
The case for making New York and San Francisco much, much bigger - dctoedt
http://www.vox.com/a/new-economy-future/big-cities
======
CPLX
I agree with the basic premise, but it seems to me that those two cities in
particular are quite different.

New York definitely has its NIMBY crowd, and people will scream about
development in certain places under certain situations, but on the whole it
seems to be an entirely different culture towards growth. As a longtime NYC
resident, my feeling at least is that everyone here basically agrees on the
premise that they are going to live in a giant, incredibly dense, tall,
interconnected city that looks like a city. People might lament loss of
historic buildings, get annoyed by the aesthetics of cookie cutter towers, or
get seriously concerned at lower income people being ignored by builders, but
we do get that we live in a big city.

From the outside, it seems like the Bay Area is completely schizophrenic. San
Francisco has obvious big city problems that seem largely unaddressed. The
Valley is completely dominated by automobile-scale planning with a way of life
based on four story office parks surrounded by parking lots, a fundamentally
broken model. And the people with real money seem to want to continue some
fantasy that everyone is living in a bucolic nature preserve rather than the
choked up global megacity that clearly surrounds them.

I have little doubt that NYC will, in fact, just get much much bigger over the
next 20 years, and will generally have the same fundamental structure and
urban fabric. The Valley on the other hand seems like it's going to need to
change course.

~~~
komali2
The weird thing is, there's no reason we can't have both (megacity and nature
preserve). A hop skip and a jump over the golden gate bridge brings you to the
expansive Golden Gate Recreational Area. Head south and you have lots of state
preserves, national parks, state parks, and etc for hiking/climbing. A mere
three hour drive south is the incredible Big Sur. A few more hours East,
Yosemite. So why not develop down town? Why not knock down the dinky little
family two stories in Daly City and put up highrises? I don't get it.

~~~
sevensor
Seismic instability? It's not insurmountable, but building skyscrapers in San
Francisco is going to be expensive.

~~~
aninhumer
Is Tokyo (and Japan in general) not even more earthquake prone than San
Francisco? It doesn't seem to have stopped them building many skyscrapers.

~~~
Nadya
They didn't say it wasn't possible - just that it is more expensive. And
they're right. Far more regulations/building codes and limited structures
(that are resistant to the sway that occurs during earthquakes) are what can
be built... and they're more expensive if you need things done "the right
way".

~~~
sevensor
Yup, that was my point :)

------
mgbmtl
Interesting article, different point of view for sure, but I have a bit of
trouble with sentences such as:

"More housing would mean lower rent and a bigger economy" : I'm all for
increasing density (up to European equivalents), but more density adds
complexity and more costs (waste disposal, parking space, public transport,
local commerce, health issues). I'm not an urban planner, but most of the
high-density areas I've seen in my city, even those outside the core, are
pretty expensive places (i.e. buildings with 10+ floors).

The author also mentions the need for serious urban planning, while seeing a
need for "liberalizing housing regulations". That's a bit contradictory.

Also, we need a culture shift in terms of how we see high density. The urban
core is not just for 20-somethings looking for an opportunity. An old
industrial area was converted to high-rise buildings in the past 10 years in
my city, and they didn't plan a single school. Now young professionals moved
in, they like the area, have kids, but want to stay in that area. (it's no
different than living in Manhattan with kids, which is not a problem if you
can afford it)

~~~
woah
It's real simple. If density is increased, more people can be serviced with a
given length of sewer and water pipes. Busses don't have to drive as far. Cars
don't have to drive as far. Businesses have more customers.

The high-density places in your city that are expensive are only expensive
because the developer probably had to fight a multi-year battle to be allowed
to build there, with millions of dollars at risk because permitting could be
stopped by a cranky neighbor at any point in the process. Dealing with those
kinds of legal impediments to construction, it only makes sense to build
higher profit luxury housing, and since there is a lack of housing the market
can bear it.

~~~
scld
While the "length" of these services is reduced, the bandwidth is not. Waste
disposal and collection, both trash and sewage, needs to be able to support
the housing. So the parent comment's point is that you can't just free up the
land on which the housing will be built, you need urban planning around it to
account for the increased population. Unless they privatize that part of the
infrastructure or shift the costs over to developers of high-rises, there will
need to be active public development in areas where density is at a maximum as
far as local infrastructure is concerned (even if density is being kept
artificially low by NIMBYism).

