
Silicon Valley's housing crisis, in one sentence - jseliger
http://www.vox.com/2016/6/7/11877378/silicon-valley-housing-crisis
======
xenadu02
Very few people bother to vote in non-presidential elections. I keep hammering
this point to anyone I meet in the startup scene here in SF. If just 1% of you
reading this right now (who live in SF) bothered to vote on a pro-housing
basis, we'd immediately turn into a huge voting bloc that could not be
ignored. You should shame your coworkers and remind people in slack channels
too. A few thousand NIMBYs currently control SF housing policy. Filling out an
online form is all it takes to change that.

It's also really easy: register online and they mail the ballot to you. It's
called "Permanent vote by mail". It takes almost no effort whatsoever.

[http://www.sos.ca.gov/elections/voter-registration/vote-
mail...](http://www.sos.ca.gov/elections/voter-registration/vote-mail/)

You don't need a California drivers license. You don't need to have lived here
for a year. You just have to have the intention to make California your
current home (eg not a tourist).

For the lazy, SF Yes In My Backyard puts out voting slates of pro-housing
politicians and propositions. Just reference that, draw the lines on the
ballot, and drop it in the mail. You don't even have to buy a stamp.

[http://www.sfyimby.org](http://www.sfyimby.org)

~~~
WWKong
Why will home owners vote for pro-housing which reduces the ROI on their
homes?

~~~
djcapelis
1) The majority of voters in SF aren't homeowners.

2) ROI isn't the most important thing about a home.

3) Even if you value property values over other values, affordable housing
that can support a strong and diverse environment that is vital to maintaining
the strength of the region. If you kill that engine, you kill the thing that
created the high values to begin with. You can shoot the golden goose if you
want, but don't claim it makes good economic sense. It doesn't.

~~~
WWKong
#2 Sure ROI isn't everything. But when you forgo every other saving/investment
opportunity to buy a house, then ROI becomes almost everything. Because that
is your investment/future. #3 I buy it that adding housing is overall better.
I'm pro-housing. But what do you tell the folks who bought million dollar
studio this year? That we are going to improve things for everyone (mostly
coming in after you) at the expense of your investment? Are you open to
building more housing and using tax dollars to reimburse folks who bought at
peak?

~~~
landryraccoon
One or two bedroom apartments don't decrease the value of single family homes.

More jobs and more population density increases the overall value of a city.
New grads and singles moving into a city need a place to live, and rental
units provide it.

Think about it this way - if you demolished all the apartment buildings in San
Francisco or New York, would the value of single family homes go up or down?
Would brownstones in New York be worth more if there were no apartment
buildings Harlem or Queens? If you walled off and burned down the Tenderloin
and Point Richmond, would that mean that houses in the sunset would be worth
more? I doubt it, since the city overall would be a less desirable place to
live with fewer opportunities to work, and lower density means that fewer
bars, restaurants, retail establishments, museums etc.. could be supported.

------
baron816
Why are people so adamantly opposed to density? Well, I know the reason is to
prop up the value of their homes, but if you think about places like New York,
London, and Paris, that argument doesn't exactly hold. Those cities are
incredibly dense and expensive, but people love living there enough to pay the
high prices. People who can live _anywhere_ choose to live there. I'm willing
to bet that SV could triple its population, and property values would hold or
increase. Supply will create it's own demand.

~~~
ChuckMcM
FWIW that is the wrong question. People are opposed to change.

So Sunnyvale has been building a number of apartment buildings and condos
around. There has been tremendous back pressure for _existing_ residents (not
me but I'm a rarity it seems). The root of their concern is that they don't
want the neighborhood experience to change from what _they_ know (or knew) to
something they don't know. I talked to some folks who had moved into the
apartments near downtown Murphy street. They _loved_ them, easy access to
Caltrain, lots of things to do and places to go, they are excited about future
growth.

The issue in Sunnyvale at least is that people don't seem to internalize that
things change. They won't acknowledge that their cute little bungalow house
used to be an orchard (where only birds and perhaps squirrels lived, had we
given them a say at City Council there would be no houses anywhere!). They
will argue strongly for _their_ values and _their_ memories and opinions of
what is "right" and what is "wrong." Meanwhile we have people in their 20's
and 30's who don't want to own a car, they want tight walkable spaces with an
easy way to get to San Francisco or the airport. Now maybe 20 years from now
those same people will be resisting even denser housing or something I don't
know.

We could easily build 200,000 market rate dwellings on existing, unused,
parcels in Sunnyvale and house close to half a million people in them. But for
folks remember empty streets and quiet drives, those people are going to be
really really unhappy.

