from Hacker News

Crazy things happening in SF because of its out-of-control housing prices

by kafkaesque on 3/7/18, 4:14 AM with 78 comments

  • by Kronopath on 3/7/18, 7:11 AM

    It bothers me that so few people mention the role of Proposition 13 and low property taxes for housing in all this. Proposition 13 makes it so that property taxes are fixed when you buy the house and only ever increase with inflation, whereas most other places make property tax rates proportional to the current market value of the home based on things like recent sale prices of other nearby homes. For example, in Toronto property taxes are set based on the assessed value of the property relative to the city average, and rates are set based on the municipal government’s budget and expenses.[1]

    As a result, it’s costly for local municipal and county governments to zone for residential areas, because of the need for schools, parks, libraries, and other public services needed. If property taxes don’t balance out those needs, then zoning for commercial buildings instead ends up being far more attractive to local governments. The results: more office buildings, more jobs, but insufficient housing to support them.

    Increasing property taxes is tricky because of the risk of further displacing long-term residents, or older residents, who have owned their homes for a long time. But in my view the impacts of property taxes on cost of living and the housing crisis are undeniable, and it’s unusual to me that so few people ever even _mention_ it in these discussions.

    [1]: https://torontoist.com/2014/01/everything-you-ever-wanted-to...

  • by xivzgrev on 3/7/18, 5:54 AM

    Ugh I'm tired of these articles that declare SF / SV are over. This is my last rant...hopefully!

    They take a small group of people that actually are moving and blow it up into a trend. It's been going on for years.

    Yes home prices are insane. No salary doesn't make up for it. Yes your house will be smooshed in between others unless you got a lot of money. Yes you could get 2x the house for 1/2 the price anywhere else.

    But it ignores two huge factors keeping people here. One the network density for tech. There are more jobs and support here than other places. More investment dollars create more startups which hopefully have more exits which attracts more investment dollars. It's a virtuous cycle.

    Two is the lifestyle. Yes there's a liberal bent but it's traditionally been one of the most open minded places in the country. There are few other places you can experience so much of life's variety within a 3 hr drive.

    And the whole remote working thing sounds logical but I see few companies actually widely adopting it. A lot of people prefer to connect in person, even though there is no rational reason why anymore.

  • by solidsnack9000 on 3/7/18, 5:35 AM

    The regulations that prevent new building are the work of incumbent residents -- people who have been here for many decades, support the arts and fly under the radar when it comes to assigning responsibility for this situation.
  • by dizzystar on 3/7/18, 6:15 AM

    I don't live in SF. I visited a few times and it's not my cup of tea. I prefer LA and plan to stay here forever.

    LA is expensive as well, but there are places that you can rent on the cheap, or at least a reasonable amount of money, and be safe. If this wasn't the case, LA as a city would break down. We need music, artists, actors, people pouring coffee, and serving tables to keep this city alive. We need a poor person living in the same building as an executive. On top of that, we need places where poor people can afford to eat, so there is a McDonalds anywhere you go.

    I bring up McD's because I was "over-fooded" in SF and went on a desperate search for something trashy to eat, almost to no avail.

    I'm just wondering how SF is able to sustain itself and how it plans to sustain itself in the future if they push all the poor people to such a distance that they can't even take the BART or bus to work anymore.

    The other difference is that LA is very much a gig economy. There are a LOT of people out here that either don't have a job and live just fine, or they have a day job and do random gigs during their off-hours. As someone once told me, you don't sleep in LA, you just rest. Others have pointed out that this is a work area, and so on. But even so, there are so many different industries down here that you can, with time, talent, and luck, have sustainable life and your own place, well outside tech, movies, music, art, and so on.

    My impression is that the bay area is an area with a few viable ways to make a living. Is it just that the lower class has to live in the dangerous areas of Oakland (and elsewhere) to just have a roof over their head?

  • by wpietri on 3/7/18, 6:02 AM

    There are a lot of causes for this. But one of the easiest to fix: VCs don't like getting on planes.

    I've lived here since Bubble 1.0, but I still keep in touch with people in the midwest. There are plenty of startup-oriented people there, but in their view to get real investment, they have to move to SF.

    It'd be great to see more companies starting and growing in places where housing and office spaced is reasonably priced. The Internet has made location much less important for so many things; we should make that true for startups as well.

  • by lph on 3/7/18, 6:32 AM

    "WeWork, a startup that rents out shared workspaces, branched into co-living in 2016. Their "dorms for grown-ups" are intended for people moving to a city and looking for fast friends.The company, which has a $20 billion valuation, has two locations: one in New York and one in Crystal City, Virginia, outside DC. The average apartment is just 450 square feet."

    How does a company running glorified dormitories have a $20 billion valuation with only two locations?

  • by dmix on 3/7/18, 5:25 AM

    "-because of it's out of control housing regulation"
  • by ggm on 3/7/18, 8:37 AM

    Laws of use and laws of possession always seem to come down to enabling benefit for current holders over future holders.

    Thing is, changing this is like changing the gravitational constant. It's baked into the DNA of property rights, leases and taxes.

    sanFran is maybe on an extreme here for the USA but it's not necessarily worse than say Tokyo, or the eggegious failure of leasehold in London, or a number of worldwide housing issues

  • by farnsworthy on 3/7/18, 6:12 AM

    What is the average 1BR apartment going for now in SF? (I'm not sure that Craiglist or quoted outliers are entirely representative, and am interested in the experiences of people more familiar with the market.)

    > This is how people outside the area imagine living in San Francisco.

    She doesn't seem to think much of her readers.

    > San Francisco's chief housing inspector deemed living in boxes illegal.

  • by rdtsc on 3/7/18, 7:23 AM

    > The median-priced home in San Francisco sells for $1.5 million, according to Paragon. It's not uncommon for buyers to bid hundreds of thousands above asking and pay in all cash.

    Who are these people? There are a lot of homes there, so there must be a whole lot of buyers with $1M in cash. There are enough of them that they even try to outbid each other by slapping an extra $100k no top of asking price.

  • by vadimberman on 3/7/18, 6:02 AM

    > San Francisco’s median two-bedroom rent of $3,040

    Is it? It's hearsay, of course, but I was told it's closer to $4K.

  • by shipintbrief on 3/7/18, 8:35 AM

    Is there any part of this site where some suggestions could be made to moderators/admins? Like restriction of sharing links to sites which you can't see if adblock is enabled?
  • by katebrooks on 3/7/18, 7:13 AM

    Eventually only a specific people who can afford would stay and who can't would move. Other cities would definitely get established which is a good thing. Remote working is not my cup of tea. I live in New York city and I love living and working here.