
The San Francisco Rent Explosion - jejune06
http://priceonomics.com/the-san-francisco-rent-explosion/
======
ericabiz
I had to have a chuckle at these numbers...

"The population is also growing. From 2000 to 2010, 28,500 new San Franciscans
arrived in the city. From 2010 to 2012, the city welcomed another 20,600
inhabitants in just three years."

Oh, is that all? I live in Austin, TX, the #1 destination in the U.S. for
people aged 25-34. [1] You got 28,500 people in 10 years? We get that many new
people _every_ year. In fact, perhaps even as often as every 6 months; 158
people move to Austin _every day_ by another estimate. [2]

You have to increase the supply of rental and housing units in order to
accommodate population growth. Austin is struggling with it, too, but condos
are springing up downtown.

San Francisco has no choice; Austin is barely managing to handle the growth,
and we're a growth-happy boom town teeming with young folks. (Yes, it's pretty
awesome to run a startup here too--I'm having a blast!) You must build more
housing. If you are an SF resident, vote people in who will support new
housing. Vote out the politicians who curb growth with ridiculous laws.
Otherwise, all the cool people will end up in Austin (and other cities that
can better manage the growth. ;)

[1]: [http://www.statesman.com/news/news/local/for-people-on-
the-m...](http://www.statesman.com/news/news/local/for-people-on-the-move-
austin-is-a-place-to-stop-a/nW75T/) [2]:
[http://www.realtyaustin.com/blog/how-to-keep-up-
with-158-peo...](http://www.realtyaustin.com/blog/how-to-keep-up-
with-158-people-moving-to-austin-per-day.html)

~~~
novum
I live in SF and it's certainly far from perfect. California no doubt has its
share of problems too.

But as noted in comments below, I would never -- not ever -- consider living
in a state run by people like Rick Perry.

~~~
flyt
Texas isn't really run by Rick Perry, it has a weak governor system. The
legislature is the major problem.

~~~
mikeash
Yeah, but he said "people like", and don't most of them qualify?

------
klochner
I believe this was posted fairly recently:

[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)

"San Francisco—one of the most expensive cities in the United States—added
just 418 new housing units in 2011, the fewest since 1993. What’s more, 149
existing units were removed, leading to a nearly nonexistent increase in
housing supply."

~~~
rayiner
Meanwhile, Chicago, a city that is at best barely maintaining population, is
seeing the construction of thousands of units in highrises in downtown alone:
[http://www.domu.com/blog/apartment-projects-under-
constructi...](http://www.domu.com/blog/apartment-projects-under-construction-
update). I think from around my old apartment in Chicago right now, you can
see three or four skyscrapers under construction just by looking around from
the same spot.

There is clearly something massively dysfunctional in San Francisco. High
prices should create the incentive for drastically increased supply. San
Francisco should look like Toronto does, with dozens of high rises under
construction trying to cash in on the high rents. See:
[http://www.canadianbusiness.com/blogs-and-comment/what-
toron...](http://www.canadianbusiness.com/blogs-and-comment/what-torontos-
skyline-will-look-like-in-2020).

~~~
kqr2
As indicated in the article cited above:
[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)

    
    
      superficial explanation for the outrageously high housing 
      prices in the Bay Area is that that there’s not much 
      developable land, especially on the peninsula between San 
      Francisco and San Jose. In fact, the major reason is  
      the NIMBY (“not in my backyard”) 
    

I can attest to this rampant NIMBYism. Not too long ago in my grandparents'
neighborhood, a small group of neighbors had the area rezoned so it could not
be developed any further. Previously, it was mixed use, but now it could only
be residential with small businesses such as nail salons. Also houses were now
limited to two stories because they did not want their views blocked.

Not surprisingly, the existing people with 3 or more story houses have seen
their property values shoot up since those large houses can no longer be built
there.

~~~
subsystem
You can't really be expecting people to go against their own interests without
a competing value proposition?

------
ctdonath
_In January 2010, the unemployment rate in San Francisco was 10.1%. By April
2013, the rate had plummeted almost in half to 5.4%. In just the first four
months of 2013, the San Francisco unemployment rate fell 22%._

Considering those rent prices (location location location!), if you don't have
a good-paying job you're not going to stay there long. No unemployment
entitlement is going to cover three years of renting a one-bedroom apartment
renting at twice the mortgage on a four-bedroom one-acre-lot house
conveniently outside Atlanta. Of course the unemployment rate plummeted:
surely sky-high rent drove out anyone not able to keep or get a high-salary
job.