~~~
hx87
Unless the property tax is a land value tax, wouldn't the additional tax
revenue from higher density construction pay for that automatically?

------
rm_-rf_slash
Let's call this what it is: a real estate crisis.

Real estate is a bigger and harder problem then people give credit for.

Us "hackers" can make the world prosperous and inexpensive through innovations
like self-driving cars, 3D printers, and so on, but the cost of real estate is
baked into EVERYTHING: the cost of food in the store or warehouse, the cost of
your haircut, the cost of your dwelling, the cost of your office, and by
extension, the opportunity cost of you compared to outsourced labor from
somewhere cheaper.

A lot of this is our own fault: we want neighborhoods with "character." We
introduce regulations that slaughter high-density living like requiring all
bedrooms have windows (to protect us from actual, fire-style slaughter). We
require nearly all living spaces to have full kitchens, even if the people
living there almost entirely eat out (the ancient Romans didn't have a kitchen
in every home, but they did have plenty of eateries).

Housing and real estate cannot be "innovated" away. It cannot be "disrupted."
It can only be solved with a lot of hard work and sacrifice for a way of life
we are lead to believe is the only way forward.

------
karma_vaccum123
Going up is one thing, but to expand out, SF would need to start swallowing
adjacent municipalities, which is not going to happen.

All of the upscale towns surrounding San Jose (Los Gatos, Saratoga, Cupertino)
were approached to be absorbed numerous times over the past few decades...none
regret their decision.

~~~
dragonwriter
San Francisco has no adjacent municipalities that aren't separate counties,
since the city and county boundaries have been identical since 1856.

~~~
vonmoltke
Is that an issue in California? Plenty of cities straddle counties in Texas,
and NYC is actually five counties. On the other hand, I don't think cities can
generally straddle counties in Florida (at least, I know of none that did).

~~~
honkhonkpants
California law prohibits a city spanning counties. However school districts
and other special districts can do so.

~~~
vonmoltke
Interesting. Texas is the opposite: cities can span counties, but school
districts cannot. Dallas actually touches five different counties and seven (I
think) school districts.

------
greghendershott
Although the "death of distance" hasn't happened as fast as expected/hoped,
maybe it's too soon to give up on it.

Trying to kill distance might be crazy. But is it crazier than trying to cram
even more jobs, people, and housing into a tiny % of the available area?

Geographical income inequality exists. Maybe it always will, and maybe we
can't make it much better. But why should we try to make it even worse?

Seems to me this equation has a couple "V" variables -- VR and VC -- to which
small adjustments might make a large difference.

------
PaulHoule
The Winner Take All economy is a circle jerk.

Palo Alto is successful because you can't make an exit from 49.5 states.

------
ngrilly
Sounds like the author is confusing correlation with causation.

The fact that the biggest cities have enjoyed growth during the last few years
doesn't necessarily imply that making them even bigger will produce even more
growth in the future.

~~~
timr
Worse, the whole argument is circular: cities are growing because jobs are
moving there! Why are jobs moving there? Because that's where the people are!

The whole SF housing debate -- both sides of it -- is completely irrational.
One side believes that unrestricted building will solve everything, despite
ample evidence to the contrary. The other believes that nothing should be
built unless it's 100% affordable, despite clear evidence that this won't
work, either.

Meanwhile, SF continues to encourage tech companies to relocate to the city by
offering substantial tax incentives. If only we could do something to reduce
the severity of the crisis...

~~~
aninhumer
>One side believes that unrestricted building will solve everything, despite
ample evidence to the contrary.

