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Why the San Francisco Bay Area should have 11 million residents today (forbes.com)
75 points by Aloisius 708 days ago | comments


DanBlake 708 days ago | link

As a new landlord in San Francisco, I can tell you that the biggest issue forcing this is rent control. The way rent control works is certainly designed to help those in need but instead it creates a artificial demand for affordable housing.

Without rent control, the market is free to compete and suddenly open up a ton of bottled up apartments. The issue is, a family on welfare with a income of 40k a year should not be living in a 4 bedroom apartment in pacific heights for 1k a month. I have no problem with giving affordable housing to those in need, but rent control is not the answer as it places the burden on individual landlords to provide social security.

The biggest gap of people who can live in SF are not the poor (taken care of by rent control) or the rich (dont care/buy homes) but those in between. Run of the road engineers and others who make between 75k and 150k a year. These are the people who are hurt most by san franciscos crazy rent laws.

If rent control was abolished, the one thing you would see is that rental rates would lower significantly as supply starts to balance with demand. Yes, some people would be displaced but the question is- If the city of san francisco wants to provide affordable rental units, why dont they instead just pay lower income people directly, letting them be free to choose where to live?

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mjn 708 days ago | link

From the numbers I can find, I don't think this is true. The biggest population constraint in the Valley by far comes in the form of explicit density constraints, such as minimum lot sizes, not rent control. Palo Alto has no rent control, for example, but is less dense than SF, despite the fact that demand exists for much denser housing to be built (especially near Stanford) if it were permitted. Some kind of scared-rich-person-club mentality going on where they're worried that allowing apartments, or even townhomes, might bring in too much riff-raff, so by law everything has to be an undivided and large single-family home (in a large portion of the total area).

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hollerith 708 days ago | link

Do any parts of the Bay Area south of San Francisco have rent control? I do not know of any.

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mjn 707 days ago | link

That's my point: the biggest density problem is the Valley sprawl, and that one's not caused by rent control, because there isn't any rent control there.

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seany 707 days ago | link

san jose does.

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hollerith 707 days ago | link

Thanks. Good to know.

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raldi 708 days ago | link

To put it another way, when someone can't afford food, we provide them food stamps, paid for by our shared tax revenue. We don't make grocery store owners grant them discounts out of pocket.

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DanBlake 708 days ago | link

Thats a pretty good analogy. I am absolutely for helping out those in need- I just dont think it should be shelved on the landlords shoulders- It should be a responsibility of government.

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raldi 708 days ago | link

And it could be financed by higher property taxes for landlords, so that the average landlord is in the same financial situation before and after, but the element of luck is greatly reduced, and the perverse market incentives are removed.

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bfrs 708 days ago | link

As a former Civil Engineer [4] and advocate of commodity-housing [1], I can tell you that rent control [3] is the minor issue here. I'm glad that HN is finally paying some attention to the elephant in the room...zoning laws. I bet that for most HNers who pay rent, it is about 50-60% of monthly expenses. This is freaking ridiculous! Look at it from a Civil Engineer's perspective: modern houses are built from very durable materials, and once constructed the maintenance expenses are minimal.

Is it that hard to connect the dots? People in power are all landlords, and they get a big chunk of their idle income via rents [2]. All they need to do is make sure that no new housing is constructed where they own rental property...basically protection racketeering. Next time you visit the Golden Gate park just spare a few minutes to read the plaque next to Joseph Strauss' statue. It says, "the biggest opposition to building the bridge came from the landlords of San Francisco, who feared that once the bridge was built, it would lead to a nose dive in rents".

[1] Housing so abundant that rents are on the order of maintenance costs, about $50-100/month!

[2] https://news.ycombinator.com/item?id=3959941

http://www.theglobeandmail.com/globe-investor/personal-finan...

https://news.ycombinator.com/item?id=3959500

[3] http://www.baycitizen.org/columns/elizabeth-lesly-stevens/sm...

This article describes in depth the problem you are facing, and since you are a new landlord it does seem like the biggest issue ;)

[4] One of the reasons for leaving Civil Engineering was the realization that the problem of high-cost-of-housing was not an engineering problem, but completely a political and social one. Constructing abundant, high quality and cheap housing was declared a solved problem in Civil Engineering by the 60s!

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staunch 708 days ago | link

Maybe you're someone to ask. Why don't we have sweet apartment buildings like the kind you find Tokyo? In the heart of Tokyo you can rent a tiny (but complete, clean, modern, beautiful) apartment for < $1k. In most major US cities that's totally impossible.

They're small as hell, but totally sufficient and way nicer than living in a bigger shittier place.

I think someone could make a killing bringing these kinds of buildings to the US.

Any reason it's not possible?

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bfrs 708 days ago | link

Such housing already exists in the US.

See http://shine.yahoo.com/green/simple-life-in-manhattan-a-90-s...

But, why do you think so small, when what is possible is a BIG, clean, modern, beautiful, 2 BR apt for $50/month!

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hristov 708 days ago | link

As a new landlord in San Francisco, you want to get rent control abolished so that you make lots of money. But of course when you bought your property you knew it was rent controlled and what the rent control price was, so if you do own rent controlled buildings you should have known what you were getting into.

