Having grown by an estimated 16,962 residents last year, the population of San Jose is now over the one million mark (1,000,536) while the population of San Francisco has grown to 836,620, an increase of 10,617 residents in 2013, according to California’s Department of Finance.

At the same time, a total of 1,960 net new housing units were constructed in San Francisco last year, on par with the 10-year average of 1,932, according to San Francisco’s Planning Department, but one-fifth the number of new residents. A reported 3,578 housing units were built in San Jose.

Having grown 1.5 percent to a total population of 1,868,558, Santa Clara County was the fastest growing county in California last year, closely followed by Alameda (up 1.5 percent to a population of 1,573,254). The estimated population of Oakland is now 404,355, up 1.2 percent in 2013.

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Comments from “Plugged-In” Readers

  1. Posted by 5 times

    So, the City added more than 5x the number of people than units built. Assuming 2 people per unit, That is 6,000 people adding to the existing crisis, in just the past 1 year.
    Just DAMN demo the large portions of low rise 1-2 nonsense (17th and Folsom for example) of autobody shops and lumber yards and build 8 story buildings.

  2. Posted by invented

    “a total of 1,960 net new housing units were built in San Francisco last year, on par with the 10-year average of 1,932.”
    And easily 2,000+ units have been removed from the market for the booming short-term visitor market.
    Wait, whose side am I on?

  3. Posted by Mark

    @5 times: hmmn, what increasing the height of much of the low-rise western SOMA plan instead?
    And I see the Bay Area has invested in its public transit systems to make way for all these new folks.

  4. Posted by Futurist

    Ah……it’s not a “crisis”.
    It’s just about desirability.
    And thankfully, we have that.

  5. Posted by pacheights bdlg owner

    @ Invented. And how many units are permanently off market because landlords would rather not deal with rent control or tenants at all? (and can afford not to)
    The building directly behind the one I own has ~ 16 one bedroom units (rent controlled) in a prime location that is safe and walkable to restaurants/services/etc. It used be popular with medical residents for CPMC and UCSF Mt. Zion. But old tenants are leaving (graduating) and not being replaced. Of the six units that face the rear of my property only 2 have tenants in them, one of which is the property manager. That is 33% occupancy for the units I can see. The building is 100 years old and it’s been in the same family for over 40 years. This situation is repeated across the city by the thousands – doesn’t bode well for rent prices…
    Rent control and increasingly confiscatory and draconian tenant/landlord regulations (see recent noise from the usual suspects) have severely limited supply. Short term renting is a drop in the bucket in terms of supply but brings tons of spending to local neighborhoods (yes I rent exclusively short term). Short term tenants leave the place untouched (no nails in the walls and don’t scuffed/scratch every surface) and are quiet and respectful as well.

  6. Posted by Invented

    Pacheights. Amen. Have three furnished accommodations more coming. Not complaining. Noticeable influx of visitors in our neighborhood and who indeed spend at many of our shops. Airbnb though is not the messiah; (someone should tell them); there are numerous other growing agencies. And let’s not forget local CList who Airbnb trashed by exporting their listings en masse into the system for months on end.

  7. Posted by anon

    “Rent control and increasingly confiscatory and draconian tenant/landlord regulations (see recent noise from the usual suspects) have severely limited supply.”
    All true of course. And what happens when supply is restricted but not demand? Prices rise! As I’ve often pointed out, rent control is an SF landlord’s best friend, and an SF renter’s worst enemy. Yet both argue and vote against their own interests. I have no dog in this hunt as we live in the home we own and that is the extent of our real estate interests. I just sit back and laugh at it all.

  8. Posted by Snobby McGoogle

    “Just DAMN demo the large portions of low rise 1-2 nonsense (17th and Folsom for example) of autobody shops and lumber yards and build 8 story buildings.”
    Ah, but there’s a better way, my dear @5 times
    The plan was laid out long ago… me thinks it’s time to send in the Winkler
    Genesis: Get em out by Friday
    JOHN PEBBLE OF STYX ENTERPRISES
    “Get ‘em out by Friday!
    You don’t get paid till the last one’s well on his way.
    Get ‘em out by Friday!
    It’s important that we keep to schedule, there must be no delay.”
    MARK HALL OF STYX ENTERPRISES (OTHERWISE KNOWN
    AS “THE WINKLER”)
    “I represent a firm of gentlemen who recently purchased this house and all the others in the road,
    In the interest of humanity we’ve found a better place for you to go-go-go.”
    MRS BARROW (a tenant)
    “Oh no, this I can’t believe
    Oh Mary, they’re asking us to leave.”
    MR PEBBLE
    “Get ‘em out by Friday!
    I’ve told you before’s good many gone if we let them stay.
    And if it isn’t easy
    You can squeeze a little grease and our troubles will soon run away.”
    MRS BARROW
    “After all this time they ask us to leave
    And I told them we could pay double the rent
    I don’t know why it seemed so funny
    Seeing as how they’d take more money
    The Winkler called again, he came here this morning
    With four hundred pounds and a photograph of the place that he has found
    A block of flats with central heating
    I think we’re going to find it hard.”
    MR PEBBLE
    “Now we’ve got them!
    I’ve always said that cash, cash, cash can do anything well.
    Work can be rewarding
    When a flash of intuition is a gift that helps you excel-sell-sell.”
    MR HALL
    “Here we are in Harlow New Town
    Did you recognize your block across the square, over there
    Sadly since last time we spoke, We’ve found we’ve had to raise the rent again
    Just a bit.”
    MRS BARROW
    “Oh no, this I can’t believe
    Oh Mary, and we agreed to leave.”
    18/9/2012 TV FLASH ON ALL DIAL-A-PROGRAM SERVICES
    This is an announcement from Genetic Control:
    “It is my sad duty to inform you of a 4ft. restriction on humanoid height.”
    EXTRACT FROM CONVERSATION OF JOE ORDINARY IN LOCAL
    PUBORAMA
    “I hear the directors of Genetic Control
    Have been buying all the properties that have recently been sold
    Taking risks oh so bold.
    It’s said now that people will be shorter in height
    They can fit twice as many in the same building site.
    (They say it’s alright)
    Beginning with the tenants of the town of Harlow
    In the interest of humanity they’ve been told they must go
    Told they must go-go-go-go ”
    SIR JOHN DE PEBBLE OF UNITED BLACKSPRINGS INTERNATIONAL
    “I think I’ve fixed a new deal
    A dozen properties – we’ll buy at five and sell at thirty-four
    Some are still inhabited
    It’s time to send the Winkler to see them, he’ll have to work some more.”
    MEMO FROM SATIN PETER OF ROCK DEVELOPMENTS LTD
    With land in your hand you’ll be happy on earth
    Then invest in the Church for your heaven

  9. Posted by Wai Yip Tung

    Do they have more long term statistics like 10-20 years changes?

