
The $50,000 San Francisco Home - davidw
http://www.strongtowns.org/journal/2016/9/22/the-50000-san-francisco-studio-apartment
======
tjpaudio
I think the real tl:dr of this article is: making affordable living spaces is
easy if the laws and NIMBYs allow it. But they don't. So it's not.

~~~
oxide
The more I learn about this situation the more surprised I am.

George Carlin had a great bit about NIMBY-types, but in that bit the NIMBY-
types, who don't want a prison built near them, have a "logical" viewpoint
that he deconstructs: criminals don't hang around outside of a prison. Inmates
who escape want to get as far away from the prison as possible, that's the
point of escaping, after all.

From what I can tell, the NIMBY-types in SF only have...aesthetic concerns? is
that really what is keeping housing from being built? concerns over an
eyesore? I don't see the "logical" viewpoint that can be deconstructed here,
no wonder it's such a headache.

~~~
ng12
It all comes back to money. People who've seen 20x returns on their property
value want to keep the money, people who've spent $5m on a small house want to
justify that investment, and landlords want to keep renting their shoebox
studio for $3k/mo. Arguments about neighborhood character are just trying to
obscure the obvious greed.

~~~
EduardoBautista
Just a random opinion from someone who doesn't live in SF: I like to visit SF
because of the architecture. It really is what makes it unique in the United
States. It would be a shame to lose that.

~~~
ng12
Nobody is asking to bulldoze the Painted Ladies or Lombard.

The problem is more about the Sunset, the Richmond, Forest Hills, Excelsior --
just these huge sweeping neighborhoods which are incredibly underzoned and
underdeveloped. Or the people who fight development in SOMA because it blocks
part of their view.

~~~
chrisseaton
Sunset is the strangest place I've ever seen from the air. A totally regular
grid of housing with no almost no open spaces at all. Maybe you can't see it
from the air but are there even community spaces where people gather? I can't
even see any shopping or restaurant areas. It's all just regular roads.

I can't imagine how you could make it any more developed. There isn't an inch
of breathing space is there? If you built up how would anyone get around? In
higher rise places even like London there are parks and a variety of spaces
and variation in the layout to get around the extra vertical density.

~~~
troygoode
I live in the Sunset. We have plenty of small parks and the Sunset runs the
entire length of the enormous Golden Gate park, which stretches across half
the city.

There are plenty of restaurants and shops, most of which is not yet
gentrified, and they just fit into the regular grid as mixed-use urban
buildings (restaurant on the street level, apartments on the floor(s) above.
There are no strip malls, big box stores, etc.

Like much of the city, developing it further would likely mean building "up",
yes. There are also an enormous number of single family homes in the Sunset,
some of which could be converted into multi family apartment buildings to
increase density.

All that said, I'm not clear on how you'd actually accomplish the above. My
family and I live here BECAUSE we wanted a single family home, a backyard,
etc. SF obviously needs a vast increase in residential availability, but I'm
certainly not the guy to ask about how to make it happen.

~~~
chrisseaton
I'm sure it must be nice on the ground in reality as so many people want to
live there, but it looks positively dystopian on a satellite image. Hundreds
and hundreds of identical crammed blocks on a rigid grid with no green spaces
in them. It looks like in some places you'd have to walk six blocks to reach
any kind of open space.

Other big cities like London are crowded as well but at least no two streets
are the same and there's always some breathing space.

------
ComteDeLaFere
I like this, although one thing that I've recently learned is that Silicon
Valley has a number of large trailer parks, and you can often purchase a home
in one of them for about $70-90K. Many of the trailers are actually quite
retro cool. I believe Tony Hsieh still lives in a trailer, in Vegas.

[http://www.zillow.com/homedetails/191-E-El-Camino-Real-
SPC-2...](http://www.zillow.com/homedetails/191-E-El-Camino-Real-
SPC-284-Mountain-View-CA-94040/2097442737_zpid/)

[http://www.zillow.com/homedetails/2150-Almaden-Rd-
SPC-125-Sa...](http://www.zillow.com/homedetails/2150-Almaden-Rd-SPC-125-San-
Jose-CA-95125/2097418932_zpid/)

~~~
Someone1234
I feel obliged to point something important out about trailer park homes (and
other temporary dwellings)...

They're a financial trap. So MOST people buy a home with finance, it might be
a bank, credit union, or whatever but ultimately these loans are backed by
larger organisations in the background that set the rules.

