7 ms·

Build more houses. None of this shit would happen if SF would just build more houses.

Russell91 12y ago
Ironically, rent control is exactly why there is so little housing available in SF. Iirc, only 30% of the voting population owns property. So how is it that the rest of us (70%) don't vote to build more? Well, because 3/4 renters are under rent control, and essentially don't care. So only 70%/4 < 30% of people are motivated to push the market towards more housing. The rest profit handsomely from increased home prices due to high demand. This is the real tragedy of rent control in San Francisco IMO. Edit: source: http://www.quora.com/What-percentage-of-San-Francisco-apartments-are-under-rent-control http://www.quora.com/What-percentage-of-San-Francisco-apartm...
- shit_parade 12y ago
  Sadly, trying to explain simple economic facts to people on HN is a good way to get down voted if it involves criticism of government regulation.
- jsprogrammer 12y ago
  If the majority of owners don't wish to personally utilize their property and instead choose to extract rent from it, what exactly are the renters supposed to buy? Owners can apparently force renters to bleed ever more money, but renters can't force a squatting owner to sell, they just have to accept it or, as this letter exemplifies, GTFO.
  - AnthonyMouse 12y ago
    > If the majority of owners don't wish to personally utilize their property, and to extract rent from it, what exactly are the renters supposed to buy? If you offer to pay at least as much for the building as the landlord would expect to make from renting it out then any rational landlord will sell you the building. > Owners can apparently force renters to bleed ever more money If they raise the rent significantly above what typical apartments go for in the area then the tenant will move out and they'll have to spend money to find a new tenant and go without rent in the meantime. Rental housing is one of the most efficient markets in existence. Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now, which is why that rarely if ever happens. But when the local market price of housing changes, adjusting rents to meet the market is completely reasonable and natural.
    - jsprogrammer 12y ago
      >any rational landlord That's a large assumption. >If you offer to pay at least as much for the building as the landlord would expect to make from renting it out Over what time period? >Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now, Where in SF is that possible? Do you know of any documented cases? >is completely reasonable and natural. Exactly the justification used for so many horrors.
    - barrkel 12y ago
      Rental housing can't be particularly efficient because neither renters nor landlords are fungible, and there's loads of information asymmetry. IME (London) what typically happens is you get a bit gouged for rent when you first move in to a place, then, as the landlord gains trust in you as a tenant, the rent is "sticky" - it doesn't go up very quickly. You can use the risk of a new tenant as a negotiation lever to keep rent down.
    - mmarx 12y ago
      > If you offer to pay at least as much for the building as the landlord would expect to make from renting it out then any rational landlord will sell you the building. Which rational tenant would pay the same amount he'd pay as rent to buy the property, when that incurs additional costs (property tax, for example)?
    - simoncion 12y ago
      Rental housing (like garbage collection) is only efficient when there is more than enough housing (or memory) available to meet demand (of tenants, or of the garbage collection machinery). In obscenely undersupplied cities like SF, rents become absurdly high very, very fast. Case in point. In 1998 (At about the height of the Dot Com bubble) a one-bedroom apartment in my building rented out for ~$500/month. In 2010 (While the real-estate market was still recovering from its enormous collapse) that same apartment rented out for ~$1500/month. That's a 3X increase in "market price" of a good from the height of a superheated bubble to shortly after the collapse of another one. SF's rental market is seriously fucked by undersupply.
- therealwill 12y ago
  Exactly. Current homeowners don't want more housing because it will lower the value of their homes. They also vote against property tax increases for the same reason.
