This is one of these problems that has a simple, obvious solution—raise or remove height limits, mandatory building setbacks, and parking space requirements—that will probably be ignored in favor of grandstanding and lots of small, fiddly solutions that don't deal with the overall problem.
Not necessarily: there are ways to build high rise buildings in such an environment. It also isn't hypothetical: San Francisco skyscrapers are some of the safest places to be during an earthquake.
See also Taipei 101 -- designed to withstand seismic events and typhoons through some rather interesting "hacks".
Well, ultimately the problem is that San Francisco is a small area where a lot of people want to live, and they're willing to pay a premium to live there. You can fiddle around with the supply side of this "problem" if you like (which will by your prescription also lower the demand by making the city a less nice place to live), but there's only so much you can do.
As far as I'm concerned the lack of cheap housing in San Francisco is no more of a problem than the lack of cheap housing in Beverley Hills.
there's only so much you can do. That's not really true, per the linked article above.
As far as I'm concerned the lack of cheap housing in San Francisco is no more of a problem than the lack of cheap housing in Beverley Hills.
See Edward Glaeser's Triumph of the City for more about why this is a problem. For example, he cites an array of research that comes to this conclusion:
"Cities enable collaboration, especially the joint production of knowledge that is mankind's most important creation. Ideas flow readily from person to person in the dense corridors of Bangalore and London, and people are willing to put up with high urban prices just to be around talented people, some of whose knowledge will rub off.
Rousseau famously wrote, 'Cities are the abyss of the human species,' but he had things completely backward. Cities enable the collaboration that makes humanity shine most brightly. Because humans learn so much from other humans, we learn more when there are more people around us. Urban density creates a constant flow of new information that comes from observing others' successes and failures" {Glaeser "Triumph"@247}.
In other words, having a large concentration of smart people leads to new ideas and "the joint production of knowledge." Preventing people from moving to cities through price restrictions means less knowledge and has an array of negative environmental consequences.
No, Beverley Hills is desirable specifically for its prestige.
San Francisco is desirable as location convenient to jobs and transportation.
Not having more housing in Beverley Hills has no real impact on the rest of LA. Not having more housing in San Francisco means the extra demand spills over into a variety of other places.
Higher Density housing does not necessarily result in a location being less-nice. Vancouver BC has made a point of choosing trading density over suburban sprawl with supposedly nice results:
I agree w.r.t. San Francisco proper (it's already very dense, certainly by American standards), but I think quite a bit more could be done in the Valley, which would also ease some of the pressure on SF. A lot of jobs are in the Valley, but people (esp. young people) end up living in SF because the Valley refuses to build anything other than suburban housing for the most part.
San Jose has been building condos and apartment buildings near the Diridon Caltrain station, so that's something. But much of the rest of the Valley between SJ and SF is extremely anti-development. Try to get approval to put in a condo tower in Palo Alto! I don't even mean that jokingly: given the demand created by the Palo Alto tech businesses and Stanford, it could easily support several condo towers near the downtown area. The fact that the city government bans them means that that demand is displaced elsewhere, e.g. to SF.
Calculated Risk (http://www.calculatedriskblog.com) did a series on the upcoming SF rent/real estate bubble, as well as the return of housing back in early 2012. I highly recommend this awesome blog for my fellow HNers - it plays host to great discussions/links/facts on the economy, housing, finance and the global/domestic (US) recovery.
I used to live in a building near a Google shuttle stop on the border of the TL. They wanted to raise my rent almost 20% y/y for a lease renewal, and the place was a trainwreck quality-wise (as was the neighborhood.)
When I went to move out, the leasing agent just shrugged and said "Some Googler will happily pay even more than that."
The real problem is SF prohibiting any dense housing from being built anywhere in the city and also the failure of running reliable/usable public transit to any region outside of the area bounded by BART and Market Street. Rent control certainly doesn't help (though I think there should absolutely be a rent stabilization law -- everywhere.)
I don't think they're prohibiting dense housing per se, just not approving/building enough of it. There have been several 50-story condos opened in the past few years, and several more currently under construction, but they're not enough to keep pace with growth in demand. It didn't help that there was a ~2-year lull in construction when a bunch of developers got into financial trouble during the financial crisis and had to put projects on hold. It's not as if SF isn't dense; it's the 2nd-densest city in the country, and way-way-way ahead of local peers San Diego and Los Angeles.
I agree on public transit, but it's not clear what to do about it. An east-west Geary subway line has been proposed since the 1930s, but it's really expensive to build in an earthquake zone, and the city / taxpayers just haven't been willing to pay what it'd cost. A cheaper alternative that leverages the already-built infrastructure might be to convince people to live in under-developed areas that do have good transit already, such as Oakland, which is actually closer to downtown SF by transit-minutes than much of SF proper is.