One thing you may not be aware of is that once a trailer park home is 15+
years old a LOT of companies won't loan against it. Even for a new dwelling of
that type it can be hard to get finance, but as they grow older loan providers
vanish.

There's a whole host of reasons for this (e.g. the type of people that live
there are "high risk," the home can literally be stolen, there's less
standardisation for home inspection, the land is low value since it is often
in the middle of a trailer park (i.e. has no general purpose value)).

I call this a "trap" because you'll buy the trailer park home, then at some
stage in the future you'll want to resell it; when that occurs you may
suddenly find that while there are a lot of interested buyers none of them can
get finance(!) to buy your home.

This has nothing to do with a buyer's credit score by the way. It is the
property itself that won't be loaned against (since when you mortgage the
property itself is normally collateral in case you don't pay, in this case
they cannot determine that the property is worth as much as the loan you're
asking for).

I know someone who's been trying to sell their trailer park home for a year.
Lot's of interested buyers, all with good jobs and solid credit scores, but
none of them can get finance because the property is too old, and none have
the cash. They're tried dozens of financial institutions.

~~~
effinggames
Could they offer seller financing?

~~~
presidentender
I knew a seller - a veterinarian in Missoula, MT - who purchased a trailer,
then sold it on owner financing, and repeated the process many times as his
buyers defaulted.

Even at the lowest income bracket, there are buyers who can put together 10%
down on a $12,000 house - even some who can put together 20%. If you owner
finance such a sale, and charge interest rates that make the monthly mortgage
competitive with rent elsewhere, you can do very well for yourself.

~~~
toomuchtodo
Dodd-Frank significantly curtails this sort of predatory behavior.

[https://www.ortconline.com/Web2/Downloads/English/CFPB%20and...](https://www.ortconline.com/Web2/Downloads/English/CFPB%20and%20Seller%20Financing.pdf)

------
malyk
Of course, then it would just get "flipped" back on the market for $500k
because that's what people are willing to pay.

~~~
stale2002
Not necessarily. If zoning laws become such that it is possible for anyone to
just build 50,000$ per unit homes, no questions asked, then the market would
solve the problem.

Or if you don't believe in the laws of supply and demand, then you could just
team up with a bunch of other people and pool your funds, and build your own
50,000$ unit. Who cares about the market price, if you can personally fund the
building of your apartment yourself!

~~~
malyk
I agree...if you can build enough of these. I can't remember off hand, but I
think that you need to build something like 40,000 more units to even start
making a dent. Call me skeptical that you can build 40k of these.

~~~
ComteDeLaFere
You could build 40k of them, it's been done and it's called Silicon Valley.
Take a look at the place with Google Earth, it's a perfect example of 50's -
60's dense Western-style suburban development. Even if you could do that,
however, I think the cost of land there would be prohibitive, which I don't
think was factored into the original post.

~~~
birdmanjeremy
Yes, cost of land was factored in to the original post. That's what the whole
section about density was about. Keeping land costs at 10k per unit defines
how many units you need to put on a given plot of land, based on price paid.

------
dclowd9901
I find it so strange that experts center their goals around how to fit as many
people as possible into these cities, rather than figuring out how to scale
what makes places like the Bay Area desirable out to other regions...

~~~
leakybit
The Bay Area is so desirable because it where all the tech companies are
located and the tech companies are there because it were all the tech workers
are. It's an unbreakable cycle.

~~~
johan_larson
I keep waiting for one of the major tech companies to get fed up with what it
has to pay staff in SV, and start moving jobs somewhere cheaper. And pretty
much anywhere is cheaper.

Even the Wall Street banks eventually moved their back-room staff to places
cheaper than Manhattan. Apparently New Jersey was a popular destination.

------
tsunamifury
I currently live in a new 330 sqft microhouse in Berkeley. Its not a solution
at all. You can't have a family and you don't gain enough value to buy an
actual livable size home.

The only use it has is to rent to others on your backlot to help pay for your
$1.2m two bedroom home's constant renovation needs.

Its like living in too small of a pot, you either end up with a tiny plant
(your life) or a dead one.

~~~
chupasaurus
FYI: In Soviet Russia in the early 80's, there were 161,5sqft of house space
per each resident. The most common accomodation was single-room apartment
351sqft sized.

~~~
tsunamifury
You just cited a nation who has been in a population decline.