Rent control does not really affect growth of housing, because new housing is almost never rent controlled. Furthermore, abolishment of rent control would also create a lot of inflation in a city because a city cannot function on engineers only. And once low income people get forced out of town they will want more money commute to the city.

So it is not such a black and white issue.

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narrator 708 days ago | link

If they didn't have rent control in San Francisco half the population would clear out every bubble. The city is already transient enough as it is. Having lived in and around San Francisco I have seen the mega-booms and busts. I think that rent control keeps the housing market from being warped by the gigantic tidal waves of money that slosh in and out of San Francisco every couple of years.

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rayval 708 days ago | link

This has nothing to do with rent control.

San Francisco is just one part of the Bay Area, and the Bay Area is just one part of California.

The entire state has high real estate prices, despite pockets of low-priced housing (Stockton, for example).

Law of supply and demand: a lot of people don't want to live in freezing Minneapolis or bleak Detroit. Or Mumbai or Monterrey, for that matter.

Rich or poor, they would rather be in place where there is a chance to bask in the sun by the ocean, even if requires an hour or two drive from their gritty neighborhood.

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mahyarm 708 days ago | link

If it's really weather, why are almost all of the east coast sun states significantly cheaper? And two of them don't have a state income tax! (Florida and Texas). New York also has fairly shitty weather comparatively and it's even more expensive.

It's more complicated than that. Prop 13, cities forcing a lack of density and other polices and forces I don't know about push California to it's sky high rates.

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bitops 708 days ago | link

> If it's really weather, why are almost all of the east coast sun states significantly cheaper?

Simple - people don't want to live in those states as much as California. For example, we have palm trees in California. They have them in Florida too - it's not the same!

Similarly, Texas also has nice weather but it's way more variable than California which has a fairly temperate climate. In TX crazy temperature swings are the norm. Also, I've known a number of Texans throughout my time in the Bay Area, pretty much all of them from Austin. The culture of Austin is the most like California and San Francisco - artsy, liberal, etc. Places like Dallas, Fort Worth and San Antonio are decidedly not like San Francisco.

To your point about Prop 13, I agree that it's an issue, and it's definitely a major part of why we keep having this budget crisis over and over and over again, every friggin' year. Sadly, I don't think Prop 13 will be abolished or really revised until the state is completely broke - much worse than it is now. But eventually it will change.

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bgentry 708 days ago | link

Stockton hasn't had high real estate prices since 2008 when their market crashed harder than anywhere else in the country.

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rayval 708 days ago | link

That's why I said it was a pocket of low-priced housing.

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thrownaway2424 708 days ago | link

What's your thought on Prop 13? It's hard to imagine why owners should be insulated from tax increases while tenants should not be insulated from rent increases.

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DanBlake 708 days ago | link

The 1% is tied to the market value of the home, at the time of taxation. Its saying, they will never tax you more than 1% of the market value of your home.

Rent control is tied to the time of original purchase. If you want to say that your rent can never be more than 1% of market rent, sure- sounds good.

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dfc 708 days ago | link

The way rent control works is certainly designed to help those in need but instead it creates a artificial demand for affordable housing.

I am having trouble wrapping my head around this quote. How could this be? Do you mean supply? There is always more demand for a good at lower prices than higher prices. If you took rent control away poor people would still want to live in nice places and pay low rent.

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benmccann 708 days ago | link

From the Wikipedia article on price ceilings:

"A price ceiling set below the free-market price has several effects. Suppliers find they can't charge what they had been. As a result, some suppliers drop out of the market. This reduces supply. Meanwhile, consumers find they can now buy the product for less, so quantity demanded increases. These two actions cause quantity demanded to exceed quantity supplied, which causes a shortage"

Price ceilings are monumentally stupid. Unfortunately, the government rarely seems to be run by people who have much of an economic education.

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dfc 708 days ago | link

I still take issue with the argument and I had trouble finding the citation for this statement or the graphs.

Under the price ceiling there is excess demand relative to the supply. This is a no brainer. But excess demand is not the same thing as an increase in demand. If there is an increase in demand why is the demand curve not shifted to the right? The curve stays in the same place.

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benmccann 708 days ago | link

The quantity demanded is a point on the demand curve. Yes, the demand curve remains in the same place. However, the point at which it intersects the price ceiling is at a lower price and higher quantity than the natural equilibrium. If you're forced to sell something at a lower price, then there will be more people willing to buy it.

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dfc 708 days ago | link

"demand curve remains in the same place" = no change in demand

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benmccann 708 days ago | link

False.

I'm talking about the actual quantity being demanded. You're talking about a demand function. They are two different things. I'm talking about a number like 1,500. You're talking about something like a coefficient changing in Q = a - bP.

A demand curve shift does result in a change in quantity demanded. However, there are other things that can result in changes in quantity demanded as well (such as a price ceiling or technological progress resulting in lower prices).

You already agreed that a price ceiling leads to excess demand. That means demand > supply. Yet, the supply curve did not shift either. Again, this is because demand is a point on the demand curve. You're confusing a graph of demand at each price with demand itself.

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DanBlake 708 days ago | link

Check these articles out for some good points

http://www.cato.org/pubs/pas/pa-274.html http://www.nmhc.org/ResearchReport.cfm?ItemNumber=55262

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dfc 708 days ago | link

I apreciate the links but I wish they were from less biased sources. Any peer reviewed academic citations?

