We’ve all seen those luxurious new apartment complexes sprout up in the Mission and the rest of San Francisco. In fact, just down the street from our own office, construction workers toil daily over the “Vida” condominium complex — a structure, according to the building’s promotional website, whose “fresh, contemporary design and caring craftsmanship are inspired by modern Latin culture – literally weaving the urban fabric of the Mission into the building itself.”
While projects like Vida and others continue to flourish, San Francisco is slated to hit the 1 million mark in less than two decades. Can the city possibly keep up with its swelling supply-and-demand problem? Dan Shreiber of The San Francisco Examiner digs deeper.
Earlier speculation that housing costs would have reached a plateau by now has not come true — not even close.
U.S. Census Bureau figures put the median of The City’s rental rates — the midpoint on the spectrum of rental prices — at $1,463 per month. Almost 40 percent of San Francisco rental properties demand at least 35 percent of tenants’ total income. The Trulia real estate listings website shows the median cost of buying a home is $850,000, which is nearly $200,000 more than five years ago and more than double what it was in 2000.
Traditional economics might hold that the high price would eventually curb growth over the long term. Not so, according to an upcoming report by the Association of Bay Area Governments, which projects that The City’s 2010 population of 805,263 will grow 35 percent by 2040 — the fastest 30-year rate of increase in nearly a century. By 2032, 1 million residents will make San Francisco their home, the report predicts.
Learn More:
Mission Protesters Take On Cops, Cafes, Luxury Apartments
Last week, protestors marched down Mission Street in response to the amplified police presence around the 16th street BART plaza. Many also criticized the slick new Vara apartment complex at 15th and Mission and yelled at residents watching the protest from their balconies. Read more here.
I agree wholeheartedly with John: government intervention distorts the housing market.
So, let’s get the meddling government out of the housing business, and let Adam Smith’s invisible hand work it’s magic: To that end, let’s revoke Prop 13, end government flood insurance, end the mortgage interest deduction, end property tax and depreciation write-offs, end govt-backed mortgages, end QE2, charge landlords for enlisting the police for evictions, and restore higher capital gains tax rates.
Remember, markets don’t exist to serve people; people exist to serve markets. Laissez-faire in all things, except when I need laws and regulations to serve my own interests.
TwoBeers, I would support some of those ideas.
Flood insurance could be privatized in the same way as earthquake insurance is.
It is illogical to oppose rent control if I support Prop13, so ending them both is viable, if some basic precautions are taken.
Fannie/Freddie isn’t the government anyway, as we discovered a few years ago.
the deductibility of mortgage interest, property taxes and depreciation are tax policies and not housing policies per se. The government wants to encourage home ownership over renting and that is a separate issue.
I was never a fan of QE although I’ve certainly made money from it. I would have let Citi and GM fail.
If it’s really a supply and demand problem, let’s go after banks that are sitting on foreclosed homes, artificially raising the median price by limiting supply. Let’s go after the Catholic dicoese of SF for sitting on vacant property. How many abandoned buildings can be converted to multi-unit housing?
The bigger problem, imho, is that real estate for rent and purchase is skyrocketing while wages remain flat. All it takes is one well-paid newbie to the area for vicious real estate agents to claim a new market rate beyond everybody else’s reach.
The “invisible hand” of Adam Smith is only a theoretical interpretation of a free, unrestrained economy. It does not apply to SF, where every level of the economy, from federal policy to local land scarcity, is being deliberately manipulated to transfer every last dollar to the already-rich and already-privileged.
Blah, blah, blah…I’m a landlord…blah, blah, I don’t like low-income residents…blah, blah…I hate rent control…blah, blah…I dislike Hispanics..blah, blah…if you can’t afford SF, get out, blah,blah,blah…the private market rules…blah, blah..I’m a troll…blah, blah.
So, no refutation? Just insults?
The problem seems clear enough. In most places, supply and demand are in perfect balance because the price is allowed to go up or go down. The same principle applies for stock prices, commodity prices and any other product that isn’t manipulated.
SF’s problem is clear enough. NIMBY’s and overly strict land use regs constrain the new supply that we all know we need. While the existing housing is under-utilized because of rent control which deters mobility and directly causes what some estimates say are up to 35,000 units being deliberately held off the market because the owners do not want to risk having a lifetime tenant.
Meanwhile people irrationally think that the rest of the Bay Area doesn’t exist and that they must live in SF, even when it is blatantly obvious that they lack the fiscal power to be here.
If you wanted to create a housing mess from scratch, you would pretty much choose the housing policies that SF has developed over the last 35 years, and then just wait for the debacle to unfold.
Amen. Thanks John.
What John said. Perfect summary.
Thank you. The truth is often very simple but, for those with an ideological bias that makes the truth too unpalatable, then they must devise ever more complex theories and systems, believing the delusion that they can control everything including human nature.
Adam Smith had all this stuff figured out 250 years ago.