~~~
guyzero
Well as an actual Sunnyvale resident the fears are slightly more rational:
cars on roads, kids in schools and no increase in infrastructure to go along
with the thousands of new residents.

Some of the buildings have less than one parking spot per apartment which in
theory is supposed to help encourage people to use transit, in practice people
fear it will lead to more street parking in adjacent residential
neighbourhoods which already have pretty full streets.

200,000 dwellings in Sunnyvale would be a DoS attack on the city's
infrastructure, not some new urban dreamland.

~~~
palakchokshi
I don't know why you're getting down voted either. will the down voters please
address the following concerns?

1\. Considering that some of the apartment dwellers will become homeowners and
their place will be taken by new apartment dwellers, how will the overcrowded
schools support the influx?

2\. Considering people will take public transit to go to work, they still
would use cars to move around locally in the area on evenings and weekends.
How will the current streets support the greater density of cars? e.g. Central
Expressway used to be an expressway now it is a parking lot.

3\. Overburdened police and firemen will be exposed to further strain.

4\. Parking is a nightmare not just on residential streets but even at local
establishments. Space needed for parking is used to build more housing.

Unless you live here and face these issues it's easy to downvote rather than
come up with solutions that are at pace with the housing construction boom.

If I paid over a million dollars to buy a house in a school district that has
a good score what would you suggest I do when suddenly the student to teacher
ratio is so skewed that the education of my children suffers?

~~~
ChuckMcM
There are a couple of things at play of course. Apartment ownership pays
parcel taxes just like single family home owners. However 1/3 of the budget is
tax revenue. Of the taxes, the two big heavy hitters are property tax (16%)
and sales tax (9%) of the total revenue[1]. More people, more business
transacted, more revenue.

As revenue increases, city services can be expanded. Schools on the other
hands are basically crooks as far as I can tell. The reason being that I have
yet to get the Fremont Union Highschool District to offer up actual budget
numbers and actual spend. They will argue all sorts of things about
"confidentiality of teacher salaries" or "we're not a government so we don't
have to give you that information." but generally I have not been impressed
with the way they operate. [2]

Traffic and parking is a legitimate concern. Traffic has gotten worse again
(after getting better after the dot com crash). But many programs are targeted
at making the city more bike accessible for easier access.

[1] Page 12 --
[http://sunnyvale.ca.gov/Portals/0/Sunnyvale/FIN/FY%2015-16%2...](http://sunnyvale.ca.gov/Portals/0/Sunnyvale/FIN/FY%2015-16%20Vol%20I%20-%20Part%20I.pdf)

[2] I had an administrator at the district tell me that it was "illegal" to be
home schooling my children.

~~~
drwl
Fremont isn't the only town/city in SV and not all school districts in SV are
crooked. Also, you didn't really address one of the big concerns the parent
commented pointed out, that is new dwellings would be a DoS on current
infrastructure for most places. It's not like you can get that infrastructure
in time for it.

~~~
ChuckMcM
Oddly enough the "Fremont Union High School District"[1] is only high schools
in the Sunnyvale/Cupertino area. The town of Fremont has a different school
district. That said, I realize that new housing would impact schools,
especially if people have kids. So far the number of new families who actually
have kids that have been moving in seems to be a relatively small ratio (lots
of couples who are both working and don't have kids). Its a good question to
ask the city manager though. They probably have a handle on what the numbers
look like.

[1] [http://www.fuhsd.org/](http://www.fuhsd.org/)

------
taurath
They link to missing middle housing...
[http://missingmiddlehousing.com/](http://missingmiddlehousing.com/) as if
thats the solution.

Having lived in the bay for a long time - there are many "middle" housing
places. Just none of them are new. Duplexes, and multiplexes are almost always
in the worst areas, because they're not big enough to allow for walking or
being close by a lot of services, but are dense enough to be VERY easily
annoyed at neighbors. The only thing they're good at is being cheap to build.

Townhomes are popping up frequently and offer a slightly nicer version, but I
don't honestly see much difference between a townhome without a yard and a
more dense mid-rise other than available floorplans. I'm all for more density,
but what frequently happens is that they build in moderately dense housing but
all the plots are walled off from each other, there's nowhere to walk and so
you just have more and more cars and traffic on the road. Full density or
bust, I say.

------
disposeofnick9
I live in a VW somewhere in Silicon Valley.