Author focuses on availability of _new_ units, and marvels at the low vacancy
rate, without addressing the turnover of _old_ units. It's a limited supply of
high-desirability housing; either pay a high price or get out, there's a line
of people waiting for openings and willing to pay premium prices to get in. Of
course unemployment is low and prices high there.

~~~
Shivetya
Tenant laws hurt availability as many people keep units off the market because
the law puts such strict limits on landlords that it can become abusive. There
are many horror stories in SF about tenants from hell.

~~~
wankerrific
Ugh...the "rent control" argument again.

First off, rent control doesn't apply to apartment building built after 1979,
so, as noted below, its less relevant - especially with the new construction
in SOMA.

Second, the anecdotal stories about landlords holding units off the market is
just that - anecdotal stories. The owners of those buildings are Prop. 13'ed
with a 30yr old assessment and are doing just fine. Opening a new unit means
they can collect more rent at todays market rates. Its a silly story promoted
by landlords that would like to make more money during the booms. Of course,
its also those very rent control laws that protect landlords during the busts
(2002, 2009, etc).

Sorry to say this, but rent will come down when companies in SF start running
out of their free, investor money and have to turn a profit or sell
themselves. More people will lose their jobs, won't be able to afford living
in the city proper and people will move away. Thats the way it has been here
for at least the last 20 years and probably longer.

By the way, also anecdotally since I can't find the reference, rents in the
area have decreased by 5% on YoY basis.

~~~
malandrew
However new buildings much provide a certain number of units as Below Market
Rate housing.

------
dev_jim
As a New Yorker I'm always amazed as to how inconvenient of a city San Fran
is. The BART has one track in the city, the Muni takes forever, walking is an
absolute pain with all the hills, and there's so little mixed use development
that you can really feel confined in many neighborhoods. Everywhere can't be
New York, but cities like Boston and Chicago and D.C. have done a much better
job of urban planning.

~~~
malandrew
I can totally attest to feeling confined and inconvenienced. I live in Nob
Hill, right at the top, and it is very confining because all the commercial
areas are at the bottom of the hill (Polk Gulch, Downtown, North Beach,
Chinatown). This means that even running to the corner store involves going
all the way down the hill and back up.

Plus, as someone who bicycles most places, I am happy that I'm capable of
biking all the way up without stopping, but it gets sooooo old and contrary to
what you may think, it never gets any easier. There is nothing worse than
going to the gym, getting in a good workout and then having to deal with that
bullshit hill just to get to your bed.

------
fizx
I tend to think that the housing is presently at a local maxima. There are at
least four large highrise apartment complexes going in SOMA right now, along
with a good size complex on Guerrero and Market St. Additionally, America's
Cup is currently in progress, which is completely eating up short-term supply
in the northeast corner of the city. By the end of the year, the new apartment
complexes will be online, and all of the short-term rentals for America's Cup
will be put back on the long-term rental market.

Edit: "More than 4,220 units of housing began construction in San Francisco in
2012 — following a year in which just 269 net units were added." \--
[http://www.spur.org/publications/library/article/san-
francis...](http://www.spur.org/publications/library/article/san-francisco-
boom-back)

------
qwerta
And thats why SF is no longer relevant for startups. I work for db startup,
and most of stuff is happening outside of California (Europe, Texas...).

~~~
bodyfour
People have been declaring that California is too expensive for startups for
decades.

~~~
qwerta
I actually blame California cost of living for stagnation of database
industry.

I know many smart people in SF and LA, who created great open-source projects
as a hobby. After a few years this project matures, and it would be great time
to turn hobby into business. But they have to keep working for large company,
to support family.

Some stuff (such as DBs) is just bellow VCs radar. I guess it is good for me.
My startup is all about collecting abandoned ideas and adding nice wrapping.

~~~
muzz
That's essentially claiming that somehow market forces don't apply to the
database industry.

------
davidtyleryork
Posted this in the comments section there, but I would love to hear your
feedback as well.

I think the primary issue is constrained supply. As klochner said, barely any
new housing is added and SF has a fixed land mass. But this problem is made
much much worse by rent control.

If you have an apartment in SF with Rent Control and prices are rising, you
don't move. This means fewer apartments are on the market, which further
increases the price, leading to a price inflation cycle.

Of course, ironically now that I live in the city I would never want rent
control taken away. Pretty much everyone else I've talked to, even those who
agree with my assessment on its negative aspects, also find it very convenient
once it's in their favor. So it's removal will likely never pass in a public
vote situation.

