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There is such a thing as induced demand - but I think it is largely overblown here.
The biggest factor is the imbalance in supply and demand. Mainly, at least regionally, on the supply side. While I know luxury apartments do little to benefit current residents looking to live in those places, you should remember that the more supply, the more options people of all income brackets will have. Absent "high-end" condos, many people who might live in those places will just end up buying your run-of-the-mill SF SFH. Or some older condo/flat somewhere else in the City. By adding more supply to the top end, relief does peculate down to other housing sectors.
Now the key here is you probably need to build A LOT (far more than we are building) to make a really significant dent in the entire market. We have seen in the luxury market specifically that there has been some saturation as prices have either leveled off or have even come down slightly. It's not enough to make a huge impact on all sectors (e.g. get us back to ~2012 housing prices), but it is a decent start.
I don't think we have the political will to build enough long-term, so I'm not sure if things will change significantly in the future. But building luxury housing can help, even if it doesn't seem so on the immediate surface.
Class level to class level, Hockey. People buying high end condos are typically not living in homes that a Middle Class family could afford, so the impact is essentially nil.
I find it hard to find exact percentages. That being said lots of the all cash offers are foreign investors. If youre selling your home, who would you rather sell to, someone (or some foreign investment company) that will pay cash on the spot or someone that has to deal with the loan approval process (which can take time and still sometimes be rejected?)
I find it hard to find exact percentages. That being said lots of the all cash offers are foreign investors. If youre selling your home, who would you rather sell to, someone (or some foreign investment company) that will pay cash on the spot or someone that has to deal with the loan approval process (which can take time and still sometimes be rejected?)
The highest bidder. And perhaps since it's hard for you to find exact percentages, maybe you shouldn't be saying things like "a lot".
Last edited by Independentthinking; 10-05-2017 at 12:16 PM..
Class level to class level, Hockey. People buying high end condos are typically not living in homes that a Middle Class family could afford, so the impact is essentially nil.
But how do you know this? In my experience, I have met plenty of wealthy tech people (often DINKs) that end up buying an average home in the City. A few of them have mentioned that they were interested in new condos, but didn't want to wait for them to be built (this was ~5 years ago before many of the new developments came online).
Perhaps the effect is not incredibly-high, but I have a hard time believing it is nil. These things do cascade down. People have to live somewhere, and when people with enough money come here, they'll buy whatever they can find. Absent "luxury" condos/homes, they'll go for the next best thing they can find. And when inventory is low, like it has been for a while, sometimes that is your run-of-the-mill SF home.
Who's "we", Hockey? Seems to me that the area is thriving right now. Unemployment is at a low of 3% and the Economy is doing well. What if we hold pat?
Specifically what dire consequence will occur if it's not done?
"we" is the region.
The assumption of my post is that "we" want to address housing costs.
If you 1) want to address housing, but 2) you want to want wait until infrastructure is up to snuff before doing so, you'll never address the first part because number 2 takes decades to plan, fund, and implement.
It's a chicken-and-egg problem, but in this case one of the options is MUCH harder to implement than the other.
Of course, if you are not even interested in addressing housing costs, then it doesn't matter. But when you read my post, you should know that it is framed from that perspective. As was the post I was responding to.
The assumption of my post is that "we" want to address housing costs.
If you 1) want to address housing, but 2) you want to want wait until infrastructure is up to snuff before doing so, you'll never address the first part because number 2 takes decades to plan, fund, and implement.
It's a chicken-and-egg problem, but in this case one of the options is MUCH harder to implement than the other.
Of course, if you are not even interested in addressing housing costs, then it doesn't matter. But when you read my post, you should know that it is framed from that perspective. As was the post I was responding to.
My thoughts are that the majority of the people that comprise the "we" are the Johnny-come-latelys that probably arrived in 2014 or later, and are simply a very loud minority. Most people that purchased before that are surviving. And yes, there are some that weren't able to secure a rent controlled apartment or chose not to buy when they had an opportunity that are struggling. Had the internet been around when my wife and I were purchasing, there's no doubt in my mind that the same arguments were made some 20+ years ago. The area didn't change for me (nor did I expect it to). I suspect there are plenty of people that don't want to turn San Francisco into a "rats in a maze" type situation like New York, where you have to dodge people on a sidewalk to avoid being bumped (which is the direction we're going in).
My thoughts are that the majority of the people that comprise the "we" are the Johnny-come-latelys that probably arrived in 2014 or later, and are simply a very loud minority. Most people that purchased before that are surviving. And yes, there are some that weren't able to secure a rent controlled apartment or chose not to buy when they had an opportunity that are struggling. Had the internet been around when my wife and I were purchasing, there's no doubt in my mind that the same arguments were made some 20+ years ago. The area didn't change for me (nor did I expect it to). I suspect there are plenty of people that don't want to turn San Francisco into a "rats in a maze" type situation like New York, where you have to dodge people on a sidewalk to avoid being bumped (which is the direction we're going in).
