It takes two to tango. Shortage takes both low supply and high demand. The tech industry did create this problem by suddenly attracting a ton of talent to the region. The municipalities passed on their opportunity to avert the housing crisis by embracing the change and their new role as Manhattan's tech counterpart, but it also could have been avoided had we chosen some other place, or a more remote/distributed mode.
It is the responsibility of industry to attract people to a region, so these people can fill the jobs that industry requires; in most other places, this is celebrated.
It is the responsibility of government to ensure a well functioning society.
It appears clear to me that the government is failing its responsibility. The governments could have averted this crises by not zoning their municipalities for 3x, 4x, 5x more jobs than housing units within their borders. Its not like many of these offices have existed forever, they willingly allowed the creating of new offices, with out the requisite housing to support. (See, New Apple Spaceship HQ, Facebook campus, and expansion in Menlo Park, Google's constant expansion, the numerous new office parks that have sprung up in every city on the peninsula in the last 10 years).
Much of this is jobs/housing imbalance is a result from prop 13, which disincentivized housing construction by making the development of commercial property more net tax advantageous (taxes in minus services provided) when compared with housing.
Democratic governments exist to serve the people who vote for them. I'd say they have succeeded in increasing property values for property owners who voted for them. Every single house in SF is owned by someone, and that someone benefits from this situation persisting, so there are quite a lot of winners.
Democratic governments exist to serve the people who vote for them.
Democratic governments should serve everybody, not only the people that voted for them. Of course they'll have some obvious preferences, but neglecting or even crushing a sizeable group of people because they're not their voters is not what democracy is meant to be. It's not even wise.
>The governments could have averted this crises by not zoning their municipalities for 3x, 4x, 5x more jobs than housing units within their borders.
Each municipal government is correctly pursuing a local optimum by doing this. The life of an existing homeowner gets no worse for the presence of a tech company office in their municipality, and the tax revenue from the company can be used to fund better services and/or lower taxes for locals.
Night-time populations, on the other hand, require water and sewer and education and policing, more wear on the roads or staggeringly expensive public transit buildouts, etc.
Each city is pursuing the best interests of its home-owning electorate in signing up for the tax revenue without the responsibility.
Ignoring property values and aesthetics, the first municipality to liberalize housing construction will get to pay all the scaling costs that the whole region should have shared.
But successful companies have a strong influence on government -- keeping taxes low, else threatening the leave.
As Bernie said: govt doesn't regulate business - it's the other way around. Businesses dictate what they want. Blame shareholders, and boards of directors? But I don't expect them to change -- they're having a great run.
The first graph is misleading, as it shows a spike, but what really matters is the YoY % change. As you can see in the second graph, the YoY % change relative to inflation has been above 0 since 1979. You can't have an asset (or cost, if this is rents) that is vital to life increase in price above inflation literally every year since 1979 and expect that the price will be reasonable in 2016.
I have to disagree with you. Can you provide an example of any desirable major metro in the US (besides Detroit) where housing prices have actually gone down YoY in the last 30 years? Even cities like Atalanta and Dallas with virtually unlimited space and new housing-friendly construction policies have had consistently increasing median rents for a long time. Small percentage increases in rent/house prices are normal due to a number of factors. It's the large spikes outstripping the normal increases that make things get crazy.
And you can see this empirically in SF as well. If you were in the city post dotcom crash, housing was easy to find and also reasonably priced for CA. It's only been in the last 10 years or so that everything got out of control due to the new tech boom.
I don't consider either of those a desirable location, though. That's pretty key to this whole argument - SF and cities like it are places people actually want to move to rather than just buy properties there.
> I don't consider either of those a desirable location, though.
Why not? Tampa has nice weather and no state income tax, and Las Vegas is a fun place to live.
Without real, objective measures on "desirable location" you're basically stating a tautology. The only places with rising real estate prices are desirable locations, which are evincing desirability by rising real estate prices.
I've spent quite a bit of time working in both locations and find them far inferior to many other US cities (SF, LA, NYC, Austin, Seattle, Portland, Chicago, Miami, Dallas, etc.) in terms of general quality of life for people under the age of 40. You're the first person I've met who really seems to think otherwise.
It's not really a tautology when we could take a simple poll of our target population and find out which cities they would and would not want to move to. I'd be willing to bet that neither LV nor Tampa would be very far up that list. I wish there was better data on median rent prices over time per city so we could do a comparative analysis with real price info.
Any other place doesn't have the literal geographic barriers to construction that the Bay Area does, or Prop 13 distorting housing incentives. For instance, Atlanta can absorb tons of new people moving in (which they are!) and there's infinite space to build out in all directions in the suburbs there.
Of course everyone will still end up stuck in traffic.
Hence why building suburban sprawl is unsustainable, and is actually a major economic problem for the Bay Area & most of the US. Eventually you end up like Detroit, since suburban sprawl is very expensive to maintain.
Urban areas need to densify rapidly if we hope to avoid financial catastrophe in the US, and many areas need to be returned to agricultural use instead of suburban sprawl, as with sprawl we have essentially covered our most fertile land in low density, high maintenance housing & support infrastructure.
http://www.strongtowns.org/journal/2017/1/9/the-real-reason-...