One thing that would help on the latter issue is if more of the suburban cities on transit lines also dropped their anti-development attitudes. For example, there is enough demand that there should be condos/apartments near the Palo Alto Caltrain station. But Palo Alto won't allow it, because they have some idea of an upper-class suburb full of single-family homes that they'd like to protect.
I believe there are some political issues (neighborhoods decrying the loss of "Old SF") in addition to somewhat onerous (compared to SJ) planning requirements, specially north of Market (where no building shadow shall impinge on a public park during the hours of 10am to 4pm or something.
Developments typically appease the loud-voiced locals by either pulling out of development plans or modifying their original proposals to lower heights (and thus lower density).
It seems some voices SF, while urban, would prefer to keep SF a quaint victorian town. I mean, we're in the 21st century, allow the city to grow like a city.
An east-west Geary subway line has been proposed since the 1930s, but it's really expensive to build in an earthquake zone, and the city / taxpayers just haven't been willing to pay what it'd cost.
That hasn't stopped the MUNI subway expansion north under 4th Street and Stockton.
Instead of a subway line, would it be possible to close off one of San Francisco's many east-west streets (Geary if you like, probably a couple north-south of there would be better) and run a light rail line (using Muni Metro or similar cars) on an east-west route?
You could adjust the timing of the traffic lights to ensure that the rail line always (or usually) has priority and cross the whole city in ten minutes.
There's a plan currently under discussion for bus rapid transit on the Geary corridor, which is sort of the el-cheapo version of that idea (http://www.sfcta.org/content/view/37/70/). Give the bus a dedicated, physically separated lane to reduce traffic problems, and build light-rail-esque, less frequent stations in the median with level boarding. Not a full solution, but the hope is that it'll raise the average bus speed significantly.
I really think both the Geary and Van Ness corridors need at least a monorail to handle the capacity. BRT seems like a band-aid, to me. Of course, it's cheaper and quicker to deploy. Long term, though, if they build the Geary corridor as envisioned (dense housing) then I think something like monorail would be suitable.
I hope they plan to raise the average bus quality too; riding Muni is less like public transport and more like a homeless shelter. I couldn't imagine doing it every day.
> You could adjust the timing of the traffic lights to ensure that the rail line always (or usually) has priority and cross the whole city in ten minutes.
Not if you wanted to pick up or drop off passengers. :)
But I've ridden N-Judah, and not loved it. Unless it's elevated or subterranean, it's going to be slow.
I think there should absolutely be a rent stabilization law -- everywhere
Do you think this on the grounds of economic theory? The empirical finding is that rent control laws limit the supply of rental housing unduly wherever they are enforced. What's a successful example of a place with a "rent stabilization law"?
The first article you link actually suggests, sort of indirectly, that NYC is an example of a place with successful rent-stabilization. The article argues that the reason NYC hasn't been destroyed by rent control is that it liberalized rent control into the more flexible rent stabilization (which allows market-driven changes, just within certain year-to-year rate limits), which mitigated the worst problems of rent control.
I don't really have a worked-out position on the question, but I'd tentatively think that stabilization that doesn't amount to de-facto freezes would avoid some of the worst problems, since prices would track the market, just with a lag, as opposed to never doing so. For example, the problem with CA's Prop 13 isn't that it limits the y-on-y assessment increase for property-tax purposes, but that it limits it to 2% per year, not accounting for inflation, which is such an absurdly low limit that assessments will never track market prices, even in a delayed sense. Esp. since in years with >2% inflation it actually mandates a cut in real valuation. (Also, if I had my way, I'd remove the inheritability of rent-stabilized rents and Prop-13 valuations, to avoid any weirdness crossing generational lines.)
You seem to be conflating "rent control" and "rent stabilization", which are two different things.
Also, these economists appear to be ignoring a simple practical matter.
The idea behind most rent regulation is to avoid pricing low-income-but-necessary-to-basic-function people out of an area. These are, basically, the garbagemen and janitors and cooks and such, who can quickly find themselves priced out of anything within a reasonable distance of the city.
This results in a corresponding shortage of those services in the city, and prices for those services increase until even the wealthy -- who can still afford the higher rents -- are not willing to bear those costs to remain in the area, and begin leaving.
This can happen surprisingly quickly. In modern environments where many lease agreements come up for renewal at essentially the same time, it can happen frighteningly quickly, far more quickly than new construction can hope to "correct" the housing shortage.
That's the stated justification. The real reason is that politicians of certain stripes enjoy redistributing wealth from the landlord class to the tenant class and getting rewarded with votes for it, so the stated reason is disingenuous anyway, but let's examine the stated reason carefully.