What evidence?

~~~
timr
For starters, read this, and then read everything it links to:

[http://cityobservatory.org/what-filtering-can-and-cant-
do/](http://cityobservatory.org/what-filtering-can-and-cant-do/)

The economics are clear and intuitive: the "filtering" effect of new
construction happens on a decades-long basis. Building today won't have a
downward impact on prices on any timeframe relevant to the people involved in
this discussion. So fine, build more...but don't expect it to solve your
problems.

Considering that the current housing crunch began in ~2012, it's _far more
likely_ that we can impact prices on a timeframe that matters by discouraging
the (acute) crisis in demand. We can start by reversing the ill-conceived tax
incentives we give tech companies to move to San Francisco.

~~~
mangodrunk
Does't that mean we should be constantly building more, and the problem right
now is because building has not kept up with demand? So, maybe this isn't a
solution for today, but it seems like a good solution for a couple of years
from now. And a stop gap would need to be put in place, such as removing the
tax incentives you mentioned to lower demand in the mean time.

~~~
timr
Uh...don't look now, but SF _is_ building more. You can't throw a stone in the
city without hitting a new construction project, and there's something like
80,000 more projects in the pipeline. And I'll wager that many of _those_
won't even be completed, because the market is beginning to soften at the high
end due to oversupply:

[http://www.bloomberg.com/news/articles/2016-06-01/apartment-...](http://www.bloomberg.com/news/articles/2016-06-01/apartment-
owners-fall-as-nyc-san-francisco-rents-seen-softening)

[http://sf.curbed.com/2016/7/12/12163544/san-francisco-
rent-p...](http://sf.curbed.com/2016/7/12/12163544/san-francisco-rent-price-
decrease)

That's what's so irrational about this debate: the construction market may be
inefficient on the margins, but it's basically functioning as you would
expect. The "build up" crowd has a poor understanding of the practical impacts
of their proposals, and the "affordable housing only" crowd has a poor
understanding of local real estate economics.

Meanwhile, everyone ignores the elephant in the room.

------
yarrel
Here comes Mega City One, or the BAMA.

------
overcast
They better start making cost of living, much, much cheaper.

------
smallnamespace
The simple reason why this will never happen in SF is because property owners
have both the means and incentive to restrict housing supply.

New York is rather different in that NIMBYism never had the formal tools to
block development as effectively.

In order to convince homeowners to allow expansion, you would need to pay them
off somehow. Perhaps a large tax on new developments that is redistributed out
to nearby property owners?

EDIT: I suspect people don't like the implication that property owners should
get even _more_ , but fundamentally property owners are the ones that vote and
go to city hall meetings because they have the most skin in the game.
Political and economic power are already concentrated in their hands, so there
is no workable solution without their consent.

~~~
aninhumer
>Perhaps a large tax on new developments that is redistributed out to nearby
property owners?

Surely if this would work, developers would already be bribing NIMBYs
directly? If they can't profit after the bribe, then they can't profit after
the tax either.

~~~
smallnamespace
There's significant friction in trying to bribe people out directly (e.g. did
you bribe the right people, and did you pay them the right amount?). Every
single transaction needs to be separately negotiated, and the developer,
unlike the state, doesn't have access to all the existing value of the people
they're negotiating with.

The point of codifying this sort of payout is so that approval would happen
automatically -- i.e. the law says the developer gets green lighted as long as
they pay. Basically the 'negotiation' between developers and the community
happens only _once_ , during the legislative debate.

~~~
jessaustin
It is a fact about legislatures that this sort of negotiation would take place
again every year. Places with not enough housing would want lower rates, big
developers would want the scheme to be restructured so that only their
accountants and lawyers could figure it out, schools (and eventually numerous
other public services) would want a piece of the action, etc. And NIMBYs would
_still_ protest new development.

I upvoted you because you do identify a real challenge with bribery; but this
solution won't solve that problem.

~~~
smallnamespace
I agree - certainly not convinced that this particular idea is a workable
solution, but any eventual fix will definitely look like bribery just because
of the political dynamics here.

------
ctulek
This looks like a poorly written sponsored article.

More housing will boom real estate market, and only for short term. I don't
believe new housing will help average Joe to have better prices. To the
contrary, it will make some real estate investors richer.