~~~
chupasaurus
USSR's population had grown up since WWII to the end.
[https://en.wikipedia.org/wiki/Demographics_of_the_Soviet_Uni...](https://en.wikipedia.org/wiki/Demographics_of_the_Soviet_Union#Population_2)

------
honkhonkpants
The article has a picture of a "typical" san francisco street that doesn't
represent most of the city. Maybe weighted by population the photo from
chinatown is typical, but weighted by land use this photo is more typical:

[https://www.google.com/maps/@37.7432808,-122.4896485,3a,75y,...](https://www.google.com/maps/@37.7432808,-122.4896485,3a,75y,358.24h,84.24t/data=!3m7!1e1!3m5!1sZGoGAvwrztEtEGSlevEvgw!2e0!6s%2F%2Fgeo0.ggpht.com%2Fcbk%3Fpanoid%3DZGoGAvwrztEtEGSlevEvgw%26output%3Dthumbnail%26cb_client%3Dmaps_sv.tactile.gps%26thumb%3D2%26w%3D203%26h%3D100%26yaw%3D136.28094%26pitch%3D0!7i13312!8i6656)

~~~
wott
This 3rd world cabling...

------
bcheung
Even if they do make houses for $50K, there is a huge demand so prices will
still rise well above those prices. Both government and local home owners
don't want more housing. Nobody who already owns a home wants more built
because it would mean their home goes down in value. Also, it means it would
be more crowded and more traffic. It's a crappy situation all around.

That aside, I wish we could get some better 100% telecommuting / remote jobs.

~~~
wrong_variable
> here is a huge demand so prices will still rise well above those prices.

That is not supply and demand works, price _will_ fall.

It might pick up again due to increased economical activity driven by
population growth, but that is a second order concern. At some point housing
itself will not be a limiting factor to the growth of the economy, however SF
is far being Manhattan, London, Paris.. It might take 10 years to get there.

Once SF increases its population by 7-8x a simple investment in underground
metro would undo the effect of congestion.

That is where technology is right now, Greater Tokyo supports 40 million
people ! and the city is an economical powerhouse. It allows cool stuff like
trains that travel at the speed of a bullet.

~~~
bcheung
I should have clarified. Yes, increasing supply satisfies some demand and
brings down prices. My point was that demand is so much higher than supply
that the market value is still much higher than the intrinsic value. Saying
you can build a home for $50K doesn't mean it will cost that.

Regulatory concerns are a large part why homes so much more expensive.

I built a 2 story, 4 room structure inside of a friend's warehouse for $3,800
total. I got a book on framing and just bought a bunch of lumber and drywall
from Home Depot and built it myself with the help of a friend.

It wasn't legal of course. If I actually followed the law I couldn't have
afforded a place to live and would have been homeless.

I agree that technology follows an exponential curve and will bring
construction costs down, but gov't and society in general doesn't move at that
speed and so I don't anticipate homes being much cheaper.

That and inflation.

------
wrong_variable
Besides NIMBYism, a drop in home equity will be extremely bad for the economy
due to how much of debt is linked to mortgage debt, so I do not expect to see
a drop in price anytime soon.

~~~
ThrustVectoring
rent-extractors going bankrupt is a net-positive for the economy. There will
be losers, sure, but we're better off overall if the Bay Area has three times
as many people at the current levels of productivity/salary.

------
jbpetersen
$10,000 profit and $40,000 expenses is not a 20% profit margin, it's a 25%
profit margin.

Is it just me or has there been a recent uptick in miscalculations like this
on the part of professional journalists?

~~~
jeffem
You sure about that?
[https://en.wikipedia.org/wiki/Profit_margin](https://en.wikipedia.org/wiki/Profit_margin)

~~~
jbpetersen
Apparently I've been mistaking profit percentage for profit margin all along.

Thanks for setting me straight.

------
makomk
Wait, they're proposing four story, wooden multiple-occupancy buildings? Would
those meet fire safety standards anywhere in the developed world? I doubt
their example photo (sheltered accommodation for the elderly in the UK) is
wood, since we don't generally build that way, and from what I can tell it
cost substantially more than their budget despite being built somewhere with
low land costs.

I also notice that their photos of how six-story buildings would look are
actually mostly four stories or less - and even at that height, they're
starting to look pretty crowded in and dark. That's the trouble with dense
high-rise buildings - you rapidly run out of light and privacy. This has two
nasty effects on their proposals: it limits the density at which you can
manage to cram them in and puts a lower cap on the minimum size.

~~~
blackguardx
In the US, home construction is almost entirely wood. Masonry is usually
reserved for commercial buildings. Really large apartment buildings are often
made with concrete and steel. Using wood isn't unusual at all for a project
like this. There was even some large apartment buildings going up in SF last
year between the Potrero and SOMA neighborhoods that were entirely of wood.