  10. Posted by Little_Boxes

    Its the Bay Area.
    Not our little 49 square miles.
    The Bay Area.
    Lots of room to grow without turning eastern San Francisco into a hell hole just to make a bunch of developers and non-profiteers rich.

  11. Posted by moto mayhem

    it sure would be nice to redo that western SOMA plan.

  12. Posted by Orland

    “… without turning eastern San Francisco into a hell hole”
    How do you reason with strident idiocy like that?
    L_B:
    Do yourself and us all a favor. Move to Pocatello.

  13. Posted by anon

    Lots of room to grow without turning eastern San Francisco into a hell hole just to make a bunch of developers and non-profiteers rich.
    I think you have it backwards. Tearing down all of the crappy 1-2 story buildings and replacing with 8 story buildings would help change the hell holish parts of eastern SF into nice and dense areas with lots of services that are pleasant to walk through.
    Bring on the bulldozers!

  14. Posted by Sierrajeff

    @pacheights – bullpucky. If the building was popular with medical residents, then there was frequent turnover and the rent control and tenant-favorable eviction regs wouldn’t have been a problem (which is underscored by the fact that the building’s mostly empty now, i.e., it’s not like there are litigous tenant hanging on and ruining the landlord’s life).
    Anyone who can hold a 16-unit building unleased obviously has money to burn and should sell it to someone who’s interested in participating in the economy (*and* I have no sympathy for them).
    The real villain here is Prop 13, which is allowing that property owner to pay taxes based on a years-old valuation. If they had to pay property taxes based on current property values, they’d have a much bigger incentive to fill those units and get some revenue.

  15. Posted by moto mayhem

    you can also be selective about who you rent to in order to try and pick people most liekly to stay 5 yrs or less. I find that young married DINKs usually want to buy in a few yrs or want to have kids and will move out of the city before kid is school age. Usually also party less. a 3-5 yr tenant is perfect. not a lot of turnover but allows to always be priced near market

  16. Posted by anon

    It’s not as if building a ton of tall buildings makes housing any cheaper. Look at Shanghai, NYC, etc. A nice place costs many millions.

  17. Posted by sf

    Ahh yes, walking down Soma, the quaint, cozy, charming neighorh*smush*
    Oh, now I gotta get a hepatitis shot.
    SAVE beautiful Soma!!

  18. Posted by zig

    “It’s not as if building a ton of tall buildings makes housing any cheaper. Look at Shanghai, NYC, etc. A nice place costs many millions.”
    Don’t know much about Shanghai.
    Regarding NYC I think there is transit accessible areas all over the Queens, Brooklyn and New Jersey that offer people a great options. The Bay Area’s options are really limited partly because of our history and geography and party because we are selfish.

  19. Posted by Wai Yip Tung

    It’s not as if building a ton of tall buildings makes housing any cheaper. Look at Shanghai, NYC, etc. A nice place costs many millions.
    It is cheaper compare to not building ton of tall buildings. If you think houses are unaffordable now, it could be far worst if there weren’t that many new building.
    In fact one of the reason we see house price fall periodically in those expensive market is the believe of a gush of new supply coming.

  20. Posted by anon

    It’s not as if building a ton of tall buildings makes housing any cheaper. Look at Shanghai, NYC, etc. A nice place costs many millions.
    And without the new tall buildings, existing places would cost the current price + X.
    There are plenty of cities throughout the world with tall buildings that are not expensive (see any Latin American city or Chinese cities other than Shanghai/Hong Kong).

  21. Posted by lol

    anon,
    rent control is an SF landlord’s best friend
    The first year, sure.
    5 years later: “still good rent”
    10 years later: “well, at least prop 13 helps”
    15 years later: “I could use the money but what can I do?”
    20 years later: “kids need the money for college, screw this, Ellis everyone.”
    In the mean time the landlord has lost 100K+ on each unit over the decades and if he wants to play nice he’ll be out 50K+ to free up each unit.
    Rent control is transfer of wealth, and in a certain way partial transfer of ownership. But hey, Joe Longtimer can live for cheap in “his” city.

  22. Posted by two beers

    anon @9:02-
    Most people can’t see this. Reality interferes with the warm, fuzzy feeling induced by the simplistic supply and demand models from Econ 1.
    In the real world, different markets follow different S&D curves, curves not seen in lower division economics (nor in upper division neo-classical economics texts).
    Housing consists of multiple market segments, and these segments follow different S&D curves, and each curve impacts the other curves in often counter-intuitive ways.
    Most importantly, some of these market segments are often only marginally fungible with each other. Building a luxury loft doesn’t add to the supply of affordable housing. It doesn’t make it easier for a first-time buyer to buy an entry-level home, because the pool of potential buyers of that entry-level home doesn’t overlap with the pool of potential buyers of the luxury loft.
    Even more to the point, due to the consequence of “improving” neighborhoods, housing often follows a reverse elasticity model. Foe example, building ten luxury condos in a slum drives up the price of all property in that area. RE pros well know this, but they hide their greed behind fake concern for making housing affordable.
    Simple concepts, marginal fungibility and reverse elasticity, but most people have never heard of them. And most neo-classical economists are ignorant of them, as well (maybe because both concepts interfere with the warm, fuzzy feeling of neo-classical econ).
    Neo-classical economics has lots of pretty models. They are easy to understand and seem unassailable, but they are worse than useless for explaining or predicting complex real-world economic activity.

