
The Whole Problem Is That There Is No Housing Boom In Silicon Valley - prostoalex
http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valley_housing_boom_there_s_no_such_thing.html
======
jameswilsterman
Everyone should read the author's e-book (it's a really short ~30 min. read).

<http://www.amazon.com/The-Rent-Damn-High-ebook/dp/B0078XGJXO>

After reading his book, I am convinced that overpriced rent is a massively
important problem that makes countless aspects of society worse.

I've read that people spend roughly 1/3 of income on housing, 1/3 on food and
1/3 on everything else. The long term trend in the U.S. has been to greatly
reduce the % of our income we spend on food (due to agricultural and tech
innovation). We need to do the same for housing prices over the next 20 years.
A small space to live for one person in NY or SF should simply not cost ~30%
of your annual income! The materials are very cheap to build a square box! And
there is lots of vertical room in our nicest cities to build square boxes. The
issue is solely constrained supply due to building regulations (many at the
local level).

For tech leaders in SF, this seems like it should be the next big political
fight (after immigration).

~~~
wes-exp
What about solving this on the technology side?

We have fantastic technology in many aspects of life, but housing seems
practically unchanged. I mean, buildings are constructed by teams of men
placing pieces of wood by hand. Is that really the best we can do?

Dear VCs, you think a billion dollars is cool? How about a _trillion_ dollars?
Housing is that big.

For instance: [http://gizmodo.com/5045863/concrete+jet-printer-gets-
caterpi...](http://gizmodo.com/5045863/concrete+jet-printer-gets-caterpillar-
funding-print+out-houses-on-the-way)

If Caterpillar, a hyper-conservative, risk-averse organization can fund this
kind of stuff, surely VCs can.

~~~
Tuna-Fish
> We have fantastic technology in many aspects of life, but housing seems
> practically unchanged. I mean, buildings are constructed by teams of men
> placing pieces of wood by hand.

That's simply not true. The kind of high-intensity housing he is talking about
is built by arranging large pre-fab pieces on steel frame. In modern tower
buildings, the pre-fab pieces are built on an assembly line and actually
finished and furnished before bringing them on site and placing them on
buildings. It's a much more efficient industry than concrete jet printers ever
could be.

~~~
wes-exp
Sorry, by "buildings" I wasn't specifically referring to steel towers.
Obviously these aren't merely made of wood.

Whether we're talking about one and two story constructions, or tall towers, I
still feel that there must be room for "more, better, faster, cheaper" through
technology here. I won't be satisfied until everyone can afford (but not
necessarily chooses to purchase) their own mansion-sized living space,
cheaply.

~~~
coldtea
Were I'm from NO building is made of wood period.

I don't get why Americans pay top dollars for "houses" made of wood, plastic,
etc, and with crappy construction (I've lived in several all around the US).

I'd take EU-style bricks, concrete, stones, etc any day of the week.

~~~
ohazi
Where I'm from we have earthquakes.

~~~
coldtea
Which is orthogonal.

~~~
SupremumLimit
No it's not. For example, the vast majority of 1-2 storey buildings in New
Zealand have wooden framing, because it allows seismic resistance at a
relatively low cost.

Most people that died in the Christchurch earthquake a couple of years ago
were killed by falling bricks and stone, and a couple of collapsed concrete
block buildings.

------
gojomo
Every lot within 500m of a rail station should automatically be zoned to allow
for 6-story buildings and ground-level retail. And, building to the max height
should earn lots a lower property tax rate. Manifest density!

~~~
WildUtah
That's what we should do. What we really do more often is surround train
stations with nothing but surface parking over every lot within 500m. Surface
parking not only fails to make use of the potential for density in appropriate
places but creates traffic and makes it harder to build mixed use or medium
density elsewhere.

BART is the single largest provider of off-street parking in the USA. CalTrain
seems to be trying to match it.

~~~
uvdiv
robg, I'm seeing your comment marked [dead], even though you are not
hellbanned and there's no reason for anyone to downvote it. Perhaps it's a
bug.

------
astrodust
Every time I've visited the Valley area I can't help but notice the enormous
difference in density between San Francisco and the Valley in general.

Where parts of San Francisco are jammed with houses, every nook occupied, not
unlike parts of Manhattan or Boston, there are large swaths of the Valley with
nothing but parking lots.

Any time I've asked a local why the densities aren't higher, why a ten story
apartment building is such an anomaly, I get some vague grumbling about
earthquakes. San Francisco has a number very tall buildings with a few even
built on the side of a literal mountain, and all of these have survived
several significant quakes, so I doubt this is the actual reason.

It's absolutely surreal the amount of under-utilized real-estate one must
drive past or around simply to get where they're going.

