Would like to say: If you would like to reverse these trends, or live in the SFBA and would like to be able to afford a home or condo without needing to commute from Stockton or hit the startup lottery, please pay attention to your local City Council and their zoning/land use decisions. Local decisions frequently don't get that many comments; your voice makes a difference.
- Brisbane may approve 4400 units of housing, or zero. 4400 units would be close to how many the Bay Area typically produces in a year.
- Cupertino and Sunnyvale residents frequently oppose new housing.
- San Francisco has a strong contingent of people that oppose large projects. There is one project near Glen Park BART, and another one with 1200 units at 700 Innes, that could use support in the coming months.
If you're not sure where to get started getting involved, contact me and I can point you in the right place. One good place to start would be to push your executives and VC's to actually work towards making housing affordable here in the Bay Area; for too many it's an afterthought.
The Brisbane proposal is a great example of the need for public input. Instead of expanding the town the idea is to build high density development on swampland far from town and services in a location so clearly undesirable that it has escaped even proposals for development since the Gold Rush. Reasonable expansion of existing towns is a good answer to this crisis while building large apartment buildings in fetid swamps far from transit, towns, and services is responding to one set of errors with even worse errors.
I got sick of living in a HCOL area and moved somewhere super cheap. Put 20% down on a nice house and have a $500/month mortgage payment. My total annual housing expenses are less than the taxes on a similar house in Seattle or San Francisco.
Pay is less on paper, but actually quality of life and savings are much higher.
Where did you move to? I'm looking for a good area like this with the biggest requirement of having fiber or otherwise just a very good 250Mbps+ service.
i once managed the product that calculated the cost basis for your property tax bill in most US counties & states (and some international jurisdictions), and it was common knowledge there that home prices were disconnected from construction costs.
construction cost relative to home prices is interesting to a company like buildzoom because they're in the construction business (and finding the coming construction booms is important to them), but if you want to understand home price inflation, it's not that interesting at all. shiller, of case-shiller fame, also showed that home prices are disconnected from construction costs in his book irrational exhuberance.
in a stable economy, you'd expect home prices to roughly follow GDP or inflation, not building cost. if you graphed median home prices against GDP, you'd literally see the bubble (between median home price and GDP) starting to form in the 80's and popping in 2008.
why? financial engineering--we turned homes from places to live into investments. greed fueled home price inflation. and real estate investment was accessible to the average american, unlike more complex financial instruments like bonds or derivatives. in classic bubble fashion, people knew (and still know) that prices are irrational, but we all think we can make a boatload and get out before the bubble pops (again).
but these are homes we're talking about, not some abstract concept like a futures contract on the production of black-eyed peas. these are not simple commodities that we can easily replace with a substitute. it's where we live.
and yet, we continue to allow financiers and investors to extract wealth through higher rents (now nearing 50% for many residents of big cities), regulatory capture, and collaterized debt (the risk on which is passed to taxpayers). but "everyone else is doing it" so it's ok, right?
"Sure. I found this for Canada: http://www.altusgroup.com/media/4099/costguide_2015_web.pdf
Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270
This comes out to $1.38 more per square foot for each additional story.
Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot.
Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity.
As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways.
By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land.
The minimum cost to add a story, $214.67 occurs for the 12th floor.
Again, back of the napkin and very naive.
A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor.
Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor.
So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs."
More than happy if someone can poke holes in it, but my takeaway was that costs are minimized at lower density rates than I first assumed. Mid-rise buildings are the most cost-effective, moreso than high-rises.
I'm glad that the BuildZoom study confirmed my exercise somewhat, but it's still disappointing that sprawl seems to be the best way to make housing affordable.
> but it's still disappointing that sprawl seems to be the best way to make housing affordable.
The other alternative is like much of Europe with lots of small cities and towns connected with trains and roads, and zoning enforced farms in-between. Isn't easy to get done in US though where developer $$ rule.
hey, i'm looking to buy a small plot of land and build a house on it in the next few years. my goal is to be able to have land and a house of my own without taking a loan, or a very big one at least. ive been looking at land in northern california and there seems to be a lot of promising deals. lake county california seems to be a pretty good spot.
if anyone has experience with buying land to settle on, in northern california or otherwise, i would be eternally grateful for advice and tips. in fact, i would greatly appreciate any advice or tips regarding anything that has to do with buying land, building a house, or owning property and a house.
Check out the book "County Property: Dirt Cheap". It has some good tips.
Note Lake County is high in fire danger, so depending on where you buy you'll want to take that into account for insurance cost or building style. Neighbors are also pretty critical to whether or not you'll be happy with this dream of yours.
They really should normalize the costs on a per square foot basis and the numbers would be even more start. Homes tend to be smaller in areas with really high per square foot costs.
It just seems so sad. When you're driving along the highway and you see all these tiny homes jam packed together like some sort of Gehtto, only 2 feet between each home and yet there's miles and miles of space in every direction, outside the complex. I'm talking about the exerbs that surround the bay area. According to one govt report i read, Only 5% of CA land is currently being used!
[+] [-] kevinburke|8 years ago|reply
- Brisbane may approve 4400 units of housing, or zero. 4400 units would be close to how many the Bay Area typically produces in a year.
- Cupertino and Sunnyvale residents frequently oppose new housing.
- San Francisco has a strong contingent of people that oppose large projects. There is one project near Glen Park BART, and another one with 1200 units at 700 Innes, that could use support in the coming months.