  23. Posted by Zig

    I am all for increasing density in SF that relies on walking, biking and perhaps around something like the Geary BRT investment
    Relying on the mickeymouse T line and the two BART stations that are already have a peaking problem at rush hour seems pretty suspect and I don’t really support this. There was an article today about how the T line is an S show when there is a Giants game because it doesn’t have the capacity. And now we are building an arena in Mission Bay?
    There are heavy rail stations all over the Bay Area that could support a lot of reverse commuting. Right now there is malls and stuff next to some of them.

  24. Posted by anon

    @two beers – not following your argument here. Are you suggesting that building new towers in Recife, Brazil has driven up the cost of housing there? Or are you only talking about cities like SF where all prices are rising anyway (so of course new buildings have high prices)?

  25. Posted by zig

    two beers there certainly is some fungibility although I agree it is not as simple as a single market
    This is why my friend who works at Salesforce rents a 3K one bedroom right next to the Projects on C. Chavez and why my wife with good incomes were willing to rent a place with no in unit laundry, no dishwasher and too few closets.
    I guess the only solution in addition to now allowing nice places to be built is to force landlords to keep places as slummy as possible

  26. Posted by anon2

    @two beers – Look at the fed paper in the other thread.
    “Formal statistical tests indicate that changes in house prices have a causal effect on inventories and the two series are tied together in a long-run relationship. ”
    Something else might be going on as mentioned in that thread, but it isn’t clear if the change is short term or long lasting.
    Though talking about existing home inventory, it’s pretty clear that the same forces affect builders.

  27. Posted by lol

    two beers,
    Housing creation is motivated by greed! Imagine that! Greed I tell you!
    If you have 2 populations in need of housing, developers will try to fulfill the wealthier first because, guess what, they have more money!
    So many words to explain such a simple concept. Do you work at City Hall?

  28. Posted by moz

    “The real villain here is Prop 13, which is allowing that property owner to pay taxes based on a years-old valuation. If they had to pay property taxes based on current property values, they’d have a much bigger incentive to fill those units and get some revenue.”
    AMEN AMEN AMEN!

  29. Posted by parklife

    “The real villain here is Prop 13″
    Prop 13 and Rent Control are equally vile. Both work to subvert the natural turnover in housing. There are much better ways to support the low income, elderly or disabled homeowners or tenants that are frequently pictured as the beneficiaries of these laws.

  30. Posted by two beers

    lol: We agree, house-building is based on greed. Let’s all agree with that, and stop pretending that building high-density luxury housing has anything to do with making housing more affordable, and is simply about squeezing out the maximum profit. Because that’s the always the response from you guys when anyone complains the high cost of housing: “Build more! Build taller!”
    The fact is that building more and building taller is very profitable for the RE/banking sectors, but only makes housing in the area _more_ unaffordable. Just be honest, and don’t hide behind a smokescreen of concern about housing affordabilility.
    anon@10:02: I don’t know anything about housing in Brazil, or what the market segments are. I’m simply saying that building predominantly high-end housing in an area makes all housing in that area more expensive.
    In layman’s terms, we call it “improving a neighborhood.” I’m not putting a value judgment on that, or saying that neighborhoods should never be improved. I’m just
    asking people to be honest about their motivations. If you want to build high-density luxury towers to get rich, fine. Just don’t tell me that it’s going to make city housing more affordable, because it’s not.
    zig: How do your examples have anything to do with my argument? I don’t think you understand what I said. But thank you for the reductio ad absurdum.

  31. Posted by lol

    Because that’s the always the response from you guys when anyone complains the high cost of housing: “Build more! Build taller!”. The fact is that building more and building taller is very profitable for the RE/banking sectors, but only makes housing in the area _more_ unaffordable. Just be honest, and don’t hide behind a smokescreen of concern about housing affordability.
    “you guys”
    “don’t hide behind a smokescreen”
    You are barking at the wrong tree there. You are not too far off, but not quite.
    Yes I want buildings to be taller, but the reason is because it will be good for SF in the long term. SF is in an unique position to attract the best and brightest. But these need to live somewhere and the more housing, the more successful people we will have. And having more smart and successful people is good for any city. Unlike the opposite…
    My personal interest in all that: I am doing corporate relocation airbnb, and most of my guests are highly educated and successful folks looking for permanent housing. Some are buying, some are renting, but if the prospect for both is negative, then my business will dry up as my guests will simply go to the peninsula. Yes I am motivated by personal interest. Who isn’t?

  32. Posted by recoveringhobo

    Socketsite,
    Can we get a source on this data?

  33. Posted by anon2

    “Just be honest, and don’t hide behind a smokescreen of concern about housing affordabilility.”
    Theory and data are both honest, and they are both telling you that supply follows an increase in price.

  34. Posted by lol

    I’ll add that if a city is serious about providing housing for the less affluent, then they should create a voucher system. If a family needs a 2BR that costs $4K but can only pay $2500, then the city should provide the difference.
    But who are we kidding, of course they won’t. Because voters are ok with sticking the bill to a developer or a mom&pop landlord, but they’re not ready to pay for it through taxes from THEIR incomes. It’s always easier to have a generous social housing program when someone else is paying for it (looking at you, rent control).

  35. Posted by two beers

    anon2: Tautologically succinct. Yes, building predominantly high-end housing makes housing more expensive, so more high-end housing gets built. And the high-end housing is reverse elastic. It leads to speculative bubbles, such as the one we’re now in.

  36. Posted by Futurist

    @ lol: weak reasons for wanting buildings to be taller.
    Good for SF? In what way? To look and feel like Shanghai some day?
    The best and brightest NEED to live somewhere! Right. God forbid, should they consider Oakland and make better neighborhoods there by investing and moving there.
    The worst urban planning goal would be to just build higher and higher here, with unlimited growth and density. There goes our “quality of life”.