Quote from NMHC: NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S.

Cato is obviously infinitely more reputable than an industry trade group. But lets face it Cato is not exactly an unbiased source for discussion of government policies.

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dennisgorelik 708 days ago | link

Actually rent control tends to push poor people out, because with rent control landlords are forced to chose between multiple applicants before letting them in. Landlords would clearly prefer to deal with wealthier tenants than with poor tenants.

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DanI-S 708 days ago | link

The Bay Area is one of the most beautiful places in the world, and if they turn it into another Los Angeles I will cry.

This country is phenomenally huge and there is no reason whatsoever to live clustered together in vile, concrete scabs. Compact cities are more efficient, but congested urban sprawl is most definitely not. Strict building regulations are part of what make this place productive and desirable in the first place.

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mjn 708 days ago | link

I would say that building regulations are precisely what is causing the the area to following an LA-style trajectory. San Francisco is one thing, and reasonably dense. But the huge sprawl of Palo Alto, Mountain View, Santa Clara, Cupertino, Gilroy, Los Gatos, etc., is caused by all these communities wanting to be LA-style suburbs with no dense housing, and enacting laws accordingly.

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luser001 708 days ago | link

Hmm, there's a HUGE difference between LA-style suburbs and the Bay Area. In LA-style suburbs, you have drive about 10 miles to a shopping mall, i.e., residental areas have no businesses apart from the occassional gas station.

That's because these areas were unpopulated desert or something which got converted into housing.

By contrast, each of the towns in the Bay Area was a standalone town of its own with its own downtown and rail station etc for a long time. Even today, most Bay Area towns are reasonably mixed wrt residental and business.

All (afaik) new construction for about 10 years has been townhomes, not single-family homes, so I'm not even sure this author is correct wrt housing code.

Just my two cents.

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nickpinkston 708 days ago | link

I have to say - whenever I drive the 101 - I'm reminded of LA. It's actually less dense than most of LA. I live in the Richmond which is probably about twice as dense housing wise as most of LA's working class neighborhoods.

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Androsynth 708 days ago | link

Have you ever been south of Palo Alto? There is not much of a difference between San Jose and LA (I have lived in both).

Besides, LA is not ugly because of the population density, but because of the endless sprawl.

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Apocryphon 708 days ago | link

How do the two cities resemble each other? SJ seems sleepy and is basically a giant suburb.

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Androsynth 708 days ago | link

Parts of it are sleepy, parts of it arent. But really its just endless tract housing and strip malls.

(also similar: minimal amount of nature within the city itself; lots of concrete but not in an elegant urban way; not much in the way of historical sections)

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mturmon 708 days ago | link

Parts of the western San Fernando valley, which lies within LA proper, are not that dissimilar from SJ.

And, when people say "LA", they really mean the LA area, which contains not only the city itself, but outlying/surrounded cities like Pasadena, Santa Monica, Compton, Long Beach, etc.

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gobbluth 708 days ago | link

I also love San Francisco, but you have the wrong target in mind. Urban density is GOOD. What sucks is a car-centric culture that forces sprawl.

You want a NYC or European-style transportation system, where it's completely unnecessary to own dangerous, unreliable, expensive automobiles. Cities designed around walking -- like the good parts of San Francisco -- are WAY more human-friendly and memorable. I guarantee that whatever parts of San Francisco you love, they're almost definitely not parts you're forced to drive to.

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kitsune_ 708 days ago | link

You can have sprawl without having to rely on individual transport by car. This is precisely what is going on in smaller European countries such as Switzerland. Cities and villages are connected through an extensive rail and bus network.

From my city, trains are leaving for Zurich, Geneva, Bern, Lausanne, Basel etc. every 30 minutes.

Most commuters take the train even if they own a car.

I'm still a proponent of urbanization because suburbs seem to disrupt natural spaces. If you travel from east Switzerland to Geneva in the west by train, you will always see a house somewhere, on the entire 400 kilometres of journey. Every village looks alike.

That said, I do think mega-cities can be very tiring and demanding. I only have limited experiences in this regard but cities like Seoul or Istanbul are not the most relaxing environments for its inhabitants.

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gobbluth 708 days ago | link

Agreed on basically all counts. But you're critical because you're spoiled... just visit anywhere in the American Midwest for a week to truly understand how blessed Switzerland is.

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nickpinkston 708 days ago | link

Agree completely!

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StuffMaster 708 days ago | link

>Compact cities are more efficient, but congested urban sprawl is most definitely not.

The article was arguing for density, not sprawl. Also that affordability is more important than desirability.

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mahyarm 708 days ago | link

I was surprised how much of the housing was just... mediocre in SV. Even if everything was $500'000 cheaper.

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rsl7 708 days ago | link

so the high cost keeps out the riffraff?

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maratd 708 days ago | link

You're making kittens cry! Stop pointing out the obvious. Nobody wants to hear why zoning and rent control is still around.

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sliverstorm 708 days ago | link

This country is phenomenally huge and there is no reason whatsoever to live clustered together in vile, concrete scabs

It's pretty simple. Communities tend to "clump", and people generally aren't willing to commute a really long way so the diameter of each "clump" is limited. Now, this wouldn't be an issue if our population was so massive the entire USA was covered in continuous urban sprawl, but I don't think that would make you happy.