Ask me anything (respectful, non-troll)

EDIT: I don't usually bite, but when I do, I won't eat much.

~~~
joss82
Do you mean a RV? First serious question: how do you manage your social life?

~~~
hx87
I don't live in an RV, but ~0% of my social life takes place at home. I just
sleep there.

~~~
sokoloff
Suppose you want to bring a date home and have sex. What's been the typical
reaction to the "van down by the river"?

~~~
johan_larson
"sex van" is sort of mid-range sketchy, and a whole lot better than "sex
tarp".

[https://xkcd.com/1101/](https://xkcd.com/1101/)

------
bllguo
So how does the process of adding housing units work? If there's space as the
article claims, and plenty of demand, whats holding things up? Bureaucracy?

I'd like to see reasonable prices sometime in my life !

~~~
xienze
Well that valley has pretty much every bit of flat land developed, so where
are you going to put these high density developments without knocking down
existing houses?

~~~
TulliusCicero
What's wrong with knocking down existing houses? If the homeowners want to
sell to developers that will build higher-density housing on their land, what
exactly is the problem?

I mean, probably every dense neighborhood in the world was at one time lower-
density, and had its old buildings knocked down and replaced. This isn't
anything new.

~~~
xienze
I didn't say there's anything wrong with that but it's certainly a hurdle to
clear (what if one person refuses to sell?).

~~~
TulliusCicero
Then the developers offer the holdouts more money. If that doesn't work, they
buy homes in a slightly different part of the city to develop on. This is how
it works in parts of the countries with looser zoning regulations on density,
and it works just fine.

------
DrScump
Perhaps the subtlety of the sentence is being missed. It says:

 _San Jose_ has taken the rare step of publicly opposing the project, saying
it would add far too many jobs, exacerbating the region’s housing shortage.

In my opinion, the motivation is that the San Jose City Council is assuming
that most of the workers would _live_ in San Jose, exacerbating their housing
price pressure while denying them any of the developer-fee benefits or tax
base improvement.

And that's true. This has been the pattern throughout the history of the
valley: San Jose's traditional business-unfriendliness has resulted in the
major Silicon Valley names locating their businesses in Santa Clara,
Sunnyvale, Cupertino (Apple!), and Mountain View (Google!) over the decades.

San Jose's emphasis was always on grabbing all the land they could
(incorporating county lands) without creating a business-friendly environment
there. (Look at San Jose city boundaries in, say, 1950 versus now.)

It's another side-effect of one-party rule (for all but one mayoral dynasty)
during this period.

Another demonstration of this nimby-ism is that San Jose and surrounding
cities tend to dump problematic development on each other's borders. For
example, Santana Row and Valley Fair straddle the San Jose - Santa Clara
border. Neither felt any incentive to consider traffic effects of dumping all
of this retail in less than a square mile. Result: gridlock so bad that it
actually backs up onto the neighboring freeways (280 and 880/17) during
November and December, at least.

Yay.

------
beachstartup
i went to school with a lot of wealthy kids from the bay area.

they and their families simply do not want to develop the area any further, in
order to keep housing as high as possible and the area exclusive as possible.
in private conversation they talk about it openly.

personally i don't think it's much more complicated than that.

~~~
hx87
Like many other problems in California, this one can be largely traced back to
a single source:

Proposition 13

~~~
xienze
Which was created to combat the problem of grandma kicked out of her house
because she can't afford her property taxes. How do you get around that?

~~~
johan_larson
You don't. Grandma should move to someplace cheaper. The cures are worse than
the disease, and if property taxes really have increased that much, she's in
for a nice windfall when she sells and buys something cheaper elsewhere.

~~~
shostack
People don't like to hear this because it is just a very non-PC narrative, but
it is the truth.

In other real estate markets, this is a huge downward pressure on housing
prices by the fact that if taxes get too high, it increases the inventory by
the amount of people forced out. The Bay Area is almost entirely lacking in
that pressure, which combined with other Prop 13-related issues and the area's
popularity makes a perfect storm for this current fiasco.

Nobody wants ol' granny, or that single mom who has lived there forever, etc.
to have to uproot their life and leave, but there simply is no way to have a
happy outcome for everyone. And, to your point, if property taxes have
increased that much, the increased home value should take some of the sting
out of it when they go to sell.

There are very real emotional downsides to all of this, but ultimately I'm of
the opinion that people being forced out of areas as they gentrify due to
property taxes are a necessary part of a healthy real estate ecosystem.