  37. Posted by anon

    I’m simply saying that building predominantly high-end housing in an area makes all housing in that area more expensive.
    Yes, but it doesn’t make housing in aggregate more expensive – quite the opposite. The increase in supply causes housing to be cheaper than it would if the supply was not added.
    Why would we not focus on housing in aggregate?

  38. Posted by Futurist

    No it doesn’t anon.
    If the “increase in supply causes housing to be cheaper”, as you say, then why ALL housing across all lines in SF more expensive than it was, say, 5 years ago, or 10 years ago?
    We’ve increased our supply, so?

  39. Posted by anon

    Futurist, but it is less expensive than it would be without the added units. Simple supply and demand. You can’t seriously dispute this.

  40. Posted by Futurist

    Yea, but that’s not what you initially said.
    thanks for correcting your statement.
    NOTHING in SF, be it rental or for sale is cheaper than it was in the past.

  41. Posted by lol

    futurist, SF will not become Shanghai. But we can improve density. If SF had frozen its density for someone’s view of “quality of life” we would have never become what we are today. Of course old coots who can’t handle change will whine. But they’ll always whine then who cares?

  42. Posted by Fishchum

    Our Resident Expert is like every SF do-nothing advocate who fights against change. There’s no middle ground with these people. To them, anything taller than 4 stories is “Shanghai!” and the dreaded “Manhattanization!!” You can’t win.
    It’s also no coincidence that they tend to be older, long-time residents as well.

  43. Posted by Futurist

    Of course, we don’t want to become “Shanghai” or some similarly over dense city. We want balance in growth that RELATES to our unique location, geography, topography and “desired” lifestyle.
    That lifestyle is broad yes, but it’s defined by walkability, scale, character and variety.
    I certainly welcome the changes happening to downtown, Rincon Hill, SOMA and Mission Bay. All are being planned carefully with a long history of study and analysis.
    But lol and others simply do NOT give solid, valid reasons for the ever-constant mantra of taller and taller. Our density should never go unabated. Future generations could find this a very different and not so great a city. I would rather see Oakland build a lot more housing and create safer and better neighborhoods than just SF growing. @ lol: why don’t you address this?
    It’s all about balance.

  44. Posted by anon

    Yea, but that’s not what you initially said.
    Futurist – please re-read my initial statement:
    “The increase in supply causes housing to be cheaper than it would if the supply was not added.”
    That is exactly what I said. You then disputed it, I stated the same thing again, and you said that I said something different. Ok.

  45. Posted by anon

    And Futurist, I advocate for Oakland and other cities in the Bay Area to adopt the exact same policies as SF – higher, denser, better.

  46. Posted by lol

    Yes futurist I agree it is about balance. We need to grow without breaking what makes SF special, but we must also recognize the laws of physics. If a city adds more people than housing units, after a while market prices increase to the point where it makes sense to build. Demand must be met by supply to cool down price increases. If you don’t, as is the case today, then the pressure will increase until it meets a breaking point.
    And you are not going to like that breaking point one bit futurist.
    In many residential areas like NV many of the original families decided to build a SFH on a lot zones for RH2 or RH3. Many of the original vics have 3 floors: a basement/garden floor, the living space and the bedrooms. These could perfectly be cut into 3 units, if the financial incentive is there.
    Right now the jury is out on whether this would be a profitable venture compared with a SFH total redo, and this is due to the fact that a totally redone SFH is a trophy home that will sell for top $$$.
    But once this demand has been met, you will still have a huge demand for more modest one-floor units. They already rent for 4K+ in many areas and sell at more than 650K as TICs or more than 800K as condos.
    What this means is that this will bring more density into residential areas. These people will have cars, but more often than not no garage.
    This WILL happen if demand keeps outpacing supply at the current rate. And the places that we under built today will come back to haunt us.
    You are a futurist, therefore I think you know this is a likely scenario.

  47. Posted by Futurist

    But you see lol, I don’t really care about price increases. Not my problem. I know hearing that’s really going to piss you off.
    Demand does NOT have to be met here. There is no “absolute” reason for SF to grow unlimited JUST to satisfy demand. I’m sorry, but not everyone who wants to live here, GETS to live here. This is a core belief in my underlying philosophy to urban growth.
    You actually seem to believe that eventually neighborhoods like mine, NV, or others will become denser due to demand. Not gonna happen. Trust me. All of the houses being fully remodeled right now near me are being re-built larger and with better construction for One family use. that’s what people here in NV want.
    Guess what? we don’t want it (neighborhoods) denser (beyond what the codes allow). All of my neighbors/friends/property owners here pretty much feel the same way. Preserving certain neighborhoods AS low density great places to live is a KEY reason why SF is so desirable.
    Yes, there is plenty of areas for well planned denser growth, and we are seeing it: Mission Bay, Dog Patch, Hunters Point, 3rd St. corridor, among others. All viable places for a denser environment. And VanNess and Mid-market for high rise density. All good. but you won’t see The Marina, N. Beach, Pac Heights, Sunset and Richmond get much denser. Just not gonna happen.
    And I still don’t get why you desire “unlimited” growth JUST to meet the demand that you seem to thing fuels everything. Cause it doesn’t. I love this city, but I will fight for balanced growth and to keep it from becoming your Shanghai.

  48. Posted by Fishchum

    So essentially, it’s “I’ve got mine, screw everyone else”, right?
    Unbelievable.

  49. Posted by The Milkshake of Despair

    “But you see lol, I don’t really care about price increases.”
    Could that be because you’ve already got yours? Try to put yourself in the shoes of someone who just graduated and has accepted a job in the bay area. Would you still not care about prices spiraling out of control? You had the luck to arrive when SF was affordable. Now NIMBYism has driven prices out of reach.
    Though you personally may not want growth the reality is that the Bay Area is growing. This is a good thing because it means that business is doing well, creating wealth, and enriching people’s lives. But forcing a new hire to commute in from the exurbs not only degrades that person’s lifestyle but also degrades the Bay Area as a whole, including those of use who already have their homes.
    Growth is going to happen whether or not NIMBYs assert influence on what happens in their neighborhoods. As lol mentioned either it is done in a thoughtful planned way or the market ultimately asserts its influence in unintended ways.