~~~
hapless
San Francisco actually has the same problem as the valley. Housing prices are
going through the roof because the city REFUSES to re-zone for higher density.
The last time there was significant re-zoning, there was a great deal of
whining about "Manhattanization."

Manhattan has incredible population density, and residents have some of the
lowest environmental impacts in america. What's bad about that?

The same slate columnist wrote about SFO real estate earlier:
[http://www.slate.com/blogs/moneybox/2013/04/11/san_francisco...](http://www.slate.com/blogs/moneybox/2013/04/11/san_francisco_zoning_needs_more_density_and_tall_buildings.html)

~~~
firefoxman1
> _the city REFUSES to re-zone for higher density_

Call me crazy, but that's what I love about SF. It feels so much more
(friendly? approachable?) than other cities because of the architecture and
height of buildings. It's quite unique and I'd hate to see it go.

~~~
potatolicious
It's an understandable stance, but IMO a disastrous one.

I lived in SF for a year, and to be honest I found it to be somewhere between
"cool" and "intolerable". The city is filled with transplants who, the moment
they set foot in the fair city, turn around and try to slam the door shut
behind themselves as hard as possible, and this has _so_ many negative
effects.

San Francisco is a city devoid of pragmatism - it is a fairy tale theme park
run amok. Instead of getting more people to and from work faster, it is
hostile to most forms of mass transit. It is hostile to the population growth
necessary to un-fuck the city's transportation disaster (aka MUNI and BART).

A city is a naturally-arising conglomeration of people that will happen
anywhere you combine places people want to live, with places where they can
work. The key word here is _people_. The city has entirely forgotten that -
zoning for new office spaces is onerous and slow. Zoning for housing
developments nearly non-existent outside of Mission Bay. It has gone out of
its way to act directly against the very basic interests of its constituency
in favor of maintaining this picturesque, fairy tale backdrop of the 1930s
frozen in time.

After experiencing the SF housing market first-hand I honestly have a changed
view of the city. When you're just visiting, the old houses, the low density,
the unique architectural style, it all feels so picturesque and lovely.
Nowadays to me the city feels like a an embalmed corpse - superficially
resembling some idealistic long-ago era while lacking any real semblance of
function. It is utterly broken, mismanaged to absurdity, all so a small number
of people can live in a slowly-crumbling fairy tale.

Nowadays I live in NYC, and frankly have no desire to go back to SF. It's
cheaper (!!!), the city has done a remarkable job of preserving old
architecture, mixing old with new (see: Hearst Building), and new development.
There is a constant stream of development that keep both commercial and
residential prices in relative check. And despite the loud cries of San
Franciscans, the density and Manhanttanization has created no shortage of
culture, interest, and unique neighborhoods.

Hardly surprising. After all, a city is primarily defined by its people, not
colorful paints and period-architecture. Keeping _people_ around, at the end
of the day, is your best shot at preserving the spirit and character of a
place than any sort of architecture.

~~~
jfb
San Francisco is Disneyland for rich people. Its a place that's designed for
tourists and the idle rich.

~~~
rdouble
_San Francisco is Disneyland for rich people._

Isn't the same complaint levied against Manhattan?

------
cpursley
As a commercial real estate appraiser with a pretty good understanding of land
economics, I completely agree. When land is pricy, there is no other logical
option than to go up. The only thing zoning serves is the uberwealthy and
those with political influence.

There should be no zoning at all. None. Just look at the best cities in the
world including pre-zoning America - their growth was dictated by pure
economic need, not by nimyism. To use startup jargon, zoning makes it
difficult and costly to iterate real estate to the 'highest and best use'.

<https://www.youtube.com/watch?v=43Egm0j_p1A>

~~~
prostoalex
For short-term yes. For long-term, how do you deal with overbuilding and/or
large groups of people moving away to the next up-and-coming city, leaving
behind a ghost town of empty high rises?

Some overbuilt cities in China or Eastern Europe have that issue.

~~~
mseebach
Overbuild cities in China or Eastern Europe are artifacts of planning gone
wrong, not the opposite.

~~~
prostoalex
I was addressing parent's "There should be no zoning at all". Maybe I'm
confusing zoning and urban planning.

~~~
mseebach
Zoning and urban planning are very closely interrelated. Zoning (obviously) is
an instance of urban planning - and it's very hard to plan a city if you don't
have a way of enforcing your plan (zoning).

The China and Eastern Europe ghost-cities are slightly different because the
distinction between the zoning authority (government) and the developer is
more fluid, but I still think it applies.

------
Apocryphon
An excellent comment on a compelling article from January:

"As a lifelong resident of Silicon Valley, I can only laugh. Our patented
brand of NIMBY liberalism married to Asperger's-induced libertarianism makes
this plan an utter pipedream."

