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Comment by i_am_proteus | Hacker News Reader

There I was, thinking I was the only one.

It's insane. When I first got here from the east coast, I thought maybe there was some reason involving earthquake codes. And then I learned.

I used to live in NYC, a city that's had its own difficulties adding new housing, corruption in the permitting process, considering too many areas "historic." But the Bay Area is something completely different. It seems that everyone who already owns a single family home is strongly in favor of pulling up the ladder.

Perhaps too much money is riding on the existing "market value" of homes here. If zoning restrictions were relaxed, could house prices collapse? Proposition 13 can't be helping, either.

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I moved here from Boston.

It honestly didn't seem all that insane to me, because Boston is crazier in nearly every dimension. The peninsula at least has 3-lane boulevards with a reasonable road hierarchy and traffic light timings. Boston has cowpaths branching off in every direction, controlled by stop signs that can literally back up for miles. The peninsula has block after block of Eichlers on 1/4 acre lots. Boston has mid-rise row-houses on landfill in the Back Bay, quickly trailing off to historic old houses on 1.5 acre lots 10 minutes outside of the city. The peninsula refuses to let you put in an in-law unit or cut down a redwood tree without going through an extensive permitting process. The Boston area might refuse to let you put in new window panes if you live in a historic house (my computer teacher lived in one from the 1730s, and it still had all the original glass - which back then was hand made and tended to flow like putty - because it was considered a historic property and she couldn't modify it). The peninsula is due for a natural disaster in the next 30 years. In Boston, as my wife puts it, every winter is a natural disaster. BART has a problem with homeless dudes and property crime. The Red Line has a problem with trains losing the 3rd rail and running 20 minutes late. Caltrain electrification is stuck in limbo. The Big Dig has ceiling tiles that fall down and kill people.

Of course, the flip side of this is that Boston hasn't grown since 1950, and is around the same size as its 1910 population. San Francisco will probably meet a similar fate when the tech boom peters out.

I'm also coming from Boston and this take is silly.

Housing prices in Boston aren't Bay bad or even close to it.

I'm coming from the Boston _area_ because I can't afford to live in Boston or Cambridge. But guess what? There are comfortably sized houses available already under $400k 20 minutes out.

Exactly. Inner Boston and SF are not dissimilar, but the real difference is when you go outside the city. You can get a good house in Waltham (for instance) for relatively cheap. The same isn't true today in East Bay at least (and I don't know what other direction it would be true in).

"The Boston area might refuse to let you put in new window panes if you live in a historic house ..."

That sounds like a really easy problem to solve ...

"Yes, children - of course you may play baseball in my front yard ..."

FYI, glass doesn't flow. That's a common myth. Modern glass making techniques are much better than older ones, and we can make flat glass panes of constant thickness. Those old screwy panes were just as screwy when they were first put in; that's as good as they could mass produce at the time.

https://engineering.mit.edu/engage/ask-an-engineer/how-does-...

It's insane. When I first got here from the east coast, I thought maybe there was some reason involving earthquake codes. And then I learned.

It's actually quite the opposite. So-called soft story buildings are more dangerous in an earthquake and property owners are taking quite a while to bring them up to code. Californians just love their cars.

> If zoning restrictions were relaxed, could house prices collapse?

I don't see how that could be the case. The property value of a plot of land on which a 50, or even 5 story building can be built is much higher than the property value of a single-family home.

There's a substitution effect. If zoning restrictions are relaxed and developer turns an acre into a 50 unit condo complex, that developer reaps a huge windfall. But everyone else who owns an Eichler on a 1/4 acre has fewer buyers competing for their property.

It's sorta like when labor unions go away. The company that hires non-unionized labor at half the price and double the productivity reaps an enormous windfall. So do the employees, who were presumably in other, less well-paying jobs. Everyone else who chooses not to play the new game ends up out of a job.

Is this correct?

Or is this correct: As housing prices rise, it becomes cost effective to replace simplexes with duplexes, threeplexes, etc., causing the value of all simplexes to rise.

The latter is correct. The price per sq ft will be at parity during development. Then buyers will compete for the smaller units that replaced the SFH properties. $/sq-ft will rise and pass over to existing, neighboring SFHs.

That logic is literally ridiculous. Midtown Manhattan used to have single family homes too, now a half acre costs a hundred million dollars.

> If zoning restrictions are relaxed and developer turns an acre into a 50 unit condo complex, that developer reaps a huge windfall. But everyone else who owns an Eichler on a 1/4 acre has fewer buyers competing for their property.

That's not completely accurate. Yes, demand might fall, but even so price and value will still rise regardless.

If you build a 50 unit complex next door, as long as some of those 50 units sell, then everyone elses 1/4th acre will become more valuable, even if no one ever actually buys them, because land value in the US has very little to do with buyers or demand, and is exclusively valued by whatever property transactions happen to occur nearby it.

Plus the single family home will be just as desirable. New condos are still less desirable in comparison.

  land value in the US has very little to do with buyers or demand, and is exclusively valued by whatever property transactions happen to occur nearby it

I don't understand the distinction you seek to make here. Those transaction values are specifically the result of buyers and demand.

Most residential properties here could have been snapped up in 2009 for about 60% of current costs... because demand was lower. (Probably several hundred percent in areas like Mission Bay.)

Thought experiment: If 500,000 new homes were suddenly available in San Francisco tomorrow, would prices decrease?

Land value in the US obviously has to do with buyers and demand.

I'd like to point out this is true only if the developer held the property during the regulatory change. Otherwise the developer makes their customary razor-thin profits and it is the seller of the land who reaps the huge windfall.

It's just basic supply and demand

Do we care much about the price of land or do we care how much it costs for someone to live there? I believe it's the latter.

So yes the price of land would go up, but the price of livable space would fall. And the cost of livable space is what we care about with regards to affordable housing.

Oddly enough, the housing structure of the SF Bay Area has a certain resemblance to ... the Boeing 737 Max. It's a system where some one parts/aspects/dimensions are kept at a certain backward (but once functional and "good") level while other parts/aspects/dimensions are automated/modernized to the hilt (basically to game regulation and so markets).

Elaborate efforts have been made to adapt the contradictory parts, efforts that worked adequately for a while but which are now coming apart, leaving a situation with no way forward at all.

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