  50. Posted by Futurist

    Actually, no: Fishchum. I’m actually saying what a lot of people think. Citizens here do NOT want our city destroyed because of unbridled growth.
    @ MOD:
    1. SF IS, in fact, affordable to the new young graduate who moved here and is making $100k or more, say at Google or FB. Trouble is, MOD, you want to create a complete Socialist city where EVERYONE can afford to actually live here. And we will subsidize the hell out of their living costs to make sure they get to live here. No matter what. go to Communist China if you want that.
    And before all of you get out your pitchforks and torches: I support getting rid of Prop 13 AND rent control.
    2. You don’t read well. I constantly talk about RESPONSIBLE AND PLANNED GROWTH. Never, ever said I don’t want growth. Just to be very clear.
    3.So lol’s “thoughtful” way is just bringing in more units, ie: 3 units in a Vic, without regard for parking or open space issues. So now more cars on the street, circling endlessly. Nice job. And the “trophy home” comment just smacks of jealous disdain for those who have the means and desire to spend money on a remodel. The comment is irrelevant to the entire conversation.

  51. Posted by two beers

    anon” “… but it is less expensive than it would be without the added units. Simple supply and demand. You can’t seriously dispute this.”
    *sigh*
    I’ll say it again: simple Econ 101 S&D models break down in housing, especially when market segments are marginally fungible and reverse elasticity applies to the high end.
    I’m not saying I have the correct model, only that empirically, using standard S&D models on housing doesn’t tell the story.
    Contrary to popular belief, S&D isn’t a “law,” it’s a theory. And it frequently tells the wrong story. If you try to analyze a situation with the wrong tools, all you’re going to get are the homilies and tautologies that comprise most of the dominant neo-classical school of economics today.

  52. Posted by Fishchum

    “I’m actually saying what a lot of people think”
    – So you’re not alone in your selfishness. No surprise there, really. That doesn’t make you right or them any less wrong.

  53. Posted by lol

    futurist, let me repeat something you oversaw:
    I am NOT calling for converting SFH into 3-unit buildings. All I am saying is that IF we do not build as much as we can TODAY in the areas you precisely quoted, we WILL have to grow in low density in the future.
    By the way, you are grandstanding but you know you only represent futurist, inc, right? The people as a whole decide for the policy they choose.

  54. Posted by lol

    And futurist, my “trophy” home is not socially conscious. It’s just the reality of these places.
    By the way, I am remodeling my own “trophy” home right now on the French Mediterranean (much better weather than Noe). I know this will be a money pit, but I think I deserve a bit of over-indulging after many years of hard work, sacrifice and smart investments.
    Now the question is: where should I put my swimming pool?

  55. Posted by anon

    @two beers – data please. Any kind of study will work. Or you can point me to the “right tools” to see that an increase in supply has caused prices to increase.
    And no, localized price increases because of gentrification don’t count. That’s not an aggregate price increase.

  56. Posted by anon2

    Looking at the tradeoff of adding supply vs existing quality of life is a very worthwhile exercise. While the meme of SF being outside the laws of supply and demand is just silly, it is worth pointing out how housing is different from other goods. If I start producing more corn, it doesn’t change the nature of corn already produced in my neighbors silo. But adding housing supply does change the nature and character of existing housing. Although this change could be for the better or for the worse.
    Additionally, changes can be somewhat subjective. Is it better to live in an urban area like SOMA or a suburban area like Noe? There’s no one answer there. Different people have different feelings.
    I actually do think that people should be able to prevent density increases in order to live in a lower density area if they so choose. But there should be a cost to doing so and the real problem is that it is currently too cheap.
    What if a “rich” person wants to buy three houses in Noe, demolish two of them to live on a triple lot? In a functional market, who cares? As I’ve said before, a consequence of the lopsided income distribution is that there really aren’t enough “rich” people to take over all the land in the Bay Area. The real problem is the artificial supply constraints, locking up of supply. Remember that housing inventory in the SF area is only 0.26% of total housing stock. If you emptied out Noe and tried to re-fill it at the current price point I very much doubt that you could do so.
    There needs to be some balance between: “I’ve got mine, screw the newcomers” and “I want a cheaper place/I want to make money developing, screw existing homeowners”

  57. Posted by anon2

    Also it’s worth pointing out that if the market were freed and once the dust settles from the latest potential tech bubble it’s not at all clear that higher density cheaper housing would be the result.
    Fundamentally, housing is going to follow income. And tech could settle out to have large numbers of stable well paid jobs or most of the income could go to a much smaller number of people.
    It seems like the Intel’s and Cisco’s took large numbers of skilled workers to build. Google, a smaller number. The core Twitter service was build by a few hundred. And WhatsApp by under a hundred.
    Google and Twitter among others have bulked up. But it seems to me that many of these non-core activities are not profitable. And I wonder how much tech employment is being bulked up by companies engaging in non-profitable activities to satisfy the current fashion for eyeballs/users over profit.

  58. Posted by Futurist

    Well, some of what anon2 says I agree with. Some I don’t.
    1. The quality of life discussion is absolutely a valid part of our “growth and change” evolution. I think most people would agree that our quality of life here in The City and the Bay Area is pretty amazing, and far more livable than many large American cities. We need to protect it and very carefully allow it to change.
    2. I just have to laugh out loud as Noe becomes now defined as “suburban”. That’s a very recent definition and quite funny. In reality, almost ALL of the neighborhoods outside of downtown and some parts of SOMA are “suburban”. Big deal. Move on.
    3. If a rich person wants to buy up 3 lots to build one new home, so be it. In ANY market. In any neighborhood. There’s no law against it, to my knowledge. Except for the socialist’s bible. The property owner adheres to the planning and building codes and that’s what matters. Capitalism is good.
    I think the really larger, perhaps more important issue we should be discussing is the transit/transpo system that needs to be built to accommodate WHATEVER level of new growth in the Bay Area.
    Let’s talk about BART circling the bay. BART to Palo Alto and beyond. A second bay bridge to the East Bay? A subway under Geary to the ocean? A subway under VanNess? Subway to Marin and Santa Rosa? Double deck the 101 from San Jose?
    That’s the discussion that needs to happen.

