When demand for housing (or any other product) exceeds supply the price goes up.
The system SF has is actually broken due too to much regulation. Regulation that inhibits the creation of new housing which would increase supply and lower prices.
SF and NYC are "desirable" places to live. People want to be there. The world is more "globalized" than ever now.
How does supply and demand cope when 6 million to 60 million superhumanly rich people (from all over the world!) want the same thing a non-superhumanly rich person also wants?
It's the exact same "superhuman AI will take all our jobs" reasoning, except in this case we have actual humans with access to vastly more wealth than any average person can accumulate.
On a long enough time scale, the market may win and only $100 millionaires and billionaires will live in SF and NYC. But for now, the non-independently-wealthy (those poor suckers who need a 'job' to live) end up paying $5,000 per month for a one bedroom apartment. That means you need to make over $200k per year just to be independent. In reality, you should be making $450k per year to live "nicely." (In actual reality, if you are a programmer who can create value with your mind your skills are easily worth over $3 million per year).
Regulation could give us options like: no non-resident foreign nationals may purchase property here. nobody may purchase more than one housing unit within the city limits. no one person may be the landlord of more than 3 housing units (or else you have "the rich get richer" where one guy uses rent income to buy more buildings to get more rent income—soon, one guy has 60 buildings being milked for rent). nobody may purchase units for money laundering purposes. hell, throw in a morality clause and say if you are convicted of a crime you lose your multi-million-dollar condo as well (hi, wall street frauds).
Regulate the heck outta the housing market because fixed assets can't be efficiently allocated in the face of supernormal resources unless you consider "the rich deserve more than people with full time jobs" to be a proper way of allocating physical pieces of the planet earth.
You are appealing to supply and demand as if it was an immutable law of the universe and not just an outcome of predatory human behaviour.
When demand outstrips supply, prices go up. He never suggested otherwise. But why do sellers raise the prices on necessities such as housing just because they can? It is because they are predatory assholes.
And why blame just the property owners? Presumably if no one was willing to pay the rents they would have to come down -- but some "predatory" renters are willing to pay to get what they want.
However, I think that a renter who pays an exorbitant rent when a cheaper yet still liveable alternative is available is partly complicit.
I work for myself, but in the hypothetical situation where I worked for somebody else, no, I would not offer to take a lower rate from my employer just because it is more than I need. I am entitled to every single penny that my employer makes from my labour. The difference between what he makes from it and what he pays me for it is capitalistic exploitation. It is in the interest of justice that it be minimised.
And what do you mean by "predatory real estate owners and bankers". It's a free market system if you can't afford to live in an area then live somewhere where you can afford given what your job is. Nobody is entitled to a particular job in an area (if they are not paid enough) if they can't (with the pay) afford the rent. I'd love to live many places but I have to consider the practicality. Hawaii would be nice! [1] As far as people getting pushed out because of rents being driven up, the answer to that is not to take property away from lawful owners.
Want to "lower the rent"? Government buys at fair market value some apartments or housing how about that? (Sure that will happen, right?) Fine as long as the rightful owners agree and everyone else in the community uses their tax dollars to pay for acquiring that property.
Given you are so unhappy about this would you use your tax dollars so that others could live and not have high rent?
[1] To clarify not because of housing prices but because of economic opportunity. NYC would be nice also however housing, traffic and so on are out of my comfort zone.
Yes. Obtaining property "technically lawfully" but actually illegally is not going to survive.
It's a free market system
Except, corrupt foreign millionaires and billionaires are buying up in-demand US real estate (SF, LA, NYC) as safe houses (see: russian and arab mobsters/politicians/princes buying condos with 3 bulletproof safe rooms) and long term investments (see: chinese family buying Palo Alto homes for their newborn daughter because they know she will go to stanford in 20 years) without living there. They either let the houses sit idle or rent them out at a profit, taking more money out of the local economy. We do not welcome our new foreign non-productive overlords.
the answer to that is not to take property away from lawful owners.
We need to track down all these "optimistic investment" purchases and safe house purchases then just imminent domain them back to the public who actually participate in the local economy. When people on salary are competing with millionaires and billionaires for rent, they can't win.
Entire living centers are being built as "ghost towers." Real estate developers travel overseas and sell every unit in a tower to Chinese buyers 5 years before even breaking ground on the building. Then when the building is complete, it sits 90% empty. The developers get their money and the buyers get to ride on tax breaks, but it does nothing to help the local population.
Then, all of that isn't getting into when all this fancy housing is purchased by illegal foreign money.
There's a spectrum here. We need to audit all purchase records, pierce the veil of every LLC, and determine if real estate purchases in tight markets are made as an attempt at laundering money. If so, the property is forfeit.
Yes, you found the exact problem.
But, with such a current high demand, all sales end up going to these wealthy few since supply is so restricted. We see it every day. Multi-million dollar condos and houses going for 150% to 200% over asking price (in cash, paid in full at closing, either by wire or by literal black duffel bags full of currency delivered by their proxy lawyer who doesn't ask too many questions). Bidding wars for simple apartments. If you try to buy housing as a worker (by saving from your paychecks to obtain a downpayment), you'll always be out priced by people who can just drop 20x your net worth on a whim—in cash.
If only we could tear down the sunset districts and replace them with more modern high density housing plus a real transit system. Heck, if only we could step back and get a real transit system between San Jose and SF at all. It shouldn't take 90 minutes to go 40 miles on dedicated track. A 90 minute commute (if you're not rush-hour bound) is the ultimate killer of morale.
Governments dramatically impact the price of the housing market already via any manner of policies such as zoning, regressive tax subsidies on mortgages and even school funding.
Not everyone who suggests tweaking the laws is on the vanguard of a communist revolution.
Yes! I'd be happy to.
I don't understand why people keep trying this "gotcha" thing when someone suggests tax dollars be used to benefit the needy. Don't assume that everyone is secretly selfish just because you are.