Well, of course the people most affected by this will be the ones that are most vocal.
But I think you are mistaken if you think it is just newcomers. Many people are affected by this. Sure, if you have owned your home for years, or you're in a rent-controlled unit (and you have no need/interest in an apartment of a different size), you're not feeling it.
But everyone else is affected by this. That does include, of course, newcomers. But it also includes local people, such as the children of people who own their homes or live in a rent-controlled unit, or people that might want to move out of their current residence to a new home.
Generation X and baby boomer homeowners in the Bay Area are considerably more opposed to construction of new housing in their neighborhoods than millennials and those who have moved to the region in the last few years.
Not surprising, of course.
Quote:
That’s the bottom line, according to a new poll released Sunday by the Bay Area Council showing generational divides in residents’ attitudes toward the region’s housing crisis. Among millennials — ages 18-39 — 70 percent say “yes” to new housing in their neighborhoods. But only 57 percent of residents age 40 and older support such housing.
While support is stronger with young people, or people new to the area, older people are still supportive of new housing.
And it's growing:
Quote:
A majority of residents — 62 percent overall — supports putting new housing in their neighborhoods, up from 56 percent in 2014.
A poll conducted by the UC Berkeley Institute of Governmental Studies showed that 51 percent of voters living in the San Francisco Bay Area have considered moving due to the rising cost of housing.
The poll also showed that out of those considering moving, 25 percent would relocate out of state.
Sixty-five percent of voters in the Bay Area feel that housing affordability is an “extremely serious” issue, according to the poll. Of all the regions polled for this question, the Bay Area saw affordable housing as the most serious issue, compared to 42 percent in Los Angeles County and 38 percent in the Central Valley.
An outside-the-box approach to alleviating the Bay Area’s housing crisis for some workers has garnered support in Santa Clara, San Mateo and San Francisco counties, according to a Silicon Valley Leadership Group poll released Tuesday.
The poll determined that 73 percent of voters in those areas would support converting publicly owned vacant lands to develop affordable rental housing. Twenty percent of respondents opposed the idea, and 7 percent had no opinion.
Seems to me that people in the region, regardless of whether they own/rent or regardless of their age, support more housing and think it is a serious issue that needs to be addressed.
Well, of course the people most affected by this will be the ones that are most vocal.
But I think you are mistaken if you think it is just newcomers. Many people are affected by this. Sure, if you have owned your home for years, or you're in a rent-controlled unit (and you have no need/interest in an apartment of a different size), you're not feeling it.
But everyone else is affected by this. That does include, of course, newcomers. But it also includes local people, such as the children of people who own their homes or live in a rent-controlled unit, or people that might want to move out of their current residence to a new home.
Seems to me that people in the region, regardless of whether they own/rent or regardless of their age, support more housing and think it is a serious issue that needs to be addressed.
I certainly agree with you regarding the difficulty that our children will face. However many of them will end up inheriting property from the Bay Area, like mine will. So they are indeed getting a benefit to it. As far as polls, we both know those are only as hood as the question that is asked. If you were to drill down, and ask how people feel about expanding housing if it would cause the value of their house to drop, I suspect you would get quite a different answer. As I mentioned, earlier in this thread, this is really nothing more than a family veiled wealth redistribution scheme.
Last edited by Independentthinking; 10-05-2017 at 09:14 PM..
Excuse my grammar on that last response (I was using voice activation on my phone and it screwed up on interpreting a couple of my words). I meant to say..."we both know those are only as good" and "a thinly veiled wealth redistribution scheme".
A very good friend of mine, who was a high powered lawyer in the city, told me something about polls that was enlightening and gave me a different perspective on them (and of course, I can't think of a better example than this last election to emphasize what he was saying). His firm was looking for a specific result in a poll for his defense on a court case he was working on. They asked a question to a test audience that they thought would generate the response he wanted. When it didn't, they tweaked the question until they got the response they wanted and then presented it as evidence. He said they did it all the time.
As stated above, if you can find me a poll that would include the adverse effects in any question they asked about expanding housing (i.e. impact to current home values, increased foot traffic that would make simply walking around the downtown area a very unpleasant experience, blocked views of the skyline, the antagonism and aggressiveness that is usually encountered when too many rats are put in a maze...exactly the reason I will never visit New York again), you might be on to something.
As it stands, most people that support increased housing tend to think those who don't agree with them as being selfish. However, I would be quick to point out that they are no more selfish than those that want to build buildings to the clouds. There are adverse effects for most everything and this is no different (even though those that support it tend to hold themselves out as doing something noble..that couldn't be further from the truth...and I'm not saying you are but rather what I've encountered with others).