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antidoh 708 days ago | link

But the real estate restrictions will never change, not in the foreseeable future.

If you imagine a world where that fact will never change in any usefully short future, then you have to work around it.

Why does the software industry need to all be located together? Yes I know, software includes startups, and it's easier to pivot and meet investors and all that when you're together. And yes, it's often more effective to be working face to face with your team mates.

Which means that development practices and industry organization are wrong for the economics of the industry, at least that part of the industry located in highly concentrated and unexpandable locations.

However we're building apps, systems and businesses right now, we're doing it wrong, if mere real estate is what's hindering hiring.

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balloot 708 days ago | link

All I know is I have lived in and visited many other places in the US, and the SF Bay Area (and especially San Francisco proper) is hands down the most distinctive and beautiful. Whatever is being done here needs to be done more and not less.

If the author wants to take his ball and stomp off to some urban-sprawly McMansion-filled city that is supposedly more optimal for talent, go right ahead. You have your choice of the vast majority of the country. There is a wonderful lack of regulation and population density out in the plains of South Dakota - just go there and I'm sure all the talent will follow in droves.

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oscardelben 708 days ago | link

I just moved here from Italy, and it's almost impossible for me to get an apartment that's near public transportation. I mean, other than caltrain there's little if nothing public transportation here, and that may be part of the problem too. I certainly can't rent a house in the hills if there's no way for me to get to work from there. I ended up renting from a colleague.

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mjn 708 days ago | link

Yes, unfortunately the whole area is built on an assumption that you have a car. Santa Clara County in particular is amazing in that it's one of the few places in the world that has three levels of grade-separated freeways: national highways, state highways, and county highways. The latter (San Tomas Expressway, etc.) were paid for out of the money that Santa Clara County saved by opting out of BART, which is not coincidentally why the public transit is bad.

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mattdeboard 708 days ago | link

I'm sorry but after living in Santa Clara Co. for a couple years, then moving back to my home state of Indiana, I can say with absolutely no compunction that Santa Clara Co. is a MECCA compared to where I live now in terms of public transpo.

Maybe it could be a ton better but my god I cannot wait until it's time to move back there.

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jarek 708 days ago | link

SCVTA is pretty bad compared to some select localities in North America (NYC, SF itself, Montreal off the top of my head). On a world scale it barely registers, the transport infrastructure compares unfavourably with, say, Lille.

Compared to Indiana it may well be nice.

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gobbluth 708 days ago | link

Agreed with you and MJN. The US is in desperate need of investment in public transportation. Europeans have absolutely mastered the art of urban design and public transportation, and I wish we'd learn from their example.

But try telling 99% of the US that 1) their shitty sprawled real estate is effectively worthless, 2) their obese asses will have to give up their cars, and 3) we've spent 70 years of infrastructure investment supporting the dumbest possible lifestyle choice.

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briandon 708 days ago | link

I don't disagree with you per se, but I have spent nearly a decade living in a city which has amazingly great public transport, very dense living arrangements (30-story highrises are the norm), and people walk constantly.

Are you ready to go grocery shopping pretty much every single day or every other day? Or can you manage to be at home during a 6-hour window for the grocery delivery if you want to shop once a week for that stuff?

Would you get stressed waiting, at least twice a day (leaving from your floor and returning from the lobby), for elevators in a 30-story building? Remember that people in wheelchairs, kids taking their bikes downstairs to ride, workmen w/materials/tools, people moving house, etc. are all going to be using the elevators.

If you're out somewhere and buy anything (in my case, yesterday, it was a new electric toothbrush) that's not groceries or something large, like an air conditioner, you're going to have to lug it around with you until you go home, even if you have several other stops to make or errands to do. There's no such thing as going to your car and putting something in the trunk until later.

Are you ready for even short trips to take much longer? You'll need to get out of your highrise, walk for some time until you get to the public transport pick-up point (bus stop, train platform, etc.), wait a while, ride the public transport (which usually moves slower than a car even if it weren't making a bunch of other stops between your home and ultimate destination's drop-off point), and then, finally, you'll have to walk some more to reach wherever it was that you wanted to go.

If you already live in a highrise, use public transportation exclusively, and don't own a car, then I'm glad that the experience hasn't soured you on high-density living and public transportation.

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kiwidrew 708 days ago | link

Except that's not the only style of living that HK offers.

Some people do opt for the arrangement you've just described, living in e.g. the "Lake Silver" high rises way out at the very end of the Ma On Shan metro line. Most of them don't seem to mind it, even though it means long rides on the bus or MTR to go anywhere.

But it's just as easy to live a few stops from work, in an older neighbourhood like Sa Ying Poon or Prince Edward with smaller buildings, where you have three different supermarkets within a five-minute walk and are surrounded by shops selling everythinng imaginable.

I mean, how many cities have two overlapping and completely independent public transport networks? HK has the "official" bus and metro system, but the red minibuses are essentially a rogue invisible-hand-of-the-market creation that just sprung up organically. And unlike most American cities, where the public transport struggles to even survive, both of these HK networks are thriving...

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briandon 708 days ago | link

The overwhelming majority of people in HK live in highrises, virtually all new housing being built here (unless your uncle is a village chief and/or you're a male who can prove that he is of villager stock and has a right to build a village house) consists of giant highrises, and most of the existing housing stock consists of the same.