~~~
muzz
Fixed land mass is a canard. Infill development requires little land. One
Rincon Hill has almost 600 units and is built on about the size of a plot that
a single-family home would have been built on, in most parts of the country.

Rent control is becoming increasingly irrelevant as anything constructed after
1978 is exempt, which is most of SOMA.

------
nirvanatikku
Interesting. I live in Kendall Square (Cambridge, MA) and have seen the prices
rise (over the past 3 years) to the median prices outlined in the article.

I keep hearing about how insane SFO is, but can't help but think that
Cambridge is experiencing a similar 'explosion' in it's own right.

I've gathered that the exit's out west are accelerating the price increases,
but with the abundance of schools here as well as the interest in establishing
a presence in 'tech square', rent has skyrocketed and I don't really see it
slowing down.

Maybe I'm missing something, but why doesn't the acceleration in Cambridge get
such attention?

~~~
eob
I think one reason Kendall rents aren't a topic of discussion is also because
the Boston/Cambridge area has lower rent areas that are close by and
accessible via public transportation.

While it's nice to live right where things are happening, you could easily get
a place out in Davis Sq or Porter Sq and take the T in, or in Somerville or
Union Sq and have a 10 minute bike ride.

From what I gather, as a fellow Cambridge resident, the problem in the Bay
Area is that areas with Somerville-level rent result in an HOUR+ commute,
rather than a 10-minute commute.

There's a lot that's great about the bay area, but I think we certainly have
the upper hand here when it comes to [reasonably priced] city live-ability and
transportation.

------
icesoldier
Any time I see stories of how crazy the situation surrounding the SF housing
market is, I compare it to my own city (Amarillo, TX), which has the opposite
situation. A much smaller population over a larger area with plenty of land to
sprawl into means that the population density (and average rent) is much
lower. My 1 bedroom apartment is ~650/mo, and my impression is that that
situation would be a laughable offer in any larger city.

The only issue? Amarillo is pretty far away from the other larger cities. In
the plains, we talk of distances between cities based on the number of hours
it would take to drive that distance. Six to Dallas/Fort Worth, six to Denver,
four to Oklahoma City, ten to Houston. Combined with the lower population, not
much of an urban culture makes it out here. I don't mind, though, and because
of the low cost of living and the Internet bringing the world to me, the low
cost of living makes up for it. I'm not working with a startup nor on any
products of my own at the moment, but should I start, I don't think I'd
relocate unless a very compelling offer came my way.

~~~
reeses
You talk about time to other cities because it's a constant.

We talk about miles because otherwise, we'd have to say,"I live seven minutes
from downtown SF between 10pm and 7am, an hour and a half between 7am and
10am, twenty minutes between 10am and noon, an hour between noon and 2pm,
forty minutes between 2pm and 4pm, an hour between 4pm and 7pm, and half an
hour between 7pm and 10pm."

~~~
icesoldier
Very true. That the roads between these cities mostly go through sparsely-
populated rural areas helps.

EDIT: Though, the point I wanted to make was that it was an abstraction over
the longer distances between the cities. To rephrase my examples, it's 360mi
to Dallas, 430mi to Denver, 260mi to OKC, and 600mi to Houston. (Now that I'm
looking up distances, I can add 500mi and 7.5 hours to Austin in that list -
that length isn't in my cache, so to speak.)

------
scelerat
Oakland and Berkeley should be ripe for startups. The rent is drastically
lower than SF, both for commercial and residential space, and they are still
very close, via freeways and BART to most of the areas that make San Francisco
attractive. The East Bay has its own cool/interesting aspects too.

Disclaimer. Just moved to Oakland. Loving the lower cost of living and
proximity to my old haunts in SF.

------
snide
I live in Petaluma up in Sonoma county. I commuted to the city for a year on a
nice direct bus-line that usually got me to/from the city in about an hour. I
know that sounds long but the bus was more comfortable than bart, had wifi and
I'd just code my way to/form work. Seemed better than as East Bay commute.

Best move I've ever made. Surrounded by beautiful country, better weather and
a very friendly, hip community with great restaurants, bars and the like.

It may not be for the 20 year olds, but when you're ready or can work a couple
days from home, there are definitely affordable alternatives other than SF and
the Valley. My previous rent check now covers a house mortgage, yard,
insurance and taxes. Plenty of places in northern or western Marin that are
the same. It's more affordable than you think.

Almost more importantly, my neighbors and friends out here aren't all in
startups. There's some actual diversity to the residents, being a mix of
farmers, blue collar workers and desk job commuters.

------
drpancake
Here's my ill-informed take on the dilemma (I no longer live in SF):

* More high-rises means that SF loses it's charm

* The technorati are cash rich so they'll keep on coming anyway

* Soaring rents are forcing out those who make SF the desirable, culturally rich place that it is

* Eventually this corrects itself and Oakland becomes the desirable, culturally rich place (already happening)

* Rinse and repeat

