)
posted by andrewesque at 6:22 AM on May 18, 2016 [2 favorites]
I've never lived in the Bay Area, but I did a similar(ly bad) commute like the one you describe for a couple of years in Chicago and I can speak a bit to this, or at least to a very demographically select part of this. My commute was from the city of Chicago to a suburb that was 35 miles away and about 1h15 each way by train and bus.
Unlike what Agenda 21 conspiracy theorists think, the US government is not trying to push everyone into Soviet-style apartment blocks served only by rickety trams. However, there is certainly a demand for an "urban" lifestyle -- read: walkable blocks, served by some form of transit, middling density, street life -- that is IMO significantly under-supplied in the US, due to a combination of zoning restrictions, automobile-focused transportation policy, veneration for the single-family home as everyone's ultimate goal, and a general perception of apartments/rental housing as socially very undesirable.
It's not that everyone wants to live in that kind of housing; but it is the case that there is a significant overlap between the kinds of people who want to work in Silicon Valley and the kinds of people who want to live in this kind of environment. (It also isn't even the case that people who aspire to "urban" neighborhoods want to live in luxury high-rises: I think a lot of them would be happy to live in middle-density 4-6 story apartment blocks, but this kind of housing is both undersupplied and barely being built these days.)
In the SF Bay Area specifically, this kind of housing/urban environment only exists really in the city of SF and parts of Oakland and Berkeley, painting in broad strokes. (And in the Chicago metro area it was basically the city of Chicago and a couple of close-in suburbs.) So if you move to the Bay Area and want to both work in tech and live in this kind of environment -- which many people do -- you've got basically very little choice except to live in SF, as Oakland and Berkeley are simply too far.
Of course, people make long commutes for many other kinds of reasons: in the US system, the quality of schooling varies drastically between different school districts and so it's a driving factor for many parents to move further out, and there's definitely been research done that people undervalue short commutes and overvalue extra space.
(Finally, I'd like to say that while that commute to the Chicago suburbs was hellish and I wish never to repeat it, if I were in the same situation I would absolutely do it again.)
posted by andrewesque at 6:22 AM on May 18, 2016 [2 favorites]
It's not even a common dislike. It's outright illegal to build that kind of housing in most places in the US.
Yes! The missing middle. And it disappearing as a form of new construction also consolidates control over real estate, since only big companies or investment pools can afford to undertake big multi-unit projects.
It's ironic, too, because medium-height, medium density neighborhoods with mixed types of structures are the type (in cities) that are most vibrant and loved, but it's basically impossible to build new ones.
posted by ghharr at 7:16 AM on May 18, 2016 [9 favorites]
> Redwood City, pursuant to its General Plan and Downtown Precise Plan, has added hundreds of units of housing (and several major, transit-accessible businesses) in the last ~5 years, and is in the process of adding several hundred more.
> Wait. Your counter argument is that a city 45 min away from SF has added "hundreds" of units over *5* years?
This is in response to
> Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing.
This is just people confused about how people are using "Silicon Valley".
posted by l_zzie at 7:43 AM on May 18, 2016 [2 favorites]
> Wait. Your counter argument is that a city 45 min away from SF has added "hundreds" of units over *5* years?
This is in response to
> Both of these statements are irrelevant because Silicon Valley doesn't allow the building of new housing.
This is just people confused about how people are using "Silicon Valley".
posted by l_zzie at 7:43 AM on May 18, 2016 [2 favorites]
This whole argument makes no sense. Yes, Redwood City is less terrible in that it is willing to build actual apartments. Yes, in general the Peninsula are total jackasses about building housing while being totally happy to add space at campuses (see: Google & Mountain View). Yes, this displaces some people up to the city who wouldn't live up there otherwise and yes, some others would choose to commute because they don't like suburbs. Overall as a region, the Bay suffers from lack of housing and terrible commutes and still seem unwilling to build their way out of it (via housing and transit). It seems like the causes are not really in dispute (though the original research is useful in what it confirms and complicates, like rent control), so then the questions become: How does a region save itself? How do you convince people to take real dramatic action? Which is a really interesting question; I can't think of another region that has been in this jam. New York has its problems but it is also far less sentimental about tearing shit down, ruining people's views, and just building. Paris maybe?