~~~
spc476
It really depends upon where you are in the US. Here in South Florida, most
homes are built out of concrete block, due to expense (it's cheap) and
building codes (for hurricanes). Yes, there are a few wood homes but you have
to go out of your way to find them.

Brick houses are very rare, as it costs a ton to ship the bricks in (we lack
the resources to make bricks, but not concrete blocks).

------
iav
1) construction costs don't scale down linearly with square footage. Every
home needs a kitchen, a heater, a bathroom, a foundation. This makes micro
homes much more expensive on per foot basis 2) using construction costs from
rural areas with low cost labor. Majority of home construction is labor with
materials and overhead the rest. Contractors in SF are highly sought after due
to hyper demand and charge double the figures here 3) seismic reinforcement in
SF significantly increase construction costs 4) the cheapest anyone ever built
anything in dense urban areas is $250/sq ft. My architect here says $350/ft is
a challenge in SF for 2000 sq ft build. Good luck!

------
powera
By "home", the author apparently means "120 square foot studio apartment". And
by San Francisco, the author apparently means "somewhere near San Francisco,
except the zoning laws don't allow this anywhere near SF right now".

~~~
davidw
There are plenty of people who would happily live in those, if the choice were
available to them:

[http://www.sightline.org/2016/09/06/how-seattle-killed-
micro...](http://www.sightline.org/2016/09/06/how-seattle-killed-micro-
housing/)

~~~
powera
I don't buy the math in that article one bit for why they can't build more
houses. I also don't buy the premise that building as many SRO-style
apartments as possible is a good thing.

~~~
stale2002
Well fortunately, you don't have to live in them! If you don't like micro-
apartments, why not just let other people live in them, and allow developers
to build them>

------
douche
I'm a little surprised that the Googles and Apples of the valley aren't trying
to build company housing on their campuses.

It's not without its own problems, as the history of "company towns" shows,
but something has got to give.

~~~
Fricken
Google has been struggling with Mountain View city council to get housing
built in North Bayshore for about a decade.

It got approved this spring:

[http://www.mv-voice.com/news/2016/03/03/council-oks-plans-
fo...](http://www.mv-voice.com/news/2016/03/03/council-oks-plans-for-dense-
housing-in-north-bayshore)

------
dismantlethesun
I did the math and it checks out. $500,000 for 1200sq is essentially DC prices
for a condo in 12-16 story buildings.

Our land values aren't that high though, so there's definitely some money
being put into the luxury of the building and grounds.

------
mankash666
Thing about dense housing is that one or two streets lead in/out of a
community of 1000 cars. When everyone wants to leave at 8:30 AM and get back
at 6 PM, this often ends in traffic tragedy

~~~
geogra4
Strange that places like Manhattan and Paris have a solution to this issue

~~~
ng12
This is the baffling thing to me -- the way people philosophize about rent in
SF you'd think it was the only city to ever grow bigger.

~~~
geebee
I am curious about this, though, and I have posed this question to HN. Is
there a lot of precedent for a city that has been at a medium level of density
for 75+ years suddenly going to a much higher density model?

One example I frequently hear about is Vancouver which is similar to SF in
square mileage, which did add a lot of density without tearing a lot of old
stuff down. However, people often don't realize that SF is already more
densely populated than Vancouver managed to achieve _after_ it's very high
profile density initiatives. Not to say we shouldn't try that here, but keep
in mind we'd be starting this high-rise density initiative from a higher
density point than Vancouver reached after the high rise initiative. Again, we
may be in uncharted political waters here. Clearly, SF isn't the first city to
grow bigger, but it may be the first city facing pressure to tear down the
oldest housing stock west of the Mississippi. Even in the relatively low
density and unfashionable SFH neighborhoods like the excelsior or outer
mission, many of the houses are nearing their 100th birthday. Out here, that's
old.

The reason I ask this question is that I'm not really sure this is a "SF"
specific phenomenon. It may be an artifact of borders. Many cities do have a
relatively old "core", but their borders extend far beyond this core. In other
words, growth in concord or walnut creek or antioch would count as growth in
"SF". So if they protect their older neighborhoods, they can still build
elsewhere and show new construction growth.

I'd be interested in seeing what kind of precedent there is for something like
this. It's reasonable to ask why SF isn't building more, but it may be in a
much more unusual situation than people realize. No, of course it isn't the
only city ever to grow bigger, but it may be the first city under pressure to
grow bigger by tearing down neighborhoods that have been in a relatively
stable, medium density state for close to the last 100 years.