  59. Posted by lol

    anon2,
    Many companies that go through an exponential growth/valuation have a similar pattern:
    – Make a breakthrough product
    – Start making real money
    – Do an IPO – high expectations priced in
    – Try and deliver on the expectations
    When companies get into this 3rd phase they need to hire a lot. Which is not an issue since the IPO gave them the cash to experiment and fail or succeed. GOOG is already mature that way, while Twitter is catching up. WhatsApp will probably go through a hiring frenzy.
    With all the cash these companies have today, I am not too worried about employment in the tech sector in the next few years.
    Bring in the new hires! I have a pricey crash pad for you!

  60. Posted by anon

    Except for the socialist’s bible. The property owner adheres to the planning and building codes and that’s what matters. Capitalism is good.
    Statement re-posted so that the irony really sets in.

  61. Posted by Futurist

    @anon. Do share your view of the “irony”. I can’t wait.:)

  62. Posted by The Milkshake of Despair

    Hey Futurist, how about considering my question? Suppose you just landed in the bay area after receiving your degree. Would you be satisfied with the prospects of owning a home in NV or comparable neighborhoods any time soon? Basically can you empathize with the situation that new residents face?
    Personally I have no problem with the addition of more residents to my already nice neighborhood. I believe that increasing the amount of neighbors results in a net improvement in desirability. And that doesn’t even take into account the altruistic benefits of making a place for more people in a way that is soft on the environment and our limited resources.

  63. Posted by anon

    @Futurist – complaining about “socialists” who want to give individual property owners more rights to develop their own property in line with market demand, and then equating central “planning and building codes” with capitalism is pretty rich.

  64. Posted by Futurist

    Mod: not following your question exactly: “satisfied with prospects…”. Huh?
    Moved here in the late 70s with an architecture degree and several job offers. Made all of about $23k. worked my ass off. Saved. Bought my first condo a year later. Sold it a few years later for good profit. Bought my next one. sold it. Bought a run down pos house in Noe.
    Do I feel sorry or have any empathy for the new young, talented and well paid people who move here now?
    NO.
    Anon: You have no idea what socialism really means. It has ZERO to do with building and planning codes that define what property owners can and can NOT do with their property: to consider the larger needs of the community over the needs/desires of the individual.
    You must really support Cliven Bundy.
    Period.

  65. Posted by anon

    No, Cliven Bundy wants to use property that is not his. Very different situation.
    You want to dictate what others can do with their property, through central planning.
    I’m not arguing that what you want is strictly socialism, but on the scale of socialism vs capitalism, you’re closer to the socialism side than the folks that you’re arguing against, but you don’t seem to understand that. No one asking for developers to be allowed to build higher is arguing that the government should require it. We’re asking for the government to allow it. You’re asking the government to prohibit it, because of nebulous “community needs”
    “To each their own, according to their abilities”

  66. Posted by two beers

    @anon:
    http://d3n8a8pro7vhmx.cloudfront.net/festival/pages/174/attachments/original/1382827220/SF_Controller_Shows_Supply_and_Demand_Does_Not_Work.pdf?1382827220
    The problem is that most people are so blindly indoctrinated in the pseudo-science that is neo-classical economics that they are incapable of seeing the world as it is. S&D models are nice, but they are only models. S&D is NOT a law, it’s a theory, and it is subject to many distortions and inversions.
    The neo-classical economnist’s favorite phrase is “ceteris paribus” – all things being equal. But in the real world, all things are NOT equal. If your model requires the exclusion of real world data to function, it is of little functional use.

  67. Posted by Futurist

    And anon, it seems that you advocate almost a complete “free for all” in the urban planning and growth of our city.
    The community needs are hardly nebulous. Perhaps to you, the needs of the larger community, the neighborhood, if you will, are NOT valid.
    There are plenty of developers/owners/landlords who would LOVE to develop and change their property to their own desires, without any involvement by the government codes and regulations.
    The Planning, Building and zoning codes were, in fact, developed BY the public, for the better good of the public.
    Not to make it easy for the developer. the citizens of San Francisco will decide how our city grows, not developers, whether thru ballot measures, re-zoning, down-zoning, up-zoning or revision of our planning codes.
    If preserving our “quality of life” means a more costly city to live in, then so be it.

  68. Posted by anon

    @two beers – that’s not a study. That’s some lunatics rant about why we need to return to 1970s price controls. He did fancy up the pdf to make it appear as though “data” supports his theory.

  69. Posted by anon

    @Futurist – that’s fine if that’s what you believe. The point was that your stance is CLEARLY more socialist than my stance, yet you keep trying to call things the opposite.
    You like socialism, that’s fine. Just stop trying to pretend that you’re some kind of advocate for capitalism.

  70. Posted by Futurist

    And thankfully, I have the background and experience to know that our codes and regulations are working well.
    Our neighborhoods are being respected and preserved, and growth is occurring in the right areas.
    And we will never be a Singapore or Shanghai. Thankfully.

  71. Posted by anon2

    two beers – that link seems to show data that supports the basics of supply and demand. As demand has risen (prices going up), more supply has been added to the market. As demand has fallen (prices going down), less supply has been added to the market.
    Is that not what you see from that graph? Would you expect the opposite? Produced supply to fall as prices go up and produced supply to increase as prices go down? Why in the world would that happen? Just trying to figure out what you’re thinking that we should see…

  72. Posted by cynthia curran

    Prop 13 was passed years ago, the pike in prices started in the late 1990’s, its low interest rates and easy loans that help price up housing in California not prop 13.

  73. Posted by Anon3

    The effects of prop 13 magnify over time. The third decade has FAR more impact than the first two, and will continue to get worse until we can repeal it.

  74. Posted by NoeValleyJim

    San Francisco will have 1M residents eventually, we might as well start planning for it now. I support higher density and more residents primarily because I believe that this is the best thing for the environment. It is also great for those extra people who get to enjoy San Francisco.
    I don’t think higher density will reduce my quality of life at all. I live in a dense city like San Francisco because I like the kinds of things that dense walkable cities have.