~~~
jquery
> Soaring rents are forcing out those who make SF the desirable, culturally
> rich place that it is

If by culturally rich you mean burner babies, human freak shows, and
unemployed artists who've depleted their trust-fund, then yes.

------
BadCookie
I wish that this article discussed other factors that are causing rents to
increase absurdly in other cities as well. In Portland, for example, rents
have gone up 20-30% in the last couple of years. Why? I don't know the whole
answer, but some possible factors are:

\- People who lost their houses recently have trouble qualifying for a
mortgage and must rent instead.

\- Investors (Wall Street and otherwise) are buying up houses to rent because
it's hard to get a good return on your money in other ways.

\- There still exists some amount of "shadow inventory" that banks are keeping
off of the market, either on purpose or because foreclosing on a house has
become more expensive and time consuming.

Source: [http://www.portlandmonthlymag.com/real-
estate/articles/renta...](http://www.portlandmonthlymag.com/real-
estate/articles/rental-market-madness-march-2013)

~~~
dgallagher
At an abstract level, it's likely caused by low/stagnant supply, and increased
demand which is inelastic (not affected much by changes in price).

Imagine a real estate market with only 100 1BR apartments to rent. If 85 are
occupied, 15 available, and 5 people are trying to rent those 15, the price of
rent should remain about the same as 10 will remain vacant.

However, if 40 people are trying to rent those 15, the price of the 15 will be
bid up due to a limit in supply. Then the remaining 25 people will continue to
bid up rents for any new vacancies. A scenarios like this can cause rents to
skyrocket, especially if supply remains nearly constant.

------
ilyanep
Yeahhh I'm living in SoMa and paying much, much below the median cost for a
1BR, but I'm thinking of moving out to the peninsula after my lease is up even
if I continue working in the city. $200/mo for a Caltrain monthly pass and 1
hour commute one way (on which I can do whatever I want because I'm on a
train!) is worth it for me to live closer to my friends (many of whom go to
Stanford), not be clumped up with thousands of other people, and have a
cheaper apartment.

SF is really going to need to figure out its artificial supply scarcity
problems soon.

~~~
SkyMarshal
Where on the Peninsula would you live that's substantially cheaper than SF?
The area around Stanford is fairly pricey.

~~~
jackowayed
You can easily find a bedroom in Palo Alto for $1500 (maybe not right
downtown, maybe as part of a bigger house/apartment, but a bedroom to
yourself). It seems like ~1k is still achievable if you're patient and any
part of PA will do. And it only gets cheaper if you're willing to go to
Mountain View (only a bit cheaper), Redwood City, or really any other part of
the peninsula.