~~~
selectodude
So you think the demand for housing in San Francisco is literally infinite?

~~~
Kinnard
Perhaps OP never took economics and doesn't understand supply-demand dynamics?

Perhaps OP thinks housing doesn't behave like a normal good or perhaps he
think there are some other governing dynamics than the ones people typically
learn?

~~~
mrec
> _Perhaps OP thinks housing doesn 't behave like a normal good_

Unfortunately, to some extent it doesn't. House prices go up, especially in a
terminally low-interest rate environment, and lots of people with (unearned)
equity from that increase pile in buying more as speculative investments.
You'd hope that government would step in to break such an obvious vicious
circle, but... no, it's no use, I can't keep a straight face.

(Not defending OP's specific claim. Also speaking from a London perspective;
YMMV.)

~~~
ktRolster
You may be surprised to learn that investment vehicles act like normal goods,
too. They respond directly to supply and demand.

~~~
mrec
Demand for normal goods goes down when prices rise. Supply of normal goods
goes up when prices rise. Neither is consistently true of housing in the
markets we're talking about.

~~~
ktRolster
Neither of those is consistently true of any product, you are doing it wrong.
Drawing supply and demand curves as a straight line is the economics
equivalent of a frictionless surface, or a perfect sphere.

------
AncoraImparo
New York is dead though. Forget it. It had its day and failed. Its all about
SF and Austin now.

~~~
milesokeefe
Why/how has it failed?

------
maxsilver
The biggest problem with density is __cost__. Even if we "liberalize housing
regulations", density in America still means housing prices 2x-4x higher than
current averages.

Wages can't support that -- most people can barely afford housing today as it
is. Even higher tech industry wages can't support that in many places. (Even
in my small-town-Midwest city, tech wages don't cover "downtown" cost of
living)

Until we get serious about planning density for people _who work for a living_
, this problem will only get worse. If you just let cities get bigger on their
own with "less regulations", developers will build cities full of penthouses
(as they do today). Sure, millionaires will save some cash, but 99% of the
population will still forever be priced out, and therefore be driving in from
elsewhere

~~~
woah
Your comment makes no sense. You are telling us that increased supply drives
up prices?

~~~
maxsilver
Yes, because housing isn't just about any "supply", it's the right kind of
supply.

In car terms : If companies only built Lamborghinis and Ferarri's, cars would
never be affordable for regular people. Even if you built 1 million of them,
you'd never end up with the Yaris or Camry or other regular cars that the
market actually needs. Increased supply _can_ drive up prices, if your
increasing the _wrong_ kind of supply.

This is the same problem we see in cities today. Developers build exclusively
super-ultra-high-end housing. If we loosen restrictions, Developers will just
build more exclusively-ultra-high-end-housing. Sure, your wealthy folks will
save 5% on housing costs as supply increases and the cost of "ultra-high-end"
housing drops. But the 95% of regular folks will still forever be priced out
of the market. It will take 60+ years before ultra-high-end housing becomes
affordable enough for a regular person to afford it.

To solve the gentrification problem this article mentions ("to stop
gentrification steadily erode opportunities for ordinary, middle-class
people") we have to start by building urban housing for _ordinary, middle-
class people_. Something no city in America is currently doing.

~~~
jessaustin
I tried to imagine a developer being able to pay the interest on the debt
incurred building all these hypothetical unsold luxury properties for years
and years, and then I realized: this implausible situation is inevitable once
interest rates are negative as it seems they are destined to become. Truly
'maxsilver you have seen the future.

~~~
ktRolster
Interest rates are not going to be negative. The only reason government bonds
have been able to go negative is because of buying by governments
(quantitative easing) and by banks who get political advantages for doing so.

~~~
jessaustin
Yes that was an attempt at humor. The mattress has offered 0% for a long time,
and it will take several rounds of redenomination to convince most people
otherwise.

