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Comment by foobarbazqux | Hacker News Reader

> real estate hyperinflation in general is a social ill that deserves to be tackled directly as such.

How do you stop house prices from going up? You can't put a cap on property values without turning bidding into a lottery and screwing owners out of asset appreciation. You could make it easier to afford expensive houses by increasing the money supply, but our interest rates have been pegged at effectively zero for four years. You could build more houses but that seems unlikely given the political climite in SF. Perhaps though you can geodiversify an industry, which actually this guy is doing by leaving SF. I'm not sure how you can regulate that though, except by capping the number of jobs in a given industry, kind of like with taxis.

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It's not about stopping prices from going up, it's about stopping them from going up at an uncontrollable rate.

Many desirable neighborhoods are seeing market rents increases in the double-digit percentages, every year. Some parts of SF are experiencing >20% YoY growth.

That's real estate hyperinflation, far in excess of the normal appreciation you'd expect in a healthy economy with increasing population.

And the solution to real estate hyperinflation is to build more.

Too bad you can't build more in SF because of the building height limits, which is the principle reason housing rates are absurd. If the city made sense they'd build some highrise condos downtown and house the entrepreneurs in studio apartments.

The earthquake in 1906 nearly ruined the entire San Francisco. It can happen again at anytime. Limiting the building heights and number of housing is a precautionary measure. The best thing the SV tech community should do is realize the limitations and move out to other cities. LA/San Diego could be the great replacement/extension for SV.

Modern building codes prevented that from happening again in '89. If you think earthquakes are a legitimate reason to limit density, Tokyo and Osaka would like to talk to you.

I worked in Seismology related field for 8 years and visited Tokyo construction companies to see how they build and retrofit existing buildings to make them earthquake proof (to some extent). Let me tell you, they are way more prepared for the earthquakes than SF is.

So SF can't have nice things because they currently do not have nice things?

Yes, but at a less abstract level, SF can't have nice thing A (tall buildings) because they currently do not have nice thing B (the ability to build earthquake proof buildings).

They have the ability to build those buildings, even if they have to contract with Japanese companies to do it. What they apparently don't have is the infrastructure to regulate and inspect such buildings. They probably don't have that infrastructure because they don't actually want tall buildings regardless...

They don't have a chicken because they don't have an egg.. they don't have an egg because "Fuck chickens; move to Manhattan if you want chickens."

Another earthquake should worry San Francisco no more than another fire should worry Chicago.

Wishful thinking..

There have been no advances in structural engineering since 1906.

The nice parts of LA are just as expensive as SV (e.g. $1mm Santa Monica cottages) and transportation is equally bad.

I know but there is plenty of space between LA and San Diego. Irvine, Huntington Beach, Orange County should be enough to accommodate most of SF!

Los Angeles has earthquakes too.

Yes, many big cities are (state-sponsored) trying to grow vertically instead of horizontally.

You'd better tell that to builders who are putting up thousands of units in high rise buildings right now.

> build more

Clearly, higher density construction in NYC has dramatically reduce prices there.

There is no amount of construction in the subset of 49 square miles trendies want to live that is going to solve this problem. There are a million 1%'ers from around the world that will snap up a $750K condo before you 5%'ers can get it.

> "Clearly, higher density construction in NYC has dramatically reduce prices there."

They have.[1]

Or more accurately, they have prevented the exact sort of rent explosion that SF is experiencing now. Manhattan is expensive to live in - but rent prices are growing at predictable and relatively low rates. There are even desirable, wealthy neighborhoods where rents are slowly decreasing.

The fact is also that artificially restricting oneself to Manhattan makes for a easier comparison to SF, but is not representative of the housing situation overall. Commuting from Brooklyn, Queens, and the Bronx into Manhattan is trivially easy, and rent (even if we strictly limit ourselves to the low-crime, desirable sections of these boroughs) is lower than SF.

Take Brooklyn[2] for example. Plenty of good, safe neighborhoods with solid subway access where prices are flat.

[1] http://www.mns.com/manhattan_rental_market_report

[2] http://www.mns.com/brooklyn_rental_market_report

You'd have to include BART-accessible Oakland, Berkeley, etc in the East Bay to make that comparison fair. 40 min is the farthest any of the BART lines go from downtown SF.

Taxation can alleviate that. Provide tax relief to owner-occupants with children. Tax the shit out of non-occupant owners.

And why woulnd't that tax transfer to rent prices?

It would transfer.

> How do you stop house prices from going up?

Allow people to actually build things, rather than insisting that 100 year old, wood-framed 3 story split level houses and no new ones are the perfect housing solution for everyone forever.

Building more housing is the only option, and like you say you can't build anything.

Maybe Peter Thiel needs to build his floating seasteading metropolis. If he put it in the bay you could connect SV to Newark and Fremont via a gentrified version of The Raft from Snow Crash.

> you can't build anything

This canard keeps getting repeated over and over in comments. Not sure if it is a projection of bias, or ignorance, or just denial of the facts.

The reality is that tens of thousands of units (22,000 since the article, a year ago, more now) are either in construction or in the pipeline. This is a construction boom.

http://www.sfgate.com/bayarea/article/S-F-apartment-construc...

It may be a boom compared to historical levels but it is in no way enough. 22,000 is tiny! There's probably already a shortage of half a million. Think about how many people live outside the city because rent is too expensive. SF is a desirable location, just because there are only 800k people here now doesn't mean more do not want to live here.

SoMa should have massive sky scrappers being built on every block, it's the perfect location to build this high density housing/offices solution (big blocks, flat land, underutilized and close to the city center). And I mean real skyscrapers Manhattan size or larger.

The city should take care in SoMa to make sure they do not allow new skyscrapers that do not reach a minimum height. The space there is valuable (even if it's not used correctly now). You wouldn't want a situation where medium density is built instead.

> How do you stop house prices from going up?

Don't concentrate outrageous salaries in one urban area?

You said it ... the fix isn't hard except the politics make it so. Make it easy to build more housing stock. Allocate more land for building high density homes.

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