~~~
bubbleRefuge
In Sunnyvale-Santa Clara area rents for 1BR's are approaching 2K. So I find it
hard to believe that MV PA is $1500.

~~~
nostrademons
He said a "bedroom", not an apartment. That actually seems high to me - if
you're willing to live with roommates you can find plenty of places for around
$1K/month, or even a bit less.

Mountain View rents for a 1BR are running around $1700/month in a not-so-great
neighborhood, or about $2k/month if you're close to the Googleplex or downtown
(except for a few smaller family-owned apartments...owner-rented places tend
to have smaller rent increases than manager-rented places, since usually a
family just wants to find a good tenant and have them stick around rather than
take the risk of getting a bad tenant).

------
gmisra
1\. San Francisco is small enough that there is in how much housing stock is
created, with the same development groups at times opposing growth and at
times advocating for growth.

2\. Since building codes and zoning laws are often manipulated to adjust
supply, there is predictably a lag between need and updated codes. We are in
the middle of a housing creation wave. There is currently a large volume of
to-be-constructed units that have been approved by the planning commission and
will be entering the market in the next year [1].

3\. One of the most overlooked sources of demand pressure is the recent and
rapid rise of west coast properties as good investment vehicle for Asian
investors [2].

4\. Re: rent control - it is intentional that the community believes it is
more valuable to keep rental housing stock fluid and accessible, at the
expense of investment appreciation. Or, at least the community used to believe
- given the changing demographics of San Francisco, I would expect these rules
to change in the next decade or two. A reasonable comp is changes in how
rental stock and rent control is treated in Berkeley over the past two
decades.

[1] [http://www.sf-planning.org/index.aspx?page=1691](http://www.sf-
planning.org/index.aspx?page=1691) [2]
[http://www.mercurynews.com/business/ci_22313326/bay-area-
rea...](http://www.mercurynews.com/business/ci_22313326/bay-area-real-estate-
market-bolstered-by-investments)

------
wwweston
Q: Can anyone document a situation where increased housing supply didn't just
take the edge off the rate of rent increases, but actually pushed prices down?

I've been able to watch some dramatic housing supply buildouts in a few areas,
and my observation has been that the owners almost always price new housing
somewhat above market rates for existing housing -- after all, it's new, and
it's often marketed as luxury housing (plus the building costs were in
$LAST_YEAR dollars and are mostly unamortized rather than in $DECADES_PAST
dollars and mostly amortized).

I'd think this might be more true for land-constrained places like San
Francisco, where the only way to increase supply is up, so it's more capital
intensive and _only makes financial sense at a certain price_.

There's a few places I've observed a decrease in price, but it hasn't been
because of supply increase. It's places like Detroit where demand drops,
usually because the economic activity of the region stagnates or collapses,
thought it's sometimes because of health/property hazards instead.

If I'm right, building more might _stabilize_ prices in SF, but they're not
going down, short of the current tech boom there turning out to be an
unsustainable bubble. Or maybe a major natural disaster.

~~~
nostrademons
Rents - like wages - tend to be sticky downwards.

Usually what happens is that a large increase in supply doesn't immediately
push prices down, but results in a large overhang of vacant housing stock. The
developer eats the cost on that for a while, but then the next recession hits,
people lose their jobs, banks foreclose on the properties, and that starts the
tumble in prices. That's how it worked in 2009 - rents dropped significantly
in the Bay Area as employment numbers tumbled and people moved in with
roommates. It does depend on their being a recession before demand catches up
with supply...if there isn't, prices just don't increase as fast in the
meantime.

------
donnfelker
This is why I wont move to SF area. Housing prices are insane. Not worth
living in a cave for that amount of money, I don't care who I work for.

------
bubbleRefuge
Will the tech community ever get politically active and do something about the
lack of new construction and rent controls creating greater scarcity?

~~~
xradionut
I don't know about "The Tech Community", but better, cheaper places to live
elsewhere do attract individuals that don't seen to be hung up on SF and SV.
You can code anywhere and find fellow geeks that don't waste money on crazy
rents.

~~~
bubbleRefuge
Been there done that. This is my second tour of duty in SF-SV. Opportunities
in the tech industry are unequaled by any other region in the states. India is
getting there I suppose.

------
pawrvx
More startups should move to low cost areas such as Austin Texas!

~~~
jetblackio
Only if you like live music, a beautiful city, wonderful people, and an old
guy who rides his bike around town in a thong, usually pink.

~~~
toomuchtodo
Why I don't live in Austin:
[http://weatherspark.com/#!graphs;a=USA/TX/Austin](http://weatherspark.com/#!graphs;a=USA/TX/Austin)

~~~
nine_k
Here in NYC it's at least as hot, but air conditioning solves the problem
nicely during day hours.