  75. Posted by The Milkshake of Despair

    Good on you Futurist for taking part in your destiny and working towards home ownership. That’s great and how it normally goes: you work hard, save, and leverage into a property purchase.
    But lets keep in mind that the market was quite different back then. I don’t know about the 1970s but when I first looked at the fixer market in Noe in the late 1980s they were going for the mid to high 100Ks. I’m sure they were cheaper in the late 70s, say ~120K conservatively (anyone know what the real number would have been in 1979?). That’s about 4.5X your starter salary.
    Fast forward to today when NV fixers routinely sell for over a million. Starting salaries for college grads are between 60-90K these days. Even for the high end grads we’re looking at over 10X salary required to buy a fixer for the best compensated grads. It is a lot more difficult these days to own a home.

  76. Posted by JR "Bob" Dobbs

    It’s not a given that SF’s population will skyrocket, and thus we must build more to house the growing population.
    This is a complex chicken-and-egg issue that I don’t think anyone can foretell with any real authority. For example, if we did not build a single additional unit, would the population increase to 1,000,000 anyway, and people would just cram into existing housing? It’s possible, but I don’t think so. The city of Boulder CO — a very desirable city — has successfully curbed population growth with strict curbs on both residential and commercial development. Believe me, Boulder would have far more people if there were more housing, so and that growth did not materialize anyway by just crowding more people into the existing housing stock. And curbing growth has not dampened the economy on a per capita basis, just kept it smaller (or, at least, the economy is still strong and it is for hypothetical discussion whether it would be even stronger).
    Futurist makes good points – growth and density are not inevitable but depend on conscious decisions. Growth in Boulder was slowed dramatically because that is what the residents demanded. I’m not sure where SF stands on this. It appears from voting patterns that most SF residents do not want much more and higher density housing on a grand scale. They like the size and density of the city as it is. It is not necessarily the case that growth is out of the peoples’ hands or that limitless newcomers will come regardless, if they so desire. There are tools both to spur growth and to dampen it. It is an important debate, requiring careful consideration not just of housing policy but mass transit, infrastructure, schools, cars, jobs, etc., and so far SF is just kind of winging it and evading the big policy questions.

  77. Posted by Futurist

    @JR Dobbs:
    Well articulated thoughts on SF growth/demand issues. I appreciate you supporting some of my thoughts as well.
    As I keep saying, there is NO INHERENT reason why we have to keep growing “unabated”. Limitless growth of population and increased density can and will radically change our unique physical culture as well as our “lifestyle” culture.
    Those who argue against me simply want growth and high density to placate ALL the humans who want to live here, regardless of their contribution or ability to actually afford it. They really seem not to think about how the quality of our urban life could suffer.
    Your example of Boulder is a good one. It’s a very livable city, yes, pricey and so what? They maintain a quality of life and character that people really do enjoy.
    San Francisco needs to think in a similar way.

  78. Posted by anon2

    We might not want to become a Shanghi, but I don’t think were anywhere close to that either.
    There’s a sharp difference in feel between neighborhoods of SFR’s and those with higher rise construction. I don’t think anyone wants to bulldoze the SFR’s down to make towers. But what’s really the quality of life difference between living in a 6 story vs 8 story building? At some level you can have a real problem with dark windy urban cayons, but I don’t think we’re near that either.
    Plus plenty of the land area in the city seems not just underdeveloped, but downright rundown.
    With one caveat, I think SF could support a great deal of development without a negative QOL impact.
    That one big caveat, is transit. I think it’s obviously possible in theory to have good transit options that will accommodate more people. What will happen in practice is a whole other issue.
    As an aside, that another problem with the plan of under provisioning parking on new development in order to “mode shift” people out of their cars. In a rational world, the point of charging fees to builders is to pay for externalities caused by the development (new utilities, transit improvements,…). This has the positive benefit of reducing opposition to new development since newcomers are in effect paying their way.
    If the city has a policy of intentionally forcing new development to have a negative externality in the form of added parking congestion, it should be no surprise that this stirs up opposition from existing residents.

  79. Posted by The Milkshake of Despair

    No-one is asking for limitless growth, just for the city to accommodate the growth that the nation and the world currently experience. Either the city should stop turning its back on reality or we should place the entire 7×7 (minus a little district in the far northeast corner) under the Williamson Act and bring the cows back to Cow Hollow. There’s no reason why the state of the city right now is its zenith. I’m sure that the Ohlone were displeased with the changes that the Europeans brought too.
    I agree with Bob Dobbs that the SF is often evading the crucial issues without directly taking a stand one way or the other.

  80. Posted by NoeValleyJijm

    San Franciscans have turned their backs on the anti-growth policies of the 70s and embraced pro-growth leadership. We could pull a Carmel or Santa Barbara and restrict growth even more (and drive up prices even more) but I doubt it. Here is what Supervisor Scott Weiner has to say:
    http://scottwiener.com/content/my-chronicle-op-ed-will-sf-do-what-it-takes-have-great-transit-future
    San Francisco proclaims itself a “transit-first” city, but its actions say otherwise – it has failed to invest in Muni’s infrastructure needs, allowing the system to deteriorate. With a growing population – at 820,000 residents, it will approach 1 million in coming decades – we must start investing heavily in Muni’s future.
    San Francisco at 1 million
    From The Examiner (all five articles are worth reading)
    The City is poised to hit the mark in less than two decades. This five-part series will explore the challenges San Francisco faces in handling this population milestone.
    http://www.sfexaminer.com/sanfrancisco/san-francisco-at-1-million-focus-turns-to-muni-reliability-and-funding-as-population-swells/Content?oid=2663290
    Our City leaders and planners are already envisioning a future with 1M residents, one with fewer cars on the road, a more robust Muni and more bicyclists. This vision is very popular with the voters and supported by a majority of the Board of Supervisors.