posted by dame at 8:08 AM on May 18, 2016 [1 favorite]
posted by dame at 8:08 AM on May 18, 2016 [1 favorite]
(Finally, I'd like to say that while that commute to the Chicago suburbs was hellish and I wish never to repeat it, if I were in the same situation I would absolutely do it again.)
Schools?
posted by Chitownfats at 8:42 AM on May 18, 2016
Schools?
posted by Chitownfats at 8:42 AM on May 18, 2016
As schmod described above, changing codes is hard, and changing zoning is often politically toxic, especially in municipal governments where the controlling voices are only the people who's interests are fully vested in the status quo. (Disclosure, I am a homeowner in SF).
I think the only way out at this point is by intervention at the state level, where real regional needs and externalities can be considered all at once, and override the short-sighted NIMBY city rules preventing change at (literally) all costs.
Areas like the SF Bay need a Regional Transit authority, with actual state funding and ability to bypass local stonewalling and multi-agency infighting that happens today.
The governor also just introduced legislation to allow As Of Right development for all code and zoning compliant projects with a limit of 30 days for local department review to prevent the endless foot-dragging and non-deterministic reviews that happen today. It would still let cities choose where things should be, but it would make the rules uniform and predictable, something completely lacking today. (Seriously, San Francisco's Discretionary Review process is a Kafka-esque nightmare of shifting ground designed to stall and prevent projects arbitrarily. Palo Alto, Berkeley and many others aren't much better).
Combine as-of-right development rules, with the legal teeth of the Regional Housing Needs Assessment (ABAG-RHNA) that gives each city/county a 'quota' of zoning that it has to allow for its share of new housing, and we *might* be able to level out the insane rate of housing cost growth.
posted by zeypher at 8:59 AM on May 18, 2016 [3 favorites]
I think the only way out at this point is by intervention at the state level, where real regional needs and externalities can be considered all at once, and override the short-sighted NIMBY city rules preventing change at (literally) all costs.
Areas like the SF Bay need a Regional Transit authority, with actual state funding and ability to bypass local stonewalling and multi-agency infighting that happens today.
The governor also just introduced legislation to allow As Of Right development for all code and zoning compliant projects with a limit of 30 days for local department review to prevent the endless foot-dragging and non-deterministic reviews that happen today. It would still let cities choose where things should be, but it would make the rules uniform and predictable, something completely lacking today. (Seriously, San Francisco's Discretionary Review process is a Kafka-esque nightmare of shifting ground designed to stall and prevent projects arbitrarily. Palo Alto, Berkeley and many others aren't much better).
Combine as-of-right development rules, with the legal teeth of the Regional Housing Needs Assessment (ABAG-RHNA) that gives each city/county a 'quota' of zoning that it has to allow for its share of new housing, and we *might* be able to level out the insane rate of housing cost growth.
posted by zeypher at 8:59 AM on May 18, 2016 [3 favorites]
**HUNDREDS**??????
My shitty little (1/4 mi2) neighborhood in DC is adding thousands of units, and is on track to add thousands more.
This is a historic, 100+ year-old rowhouse neighborhood, and we're managing to do this without demolishing a single historic structure.
It's not enough, and prices continue to spiral out of control. But, goddamnit, it's something.
TRY HARDER, SAN FRANCISCO.
posted by schmod at 9:15 AM on May 18, 2016 [7 favorites]
My shitty little (1/4 mi2) neighborhood in DC is adding thousands of units, and is on track to add thousands more.
This is a historic, 100+ year-old rowhouse neighborhood, and we're managing to do this without demolishing a single historic structure.
