
Tech Boom Hits San Francisco Rental Prices  - KeepTalking
http://online.wsj.com/article/SB10001424052702303296604577450760765114108.html?google_editors_picks=true
======
jseliger
The basic problem is simple: lots of demand chasing little supply, as
discussed extensively here:
[http://www.slate.com/articles/business/moneybox/2012/05/face...](http://www.slate.com/articles/business/moneybox/2012/05/facebook_george_lucas_and_nimbyism_the_idiotic_rules_preventing_silicon_valley_from_building_the_houses_and_offices_we_need_to_power_american_innovation_.html)
(HN discussion:
[http://www.slate.com/articles/business/moneybox/2012/05/face...](http://www.slate.com/articles/business/moneybox/2012/05/facebook_george_lucas_and_nimbyism_the_idiotic_rules_preventing_silicon_valley_from_building_the_houses_and_offices_we_need_to_power_american_innovation_.html)
). See also this:
[http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o...](http://www.theatlantic.com/magazine/archive/2007/11/a-tale-
of-two-town-houses/6334/) .

This is one of these problems that has a simple, obvious solution—raise or
remove height limits, mandatory building setbacks, and parking space
requirements—that will probably be ignored in favor of grandstanding and lots
of small, fiddly solutions that don't deal with the overall problem.

~~~
planetguy
Well, ultimately the problem is that San Francisco is a small area where a lot
of people want to live, and they're willing to pay a premium to live there.
You can fiddle around with the supply side of this "problem" if you like
(which will by your prescription also lower the demand by making the city a
less nice place to live), but there's only so much you can do.

As far as I'm concerned the lack of cheap housing in San Francisco is no more
of a problem than the lack of cheap housing in Beverley Hills.

~~~
jseliger
_there's only so much you can do._ That's not really true, per the linked
article above.

 _As far as I'm concerned the lack of cheap housing in San Francisco is no
more of a problem than the lack of cheap housing in Beverley Hills._

See Edward Glaeser's _Triumph of the City_ for more about why this is a
problem. For example, he cites an array of research that comes to this
conclusion:

"Cities enable collaboration, especially the joint production of knowledge
that is mankind's most important creation. Ideas flow readily from person to
person in the dense corridors of Bangalore and London, and people are willing
to put up with high urban prices just to be around talented people, some of
whose knowledge will rub off.

Rousseau famously wrote, 'Cities are the abyss of the human species,' but he
had things completely backward. Cities enable the collaboration that makes
humanity shine most brightly. Because humans learn so much from other humans,
we learn more when there are more people around us. Urban density creates a
constant flow of new information that comes from observing others' successes
and failures" {Glaeser "Triumph"@247}.

In other words, having a large concentration of smart people leads to new
ideas and "the joint production of knowledge." Preventing people from moving
to cities through price restrictions means less knowledge and has an array of
negative environmental consequences.

------
confluence
Calculated Risk (<http://www.calculatedriskblog.com>) did a series on the
upcoming SF rent/real estate bubble, as well as the return of housing back in
early 2012. I highly recommend this awesome blog for my fellow HNers - it
plays host to great discussions/links/facts on the economy, housing, finance
and the global/domestic (US) recovery.

The direct links for those who want more detail:

[http://www.calculatedriskblog.com/2012/04/san-francisco-
rent...](http://www.calculatedriskblog.com/2012/04/san-francisco-rents-on-
tear.html)

[http://www.calculatedriskblog.com/2012/04/bottom-for-
house-p...](http://www.calculatedriskblog.com/2012/04/bottom-for-house-
prices.html)

[http://www.calculatedriskblog.com/2012/04/wsj-on-housing-
bid...](http://www.calculatedriskblog.com/2012/04/wsj-on-housing-bidding-wars-
are-back.html)

[http://www.calculatedriskblog.com/2012/04/private-money-
comi...](http://www.calculatedriskblog.com/2012/04/private-money-coming-back-
into-housing.html)

And a summary about all of the above that I found on Quora can be found here
(scroll to the bottom - ignore the editorializing):
[http://www.quora.com/the_edge/Intriguing-answer-on-
Silicon-V...](http://www.quora.com/the_edge/Intriguing-answer-on-Silicon-
Valley-bubbles-manias-booms-busts-crashes-and-winning-the-startup-lottery)

------
gergles
I used to live in a building near a Google shuttle stop on the border of the
TL. They wanted to raise my rent almost 20% y/y for a lease renewal, and the
place was a _trainwreck_ quality-wise (as was the neighborhood.)

When I went to move out, the leasing agent just shrugged and said "Some
Googler will happily pay even more than that."