[http://www.theatlantic.com/technology/archive/13/01/a-grand-...](http://www.theatlantic.com/technology/archive/13/01/a-grand-
plan-to-make-silicon-valley-into-an-urban-paradise/266998/#comment-761592824)

Previous discussion of article here:
<https://news.ycombinator.com/item?id=5032555>

~~~
guelo
Weird to call NIMBY a liberal thing when many conservatives hate any kind of
density planning or mass transit.

~~~
jacoblyles
How many conservatives live in San Francisco? 12?

~~~
moocow01
Many actually - they just don't realize they are in most ways conservatives.

~~~
jacoblyles
I do think pro-regulation liberalism is fundamentally "conservative" in many
ways, in that it is risk-averse.

------
webjprgm
Ugh, please no. The real problem is that startups can't decide to open up shop
somewhere else, like Pleasanton or Napa. Somewhere that's just as accessible
to all the VCs and conferences but not so short on housing.

I don't want mega city. I'm sure a lot of people who have made the Silicon
Valley their home for many years agree. It's just the young crowd who has to
live in apartments anyway that think more mega Apartment buildings would be
great. I completely refuse to live in SF because of the density and turn down
any job based in SF automatically.

~~~
icebraining
But does anyone want to live in Pleasanton or Napa? (I wouldn't know, just
curious)

~~~
steve-howard
I grew up in San Ramon (10 mins from Pleasanton), and I can assure you that --
mind-numbingly boring as I found the place -- many people want to live there.

------
pconf
Good luck with that. Problem is the Valley has been a real estate developer's
dream for 60+ years and it has not had the effect this (opinionated but poorly
researched) article espouses.

Rezoning alone is "dumb planning". Rail, transit, bike friendly streets,
greenbelting and farmland preservation all must be in place first in order for
density rezoning to work.

Problem is Santa Clara County has been all about cars and freeways for as long
as they have existed. Just last month they closed the San Thomas Creek bike
trail for the convenience of the 49er stadium construction. Now cyclists at
the Santa Clara Amtrak station are forced to ride on Tasman which has no bike
lanes, Sharrows or shoulders. It's exactly this kind of dumb planning that
allowed developers to demolish the downtown that Santa Clara once had and
perpetuate the kind of auto-centric sprawl that characterizes Silicon Valley.

------
babesh
People live in the Peninsula partly for the house with a yard. People live in
SF for the city life etc...

Its been self selecting for a long time. You will get a lot of opposition to
high rise apartments in those areas especially since the existing residents
don't 'need' or even want these developments.

You don't even have BART in middle to lower parts of the Peninsula. Where you
do see Bart, you see a little bit of the developments that you speak of
(Millbrae, South San Francisco, etc...)

There is increased demand. It translates into higher prices for the Peninsula
and increasing development and somewhat higher prices in the outskirts (East
Bay, South Bay, etc...). Also, see a bit more in fill in the Peninsula.
Previously, subpar empty lots are being bought and built on.

------
davidw
He wrote an entire book on this subject:

<http://www.amazon.com/dp/B0078XGJXO/?tag=dedasys-20>

Which wasn't bad. Pay the ratings no mind - when it came out, he'd just
written something that pissed off a lot of folks for some reason and so they
got it into their heads to try and trash his book.

~~~
patmcguire
Yeah, said the taboo on speaking I'll of the dead was stupid and the world was
a better place without Brietbart.

~~~
newnewnew
I can't defend all of Breitbart's actions, but he did commit some acts of
serious original journalism. A recent New York Times expose on $4 billion in
waste in the Department of Agriculture due to fraudulent civil rights claims
was based on original reporting on Breitbart.com[1]. By itself the traditional
media doesn't report on these kinds of stories because they are afraid of
being called racist.

[1][http://www.nytimes.com/2013/04/26/us/farm-loan-bias-
claims-o...](http://www.nytimes.com/2013/04/26/us/farm-loan-bias-claims-often-
unsupported-cost-us-millions.html)

~~~
illuminate
"By itself the traditional media doesn't report on these kinds of stories
because they are afraid of being called racist."

His racist obsessions (Sherrod comes to mind) are why people didn't take his
"original reporting" seriously.

~~~
illuminate
And by "his racist", I mean his pandering to a particular demographic.

------
steve-howard
> Some people might get dispaced out of the individual house they live in,
> [...]

Exactly. Who is going to have a voice in community matters, particularly when
it comes to eminent domain: local homeowners, or hordes of hypothetical people
that don't live there yet?

------
daniel-cussen
I feel like Santiago, Chile is what the valley would be like if it didn't have
zoning. An intense, urban environment with nice neighborhoods _and a
downtown._ A _real_ downtown, with a _real_ nightlife, high quality walking,
good public transport, cheap taxis, low taxes, low crime, all without
sacrificing fantastic weather.