- patrickaljord 12y ago
  Funny thing is that rent control is one of these issues that is non controversial among economists, from the most Keynesians to the most libertarians, they all agree that it's a bad idea. In fact, socialist economist from Sweden Assar Lindbeck said: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”. Rent control is usually pushed by ruthless politicians to buy votes and end up being catastrophic for the cities victim of such policies.
  - ageek123 12y ago
    Yep, even Paul Krugman thinks rent control is a bad idea: http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-...
- HaloZero 12y ago
  Is there any sources you get those numbers? They seem very wrong from when I last researched this.
  - deleted 12y ago
    [deleted]
- sampo 12y ago
  "The rest profit handsomely from increased home prices due to high demand." The irony is, they would probably profit even more, if they allowed the city to grow naturally. New York City had a population of 800k (like San Francisco has now) some time in the 1850's. Do you think a piece of land in NYC would be more valuable now, if they had decided to stop the city's population to 800k back then?
- simoncion 12y ago
  Rent control doesn't prevent me from desiring more high-density residential construction in the city. Thing, is, even folks in rent controlled units have major life events. You get tired of the person you're living with, get sick of the changing neighborhood, have a baby, or a new Significant Other. In a city that has such an extreme lack of housing, changing your living arrangement to reflect your changing life is somewhere between extremely difficult and impossible. Folks who are preventing new development aren't folks that are motivated by a desire to protect their rent controlled apartments. They're folks who are motivated by a desire to see greatly increased year-over-year rents on their non-rent-controlled units, greatly increased year-over-year leverage on their existing property, and/or the continued preservation of the look and feel of the neighborhood (read: those with a strong resistance to change.).
codezero 12y ago
But if we do that, the skyline will be ruined for the residents of Palo Alto, and we can't have that! http://www.paloaltoonline.com/news/2014/07/10/growth-debate-tests-citys-height-limits http://www.paloaltoonline.com/news/2014/07/10/growth-debate-...
justin66 12y ago
A nice sentiment but it would make infinitely more sense to build more apartment buildings.
hristov 12y ago
I do not know if you have been in SF lately, but the city is downright full of under construction apartment towers.
- raldi 12y ago
  The mayor's goal, which we're not on track to hit, is to add 30,000 new homes by 2020. Meanwhile, the city's chief economist says we need at least 100,000 homes to start having a real impact on prices. Source: http://m.sfexaminer.com/sanfrancisco/leveling-sf-housing-field-could-take-100000-new-units/Content?oid=2703869 http://m.sfexaminer.com/sanfrancisco/leveling-sf-housing-fie...
  - hristov 12y ago
    He said that we need 100 000 new homes to have an impact equivalent to a $75 000 down-payment grant. He said the 30 000 homes would also have an impact but not as great.
joshuapants 12y ago
Liberalized zoning laws would go a long way to making this less of a problem
Sanddancer 12y ago
One of the problems is that San Francisco in the 60s and 70s passed rather strict zoning ordinances to prevent "Manhattanization". So, this city that has a very limited amount of space cannot grow upwards to help meet demand.
- awad 12y ago
  This is the real problem. SF is loathe to build out skyscrapers even though it's been proven that dense urban areas are the most efficient way to live. The earthquake argument isn't really a sound one in this day and age so the only thing left is "we don't like change."
  - woah 12y ago
    The most conservative liberals on earth.
hindsightbias 12y ago
I will bring a bulldozer to Googler Mission Wonderland the day you bring a bulldozer to low-density Palo Alto whitey-ville. We just have acres of open land here... derp.
xasos 12y ago
Build more high rises possibly? Part of the charm of living in SF is that it feels "small" and homely, compared to a city like Chicago or NYC, where almost everyone lives in a flat in a building 20-30 stories high.