Has this ever actually happened? Has any city ever run out of garbagemen and janitors due to a lack of rent control? I have never heard of anything like this happening, even in extremely expensive cities with free rental markets.
> redistributing wealth from the landlord class to the tenant class
This may be true, but SF rental property values are extremely high, indicating investors are more than willing to make long-term bets on the value of rent-controlled units.
If someplace is paying minimum wage and can't find people to fill the positions (due to high housing/transportation costs), they'll have to raise the wages or close down.
This actually happened in Calgary, Canada a few years back. McDonald's was paying 50-100% more than minimum wage in order to attract employees. Stores actually closed on Sunday because they couldn't find staff.
As long as the rules are reasonably stable, it's not "pinned on landlords", because they presumably already took those considerations into account when purchasing their property, so everything is priced in already, and it's a wash from their perspective. The only people really injured would be those who purchased property under one regulatory regime, and then unexpectedly had it changed out from under them to a different regulatory regime.
But it does matter, because it tends to be a disincentive to get into the landlording business, which tends to further decrease inventory, which tends to make the problem worse, which tends to necessitate more onerous regulation, etc.
I mean, hell. It would even be an improvement to just levy a tax on all landlords to pay for a housing stipend for public workers. That way it's evenly spread among landlords instead of just the ones unlucky enough to have ultra-tenacious tenants.
Well that's even worse, as the whole cost is pinned not just on landlords but on a single generation of landlords. Bam, I just took away hundreds of thousands of dollars of your money with a stroke of a pen, how do you feel about that?
Much better overall if the increased cost merely gets reflected in a rise in wages for unskilled labour in the city. If indeed it ever is an actual problem which I don't believe it is.
Rent stabilization (if applied fairly; New York's 1947-era rent control doesn't qualify) is a good thing, but it's a temporary fix. It's only one part of the solution, because it doesn't do anything to fix an intrinsic shortage.
More necessary is taxing landlords and owners of large amounts of real estate (anyone owning real estate at more than 12 times the average pre-tax income in an area qualifies) at very high rates and using the funds to build the best public transit system in the world-- a long-term solution that obviates the need for stabilization in the first place.
Part of the problem is that when rents are raised in a predatory fashion, the purchasing power of the renter is diminished.
Homeownership rate, 2006-2010 in SF County = 37.5%
Homeownership rate, 2006-2010 in California = 57.4%
Median value of owner-occupied units, SF 2010 = $785,200 (2000 = $396,400)
Median value of owner-occupied units, California 2010 = $458,500 (2000 = $211,500)
Rent control and rent stabilization aren't about low rent; they are about preventing landlords from enacting unreasonable increases in rent that are related to housing booms and bubbles. Renters really should be immune from the mortgage / interest rate speculation that drives housing booms and bubbles. Instead, the supply of renters is essentially leeched of its ability to invest its capital in housing for the long-term.
The topic comes up here so frequently; it's really astonishing how few people understand it.
Would you apply the same logic to cars? If you happen to own a car that suddenly became desirable, should the gov't step in and prevent you from getting the best price for it?
How about if you own a start-up? Was Instagram guilty of "predator" pricing when Facebook bought them?
What people don't seem to understand is that in a free-market system, there is no free lunch. Look at the rental market in SF. People pay "key money" to secure a place. Or the landlord rents to their friend, not the best tenant because if he can't get fair market value in terms of a rental rate, he'll get it someway else (and buyers will pay, because they value it the same way).
Why should renters be "immune" from the fact that the property they occupy is suddenly worth a lot more? This is the gamble you take when you choose to rent rather than buy.
Besides, price booms are the natural result of demand outstripping supply. If rents don't go up to reflect this fact, then how do you cope with the fact that the number of people who want to live in San Francisco outstrips the number of people who can fit into San Francisco?
SF prohibiting any dense housing from being built anywhere in the city
SF would love to give out more building permits than it actually does. The problem is that existing property owners and tenants bewail any attempt at building upwards and the permitting process is so process-heavy (environmental review, public comment periods etc.) that getting anything actually done turns into a major political battle. Forgive me for saying so, but if not for the loss of life and livelihood the best thing that could happen the city right now would be a medium-size earthquake. It's so dysfunctional as to have affected my political views.
That's a huge increase, but actually follows overall San Francisco rental trends. HotPads recently looked at rental trends YoY and found SF rent is up 20%. It's also the most expensive city to rent in the U.S. (a two bedroom in SF is 23% more expensive than the same size in NYC).
