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Comment by wernercd | Hacker News Reader

Supply & Demand. Demand is high and supply doesn't meet it? Prices go up.

Why is demand high? Nice year round weather, Hollywood, large military presence, etc.

Why doesn't supply meet demand? Restrictive policies, companies taking options that have more profit, demand increases faster than supply, etc.

Any which way you look at it... You have a nice area and tons of people want to live there? Things are going to cost more.

On top of that, increasing wages won't really solve everything as costs will go up (Businesses have to increase costs to make up for increased paychecks. Example: http://townhall.com/tipsheet/erikahaas/2016/11/16/child-care... ) negating the extra money you make.

You want a low cost of living? Move further inland. Move to Arizona or the mid-west. Much cheaper to live.

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That is all painfully obvious. What Velodrome is saying is not out of reach in the slightest. State and local governments could take plenty of steps to lower the cost of living.

Which would just make more people want to live there, and ... make supply lower, and make the cost go up.

California has a finite people carrying capacity. You can remove all the cars, build sky scrapers to the stratosphere, etc, etc.

It's like arguing that all the people in the world who want to live in hawaii should be able to live in hawaii.

California isn't very densely populated. It's much less populated than UK, Switzerland, Italy, Germany etc.

Large swathes of the coastline are protected. That's not a particularly bad thing. But also, development in general is really wasteful of space. Spending time in California as a European was an object lesson in scale: everything is bigger than it needs to be, everything is spread out, walking places takes ages, roads are far wider than necessary, parking lots take up loads of space (legally mandated!), etc.

California's urban planning has long been guided by the assumption that everyone owns an automobile:

http://www.autolife.umd.umich.edu/Environment/E_Casestudy/E_...

As vigorously promoted by the automobile industry:

https://en.m.wikipedia.org/wiki/General_Motors_streetcar_con...

State and Local governments COULD take steps to provide affordable housing... but that would ruin San Francisco!

http://www.sfchronicle.com/bayarea/article/In-a-wealthy-SF-n...

It won't match the Church! My kid(s) won't be safe! People with Mental Illness and Drug Addiction will end up there!!!

This is just one example I found for San Francisco... expand this example to any other town in California - Hollywood, The Valley... any part of town with wealthy people or people who don't want to lose their identity.

And THESE situations - in addition to basic Supply & Demand - are why housing costs are even WORSE in these areas. Demand alone causes the coastal areas to cost more - people want to live close to the ocean. This fight against affordable options cause the situation to be even worse.

Good luck solving it in California. I pick on CA, but CA isn't alone in these issues.

If that is true, why don't all areas with the same income average have the same home prices? Look at this data: http://ritholtz.com/2017/01/least-affordable-housing-u-s/

Because the same income average is one of a "bazillion" things that affect home prices.

Pick a town with an average income in California compared to a town in Utah or Texas with the same average income.

What's different?

* Supply and Demand. Average income does not mean supply and demand are equal.

* Area (Coastal Desert vs inland desert... beach front property in California vs... Utah...)

* regulations (try to build stuff in San Francisco vs Dallas or Salt Lake City)

* available area to build (density of San Fran vs Utah)

* City/County/State Taxes (Compare property taxes for those locations)

* etc, etc, etc.

Hell... supply & demand ALONE would account for the difference price between California and Utah. THEN Add all the other bazillion differences...

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