Ironically, rent control is exactly why there is so little housing available in SF. Iirc, only 30% of the voting population owns property. So how is it that the rest of us (70%) don't vote to build more? Well, because 3/4 renters are under rent control, and essentially don't care. So only 70%/4 < 30% of people are motivated to push the market towards more housing. The rest profit handsomely from increased home prices due to high demand. This is the real tragedy of rent control in San Francisco IMO. Edit: source: http://www.quora.com/What-percentage-of-San-Francisco-apartments-are-under-rent-control http://www.quora.com/What-percentage-of-San-Francisco-apartm...

shit_parade 12y ago
Sadly, trying to explain simple economic facts to people on HN is a good way to get down voted if it involves criticism of government regulation.
jsprogrammer 12y ago
If the majority of owners don't wish to personally utilize their property and instead choose to extract rent from it, what exactly are the renters supposed to buy? Owners can apparently force renters to bleed ever more money, but renters can't force a squatting owner to sell, they just have to accept it or, as this letter exemplifies, GTFO.
- AnthonyMouse 12y ago
  > If the majority of owners don't wish to personally utilize their property, and to extract rent from it, what exactly are the renters supposed to buy? If you offer to pay at least as much for the building as the landlord would expect to make from renting it out then any rational landlord will sell you the building. > Owners can apparently force renters to bleed ever more money If they raise the rent significantly above what typical apartments go for in the area then the tenant will move out and they'll have to spend money to find a new tenant and go without rent in the meantime. Rental housing is one of the most efficient markets in existence. Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now, which is why that rarely if ever happens. But when the local market price of housing changes, adjusting rents to meet the market is completely reasonable and natural.
  - jsprogrammer 12y ago
    >any rational landlord That's a large assumption. >If you offer to pay at least as much for the building as the landlord would expect to make from renting it out Over what time period? >Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now, Where in SF is that possible? Do you know of any documented cases? >is completely reasonable and natural. Exactly the justification used for so many horrors.
  - barrkel 12y ago
    Rental housing can't be particularly efficient because neither renters nor landlords are fungible, and there's loads of information asymmetry. IME (London) what typically happens is you get a bit gouged for rent when you first move in to a place, then, as the landlord gains trust in you as a tenant, the rent is "sticky" - it doesn't go up very quickly. You can use the risk of a new tenant as a negotiation lever to keep rent down.
  - mmarx 12y ago
    > If you offer to pay at least as much for the building as the landlord would expect to make from renting it out then any rational landlord will sell you the building. Which rational tenant would pay the same amount he'd pay as rent to buy the property, when that incurs additional costs (property tax, for example)?
  - simoncion 12y ago
    Rental housing (like garbage collection) is only efficient when there is more than enough housing (or memory) available to meet demand (of tenants, or of the garbage collection machinery). In obscenely undersupplied cities like SF, rents become absurdly high very, very fast. Case in point. In 1998 (At about the height of the Dot Com bubble) a one-bedroom apartment in my building rented out for ~$500/month. In 2010 (While the real-estate market was still recovering from its enormous collapse) that same apartment rented out for ~$1500/month. That's a 3X increase in "market price" of a good from the height of a superheated bubble to shortly after the collapse of another one. SF's rental market is seriously fucked by undersupply.
therealwill 12y ago
Exactly. Current homeowners don't want more housing because it will lower the value of their homes. They also vote against property tax increases for the same reason.
patrickaljord 12y ago
Funny thing is that rent control is one of these issues that is non controversial among economists, from the most Keynesians to the most libertarians, they all agree that it's a bad idea. In fact, socialist economist from Sweden Assar Lindbeck said: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”. Rent control is usually pushed by ruthless politicians to buy votes and end up being catastrophic for the cities victim of such policies.
- ageek123 12y ago
  Yep, even Paul Krugman thinks rent control is a bad idea: http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-...
HaloZero 12y ago
Is there any sources you get those numbers? They seem very wrong from when I last researched this.
- deleted 12y ago
  [deleted]
sampo 12y ago
"The rest profit handsomely from increased home prices due to high demand." The irony is, they would probably profit even more, if they allowed the city to grow naturally. New York City had a population of 800k (like San Francisco has now) some time in the 1850's. Do you think a piece of land in NYC would be more valuable now, if they had decided to stop the city's population to 800k back then?
simoncion 12y ago
Rent control doesn't prevent me from desiring more high-density residential construction in the city. Thing, is, even folks in rent controlled units have major life events. You get tired of the person you're living with, get sick of the changing neighborhood, have a baby, or a new Significant Other. In a city that has such an extreme lack of housing, changing your living arrangement to reflect your changing life is somewhere between extremely difficult and impossible. Folks who are preventing new development aren't folks that are motivated by a desire to protect their rent controlled apartments. They're folks who are motivated by a desire to see greatly increased year-over-year rents on their non-rent-controlled units, greatly increased year-over-year leverage on their existing property, and/or the continued preservation of the look and feel of the neighborhood (read: those with a strong resistance to change.).

codezero 12y ago

But if we do that, the skyline will be ruined for the residents of Palo Alto, and we can't have that! http://www.paloaltoonline.com/news/2014/07/10/growth-debate-tests-citys-height-limits http://www.paloaltoonline.com/news/2014/07/10/growth-debate-...

justin66 12y ago

A nice sentiment but it would make infinitely more sense to build more apartment buildings.

hristov 12y ago

I do not know if you have been in SF lately, but the city is downright full of under construction apartment towers.

raldi 12y ago
The mayor's goal, which we're not on track to hit, is to add 30,000 new homes by 2020. Meanwhile, the city's chief economist says we need at least 100,000 homes to start having a real impact on prices. Source: http://m.sfexaminer.com/sanfrancisco/leveling-sf-housing-field-could-take-100000-new-units/Content?oid=2703869 http://m.sfexaminer.com/sanfrancisco/leveling-sf-housing-fie...
- hristov 12y ago
  He said that we need 100 000 new homes to have an impact equivalent to a $75 000 down-payment grant. He said the 30 000 homes would also have an impact but not as great.

joshuapants 12y ago

Liberalized zoning laws would go a long way to making this less of a problem

Sanddancer 12y ago

One of the problems is that San Francisco in the 60s and 70s passed rather strict zoning ordinances to prevent "Manhattanization". So, this city that has a very limited amount of space cannot grow upwards to help meet demand.

awad 12y ago
This is the real problem. SF is loathe to build out skyscrapers even though it's been proven that dense urban areas are the most efficient way to live. The earthquake argument isn't really a sound one in this day and age so the only thing left is "we don't like change."
- woah 12y ago
  The most conservative liberals on earth.

hindsightbias 12y ago

I will bring a bulldozer to Googler Mission Wonderland the day you bring a bulldozer to low-density Palo Alto whitey-ville. We just have acres of open land here... derp.

xasos 12y ago

Build more high rises possibly? Part of the charm of living in SF is that it feels "small" and homely, compared to a city like Chicago or NYC, where almost everyone lives in a flat in a building 20-30 stories high.