In a sane world, the Bay Area would have the highest new-construction numbers of any metro area in the USA, and probably the developed world. Unfortunately, the market is so distorted that I'm only aware of one potential large-scale buildout in the area (the Brisbane Baylands development -- and even that has a 50/50 shot of being successfully blocked). Such pointlessly wasted potential. :(
Or some of the tech companies could be distributed over a larger number of cities. It seems ironic to me that tech companies, of all industries, are placing such a huge premium on physical proximity.
I support building more housing, but we can't have much more housing without completing significant upgrades first. Our roads, schools, and popular public transit routes are now operating beyond design capacity in much of the Bay Area. We can complain about how urban planners should have foreseen the need for higher density decades ago but that doesn't change our reality today. Any major new housing developments need to be coupled with simultaneous infrastructure upgrades; if we can't find funding and political will for infrastructure then the housing will have to wait.
The Brisbane Baylands is not a load of potential, it is a fetid swamp that has remained undeveloped because it is a flood prone wasteland well apart from all nearby inhabited areas. The Brisbane Baylands have remained undeveloped since the gold rush for very solid reasons. Simply adding one or two stories to permitted development in downtowns in nearby areas would open up large volumes for more development, but because of the depraved and irrational state of land use planning a fetid swamp is considered vastly more desirable than an added story in an existing and already developed downtown with transit access and all the rest. Zoom out and look at the big picture of bay area land use and this idea that the Brisbane Baylands is an absolutely critical development falls away.
I heard there's a 10,000 unit development going forward in MV. Not sure if that doesn't meet your threshold of large-scale buildout.
EDIT: why was this downvoted? I'm adding new information that is directly relevant to the parent comment. If what I've heard is untrue, feel free to say so.
Back during the .com era, I got bored one day and looked up the cheapest house for sale in Cupertino. $300k got you what would have been a crack house in the RTP area - run down, no lot, chain-link fence to keep people out.
I just repeated this experiment - $500k for a 1-acre lot with a shack on it, or $925k for a 2 bedroom condo. Those prices are insane. Yet every time I think they're unsupportable - they go higher.
The insanity has kind of infected me, now I want to see the 1 acre lot for 500K. You could build a lot of 925K condos on that! edit: looked on Zillow and the cheapest condo/townhome was 2.19 million for the new ones just built off Stevens Canyon where the dump trucks from the quarry pass by five days a week (seven when the building boom was here). There used to be a gas station here until the condo developer bought it and tore it down so they are probably right on top of an EPA site. The cheapest homes were estimated at 1.4-1.5 million for three foreclosures.
Also don't discount the fact the USD went through some serious deflation. In the name of jump starting the economy, our govt literally made money out of thin air and made it rain.
Disagree. Maybe one day all of these homes will be owned by a giant corporation, but for now, they are typically owned by individuals. Not everyone who has benefited is a robber baron.
There should be another option besides McMansion, townhouse, condo or condo hi-rise. That is small two-story homes. I say split the lots up into two or three pieces.
Not sure how much of this primer on Bay Area politics you need, but here we go:
Mostly local governmental opposition. Local towns want businesses (tax revenue!) but not residential development (costly services!). Local homeowners who vote for said town governments also have an interest in higher home prices.
What makes this possible for them is the lengthy public hearing process involved, allowing local activists to delay construction for years for BS reasons; and the discretion given to elected officials not just to make policy, but also to override it.
In recent years, Bay Area activists (under the slogan of YIMBY - "Yes In My Backyard") have been successful in both pushing housing development through direct local advocacy (especially effective in places with lots of voting renters, like SF proper), and in getting the state to exert its power more over local government. The background to this being that the state has since 1982 had a law trying to combat this phenomenon - the Housing Accountability Act. It requires cities to publish city development plans for public inspection, requires those zoning policies to meet certain requirements in terms of housing quantity, and then to actually make zoning decisions that comply with those policies. However, private individuals or organizations need to bring suits against cities to make it effective, because the US is crazy and prefers lawsuits to actually hiring professional regulators. So activists have funded lawsuits (see the more recent entries at https://en.wikipedia.org/wiki/California_Housing_Accountabil...) against cities that have obstructed development. They also got the CA state legislature to strengthen the HAA this year, putting more of the burden of proof on the cities to show their justification for development denials, making cities pay attorney's fees when they lose a case, and allowing judges to fine cities for violations.
Basically, there are a lot of regulations governing what you can build and where. And those regulations have a constituency that benefits from them, namely everyone who already owns a home in the Bay area.
If you bought a nice single-family home twenty years ago, you're sitting pretty. You live in a nice area that probably isn't going to change very much (thanks to the regulations), and the steeply rising value of your real estate (thanks to the regulations) is going to fund your retirement very nicely.
I wonder how the self-driving car trend will change things in the Bay Area. Right now, there's a tradeoff between paying $2M+ for a house and having a 2 hr+ commute. When your car can drive you to work, the commute becomes much less annoying. If people can save $1.3M on a house in exchange for a long, but self-driven, commute, the allure of living right in SV will be significantly lower.