The real problem is SF prohibiting any dense housing from being built anywhere
in the city and also the failure of running reliable/usable public transit to
any region outside of the area bounded by BART and Market Street. Rent control
certainly doesn't help (though I think there should absolutely be a rent
stabilization law -- everywhere.)

~~~
_delirium
I don't think they're prohibiting dense housing per se, just not
approving/building enough of it. There have been several 50-story condos
opened in the past few years, and several more currently under construction,
but they're not enough to keep pace with growth in demand. It didn't help that
there was a ~2-year lull in construction when a bunch of developers got into
financial trouble during the financial crisis and had to put projects on hold.
It's not as if SF _isn't_ dense; it's the 2nd-densest city in the country, and
way-way-way ahead of local peers San Diego and Los Angeles.

I agree on public transit, but it's not clear what to do about it. An east-
west Geary subway line has been proposed since the 1930s, but it's _really
expensive_ to build in an earthquake zone, and the city / taxpayers just
haven't been willing to pay what it'd cost. A cheaper alternative that
leverages the already-built infrastructure might be to convince people to live
in under-developed areas that _do_ have good transit already, such as Oakland,
which is actually closer to downtown SF by transit-minutes than much of SF
proper is.

One thing that would help on the latter issue is if more of the suburban
cities on transit lines _also_ dropped their anti-development attitudes. For
example, there is enough demand that there should be condos/apartments near
the Palo Alto Caltrain station. But Palo Alto won't allow it, because they
have some idea of an upper-class suburb full of single-family homes that
they'd like to protect.

~~~
planetguy
Instead of a subway line, would it be possible to close off one of San
Francisco's many east-west streets (Geary if you like, probably a couple
north-south of there would be better) and run a light rail line (using Muni
Metro or similar cars) on an east-west route?

You could adjust the timing of the traffic lights to ensure that the rail line
always (or usually) has priority and cross the whole city in ten minutes.

~~~
_delirium
There's a plan currently under discussion for bus rapid transit on the Geary
corridor, which is sort of the el-cheapo version of that idea
(<http://www.sfcta.org/content/view/37/70/>). Give the bus a dedicated,
physically separated lane to reduce traffic problems, and build light-rail-
esque, less frequent stations in the median with level boarding. Not a full
solution, but the hope is that it'll raise the average bus speed
significantly.

~~~
planetguy
I hope they plan to raise the average bus _quality_ too; riding Muni is less
like public transport and more like a homeless shelter. I couldn't imagine
doing it every day.

------
205guy
Did anybody see the other article in WSJ about SF real-estate? The title is
"China in Talks With U.S. Home Builder / State Bank in Talks to Provide Lennar
$1.7 Billion for Two Long-Stalled Projects [for 20,000 units in SF]"

[http://online.wsj.com/article/SB1000142405270230445860457748...](http://online.wsj.com/article/SB10001424052702304458604577489062449154168.html?mod=WSJ_hp_editorsPicks_3)

Pwn'd is the word that comes to mind.

------
JWhiteaker
I experienced this first-hand as I just signed a place a little over a month
ago. Compared to what was listed the apartment we ended up with was several
hundred dollars cheaper, and we competed with at least 10 other applicants for
the place.

However, as I talk to more people they think we are overpaying several hundred
dollars based on what they are paying for comparable units, most of which were
signed around a year ago.

------
wunderland
What should someone do if they're moving to SF and want to live in SOMA or
nearby neighborhoods? Does anyone have any recommendations? It seems like
there aren't that many choices for buildings, and a lot of them aren't that
new. All of the reviews I have read (for almost all of the buildings) sound
mediocre or negative.

~~~
quesera
Get roommates, get ready to pay, and don't expect much.

There are some great old houses in South of Market, but turnover is rare, and
they're all expensive. There are some great/awful new live/work buildings
there too, but most of them are condos and all of them are expensive.

Affordability comes in Outer Mission, Excelsior, Outer Richmond, Outer Sunset.
Occasionally Potrero Hill toward Cesar Chavez. "Affordability" is relative of
course, but if you're finding yourself priced out of the places that everyone
talks about and look nice on the map, check prices in the places I listed.

Also, remember that East Bay near BART is closer to South of Market than most
of San Francisco city is, time-wise.

~~~
bbrian
Any figures? I live in Dublin, Ireland, and pay €500 ($624) per month for a
room in a two bed apartment in the centre of the city. That's cheap for the
area -- I live within walking distance of all the bars.

~~~
juiceandjuice
You can't get a room share in most of SF for under $700, for SOMA and the
Mission you'll be lucky at $850. A studio you might be able to get for
$1200-$1500, 1BR $1400-1800, 2BR $2000-$$$$$.

This is assuming you don't want to live in Bayview.

~~~
dot
I think you need to add about 50% to all those prices.

------
dm8
For those who are finding it hard to rent a place, I have a suggestion for
you: move to Berkeley. Amazing food. Great weather most of the time. And if
you live near BART station its not that far if you work in SF.