~~~
bluedino
NYC is above 90 for what, 10-20 says a year? I'd wager Austin is above 90 for
150+

~~~
toomuchtodo
Close.

Average # of Days Above 90 degrees: 111

Source: [http://www.ncdc.noaa.gov/](http://www.ncdc.noaa.gov/)

------
nsxwolf
I hear Detroit has some pretty cheap rent these days. Maybe it's time for an
exodus?

------
rwhitman
Its unsurprising that SF would eventually have a rental market as bad or worse
than NYC. I'm just surprised it took this long

But at least in NYC developers are constantly adding bucketloads of rental
inventory, especially in Brooklyn and Queens. The restrictive development
policies of not just San Francisco but other Bay Area municipalities sounds
like a disturbing crisis is on the horizon. Pretty glad I'm not planing on
moving back there anytime soon...

------
icedog
I'm currently living in my startup's office closet in SOMA.

I used to have an apartment a few blocks away, but my roommate moved out and
the rent went up. From a month before my move-out to a week after, I scoured
through craigslist trying to find an acceptable home at a reasonable price.
But now, having lived in my office for 3 weeks, I have lost all will to look.

Perhaps I don't get paid enough as a developer in SOMA. I'm certainly not
making six figures.

------
wooster
The numbers of units being built in the linked SF Business Times article [0]
seems to contradict those from the SF Chronicle [1].

Business Times:

    
    
        Nearly 8,000 new apartments, mostly in mid-rise and high-rise buildings, 
        will come on line between now and 2015 — 3,498 in 2015 alone. It’s more 
        new rental housing than was built in the last 15 years combined, according 
        to real estate research firm Polaris Pacific.
    

SF Chronicle:

    
    
        Largely in response to the city's growing technology sector, 22,000 residential 
        units are in various stages of approval and construction. … Since 2008, only 
        about 1,710 units were built each year, compared with an average of 2,220 each 
        year between 2004 and 2008, according to the department.
    

If the average was 2,200 housing units built each year between 2004 and 2008,
that's 11,000 housing units. Granted the Business Times is using apartments as
units, while the planning department uses housing units.

Looking at the planning department data [1], there are currently 28,010
housing units approved and 3,930 under construction. The total pipeline is
43,580 units. For the previous reports they provide, we've got:

    
    
      * Q1, 2007: 9,305 filed, 4,736 approved, 4,978 under construction, 30,002 total
      * Q3, 2007: 10,708 filed, 5,005 approved, 6,134 under construction, 31,761 total
      * Q4, 2007: 20,890 filed, 4,570 approved, 6,790 under construction, 40,370 total
      * Q1, 2008: 34,510 filed, 4,560 approved, 7,520 under construction, 53,980 total
      * Q2, 2008: 32,370 filed, 4,780 approved, 7,480 under construction, 51,470 total
      * Q2, 2009: 34,570 filed, 6,200 approved, 6,510 under construction, 54,610 total
      * Q4, 2009: 30,370 filed, 8,220 approved, 1,320 under construction, 46,600 total
      * Q2, 2010: 30,780 filed, 5,870 approved, 1,480 under construction, 43,780 total
      * Q3, 2010: 20,710 filed, 16,690 approved, 1,180 under construction, 44,100 total
      * Q1, 2011: 15,610 filed, 22,590 approved, 1,730 under construction, 45,820 total
      * Q2, 2011: 7,620 filed, 29,760 approved, 1,820 under construction, 45,760 total
      * Q3, 2011: 7,620 filed, 30,280 approved, 1,990 under construction, 46,620 total
      * Q1, 2012: 6,180 filed, 27,670 approved, 3,990 under construction, 42,520 total
      * Q2, 2012: 6,940 filed, 28,060 approved, 4,220 under construction, 43,280 total
    

So, data-wise, it's not clear this is as big a construction boom as it's made
out to be. As an SF resident, however, I've never seen so much housing under
construction, so maybe it's just more visible?

Does anybody else have any data?

[0] [http://www.bizjournals.com/sanfrancisco/print-
edition/2013/0...](http://www.bizjournals.com/sanfrancisco/print-
edition/2013/05/17/san-francisco-rental-construction-soars.html?page=all)

[1] [http://www.sfgate.com/bayarea/article/S-F-apartment-
construc...](http://www.sfgate.com/bayarea/article/S-F-apartment-construction-
boom-around-the-corner-3428146.php)

[2] [http://www.sf-planning.org/index.aspx?page=1691](http://www.sf-
planning.org/index.aspx?page=1691)

~~~
wooster
Ooh, more data from the Housing Inventory reports [0] by the Planning
Department.