So, while you're correct in saying that highrise living is not the only choice, it is the reality that most people here are living in highrises and that the small percentage of people living in smaller buildings will continue to dwindle over time.

Regarding older, low-rise, buildings, those low-rise residential buildings that do exist and which aren't out in the boonies are being gradually "redeveloped", as you may already know. The government or a developer buys a certain percentage of the flats and compels the holdouts to sell, usually at a price that won't permit the residents to buy a newer flat in the same neighborhood, demolishes the building(s), and erects a huge tower block.

Regarding the minibuses, a car or taxi is still faster than taking a minibus for the same reasons that a car or taxi are faster than the MTR: no walking/waiting/walking and you're going to your destination directly rather than following a route and making lots of stops at places that you don't want to go and then.

This is a separate issue, but haven't you noticed that most of the drivers are visibly impoverished (raggy-looking clothing, many missing/black teeth, etc.) and many are senior citizens? The minibuses, especially the red ones, also tend to speed and get into lots of accidents. Rarely does more than a day or two pass without a report of a minibus ramming into something and most of the passengers being injured, or two minibuses t-boning each other and two minibus-fulls of passengers being injured, etc.

Also, you do know that most of the red minibuses are under triad control, that the drivers have to pay a huge lump sum when they start driving and then "parking fees" every month thereafter?

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bhickey 708 days ago | link

> Or can you manage to be at home during a 6-hour window for the grocery delivery if you want to shop once a week for that stuff?

Having left London, I really do miss Ocado. Unlike the silly timing restrictions you suggest, they delivered at any hour between about 0700 and 2300 with one hour windows.

> ...ride the public transport (which usually moves slower than a car even if it weren't making a bunch of other stops between your home and ultimate destination's drop-off point)

This is just the tragedy of the commons at work. Outside of the City there are bus lanes (shared with cabs). It isn't the job of society to subsidize drivers in congested areas. There's simply no political will to squeeze private autos.

> If you already live in a highrise

You're tilting at a straw man. Single family houses and high rises aren't the only options. Greater London, for example, is full of four story row houses.

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briandon 708 days ago | link

> Having left London, I really do miss Ocado. Unlike the > silly timing restrictions you suggest, they delivered at > any hour between about 0700 and 2300 with one hour > windows.

We really do deal with six-hour windows here (and the delivery people tend to miss even those and come late). One-hour windows sound great, especially if they never missed them. You're still stuck waiting around for a delivery person, though, even if it is just for an hour once a week.

> This is just the tragedy of the commons at work. Outside > of the City there are bus lanes (shared with cabs). It > isn't the job of society to subsidize drivers in > congested areas. There's simply no political will to > squeeze private autos.

Sorry, I should have been more clear. I wasn't saying that driving was faster than taking a bus in my city, though it is. I was actually thinking of the local rail system, the MTR. Taking a taxi anywhere or driving yourself is almost always faster than taking the MTR.

By it's very nature, public transport, which has to run on a schedule and leave gaps between runs to allow passengers to accumulate and then make multiple stops is, is often going to be slower than an individual getting into a personal vehicle and driving themselves to their destination.

> You're tilting at a straw man. Single family houses and > high rises aren't the only options. Greater London, for > example, is full of four story row houses.

I'm not British and haven't been to London (I just live in a former British colony whose development was planned by British civil servants), but the reference to Greater London seems to refer to London plus its suburbs.

Hong Kong has a lot of three-story "village houses" in what passes for rural areas here but which in reality are more like suburbs or outer boroughs.

HK village houses don't have elevators. Do the four-story row houses in Greater London have them? If so, then great. If not, then I would imagine it must be quite unpleasant for the people on the higher floors to carry their groceries (or anything else) up to their flats.

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gobbluth 708 days ago | link

I do live in an urban environment (NYC for a decade now), and you're... confused on some counts. Public transportation is radically faster than cars, at least in any city with a fraction of the same population. Have you ever tried to drive through Atlanta or Miami? And living in an urban environment doesn't demand high-rise towers -- walkable townhouses and height-restricted buildings abound, and there's no shortage of human-friendly neighborhoods in New York. (I also hate midtown Manhattan, but that's nowhere near representative of city living.)

If you absolutely need a car for big purchases, Zipcar and its competitors are easily accessible. If you're older, you have BETTER options here in the form of delivery services than you'd have in a rural setting. If you'd like to get a little further away from the city in a nice, quiet Queens neighborhood, you can hope on the express train and read a book while you're zipped to your destination.

Hong Kong is a different animal just because it's, well, Hong Kong. But nothing in the world quite compares to that, and you really shouldn't associate New York or Paris with that crazy city.

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briandon 708 days ago | link

The walkable townhouses and height-restricted buildings you're talking about (1.) only exist so long as the aesthetic/lifestyle value of a low-risey city balances against the demand for more housing and developers' desire to make money and (2.) make public transport trips take longer because you have to walk past more of your neighbors' low-rise buildings to get to a public transport hub and the bus/train/whatever has to travel farther (past the low-rises) to get anywhere and also make more stops if more hubs/stations have been built to offset the problem of people living relatively far apart in those low-rise buildings.

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gobbluth 708 days ago | link

You, sir, have never been to Brooklyn.