Really curious to see what happens in the long game as the families who
inherit homes that were locked into old tax levels are forced to sell as they
can't pass them on to a second generation without the tax rate resetting.

Anyone have an estimate on when that may be? Perhaps we'll see a major
correction in Bay Area house prices at that point as the inventory increases
from that.

~~~
johan_larson
> Really curious to see what happens in the long game as the families who
> inherit homes that were locked into old tax levels are forced to sell as
> they can't pass them on to a second generation without the tax rate
> resetting.

That game has already been played. Transfers between generations do not cause
reassessment.

[http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1](http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1)

Congratulations, California voters. You made bad into worse.

~~~
shostack
Wow, that's crazy. I knew there was an exclusion of reassessment for initial
transfer between parents and children (or grandparents and grandchildren in
the event of deceased parents) but I didn't realize it just continued in
perpetuity down the generational line. My original understanding was that the
home could be transferred without triggering the reset in this manner once,
and then subsequent times caused a reset.

Bad into worse just about sums it up. If it wasn't for Prop 58 and 193 you'd
expect that eventually, decades from now once the majority were reset, that
Prop 13 would have a chance of being struck down, but this just ensures that
future generations have every incentive to keep homes in the family.

Thanks for sharing the link.

~~~
hx87
Strategic marriages just got a whole lot more attractive in California.

~~~
johan_larson
"She's got huge ... tracts of land!"

[https://www.youtube.com/watch?v=GPX-
mW4l1rU](https://www.youtube.com/watch?v=GPX-mW4l1rU)

------
nolepointer
I can't really blame residents for wanting to keep the status quo. Living in a
neighborhood of single-family homes has always been the image of the American
dream. Why would they want to relinquish that?

------
Animats
That's been called the "jobs-housing imbalance" since the 1980s.

~~~
HarryHirsch
It is was only housing! But it's infrastructure, too. You need to put in extra
sewage, electric, roads, schools &c to accommodate the rise in population, and
that is going to be painful. With Proposition 13, how does a municipality
raise funds for new schools or a sewage plant expansion?

~~~
gozur88
Typically through Mello-Roos districts. It's pretty common for residents of
newer developments to have an additional line item on their property tax
bills. This is to service bonds that were taken out for things like new roads,
schools, water, and sewage. Mello-Roos districts are pretty popular with
existing residents, since they don't have to pay for new infrastructure to
accommodate new residents.

From the wiki page:

>Many communities requiring new schools or other public infrastructure such as
public parks and roads impose Mello-Roos taxes as an alternative to (or in
addition to) impact fees paid directly by real estate developers. While real
property taxes are generally levied as a percentage of the assessed value of
the parcel, a Mello-Roos tax is levied independent of assessed property value
(a parcel tax), and is not subject to Proposition 13 property tax rate
limitations.

~~~
shostack
I think Mello-Roos is awful in some ways. New owners in the area shouldn't
have massively disproportionate tax burdens because they moved there a few
years later (in some cases that is a very large difference). Especially when
you consider things like the fact that people are still using the resources
just as equally.

Areas change, and increasing taxes on all residents (even if it forces some
out) is unfortunately part of the downward pressure of house prices that our
market is missing.

Elsewhere in the country in saner real estate markets, if taxes increase too
much and you need to move as a result, that's what happens. It absolutely
sucks, but it helps balance the inventory.

~~~
gozur88
>New owners in the area shouldn't have massively disproportionate tax burdens
because they moved there a few years later (in some cases that is a very large
difference).

But they're paying for new infrastructure that didn't need to exist if they
didn't move there. How is it fair to ask existing homeowners to pay more
because new people moved in nearby?

Mello-Roos is really no different than developer fees included in the price of
a new home.

~~~
shostack
Let me paint a picture for you and you tell me if you think this is fair.

If you moved to the area in 2012, odds are you got a very good deal. If you
moved in 2015, odds are you paid several hundred thousand dollars more for
your home than your neighbor in a comparable home.

Do you think there is such a radical difference in infrastructure needs during
that period to warrant shifting a disproportionate percentage of that burden
to the person who bought only a couple years later? That is madness when
talking about the kinds of dollars we are when things are percentage based.

Further, long-time owners in the area have been paying massively less than
newer residents despite taking advantage of any new infrastructure funded by
newer taxes thanks to Prop 13. Oftentimes to a comical degree.