  81. Posted by NoeValleyJijm

    @anon2
    http://www.sfcta.org/sites/default/files/content/Planning/SFTP2/FinalReport/Appendix%20C%20Core%20Circulation%20Study.pdf
    PREVENTING CARMAGEDDON IN SAN FRANCISCO’S RAPIDLY DENSIFYING CORE
    This study says that our really only effective techniques to stopping gridlock are reducing parking and congestion pricing.
    And that is from the County’s transportation planners.
    Tell us again what your background is city and regional planning is? Do you have a degree in traffic engineering?

  82. Posted by anon2

    @NVJ — “San Franciscans have turned their backs on the anti-growth policies of the 70s and embraced pro-growth leadership”
    That’s nice to say, but the reality is that there’s been plenty of successful opposition to growth even recently.
    And overcoming this opposition requires understanding where it comes from, not spouting out platitudes.
    Certainly SF is home to some colorful irrational characters, but many people do behave rationally.
    And you can’t seriously believe that you can advocate a policy of intentionally restricting parking in new development for the express purpose of shifting people out of cars, and not have people connect the dots as to what will happen if they allow new development nearby.
    Versus what would happen if people actually believed that fees and taxes from new arrivals would conribute to better transit.
    Call it “NIMBYism” if you want, but that’s the fundamental problem with trying to effect change with the sitck instead of the carrot.

  83. Posted by JR "Bob" Dobbs

    But it’s not a done deal at all that SF will see 25% gains in population over the next 20 years. My point is that will only happen if the developer arguments win out. From everything I’ve seen, that is not the case as just about every slow growth initiative that comes out passes (8 Washington, historic preservation commission, and on and on), and Planning still puts huge hurdles in front of developments large and small. Without housing for 200,000 more people, we are not going to grow by 200,000 people. Those sorts of things are not accomplished by fiat.
    I’m agnostic on this at present. I love SF just the way it is. But I also recognize that more people/density can bring more greatness in the forms of better transit, better/bigger arts, etc. But it can also bring problems if not carefully managed – more traffic, more strain on infrastructure, higher social services costs, etc. And it is certainly far from certain that today’s residents are going to agree to pay more taxes so that the new residents in 20 years have a better Muni system.
    The March to 1 million depends on conscious, careful decisions that have to be made – and they have not yet been made. I think it is just as likely that the people will say “no.”

  84. Posted by NoeValleyJim

    It’s a done deal. The population of San Francisco has been growing steadily for 45 years, it is not pausing now, especially with so many people in favor of more growth. An earthquake or other natural disaster might stop it, but otherwise I believe it to be inevitable.
    I agree 100% that we need impact fees and other taxes to build the infrastructure to support this growth. We are already behind the curve as it is with respect to Muni. I hope residents vote for more money for Muni in November, but I fear the short-sighted ones will win out.

  85. Posted by JR "Bob" Dobbs

    It’s been growing (with pauses) since 1980. It fell for 30 years before that. It’s not a done deal at all. If the voters choose not to permit tall/more dense building (a very real possibility), or Planning slows down or halts approvals of development, people are not going to just squeeze in.
    You keep saying “so many people are in favor of growth.” I understand that you are and that you hope that most others are. Personally, my mind is not made up. From recent votes, it appears that the majority are NOT in favor of so much growth. I see a lot of protesting against development but not much in favor of it. And if Muni gets more crowded, or traffic gets worse, or SF otherwise does not keep up with the growth we’ve had recently, more and more will say that we just don’t have room for any more. Growth in any one city can be turned off. It is not just a law of nature.

  86. Posted by anon2

    Not at all a done deal.
    From 1970-2012 the SF population grew 15% from 714 to 825k.
    Even at that rate we could still be under 1M at 2054
    The US population grew over 50% over that same time period

  87. Posted by Futurist

    A lot of people are NOT in favor of intense growth, without controls. Including me.
    I think we’re going to see more anti-growth forces pop up. Yes, certain, VERY select locations are acceptable for high rise and high density, but not in the neighborhoods, Western SOMA, Mission Bay, Dog Patch or 3rd st. South.
    It’s hardly a DONE DEAL. Not by a long shot.
    Our quality of life that is ABSOLUTELY unique here in SF of any American city, is far more important than growth for the sake of letting anyone move here who wants to: Those who do and can’t afford it will just whine and complain and expect full rent control protection.
    Just so they can hang in Dolores Park, drink their PBR’s, enjoy their bro and marina girl culture, then hang out and trash the Mission at night, barf on someone’s front steps, then hop on their G bus in the morning for the mindless cube farm.

  88. Posted by Jake

    The population projections being used for most transportation planning are based on SF having an average annual growth rate of 0.7-0.8%. That is slightly higher than the growth rate of 1980-2000. If SF grows at that rate, then it will reach 1 million in 25-30 years .
    But if the average annual growth rate is similar to 2000-2010 (0.36%), then SF won’t reach 1 million until around 2070.
    Which growth rate we have has a huge impact on the urgency of building more density as well as mega transportation projects.
    For example, it would take about an extra 75-80k housing units to handle the population increase to 1 million (at current person/unit). Which of these two growth rates we have is the difference between needing to build an annual average of about 3,000 units vs less than 1,500.
    When you get past the fluff about bikes and ferries, the key to SF transportation in the future is BART from the east bay to bring in 50% of the additional workers and MUNI to shuttle the extra people around in SF. The four Market St BART stations alone account for one third of all boardings and have for something like 30 years.
    No one is going to build more highways and bridges or allow much more downtown parking garages. And ‘transit first’ isn’t going to stop the 30-50k/hr cars that stream across the Bay Bridge during the AM peak period and have for at least a generation.
    Here’s a fun study of how to move more people from the east bay to downtown SF. It even considers making one lane of the Bay Bridge each way vary in direction to help with rush hour. Pretty graphics too.
    http://www.actransit.org/wp-content/uploads/2010_10_14_Bay_Bridge_Report_V5D.pdf

  89. Posted by Jake

    correction: should be 30-50k cars that stream across the Bay Bridge during the AM peak period.
    The AM peak period is 4 hrs long.
    Didn’t mean to have the “/hr” there.

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