It's not enough, and prices continue to spiral out of control. But, goddamnit, it's something.
TRY HARDER, SAN FRANCISCO.
posted by schmod at 9:15 AM on May 18, 2016 [7 favorites]
One thing to point out: post Prop-13, housing tends to be a money sink for a locality in California. The primary reason San Jose is constantly having difficulties with their budget is that for many decades, the leadership viewed more and more housing as the way to go -- other localities could concentrate on commercial and industrial uses and San Jose would be the place where they lived. And this has totally fucked them over. Brand new housing may pay its way today, but 10 or 20 or 30 years down the road they will be in the red if they don't have enough turnover.
As an example, the converted triplex I live in is frozen for property tax purposes at 68K. It would sell for 10 to 15 times that today, yet San Jose has to provide all the police and fire and infrastructure maintenance for the house for the minimal taxes paid on that value.
posted by tavella at 12:18 PM on May 18, 2016 [2 favorites]
As an example, the converted triplex I live in is frozen for property tax purposes at 68K. It would sell for 10 to 15 times that today, yet San Jose has to provide all the police and fire and infrastructure maintenance for the house for the minimal taxes paid on that value.
posted by tavella at 12:18 PM on May 18, 2016 [2 favorites]
Yet another way prop 13 has screwed the state. But people still defend it with the hoary old "don't throw grandmothers out on the street" canard.
posted by Justinian at 12:55 PM on May 18, 2016 [2 favorites]
posted by Justinian at 12:55 PM on May 18, 2016 [2 favorites]
noah smith (who recently moved to SF ;)
"5/It sucks to go to a cafe or an art gallery and be constantly reminded that everyone who works there is hanging on by their fingernails."
channeling milton fucking friedman :P
"again, a neighborhood effect. I am distressed by the sight of poverty; I am benefited by its alleviation..."
This may be a really profound -- and empirical -- argument against Universal Basic Income, since it appears that any extra income will simply be diverted to property owners in the form of higher rents.
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters. Naturally, this will have tremendous side effects.
how about a georgist land value tax (LVT) to fund universal basic income (UBI)? along with a carbon tax! "First, pass the tax, give businesses and consumers five years to prepare for it, and start it at just $10 per ton of CO2. Second, raise the price by $10 a year until the US meets its emission targets. Third, put a tax on imports from countries that don't tax carbon. Fourth, give all the money back to taxpayers, probably by reducing payroll of income taxes." [/em added!]
posted by kliuless at 2:00 PM on May 18, 2016 [4 favorites]
"5/It sucks to go to a cafe or an art gallery and be constantly reminded that everyone who works there is hanging on by their fingernails."
channeling milton fucking friedman :P
"again, a neighborhood effect. I am distressed by the sight of poverty; I am benefited by its alleviation..."
This may be a really profound -- and empirical -- argument against Universal Basic Income, since it appears that any extra income will simply be diverted to property owners in the form of higher rents.
The more I think about it, the more I think that UBI is not possible until we develop a comprehensive way to re-divert money from property owners back to renters. Naturally, this will have tremendous side effects.
how about a georgist land value tax (LVT) to fund universal basic income (UBI)? along with a carbon tax! "First, pass the tax, give businesses and consumers five years to prepare for it, and start it at just $10 per ton of CO2. Second, raise the price by $10 a year until the US meets its emission targets. Third, put a tax on imports from countries that don't tax carbon. Fourth, give all the money back to taxpayers, probably by reducing payroll of income taxes." [/em added!]
posted by kliuless at 2:00 PM on May 18, 2016 [4 favorites]
Wages have been increasing exponentially, just like anything else that compounds yearly.
Wages don't compound yearly.
(Though thank you for otherwise using "increasing exponentially" correctly in a quantitative context.)
posted by eviemath at 2:39 PM on May 18, 2016 [1 favorite]
Wages don't compound yearly.