At the same time, Santiago, while vibrant, requires you speak Spanish, and is
not the Valley.

------
gcb0
1\. get lots of land

2\. bribe zoning people to not allow more people to grab land

3\. instead of building/managing lots and lots of buildings, put the price of
the few ones high up.

it's basic pricing. if you can limit the demand and charge more, its much
safer than lowering the price and trying to scale. you guys talk about that
all the time here with digital goods and service. but now get impressed that
people do that with real world goods since the dawn of time?!

------
chipsy
I think the whole thing is another symptom of the local government's
dysfunctional incentives. There's no unified agenda for the Bay Area, and it
hurts everyone. It shows in the approach to housing and transportation, in
business development, and in the nature of political campaigns.

To some extent, I would venture to say that the region suffers from a form of
Resource Curse - nice location and weather, and a tech ecosystem that, these
days, spins money out of "nothing." Lots of wealth, lots of idealism, but
nobody with both the privilege and the responsibility to organize it all in a
way that would fix the issues.

------
SurfScore
Could this have anything to do with the fact that abundant displays of wealth
(I.e. a mansion) are frowned upon by some in the Valley? I honestly have no
idea, but you hear stories about tech millionaires living modest lives in SV
all the time.

Nothing wrong with that at all, but if they aren't spending the money they
have then its not helping the economy (at least in this respect).

~~~
svachalek
No. There are plenty of mansions too. But the prices here are all about the
fact that demand keeps increasing while supply is not allowed to.

------
steven2012
It's easy to give objective evaluations about what _should_ be done, but the
reality is that given how many people have spent inordinate amounts of money
for their homes already, they will likely fight tooth and nail to ensure that
their houses maintain their values. The last thing current home owners will be
is charitable towards newcomers, who would pay less for homes than what they
had to, and at the same time dragging down their own home prices. I think the
low density housing in the Valley is just a situation that people will have to
live with for the foreseeable future.

The thing is, there are plenty of cheap housing in the outer-lying areas like
Livermore, Tracy, Stockton, etc. They just need to invest in proper
transportation options, like extending BART to those cities.

~~~
taurath
When people have to pay $4000/mo to rent a 3bedroom condo that the person next
door pays $1300 on their mortgage (as is probably the case in many areas
currently), won't companies eventually think that they can offer far more than
just location to potential employees if they go elsewhere? I moved to the bay
in 2004, and I was able to comfortably afford a few decent apartments in
mountain view/sunnyvale. Those apartments have gone up by 200% in their price
because of proximity to FB, Google and other firms.

Everything will continue to get more and more expensive as the cost of basic
services goes up and up - eventually you'll start losing a lot of good
creative people because nobody can afford to take an entry level job and work
their way up. The bar for living "comfortably" in the bay area has been rising
extremely fast, and those who have bought a home 20 years ago can live fine,
but for young people especially it will be really difficult to catch up. I've
had 7 or 8 friends in their 20s and 30s move to the Seattle area for purely
economic reasons - a few to colorado and a few to Texas as well.

~~~
steven2012
This is just a function of the markets. If people can't afford to move here,
and vacancy increases, then housing prices will naturally drop. I've seen this
happen more than a couple of times in the last 15 years. I have no doubt that
rent prices will drop sometime in the next couple of years, because the rate
of growth is unsustainable. One of my friends moved out of her 2br2ba
apartment at Avalon Mission Bay because her rent was increased to 5100/month.

------
messick
People with money (i.e. home owners) don't want an apartment on the 7th floor.
They want a ranch style home with a front and back yard. Which is what they
have right now in SV.

This argument has been going on for as long as there has been a "Silicon
Valley" to make housing expensive, so decades. Nothing will change, because
the people who actually live there now like it the way it is.

~~~
saosebastiao
That is an incredibly bad generalization. Not only are the wants of wealthy
people not absolute, but the general trend of housing for the last 20 years
are the exact opposite.

------
protomyth
I do wonder sometimes if standardized, truck haul-able modules of housing
wouldn't be an interesting alternative to apartments. Build a building that
you plug the modules. Want to move, haul the module to a new building.

I guess I wonder more about what could change to lower the cost of housing.

~~~
joonix
That's called modular or pre-fab housing and it exists.

The problem here is not building costs, by any means. It's artificial
restrictions on the market by local councils who refuse to support higher
density living.

~~~
protomyth
true on the politics of it.

I am thinking something a little different than pre-fab, something more along
the lines of plug-able module into building. More along the lines of cargo
containers in a warehouse.

------
mixmastamyk
I'm generally pro-density, but after reading about the toxic waste there, I'm
not excited about new development in the area.

------
snambi
There is only one problem. "Land is limited". And people like to live in
single-family homes.

------
ttrreeww
I hope more startups move to Texas...