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briandon 707 days ago | link

Please, do step into my handy dandy time machine. We'll set it for thirty years in the future and then step out for a moment and count the number of hip, low-rise brownstones that we can see and then try to pick out the Brooklyner from amongst the other highrises.

I think that you're living in Brooklyn and enjoying it, which is great, and idealizing it without thinking about how Brooklyn is actually changing right around you.

[The Brooklyner is a 51-story skyscraper recently built in Brooklyn: the http://en.wikipedia.org/wiki/Brooklyner ]

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hollerith 708 days ago | link

Please tell us which city you just described.

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briandon 708 days ago | link

I live in Hong Kong.

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bane 708 days ago | link

It's not much different than in Seoul, Manhattan and central Paris.

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hollerith 708 days ago | link

Europeans tolerate more onerous restrictions on individual liberty than Americans do. The combination of high degrees of individual liberty and high population density tends to produce a less predictable, sometimes disheartening and sometimes dangerous environment that wealthy people in the U.S. tend to prefer not to live in (at least after their young adulthoods).

The point is that there are good reasons why most Americans with the ability to do so choose to live in areas low enough in density that cars work better than public transportation and that America cannot simply copy Europe's urban planning without also copying some of Europe's laws and attitudes regarding individual liberty. (And laws and attitudes are hard to change.)

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gobbluth 708 days ago | link

I'm sorry, but you're associating liberty with cars, and that's just not true. If you live in Nowhere, Indiana, then you're completely dependent on your car to get ANYWHERE, including to buy food, get to work, or see your mother in the hospital. If it breaks down and you can't afford the repair? How free are you to travel now?

You're not completely incorrect, insofar as European cities (and any worthwhile city) are forced to infringe to some extent on fundamentalist interpretations of property rights for urban planning. But you might as well throw up your arms and complain about building codes and zoning restrictions anywhere else if such things are such "onerous restrictions on individual liberty."

The reason why so many Americans have settled in exurban developments is because we've artificially subsidized those lifestyle with federally-funded freeways, artificially cheap gasoline, and destructive corporate attacks on public transportation systems (especially in the 1950s, check out the GM attack in Los Angeles as an example). Exurbs didn't develop organically, nor are they in any way models of efficiency, cost, or sustainability.

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hollerith 708 days ago | link

You have misunderstood me, so let me give you an example.

When I used to live in the Mission District of San Francisco, sometimes "poor, urban" type people would stand around on the sidewalk and street in front of my window and yell at each other for hours in the early in the morning. (My guess is it had something to do with pimping and prostitution.) If I lived in an outer suburb of San Francisco (Walnut Creek miles from a BART station for example), people like that would have a hard time getting to my street, because most of them do not have cars; and since there would be nothing near my home besides other homes, it would be a boring environment for them unless perhaps they are into jogging or walking their dog or something like that. Ditto the people who used to park across the street and play their car stereo really loud. And the guy with the pick-up truck who was helping his friend move and left his car alarm on the most sensitive setting, so that it would go off every time a car passed by it. The French and other nations on the continent of Europe are much more accepting than Americans of the use various policing, administrative and legal procedures to encourage the aforementioned individuals to stop the aforementioned behaviors and conform to a quieter or more conventional patterns of behavior. This is an example of what I meant when I said that Europeans tolerate more onerous restrictions on individual liberty than Americans do, and this is a significant part of why IMO wealthy people in France mostly consider the core of Paris a nice place to live whereas wealthy people in the U.S. mostly do not want to live in American inner cities -- at least they do not want to after they turn 30 or so.

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gobbluth 708 days ago | link

Fair enough, but that's not really more liberty. Presumably the police would also arrest a homeless guy screaming about prostitutes if he were in your front lawn in the suburbs.

You'd just like to pay extra to be so far away from everyone that you won't see homeless people. Besides the obvious suggestion of directing the money taxpayers are forced to spend on exurban roads, water pipes, etc. towards asylums, rehab clinics, and shelters... you realize that gentrification means you can have your cake and eat it too, right? Especially in NYC, while there are still tons of bums and Jersey douchebags, the gangster element has all but died off. (Though you still have stupid assholes in the Bronx and Bed-Stuy, gangs aren't the problem you see everywhere else.) Having mixed-income, dense neighborhoods makes policing WAY easier and makes NYC the safest American city.

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briandon 708 days ago | link

Cars really do give individuals more liberty.

Replace cars with, for example, private refrigerators and public transport with communal refrigerators and think it through.

Any time that you smoosh people together and force or nudge them into using shared or communal facilities rather than their own, personal freedom of action is being curtailed.

We can argue that whatever we're getting in return is worthwhile but we can't pretend that we're not giving anything up.

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gobbluth 708 days ago | link

Is that really a good analogy? Do you really feel that sitting in your car on a freeway is so radically different (and liberating) than sitting in a subway car?

If you're so certain that public transportation means giving something up, what is it that you're losing?

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briandon 708 days ago | link

No analogy is perfect but, yes, that analogy is good enough.

If every car trip really did mean sitting in a traffic for an hour, then I would love public transport more. Thankfully, that's not the case.

My wife and I take taxis a lot and, even in uber-dense HK, we rarely get stuck in traffic. When we do, it's usually just at a handful of choke points, like entrances to cross-harbor tunnels, and the traffic gets moving again once one is in the tunnel.