(Though thank you for otherwise using "increasing exponentially" correctly in a quantitative context.)
posted by eviemath at 2:39 PM on May 18, 2016 [1 favorite]
Wage increases compound whatever the interval. This is why a bonus instead of a raise is such a slap in the face.
posted by Mitheral at 3:37 PM on May 18, 2016
posted by Mitheral at 3:37 PM on May 18, 2016
Your salary or wage gets multiplied by (1+r) for some r>0 at regular time intervals? Good deal! (Well, if r > inflation over the same time increments.) My salary increases at a mostly linear rate as I go up grid steps on my salary table (until I reach the top grid step), with different percent increases to the entire grid as negotiated in each round of collective bargaining, which means high year-by-year variance on that rate, and not necessarily keeping up with inflation. Which is not a bad deal; certainly I have friends whose wages don't go up at all.
posted by eviemath at 4:32 PM on May 18, 2016 [1 favorite]
posted by eviemath at 4:32 PM on May 18, 2016 [1 favorite]
so then the questions become: How does a region save itself? How do you convince people to take real dramatic action?
Potentially, by changing things at the state level.
(TL; DR: Jerry Brown just proposed legislation which would mean that "new projects with 20 percent affordable housing for tenants making no more than 80 percent of the area median income or projects with 10 percent affordable housing near transit would be exempt from most local reviews.")
posted by asterix at 5:57 PM on May 18, 2016 [1 favorite]
Potentially, by changing things at the state level.
(TL; DR: Jerry Brown just proposed legislation which would mean that "new projects with 20 percent affordable housing for tenants making no more than 80 percent of the area median income or projects with 10 percent affordable housing near transit would be exempt from most local reviews.")
posted by asterix at 5:57 PM on May 18, 2016 [1 favorite]
(Finally, I'd like to say that while that commute to the Chicago suburbs was hellish and I wish never to repeat it, if I were in the same situation I would absolutely do it again.)
Schools?
Nope -- I may have been a little unclear, but I'm a card-carrying childless Millennial who highly values an urban lifestyle (I was commuting from Chicago to the suburbs in the morning and back in the PM). The commute to Schaumburg and beyond was dreadful, but it was completely worth it to be able to walk around on Saturdays and Sundays without having to plan my life around the Metra schedule.
posted by andrewesque at 12:58 PM on May 20, 2016 [2 favorites]
Schools?
Nope -- I may have been a little unclear, but I'm a card-carrying childless Millennial who highly values an urban lifestyle (I was commuting from Chicago to the suburbs in the morning and back in the PM). The commute to Schaumburg and beyond was dreadful, but it was completely worth it to be able to walk around on Saturdays and Sundays without having to plan my life around the Metra schedule.
posted by andrewesque at 12:58 PM on May 20, 2016 [2 favorites]
How come Google and Apple don't build housing on their campuses?
In general, advertising and tech companies in SF have no wish to compete with landlords, and there's very little upside if they do. High rents keep labor living from paycheck to paycheck, which keeps them at their jobs; wage slavery is always good for the bosses.
posted by a lungful of dragon at 12:33 AM on May 22, 2016
In general, advertising and tech companies in SF have no wish to compete with landlords, and there's very little upside if they do. High rents keep labor living from paycheck to paycheck, which keeps them at their jobs; wage slavery is always good for the bosses.
posted by a lungful of dragon at 12:33 AM on May 22, 2016
In general, advertising and tech companies in SF have no wish to compete with landlords, and there's very little upside if they do.
As mentioned above, tech companies outside of SF are actively trying to build housing, since they do have an upside-- the massive amounts of productivity lost when most of your company is spending hours of every work day on a bus.
I commuted on one of those busses from SF for about a year before I was able to transfer to a similar job in the city, and get more done now on a schedule of 8:30-5:30 than I could with 7:30-6:30 when three hours of that were on the bus (not to mention the non-work upside of, you know, not spending three hours on a bus every day).
posted by what of it at 9:03 AM on May 22, 2016 [1 favorite]
As mentioned above, tech companies outside of SF are actively trying to build housing, since they do have an upside-- the massive amounts of productivity lost when most of your company is spending hours of every work day on a bus.
