Just a reminder that the growth rates for SF, SV, Seattle, Portland are all pretty puny compared to the growth rates of, e.g. Detroit at its peak. Hell they're not even that crazy compared to growth rates those cities have handled before.
People just aren't interested in any perceived threat to their property values so they're strangling growth based on an entitlement mindset. No, sirs and ma'ams, your home's price appreciation isn't a right.
I think it's also clear that Detroit is not a growth model you'd want to emulate. With the benefit of hindsight, it's clear that Detroit ended up with way too much low-productivity infrastructure that the current residents of the area can't afford to maintain.
Detroit's infrastructure was fine. Detroit's problem is suburbanization. The population of the Detroit metro area is up 1 million people since 1950 and the population of Detroit itself is down 1.2 million people since 1950. Most of the people and nearly all of the people with money left the city and moved to the surrounding suburbs.
However, any system that allows people to rent seek by creating building restrictions that protect their property values is not an optimal solution. So sure, they can vote but they should not be able to vote on zoning.
What about nuisances or factories or what have you? Well, that's easy enough to take care of through noise ordinances. Land use zoning is mostly a well intentioned but terrible in practice policy idea.
1. Less room to spread out in the Bay Area. Detroit does not have many high-rises, and as far as I can tell, it has had a large number of single-family dwellings condemned/abandoned etc. during the recession. Also, Detroit is in a seismically stable zone.
2. Large number of incoming people who do not have a say in local politics in the Bay Area. To my knowledge, many of the incoming workers are here on visas, and they are largely apolitical, unable, or uninterested to cast a vote. Most of the busy workers do not have the time or the inclination to participate in local politics. I imagine this must not have been the case in Detroit, where unions were strong.
The other problem is that many Bay Area residents who bought their properties when interest rates were quite high (I had an older colleague who bought his house at 24% or so interest rate --- unimaginable nowadays), and the Federal Government had not embarked on a protracted QE, QE2 ... phase of pumping money into the economy, so to a certain extent, buying a house in the Bay Area has always been hard (not impossible, though, which it is now, for most people); as a result these existing homeowners (who ploughed a significant portion of their incomes into their homes) feel entitled to keep their insane property values that way.
1. This is not the issue. If it were, suburban low density Palo Alto would be absorbing new people at a fine clip. The problem is the lack of building.
2. This is much closer to the heart of it. Local politics allows homeowners to veto good housing policy in the interest of protecting their investments. However, Detroits expansion had nothing to do with the unions lobbying for housing policy, there just wasn't much in the way of zoning laws and people built where there was demand.
In any case, the only thing that's going to fix the housing crisis over there is zoning reform. Believe me I feel your pain, I live in Manhattan. At least we're doing some building, though not nearly as much as we should. If it were up to me all (most) of the three story sixpacks in Bushwick would be bulldozed for six story tenements.
Yeah, I think the way the 5 boroughs are organised is great for New York. People who are okay with high-density housing flock to Manhattan and those that want to have suburbs, leafy streets and green lawns stay in Long Island, West Chester etc. The key enabling factor is the (now decrepit) public transportation system. The Bay Area, again, has nothing like it (once again, possibly due to the crazy geography of the place).
But New Yorkers beware. The Subway is at risk of being destroyed by idiot Cuomo. It's already leagues behind London (which does it cheaper and better), not to mention Tokyo and others.
> The key enabling factor is the (now decrepit) public transportation system. The Bay Area, again, has nothing like it (once again, possibly due to the crazy geography of the place).
I'd put this more on the Bay Area's low population than on the geography.
Plus the myriad of municipalities that all want a say. It's no coincidence that the BART doesn't go all the way down the Peninsula, stopping just before Burlingame. The rich homeowners there didn't want the SF riff-raff coming to their town, therefore commuters are stuck with the Caltrain.
How? The area west of 280 is mostly protected land, so it's hard to build. Some of the empty areas out by Alviso/Milpitas are superfund sites. Apparently it's much harder than it looks to reclaim the Bay and build on it (best chance of opening up large amounts of land). Is there some map that shows areas that can be developed?
Also, Santa Clara county is chock-full of EPA superfund sites. Lots of soil and groundwater contamination.
Depends! Increased density should drive up the price of land.
However, if you are in a neighborhood of single family homes and a huge multi family building is constructed on your block, your home price will go down because there will be enough supply to meet demand, taking pressure off the single family homes.
If you are in an already dense city and regulations are relaxed so that more high rises can be built in more neighborhoods, the price of your condo all else being equal will be lower because there will be more supply. The land price may well go up but your individual apartment would likely be worth less.
a huge multi family building is constructed on your block
which is why NIMBYs should at least be in favor of gentle density - duplexes and triplexes, small walk-ups, etc. But they fight those like the end-of-days too.
And then you're back to the original argument: the appreciation of your neighbor's property isn't some kind of god-given right, no more than that of yours is.
Look, I don't want to destroy the value of the largest "asset"[0] most people will own. But... what's the alternative here? The incumbents just get to grow fat off riches that they absolutely lucked into and played minimal part in creating, while lower-income residents get forced out of their homes? We just give up on the bay area as a worthwhile economy, have all the tech companies pull out, and then home prices crash?
[0] People really really love to believe their primary residence is an asset/investment, because it cost them so much money to acquire it, that it just has to be. If they'd consider it just a cost of living, a liability even, we'd have such fewer financial issues in housing markets.
I don't think entitlement or rights need to come in to it. It's entirely possible to have a want and act on that want without invoking moral righteousness.
we are at record low growth rates for "peaking" in the development cycle.
The problem is (1) we haven't built that much since 2008 anywhere, so any change seems like its a flood (2) most growth pre 2008 was greenfield SFH development, most growth happening now is in established communities
People just aren't interested in any perceived threat to their property values so they're strangling growth based on an entitlement mindset. No, sirs and ma'ams, your home's price appreciation isn't a right.