As to what one gives up by not owning a car, living in densely populated areas, and using public transport, I would refer you to an earlier reply: http://news.ycombinator.com/item?id=3974910

Basically, living close together and without a car means that the pain-in-the-neck factor of practically everything is increased. Everything becomes at best just a teensy bit more of a hassle and needs to be scheduled more carefully. Convenience and the ability to be spontaneous become more of a luxury.

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WildUtah 708 days ago | link

I don't know what you are suggesting about high degrees of personal liberty and high density being incompatible. European cities and even the denser US cities like San Francisco and New York are known for better civil liberties records than the majority of the USA.

And the USA is not reluctant to really cram down civil liberties to control crime, if that's your unstated implication. The rate of imprisonment is many times higher in the USA than in Europe. You might be suggesting that controlling crime in the USA is simply impossible with anything short of a police state but criminological research indicates the high crime rates are largely a result of poor policing policy.

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cageface 708 days ago | link

The problem is that the U.S. is huge compared to Europe. I agree that we need more mass transit but it's a different problem here.

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gobbluth 708 days ago | link

Just because I don't want to spam with the same message, please see my response to Spullera. The argument you're using may be intuitive, but it's very incorrect.

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spullara 708 days ago | link

You really can't compare Europe to the US. They are tiny. For example, one of the largest countries in Europe is France: slightly less than the size of Texas. It's metropolitan population is 65m. Texas is only 28m. Other countries there are even more lopsided. Just as with cellphone networks, smaller area is easier.

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gobbluth 708 days ago | link

That's not actually true. The US is 3,794,101 sq mi. Europe is 3,930,520 sq miles

However, Europe is almost entirely concentrated in walkable, urban areas -- even beyond the major cities, small towns are accessible by train, navigable by foot, and have excellent support in the form of public transportation. If people do have "cars," they tend to be tiny or Vespas.

There's no reason we can't have the same system here, except that we absolutely suck at infrastructure investment. It's really not that hard to build an urban environment, and it's overwhelmingly popular with people who can afford it. The exurbs of Las Vegas and Miami are completely worthless, and will be even more so in a future with higher fuel costs, water scarcity, and resettlement in urban environments.

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spullara 708 days ago | link

It really is true.

Population of Europe: 738,199,000 Population of US: 311,591,917

If the US were double density, it would have more walkable, urban areas, etc.

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gobbluth 708 days ago | link

I'm sorry, but that's not how urban design works. We're not forced to develop proportionate to land mass. Your argument is seriously that the existence of the Dakotas prevents us from building decent cities? Are there so many people in Wyoming that we just don't have the population to build decent subways in Seattle?

We're trapped by a car-centric lifestyle, and it's absolutely poisonous.

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spullara 708 days ago | link

Yes, basically. Though it more like the existence of twice as many twice as small cities. It also means that we devote huge amounts of infrastructure dollars to the middle of nowhere serving virtually no one. Look at the subsidies we give to "rural phone companies" or the postal service.

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vannevar 708 days ago | link

In short, the reason there’s too much money chasing too few businesses isn’t that the country is running out of people with good technology ideas. It’s just that bad housing policies mean that there’s nowhere for additional people to live.

Well, you could spend millions and take years to move thousands more engineers to Silicon Valley. Or you could just get on a goddamned airplane and invest your money more than a few miles from your house. Silicon Valley self-absorption never ceases to amaze me.

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mahyarm 708 days ago | link

More offices in the East Bay/Berkeley would be an improvement. Maybe a mini air taxi bus to go from one tip to another. (Berkley Airport - San Carlos/Palo Alto Airport - Reid Airport)

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redwood 708 days ago | link

Spot on, we need to see more business move into the east bay where there's plenty of room for it and transportation infrastructure already in place... it's only natural

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redditmigrant 708 days ago | link

I think you are ignoring the fact that Silicon valley is an ecosystem of engineers/product managers/sysadmins etc. all of which a growing startup needs. Hence, while a remote area might have people with ideas, it most likely will not have the eco system to sustain the growth of the startup.

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vannevar 708 days ago | link

I think 'the ecosystem' consists mostly of people with connections to money. Which of course is true, since the money is so provincial. Yes, there are lots of engineers there too, but as the article points out, they all have jobs plus back-up offers lined up three deep. Instead of going to the trouble to import people, why not invest in them where they're at? I'm not talking about farm towns in Iowa, I'm talking about places like Boston, New York, Austin, Atlanta, Chicago, etc, etc.

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waterlesscloud 708 days ago | link

If you have remote workers, you have a very very large ecosystem.

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Cariapa 708 days ago | link

True. But I think his point was that by not investing in other parts of the country, people are not giving a chance for the ecosystem to develop.

I think local culture plays a big part as well. In most other parts of the country people join big large companies and then spend their entire life being the company man or woman.

If I did that I'd cry just like the other guy said he would if the Bay Area got paved over.

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pwthornton 708 days ago | link

Silicon Valley has some of the least progressive views on housing in the country. Limiting people to single family homes, which much of the valley does, is terrible for the environment and drives housing prices up. Space is finite. Building up leads to more affordability, shorter commuters and more creativity (by making it more likely that smart people run into each other).

The issue in the Valley is that there isn't enough housing stock. That's not hard to fix, unless you have too many regulations and nimbys.