~~~
ng12
That's the problem -- SF isn't going to a much higher density model. The
population growth is actually pretty tame, especially compared to cities in
Texas and Arizona. Granted, they have more land, but it's not like this kind
of growth is unprecedented. San Francisco doesn't want to be low-growth, it
wants to be no-growth.

I appreciate the desire to protect the housing stock, but there's a reasonable
balance. For example many of the neighborhoods between Midtown and Downtown in
NYC are protected -- but neighborhoods like Hell's Kitchen, FiDi, Long Island
City, and Downtown Brooklyn/Dumbo offset the housing impacts. SF can't even
agree to build a couple of high-density buildings in SOMA which was (still
is?) a wasteland.

~~~
geebee
What about growth outside SF in nearby areas, though? For instance, Austin
Texas, a city growing rapidly, has a current population density of 3,360 per
square mile

[https://en.wikipedia.org/wiki/Austin,_Texas](https://en.wikipedia.org/wiki/Austin,_Texas)

But here's the thing - Austin has a land area of 271.8 sq miles! SF has about
48. Yes, like SF to the Bay Area, Austin _city_ is smaller than Austin _metro_
, but even the city area is so much bigger that there's probably far more
space to build without tearing down something old, enough that I'm not sure
the comparison is a fair one.

My guess is that you could draw a square around 48 square miles of Austin that
locals would consider completely off limits to demolishing for high rises.
Thing is, Austin continues to grow because growth at the peripheries counts as
growth "in Austin".

As for SF... well, there certainly is growth going on in SF.

[http://www.sfexaminer.com/san-franciscos-most-massive-
housin...](http://www.sfexaminer.com/san-franciscos-most-massive-housing-
construction-era-since-urban-renewal/)

My thesis is that if you compare this to the smaller, old and medium to high
density areas within the cities where growth is more substantial, you'll see a
very similar pattern - in fact, SF may be be showing a _greater_ willingness
to grow - but that the supposed resistance is really just an artifact of
borders.

That's a thesis, not a conclusion - it's something I find intriguing, possible
true, enough that I'd be interested in seeing more data on it before
concluding that SF is somehow uniquely against growth compared to comparable
sub-regions in greater metro areas.

~~~
khuey
I'm not familiar with Austin, but if it's anything like most other cities, the
growth is not happening at the peripheries of the city limits. It's happening
in the inner urban core or well outside city limits at the edges of the
_metro_ , where there's nobody to object.

In SF proper most development is happening in the South of Market
Neighborhood, an old industrial/warehouse district walking distance from
downtown. The other areas seeing substantial growth are in far eastern Contra
Costa County (Antioch, Brentwood, etc) which is a 90 minute commute from
downtown SF. In the Bay Area nearly all the land between downtown SF and the
exurbs is either protected park/watershed land or is filled with existing low-
density suburban communities who object vociferously to any new development.
In San Francisco much of the city was downzoned in the 70s and 80s so that
even the existing structures would be too dense, tall, or otherwise non-
compliant for today's codes.

That 3500 homes per year is setting a record since the mid-60s just shows how
little development there has been. San Francisco has about 350000 existing
homes, so that's a growth rate of 1% a year. That's only slightly above the
rate of population growth nationwide, and doesn't account for the neighboring
communities that have zero growth (Palo Alto, all of Marin County) or
migration that would like to join the enormous economic boom going on here.

~~~
dismantlethesun
Austin's downtown isn't that big. If you drive 15 minutes away from the city
center, you're basically in ranch-lands.

There's no one to object to building houses there.

------
johan_larson
I wonder what people would be willing to pay for 200 sq ft apartments in, say,
San Mateo if the units could be rented at market. Could you get $1000 per unit
per month?

------
imaginenore
I wonder if one could create some sort of a floating platform and build
housing on it.

~~~
BlickSilly
just use a cruise ship to bring cheap labor 5 miles off shore ala
[http://www.sea-code.com/](http://www.sea-code.com/)

~~~
imaginenore
Most cruise ship cabins aren't exactly comfortable. Plus cruise ships are
really shitty in storms. I'm thinking of a much wider structure.

~~~
internaut
You haven't heard of seasteading?

------
munificent
TL;DR: It's the size of a postage stamp.