If you're not sure where to get started getting involved, contact me and I can point you in the right place. One good place to start would be to push your executives and VC's to actually work towards making housing affordable here in the Bay Area; for too many it's an afterthought.
[+] [-] m0llusk|8 years ago|reply
[+] [-] innesinnes|8 years ago|reply
https://twitter.com/SFyimby/status/921454648044666880
https://twitter.com/SFyimby/status/921438475554918400
[+] [-] TheSpiceIsLife|8 years ago|reply
Have other cities seen home prices move toward affordability when more housing has been built?
I'm not saying it isn't a good idea, just that the logic seems flawed.
[+] [-] pxeboot|8 years ago|reply
Pay is less on paper, but actually quality of life and savings are much higher.
[+] [-] johnvanommen|8 years ago|reply
5) It has a train station that connects it to every city from Los Angeles to Portland to Seattle via Amtrak
4) Portland's train system doesn't connect to it yet, but it will soon. At the moment, it takes about 15 minutes to get to the city train station.
3) Portland is overrun with homeless people, but Oregon City isn't.
2) The traffic isn't as bad as Portland
1) You can get a nice house for well under $1800 a month. If you can live with a condo, you can get that down to about $1200.
[+] [-] lostmsu|8 years ago|reply
[+] [-] toomuchtodo|8 years ago|reply
[+] [-] loeg|8 years ago|reply
[+] [-] clairity|8 years ago|reply
construction cost relative to home prices is interesting to a company like buildzoom because they're in the construction business (and finding the coming construction booms is important to them), but if you want to understand home price inflation, it's not that interesting at all. shiller, of case-shiller fame, also showed that home prices are disconnected from construction costs in his book irrational exhuberance.
in a stable economy, you'd expect home prices to roughly follow GDP or inflation, not building cost. if you graphed median home prices against GDP, you'd literally see the bubble (between median home price and GDP) starting to form in the 80's and popping in 2008.
why? financial engineering--we turned homes from places to live into investments. greed fueled home price inflation. and real estate investment was accessible to the average american, unlike more complex financial instruments like bonds or derivatives. in classic bubble fashion, people knew (and still know) that prices are irrational, but we all think we can make a boatload and get out before the bubble pops (again).
but these are homes we're talking about, not some abstract concept like a futures contract on the production of black-eyed peas. these are not simple commodities that we can easily replace with a substitute. it's where we live.
and yet, we continue to allow financiers and investors to extract wealth through higher rents (now nearing 50% for many residents of big cities), regulatory capture, and collaterized debt (the risk on which is passed to taxpayers). but "everyone else is doing it" so it's ok, right?
[+] [-] carradjm|8 years ago|reply
Don't mean to boil down your entire well-written post to a single point, but I maintain that Georgism is the only sensible solution to this problem.
[+] [-] AznHisoka|8 years ago|reply
I guess the government should recommend bitcoin investing to everyone since its not real and nobody is affected?
[+] [-] jackcosgrove|8 years ago|reply
"Sure. I found this for Canada: http://www.altusgroup.com/media/4099/costguide_2015_web.pdf Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270 This comes out to $1.38 more per square foot for each additional story. Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot. Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity. As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways. By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land. The minimum cost to add a story, $214.67 occurs for the 12th floor. Again, back of the napkin and very naive. A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor. Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor. So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs."
More than happy if someone can poke holes in it, but my takeaway was that costs are minimized at lower density rates than I first assumed. Mid-rise buildings are the most cost-effective, moreso than high-rises.
I'm glad that the BuildZoom study confirmed my exercise somewhat, but it's still disappointing that sprawl seems to be the best way to make housing affordable.
[+] [-] mlinksva|8 years ago|reply
So no, sprawl is not the best way to make housing affordable. Doubly so if you account for transportation costs.
[+] [-] rb808|8 years ago|reply
The other alternative is like much of Europe with lots of small cities and towns connected with trains and roads, and zoning enforced farms in-between. Isn't easy to get done in US though where developer $$ rule.
[+] [-] wheresmyusern|8 years ago|reply
if anyone has experience with buying land to settle on, in northern california or otherwise, i would be eternally grateful for advice and tips. in fact, i would greatly appreciate any advice or tips regarding anything that has to do with buying land, building a house, or owning property and a house.
[+] [-] nowarninglabel|8 years ago|reply
Note Lake County is high in fire danger, so depending on where you buy you'll want to take that into account for insurance cost or building style. Neighbors are also pretty critical to whether or not you'll be happy with this dream of yours.
[+] [-] pascalxus|8 years ago|reply
It just seems so sad. When you're driving along the highway and you see all these tiny homes jam packed together like some sort of Gehtto, only 2 feet between each home and yet there's miles and miles of space in every direction, outside the complex. I'm talking about the exerbs that surround the bay area. According to one govt report i read, Only 5% of CA land is currently being used!
[+] [-] rb808|8 years ago|reply
[+] [-] asah|8 years ago|reply
[+] [-] chrisseaton|8 years ago|reply
Tiny is bad, but what's wrong with old?
I find older houses are usually built to a much higher standard (may just be those that remain but that's irrelevant), and have much more character.
[+] [-] liveoneggs|8 years ago|reply
[+] [-] dsfyu404ed|8 years ago|reply
It ain't rocket science people.
[+] [-] purplezooey|8 years ago|reply
[+] [-] neaanopri|8 years ago|reply
[+] [-] 0bfus|8 years ago|reply
[+] [-] dogruck|8 years ago|reply