I commuted on one of those busses from SF for about a year before I was able to transfer to a similar job in the city, and get more done now on a schedule of 8:30-5:30 than I could with 7:30-6:30 when three hours of that were on the bus (not to mention the non-work upside of, you know, not spending three hours on a bus every day).
posted by what of it at 9:03 AM on May 22, 2016 [1 favorite]
There’s no substitute for a substitute - "Eric Fischer, after heroically reconstructing San Francisco housing data for much of the 20th Century, published an analysis of the determinants of median rents. The hat tip goes to Tyler Cowen, who concludes “basically SF is ****ed.” Less pithy commentators did what less pithy commentators usually do, and used the analysis to claim that it basically supports their preconceptions and what they have been saying all along. It was only March when Hamilton Nolan helpfully concluded, “Build some housing, assholes. A lot!”.
Well, far be it from me to buck the trend. The analysis supports my preconceptions and what I’ve been saying all along."
posted by the man of twists and turns at 8:40 AM on May 27, 2016 [2 favorites]
Well, far be it from me to buck the trend. The analysis supports my preconceptions and what I’ve been saying all along."
posted by the man of twists and turns at 8:40 AM on May 27, 2016 [2 favorites]
Further analysis of the data seems to show wages, not housing supply, as the single most important factor.
posted by latkes at 9:13 AM on May 27, 2016 [3 favorites]
posted by latkes at 9:13 AM on May 27, 2016 [3 favorites]
Surprised nobody's tried ridge regression for the multicollinearity...
posted by en forme de poire at 11:48 AM on May 27, 2016
posted by en forme de poire at 11:48 AM on May 27, 2016
The Urbanist's take: Rents In San Francisco Are Determined By Demand, New Data Show
But we can do something about wages short of recessions and earthquakes: tax the rich. In Fischer’s model, a sustained doubling of housing construction can turn a $3,500 1-bedroom San Francisco apartment into a $2,500 one-bedroom San Francisco apartment (if employment and wages stay the same) by 2035. An income tax of 17% does the same thing by next April without the New Deal-sized building program. (The income tax can pay for a New Deal-sized building program.)posted by vibratory manner of working at 11:11 PM on May 27, 2016 [3 favorites]
Speaking of income tax, I actually don't understand why income taxes on SF residents aren't higher. Anyone who lives in NYC, regardless of where they work, pays a municipal income tax of 3% (!). SF has its own income tax but (correct me if I'm wrong?) it's a payroll tax for people who work in SF. Given that so many high earners commute down to the Peninsula, this seems totally bass-ackwards to me. Plus I think it's closer to 1%.
Anyway, certainly wouldn't solve all of our problems but if it were specified in a progressive way (i.e., so low-income people wouldn't have any additional tax burden), I also don't think it would hurt and it could free up some caysh for stuff like homelessness, fixing Muni, etc.
posted by en forme de poire at 2:48 PM on May 31, 2016 [1 favorite]
Anyway, certainly wouldn't solve all of our problems but if it were specified in a progressive way (i.e., so low-income people wouldn't have any additional tax burden), I also don't think it would hurt and it could free up some caysh for stuff like homelessness, fixing Muni, etc.
posted by en forme de poire at 2:48 PM on May 31, 2016 [1 favorite]
Why Housing is About to Eat the US Economy
posted by kliuless at 4:49 PM on June 6, 2016 [1 favorite]
posted by kliuless at 4:49 PM on June 6, 2016 [1 favorite]
« Older How To Ruin My Life By Becoming a DJ | Google Art Camera Newer »
This thread has been archived and is closed to new comments
Wages *definitely* have not been increasing logarithmically.
*and the graphs still make it look pretty bad!
posted by schmod at 6:08 PM on May 17, 2016 [5 favorites]