Commute is a pretty big thing. If SV had proper public transportation (which is virtually non-existent) it's be much easier to live a bit further. But I don't think it's feasible - maybe with self-driving cars it would be?
But then, for 90% of tech jobs, you don't do anything that needs you to be physically present in the office anyway. We should just learn to work remotely better.
“The biggest single factor that determines pricing or value of a home is supply and demand,”
It's a bit different from the traditional supply and demand:
There are two kinds of demand: One is the demand for actually using housing, which is not affected by supply and price.
The other is the demand as a financial instrument, which even increases with rising prices.
I know there is a class of people in SV unaffected by this directly, but eventually it MUST start to affect them in that they will be unable to get employees to come to the area? I guess this is probably a self correcting problem with more people/companies going to Seattle, RTP, Austin, Boston and elsewhere.
The best way to cut success probability of your startup in to half is by basing it in SV. Startups don’t have truckload money to pay for COL in SV. They can’t attract talent other than big shots who are already multi-millionaires (and likely won’t code). People from other place would not move to join them because base salary won’t even pay for their rent (and stock options stays paper money for long time). It’s utterly foolish to base your startup in SV. Come here for hiring but keep your base out of SV, probably in Austin, Seattle, Florida or may be Southern CA.
That's been happening for a while. I was involved with recruiting for my employer and HR mentioned the COL in the Bay Area is a major barrier to hiring. People love the company, love the area, but just can't afford to move here.
In fact, my employer just open a site in Portland, OR to address a major hiring need. The fact that the lower COL was a major deciding factor was clearly stated.
My view on that is: good. Stay away. Go elsewhere. Whatever. That's less competition with the same demand for my skills here. I haven't found a single job in Seattle, Austin, Boston, or elsewhere willing to offer the salary I earn, benefits, and equity that isn't also with a company that has a presence in the Bay Area.
I find it beyond belief that local homeowners are being so short sighted.
Do they not worry what their children/grandchildren are going to do for accommodation when they are property hunting? Or is their assumption that screw them, that's their problem?
As with most issues, what does the future have to do with today?
Most people don't want to take the risk of a huge hit on their property value today in exchange for a chance at avoiding crisis some day in the future. Ideally, some other chumps would take a huge hit on their property values for the future, and mine would remain high.
I don't actually live in SV, but that sort of thinking is everywhere.
Fuck the Bay Area. Just...fuck it. There are other well-paying jobs in nice parts of the country where you can still live like a human being and not spend 4/5 of your income on rent or 2 hours a day in traffic.
Just boycott the whole damn mess and let the companies figure out that they have to stop hiring and expand to other parts in the country.
America cannot do city planning to save its life. Hasn't been able to since the 1920's. It's all single-story homes and strip malls and highways and that shit doesn't scale past a point that most other industrialized societies laugh at, but we just suck at it here and quality of life goes to shit immediately.
Just accept it, there's no easy solution, and move somewhere else. Even NYC is better at this point. DC are has a shit-ton of jobs, so does Texas, so does Washington, so does Colorado.
many homeowners are electing to retain ownership of their home but rent it out. this has reduced the inventory available for purchase. many homes on my street in Los Gatos have become rentals. when my new neighbors (renters) tell me their monthly rent, my jaw drops.
Prop 13 highly encourages this behavior. If one is leaving the Bay Area and ever wishes to return, keeping ownership of a property with a low assessed value could save one or two thousand dollars a month in property tax when you return.
If you follow homes on Zillow you'll see small two bedroom houses get bought for 1.2-1.5 million and then immediately show up as rentable for $5500/month.
If you actually live here and want to buy it's very difficult and extremely risky. I don't mind living with roommates, but if you're someone who wants to have a family it's probably not worth it.
I share a 3 bedroom with three other roommates (four total since there's one couple) and the total rent is $6150 (which is a pretty good deal).
I wish there was some hefty tax on people buying houses just to rent them that don't actually live here.
We have a neighbor who rented out her house to 5-6 groups of people (some individuals, some couples). Based on the type of cars her tenants drive — newer German sports cars — I'm guessing she pulls in around 10k per month in total.
She cashes the checks from South America, where she now lives.
[+] [-] kcorbitt|8 years ago|reply
[+] [-] gehwartzen|8 years ago|reply
[+] [-] nradov|8 years ago|reply
[+] [-] m0llusk|8 years ago|reply
[+] [-] gnicholas|8 years ago|reply
EDIT: why was this downvoted? I'm adding new information that is directly relevant to the parent comment. If what I've heard is untrue, feel free to say so.
[+] [-] chiph|8 years ago|reply
I just repeated this experiment - $500k for a 1-acre lot with a shack on it, or $925k for a 2 bedroom condo. Those prices are insane. Yet every time I think they're unsupportable - they go higher.