Did anybody see the other article in WSJ about SF real-estate? The title is "China in Talks With U.S. Home Builder / State Bank in Talks to Provide Lennar $1.7 Billion for Two Long-Stalled Projects [for 20,000 units in SF]"
I experienced this first-hand as I just signed a place a little over a month ago. Compared to what was listed the apartment we ended up with was several hundred dollars cheaper, and we competed with at least 10 other applicants for the place.
However, as I talk to more people they think we are overpaying several hundred dollars based on what they are paying for comparable units, most of which were signed around a year ago.
What should someone do if they're moving to SF and want to live in SOMA or nearby neighborhoods? Does anyone have any recommendations? It seems like there aren't that many choices for buildings, and a lot of them aren't that new. All of the reviews I have read (for almost all of the buildings) sound mediocre or negative.
Get roommates, get ready to pay, and don't expect much.
There are some great old houses in South of Market, but turnover is rare, and they're all expensive. There are some great/awful new live/work buildings there too, but most of them are condos and all of them are expensive.
Affordability comes in Outer Mission, Excelsior, Outer Richmond, Outer Sunset. Occasionally Potrero Hill toward Cesar Chavez. "Affordability" is relative of course, but if you're finding yourself priced out of the places that everyone talks about and look nice on the map, check prices in the places I listed.
Also, remember that East Bay near BART is closer to South of Market than most of San Francisco city is, time-wise.
Any figures? I live in Dublin, Ireland, and pay €500 ($624) per month for a room in a two bed apartment in the centre of the city. That's cheap for the area -- I live within walking distance of all the bars.
You can't get a room share in most of SF for under $700, for SOMA and the Mission you'll be lucky at $850. A studio you might be able to get for $1200-$1500, 1BR $1400-1800, 2BR $2000-$$$$$.
This is assuming you don't want to live in Bayview.
I used to rent an entire 3BR house for $700/mo, albeit in one of the more depressed markets in the US. Thinking about moving to SF makes me more than a little queasy.
Also, remember that East Bay near BART is closer to South of Market than most of San Francisco city is, time-wise
Depends what part of the East Bay, of course. West Oakland is the closest BART station, but it is in some serious ghetto. Lake Merritt, Berkeley (esp North Berkeley) and Rockridge are your first good options, but they'll take a little longer to get to. My advice would be definitely to check out Rockridge, it's a surprisingly nice part of town.
Yep. Sketchiness is proportional to affordability.
Actually the Dogpatch area has come a long way in the last decade or so. Not much of a secret any more, and low turnover, but still relatively cheap, easy access to South of Market (or 101), and nicer than many other options. Low walkability, but easy parking...
Realize you are going to get what you pay for if you want to live in SOMA. Realize that most buildings aren't new in SF in general, especially the more affordable ones. Then decide if you can't pay that much, whether or not you can stomach living in the tenderloin. Next up, you decide what other neighborhoods might be a good alternative, probably the Richmonds or the Sunsets, or maybe outer mission.
And unless you have 3+ months to look for a place every day, don't expect:
1. A bargain
2. That you will get picked for said bargain
Avalon is brand new and freaking expensive. It depends on your comfort level. For me $3K odd for a 1 bedroom apartment was deeply discomforting. If you are open to living a little far away, take a look at the Castro, Noe Valley, Haight-Ashbury. All these neighborhoods are on Muni train lines which will make traveling to SoMa suck less (it won't be awesome but it will be ok).
It is also riddled with problems: management went to the pits from mid 2010; the construction quality is terrible (particularly in the new third phase); if you value a decent night's sleep, you're screwed (Caltrain and Berry St garbage trucks)
Moving into an older, but more sturdy unit is the most sensible thing we have ever decided to do.
Forget it, unless you have friends or money. The building quality is generally terrible and the economics are dreadful. My wife and I bought in North Oakland, not far from Berkeley. It's not perfect, but it's a lot nicer than the Mission was when I first moved to SF. We spent over 2 years looking for a place, partly because my wife grew up in SF and was reluctant to move outside the city. Now we have space and she gets downtown in half the time on the days when she goes to her office, plus we have a large garden and a kitchen we can both fit into at once. The economics are a bit different if you're renting, but not that different. Sorry to say it because I lived in SF for 15 years, but I gave up on the city a couple of years ago and haven't missed living there since we moved last spring.
For those who are finding it hard to rent a place, I have a suggestion for you: move to Berkeley. Amazing food. Great weather most of the time. And if you live near BART station its not that far if you work in SF.
This is one of these problems that has a simple, obvious solution—raise or remove height limits, mandatory building setbacks, and parking space requirements—that will probably be ignored in favor of grandstanding and lots of small, fiddly solutions that don't deal with the overall problem.