I've said it countless times in these threads that pop up nearly once a month, regurgitating the same tired talking points. The only thing expanding housing (and anything related to it) in the Bay Area would do is have an extremely short term impact (it is no solution by any means). You could build to the clouds and get rid of rent control tomorrow and sure, it would have an immediate impact on housing. But what are we talking here? Maybe 20 years? The people that live on the outskirts would immediately move to the city or much closer. As those people move in, people from outside the area would fill up the outskirts, and eventually, we would be in the exact same situation, but those that arrived recently would "get theirs" and our grandchildren would be in the exact same predicament.
As for the adverse effects...you would immediately displace anyone on rent control, housing and rent values would take a temporary haircut (really cool for those that are approaching retirement and wanted to either sell their homes or rent them to help them survive since they didn't work in a time with salaries like many on the market now), more congestion, likely problems with infrastructure, etc. But lord forbid we talk about those things and show how the Emperor has no clothes, right?
There is no win-win here. I don't have a problem with the conversation, as long as those that advocate for doing this can at least admit that they are attempting to severely hurt homeowners and people on rent control for their own personal benefit (and for a very short term period).
The only thing that would truly impact this situation would be a loss of jobs. But I'm thinking people prefer unemployment being at 3% vs the 9+% back in 2010.
Last edited by Independentthinking; 10-06-2017 at 07:44 AM..
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Quote:
Originally Posted by Independentthinking
Excuse my grammar on that last response (I was using voice activation on my phone and it screwed up on interpreting a couple of my words). I meant to say..."we both know those are only as good" and "a thinly veiled wealth redistribution scheme".
A very good friend of mine, who was a high powered lawyer in the city, told me something about polls that was enlightening and gave me a different perspective on them (and of course, I can't think of a better example than this last election to emphasize what he was saying). His firm was looking for a specific result in a poll for his defense on a court case he was working on. They asked a question to a test audience that they thought would generate the response he wanted. When it didn't, they tweaked the question until they got the response they wanted and then presented it as evidence. He said they did it all the time.
As stated above, if you can find me a poll that would include the adverse effects in any question they asked about expanding housing (i.e. impact to current home values, increased foot traffic that would make simply walking around the downtown area a very unpleasant experience, blocked views of the skyline, the antagonism and aggressiveness that is usually encountered when too many rats are put in a maze...exactly the reason I will never visit New York again), you might be on to something.
As it stands, most people that support increased housing tend to think those who don't agree with them as being selfish. However, I would be quick to point out that they are no more selfish than those that want to build buildings to the clouds. There are adverse effects for most everything and this is no different (even though those that support it tend to hold themselves out as doing something noble..that couldn't be further from the truth...and I'm not saying you are but rather what I've encountered with others).
I've said it countless times in these threads that pop up nearly once a month, regurgitating the same tired talking points. The only thing expanding housing (and anything related to it) in the Bay Area would do is have an extremely short term impact (it is no solution by any means). You could build to the clouds and get rid of rent control tomorrow and sure, it would have an immediate impact on housing. But what are we talking here? Maybe 20 years? The people that live on the outskirts would immediately move to the city or much closer. As those people move in, people from outside the area would fill up the outskirts, and eventually, we would be in the exact same situation, but those that arrived recently would "get theirs" and our grandchildren would be in the exact same predicament.
As for the adverse effects...you would immediately displace anyone on rent control, housing and rent values would take a temporary haircut (really cool for those that are approaching retirement and wanted to either sell their homes or rent them to help them survive since they didn't work in a time with salaries like many on the market now), more congestion, likely problems with infrastructure, etc. But lord forbid we talk about those things and show how the Emperor has no clothes, right?
There is no win-win here. I don't have a problem with the conversation, as long as those that advocate for doing this can at least admit that they are attempting to severely hurt homeowners and people on rent control for their own personal benefit (and for a very short term period).
The only thing that would truly impact this situation would be a loss of jobs. But I'm thinking people prefer unemployment being at 3% vs the 9+% back in 2010.
Again, that's just you thinking that everyone and their mother is just itching to move to the Bay Area. That I assure you is not the case. People won't move if they won't have jobs when they get there. And some people don't want to abandon family wherever it is they currently are. Among other reasons.......
And another point. Homeowners do "need to be hurt" in the sense we are talking here. Nowhere else in this country besides maybe NYC and Boston have seen a single family house as some type of gold mine. That type of appreciation doesn't happen in any other metro in this country. Because other metros let the free market work for housing supply, rather than letting NIMBYs declare no vacancy. Take my mother's house in NY (but not the city). It is actually worth about $30k less than the purchase price from back in 1995, based on a recent appraisal. That's what happens when you let the free market work.
Otherwise, to put it in a way you can understand, should Apple stop building iPhone's so that the people who already own iPhone's can make a killing selling them later? Or should Chevy stop building Silverado's so the people who already own Silverado's can make a killing selling them later?
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