[+] [-] stevenwoo|8 years ago|reply
[+] [-] magicalist|8 years ago|reply
That sounds low for Cupertino
[+] [-] smsm42|8 years ago|reply
[+] [-] nojvek|8 years ago|reply
[+] [-] rat_1234|8 years ago|reply
[+] [-] anubisresources|8 years ago|reply
[+] [-] SapphireSun|8 years ago|reply
[+] [-] junkscience2017|8 years ago|reply
[+] [-] ilaksh|8 years ago|reply
[+] [-] harryh|8 years ago|reply
[+] [-] cgb223|8 years ago|reply
Seems like an opportunity to make a lot of money
[+] [-] azernik|8 years ago|reply
Mostly local governmental opposition. Local towns want businesses (tax revenue!) but not residential development (costly services!). Local homeowners who vote for said town governments also have an interest in higher home prices.
What makes this possible for them is the lengthy public hearing process involved, allowing local activists to delay construction for years for BS reasons; and the discretion given to elected officials not just to make policy, but also to override it.
In recent years, Bay Area activists (under the slogan of YIMBY - "Yes In My Backyard") have been successful in both pushing housing development through direct local advocacy (especially effective in places with lots of voting renters, like SF proper), and in getting the state to exert its power more over local government. The background to this being that the state has since 1982 had a law trying to combat this phenomenon - the Housing Accountability Act. It requires cities to publish city development plans for public inspection, requires those zoning policies to meet certain requirements in terms of housing quantity, and then to actually make zoning decisions that comply with those policies. However, private individuals or organizations need to bring suits against cities to make it effective, because the US is crazy and prefers lawsuits to actually hiring professional regulators. So activists have funded lawsuits (see the more recent entries at https://en.wikipedia.org/wiki/California_Housing_Accountabil...) against cities that have obstructed development. They also got the CA state legislature to strengthen the HAA this year, putting more of the burden of proof on the cities to show their justification for development denials, making cities pay attorney's fees when they lose a case, and allowing judges to fine cities for violations.
[+] [-] johan_larson|8 years ago|reply
https://techcrunch.com/2014/04/14/sf-housing/
Basically, there are a lot of regulations governing what you can build and where. And those regulations have a constituency that benefits from them, namely everyone who already owns a home in the Bay area.
If you bought a nice single-family home twenty years ago, you're sitting pretty. You live in a nice area that probably isn't going to change very much (thanks to the regulations), and the steeply rising value of your real estate (thanks to the regulations) is going to fund your retirement very nicely.
[+] [-] santaclaus|8 years ago|reply
Local property who oppose new development in order to restrict supply, primarily.
[+] [-] deadmetheny|8 years ago|reply
[+] [-] gnicholas|8 years ago|reply
[+] [-] smsm42|8 years ago|reply
But then, for 90% of tech jobs, you don't do anything that needs you to be physically present in the office anyway. We should just learn to work remotely better.
[+] [-] goialoq|8 years ago|reply
[+] [-] legulere|8 years ago|reply
It's a bit different from the traditional supply and demand: There are two kinds of demand: One is the demand for actually using housing, which is not affected by supply and price. The other is the demand as a financial instrument, which even increases with rising prices.
[+] [-] sputknick|8 years ago|reply
[+] [-] sytelus|8 years ago|reply
[+] [-] refurb|8 years ago|reply
In fact, my employer just open a site in Portland, OR to address a major hiring need. The fact that the lower COL was a major deciding factor was clearly stated.
[+] [-] sidlls|8 years ago|reply
[+] [-] sloxy|8 years ago|reply
[+] [-] pwinnski|8 years ago|reply
Most people don't want to take the risk of a huge hit on their property value today in exchange for a chance at avoiding crisis some day in the future. Ideally, some other chumps would take a huge hit on their property values for the future, and mine would remain high.
I don't actually live in SV, but that sort of thinking is everywhere.
[+] [-] PopsiclePete|8 years ago|reply
Just boycott the whole damn mess and let the companies figure out that they have to stop hiring and expand to other parts in the country.
America cannot do city planning to save its life. Hasn't been able to since the 1920's. It's all single-story homes and strip malls and highways and that shit doesn't scale past a point that most other industrialized societies laugh at, but we just suck at it here and quality of life goes to shit immediately.
Just accept it, there's no easy solution, and move somewhere else. Even NYC is better at this point. DC are has a shit-ton of jobs, so does Texas, so does Washington, so does Colorado.
[+] [-] johan_larson|8 years ago|reply
[+] [-] junkscience2017|8 years ago|reply
[+] [-] njarboe|8 years ago|reply
[+] [-] gonehome|8 years ago|reply
If you actually live here and want to buy it's very difficult and extremely risky. I don't mind living with roommates, but if you're someone who wants to have a family it's probably not worth it.
I share a 3 bedroom with three other roommates (four total since there's one couple) and the total rent is $6150 (which is a pretty good deal).
I wish there was some hefty tax on people buying houses just to rent them that don't actually live here.
[+] [-] gnicholas|8 years ago|reply
She cashes the checks from South America, where she now lives.
[+] [-] wavefunction|8 years ago|reply
[+] [-] bobosha|8 years ago|reply
[+] [-] stmfreak|8 years ago|reply