~~~
gozur88
>If you moved to the area in 2012, odds are you got a very good deal. If you
moved in 2015, odds are you paid several hundred thousand dollars more for
your home than your neighbor in a comparable home.

I don't see what that has to do with new infrastructure. If you moved in 2007,
people moving to the area in 2011 were paying half what you paid.

>Do you think there is such a radical difference in infrastructure needs
during that period to warrant shifting a disproportionate percentage of that
burden to the person who bought only a couple years later?

When you move into a Mello-Roos district you're paying for the infrastructure
that was built for _you_. That's not a shifting tax burden. That's paying your
own freight. If it's too much, don't move there. There are plenty of old
houses that were either never in a Mello-Roos district or for which the bonds
are paid off.

>Further, long-time owners in the area have been paying massively less than
newer residents despite taking advantage of any new infrastructure funded by
newer taxes thanks to Prop 13. Oftentimes to a comical degree.

That's true, but it's also true for new residents who move into an older area.

------
adrianratnapala
> The really strange thing is that the city's officials aren't being
> irrational.

As Yglesias is well aware, the city officials are only being rational in a
very narrow sense.

A building project can only create as many jobs as it can pay for -- and the
workers must be payed enough to buy or rent places to live. What lies behind
the claim that it will "create too many jobs" is that the construction workers
will compete in the housing market against people that the officials want to
protect.

And even that "protection" is only coherent within a mindset where it is
somehow evil to build new things, or else the stock of accomodation could be
increased.

~~~
pjlegato
Construction workers already cannot remotely afford to compete in the Santa
Clara / SV housing market, and they haven't been able to for a very long time.
Construction work is also short-term and temporary in character. That is not
the issue. Not _everything_ that happens is a hidden plot against the long-
suffering proletariat by the evil, scheming bourgeois.

The issue is what happened in Mountain View with Google, and in Cupertino with
Apple -- a company builds a huge new campus that creates 60,000 or 100,000 new
permanent, high-paying jobs, but zero new housing gets created, making the
cost of living insanely high for everyone (not just for construction workers.)

This is because the cities won't allow any zoning changes to their low-density
1960s suburban setup. Their goal is to preserve the physical infrastructure in
that low-density shape, not to keep out lowly poor people as such.

~~~
johan_larson
You'd think at some point salaries would climb high enough -- driven by
housing costs -- that it stopped making sense to hire people in SV. But that
hasn't happened yet, at least not for programmers.

~~~
pjlegato
They believe (rightly or wrongly) that the added costs are worth the benefits
from the network effect of being in the region, around lots of other tech
people.

Many of them are starting to build satellite offices in other places.

------
hkmurakami
Similar forces in effect for school districts. I remember Cupertino being
against additional medium density development because of concern over
overcrowding of schools. Given that background I'm modestly surprised that the
new Vallco redevelopment got approved.

~~~
shostack
Sunnyvale is likewise overcrowded and parents are PISSED [1]. Can't say I
blame them--if you drop a massive amount of money to get into a neighborhood
with the school being a large driver of that, only to be told "sorry, we're
overcrowded and you're kid is going to go to this school that is known to be
significantly worse" I know I'd be livid and consider whatever means necessary
to fix it.

While SF's random lottery system certainly has its issues, it does actually
solve for some of these problems.

[1]
[http://www.mercurynews.com/sunnyvale/ci_26825651/sunnyvale-s...](http://www.mercurynews.com/sunnyvale/ci_26825651/sunnyvale-
school-district-considers-redistricting-hundreds-parents-not)

------
AceJohnny2
Remember when you played SimCity, and you had those demand bars for Industry,
Commercial, and Residential Zoning?

...

Of course in the real world, you can't arbitrarily bulldoze existing zones to
replace them with high density residential :|

~~~
TheCoelacanth
Of course, but you can at least rezone and allow people to bulldoze their own
buildings and replace them with high density residential if they choose to. If
housing prices are high enough, many of them will choose to do that.

------
DrScump
Perhaps coincidentally, this from today's Wall St. Journal:

[https://news.ycombinator.com/item?id=11854989](https://news.ycombinator.com/item?id=11854989)

------
Pica_soO
Could you pack people into shared flat- without them noticing? As in - selfre-
arranging Walls and Furniture, and Set-Furniture (Kitchen/Bathroom) that
quietly pops up even before the user arrives?

------
slantaclaus
Residential building height, per acre unit density and minimum off-street
parking space per unit restrictions.

------
pessimizer
Why in the world would an area with 100% employment want to add jobs?