Net gain or loss of units:

    
    
      * 2000: 1,797
      * 2001: 1,779
      * 2002: 2,408
      * 2003: 2,496
      * 2004: 1,487
      * 2005: 1,855
      * 2006: 1,914
      * 2007: 2,567
      * 2008: 3,263
      * 2009: 3,454
      * 2010: 1,230
      * 2011: 269
    

[0] [http://www.sf-planning.org/index.aspx?page=1663](http://www.sf-
planning.org/index.aspx?page=1663)

------
drivingmenuts
How much potentially rentable space is currently being held off the market by
disgruntled landlords?

I seem to recall an article about at least one owner who was tired of bad
tenants. He had mentioned that he wasn't the only one and that there were many
who just weren't leasing out otherwise empty space.

------
arbuge
I'm beginning to be glad I'm not in the Valley. My competitors there might
have access to far more VC than I do, but their cost structure is going the
wrong way for them with these crazy rental prices.

------
rogerbinns
Can a local explain what is "wrong" with Sunset/Parkside as they are half the
price? Surely there is some attraction to being able to observe the ocean,
sunsets and being alongside a park?

~~~
timr
Nobody in the tech scene thinks there's life west of Divisadero.

In my experience, if you grabbed ten tech people at random, you'd find at most
one person who could tell you anything at all about neighborhoods outside of
the Mission and SOMA. The Googlebus picks people up from their home in those
neighborhoods in the morning, and drops them off again at night. There is
nothing else.

~~~
batbomb
Life west of divis, southwest of Glen Park, South of Bernal and Dog Patch.

Honestly, the inner/outer richmond has better restaurants than SoMa.

------
ww520
Rising rent is a leading indicator of rising house price, 6 months to 1 year.
If there's that house you want to buy, buy it now. House price will move up in
the area.

~~~
jquery
I bought in November for this reason. My home value estimate on Trulia and
Zillow has increased by nearly 50% since I purchased. I thank my lucky stars
every day that my wife and I were ready to buy at that time. I dread to think
what we could afford in today's market.

------
jrockway
Do San Franciscans have to pay a broker $5000 every time they move? If not,
the city is still _much_ cheaper than New York.

------
wf
Did... they do that svg path overlay on the map image by hand? Or is there
something that makes creating these shapes easier?

------
varelse
This could be mostly addressed overnight by abolishing the Ellis Act. This
will never happen.

------
redwood
"In San Francisco last year, only 269 new units came on the market."

~~~
muzz
The most-loved canard on HackerNews?

~~~
reeses
No, that's DuckDuckGo.

~~~
Apocryphon
That's a mallard.

~~~
reeses
No, mallards have colored heads. Brown for the female, glossy green for the
males.

(Apologies for even more off-topic, but xkcd #386.)

------
newman314
How do people afford this?!?

~~~
usaar333
Not sure if you are being rhetorical, but the answer is that the new entrants
are generally childless and making at least $80k annually.

------
michaelochurch
That's horrible.

Paying the high rents isn't _that_ bad. It sucks to have to have sell off your
prime saving years to landlords, but the high tech wages and career benefits
of spending one's 20s in high-prestige companies almost sorta quasi-compensate
for that.

The problem is that it's culturally devastating when rent gets that high. When
rent prices go up, losing a job is a financial catastrophe (as opposed to an
annoying inconvenience) and employers know they can get away with more
bullshit. Adventurism goes away and you get an almost creepy deference to
authority in the workplace that's unbecoming of high-talent people. That's a
big part of why the New York startup scene is, while well-funded, so
unimaginative and mediocre.

If Silicon Valley wants to be relevant in 25 years, it will drop some Nordic
Indignation on the NIMBY assholes. New York has tons of other stuff and will
be fine (as a city, if not necessarily a tech scene) when what is now called
"the Series A crunch" is fully fledged and recognized as what it it is-- a
post-bubble correction, the start of a bust-- but the Valley will die if it
doesn't reverse course. (By the way, one might think that prices would come
down and reverse the problem; that doesn't happen. Real estate prices are so
sticky against downward movement that, by the time they start to seriously
drop, it's too late.)