Steve Jobs was a genius about a lot of things, except housing and work environments. The new Apple campus is almost laughably stupid. Everything we know about cities and their ability to forward humanity and creativity can't happen in Apple's new campus. It's disconnected from the larger community and sits next to a freeway.

See Triumph of the City as to why density of knowledge workers leaders to more innovation and creativity (or why the Renascence would never happen in rural America).

I bring up Jobs because I think his ideas on housing is common in the area. He loved the suburbs and perhaps the suburbs of the 60s and 70s were nice for a kid growing up. But Apple doesn't employ kids and our country's populations has doubled since 1960 and shows no signs of slowing down.

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rachelbythebay 708 days ago | link

Have these people looked at North San Jose lately? They have been tearing down office buildings (Sony, on Zanker) and have been putting up huge residential complexes. One of them just opened its first phase, and many more are on the way.

Basically, anywhere between the Guadalupe River and Coyote Creek north of Montague is starting to go crazy, and if that isn't the Valley, I don't know what is.

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rdl 708 days ago | link

The big hack for living in the Bay Area seems to be having roommates. I'm currently trying to find a really nice, big house in San Mateo County (the only Bay Area county which is pro firearms ownership, thanks to an excellent sheriff, Greg Munks).

There's really spotty availability of nice houses in a "reasonable" price range (2-3br/2ba for $3000 or less) anywhere reasonable, but a lot of huge, absurdly nice houses (8-12br, 8+ ba, multiple pools, etc. for about $10k/mo). The rent vs. buy calculation is totally rent for properties like that too.

Clearly the arbitrage play, assuming you don't mind sharing a $300k gourmet kitchen, housekeeper, chef, etc., is to rent a house like that and share it. $1-2.5k/mo, and you get to live as well as you would in Texas, while being in SFBA.

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ahh 708 days ago | link

I've been looking all over for such a situation--can you show a link to one such house? I'm not convinced they exist.

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ebiester 707 days ago | link

So long as you don't go too many months with too many vacancies and suddenly your rent doubles.

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rbranson 708 days ago | link

Those types of regulations exist in every city. The problem isn't housing, it's transportation. Without the necessary transit infrastructure, it's pointless to just build buildings. It seems as if it was up to the author of this piece, the Bay Area would look a lot like LA. Please, for the love of all that is good, do not make this place like LA.

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benmccann 708 days ago | link

The two are fairly related. Without sufficient housing density, it's difficult to build efficient mass transportation.

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rizzom5000 708 days ago | link

This article seems to have missed or glossed over a number of critical relevant points:

1. Few people on this planet would consider Atlanta, Phoenix or Las Vegas as cities to emulate. They are all excellent examples of unsustainable growth - and to the point where water shortages are a very real future possibility for any or all of the three.

2. The 'nut' of the story is that Silicon Valley needs more engineers, and that more engineers would move there if only the cost of living were less. By this logic, Silicon Valley investors should be able to take a quick drive over to the cheaper Las Vegas, where all the cheapskate engineers must be hiding out waiting for a Silicon Valley investor to show them the way to the riches that can be found building web services and phone apps for sweat equity.

3. No mention of telecommuting? Still a taboo topic? If it's such a problem, maybe one of those start ups should start looking for a solution to that problem - that way engineers could live wherever they wanted and we wouldn't have to contemplate what the Bay Area, Phoenix style, would be like.

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nnnnnnnn 708 days ago | link

The author uses three examples to assert his 11 million number, but he doesn't explain why he believes the bay area should model these growth points.

In the case of Detroit, the boom was driven by many cheap manufacturing jobs available to all. This differs significantly from the fairly specialized and specific technical positions available in the valley. Cheap, uneducated labor isn't seeking out the valley -- in fact the economic incentive is an exact opposite: If you can't earn a high salary, you flee to a cheaper state.

Las Vegas has a booming service industry, which is much more in line with the manufacturing boom in Detroit.

Phoenix is where people go when they flee expensive southern California life. Phoenix is also close to Mexico, and the hispanic population is by far the fastest growing demographic (46% growth vs 17% for all other demographics per 2010 census).

The author of this Forbes article ought to spend more time analyzing the cause of population booms, rather than trying to rely weak and unsupported correlations. What a disappointment.

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dionidium 708 days ago | link

See, also, Matt Yglesias on parking regulations, among other things:

https://www.google.com/search?q=matt+yglesias+parking

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guelo 708 days ago | link

Coincidentally this other article also published today has a similar theme making the case that California's previous prosperity was caused by higher population growth and advocating construction in Silicon Valley. http://www.slate.com/blogs/moneybox/2012/05/14/the_decline_o...

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redwood 708 days ago | link

There's another problem: integration of mass transit across counties... BART and Caltrain each have their advantages, especially BART which is truly rapid. But those are arteries, and we need to see veins also connect across counties.

For example it's a pity that Palo Alto, being at the county line between SAMTRANS and Valley Transit, does not have any good street car service. The light rail that ends in Mountain View should continue to Palo Alto, and I hope the density will push that.

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redwood 708 days ago | link

I'd love to see the bay area achieve a level of density that makes mass transit (and not cars) the norm everywhere.

There has been a lot more progress, at least in areas like Palo Alto, than this article makes clear. Throughout my life countless properties have been turned into relatively high density homes.

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