Lucretia had the best comment: "Since we build around 250 new units per year in SF...We're in this terrible situation. It's not that difficult to comprehend."
9 million people live in the SF Bay area. If 20% of those people want to live in SF, and there are only enough housing units for 10%, the price increases until only the 10% who can afford the most are able to live here.
Economics isn't rocket science. If you limit supply with zoning & planning restrictions, then any increase in demand will drive higher prices. The predictable result is boom & bust cycles. If you allow people to build enough to meet demand, which in SF would mean allowing at least another 100k units, then the price/income ratio will return to normal levels, i.e.2x-5x. Instead we see myriad programs to divide & misrule voters while politicians' patronage networks get fat off developers' "donations" and reserved "below market" units that go to somebody's nephew.
Meanwhile the old time residents who pay the least taxes scream NOT IN MY BACKYARD when new development is proposed.
It's business as usual: government by the rich, of the rich, and for the rich. Everyone else gets screwed.
Wa? I thought most economists couldn't tell the last impending economic disaster everyone in this website except Iwog saw. If economy is simpler than rocket science, the economists like Green Span should have seen it coming miles away.
Oh, and about supply and demand? Could you pleeeeeeze tell us something we don't already know? It gets too boring here.
I can understand people wanting to contain sprawl and keep Atherton bucolic, but downtown SF? The City is going to require that old buildings on the verge of collapse must be retrofitted at a cost over $10k/unit, with of course the obligatory debt financing from the banking sector which is credited for its lobbying:
This is like retrofitting airbags into a Yugo. Old dangerous apartment buildings that are already fully depreciated and could collapse any day should be replaced with new and stronger buildings that can safely house 10x more people. We are borrowing & spending billion$ to replace the eastern span of the SF Bay Bridge with a new and (hopefully) safer design, and we are going to borrow & spend million$ not to replace rickety old apartment buildings downtown.
The excess demand priced out of SF artificially increases prices throughout the Bay Area. Federal policies like QE and ZIRP inflate prices nationwide, but SF Bay's special excess results from the difficulty of building even in urban centers. It's the same in NYC: if the current zoning & planning restrictions had existed 200 years ago, Manhattan would still be mostly farmland and there wouldn't be any such thing as NYC as we know it. There were communities in China where girls' feet were bound in tiny shoes to keep them small and pretty. NYC and SF have become like that. Some people think it's nice to look at, but it's really cruel, and yet the victims scream the loudest that it must continue, like African women demanding genital mutilation.
The biggest myth in economics is the assumption that people are rational actors. People are the weirdest, most irrational creatures on this planet.
Old Ed has been hitting some herbal medicine lately. They elected a demented idiot in SF.
"Every nation (and city) gets the government it deserves". Often attributed to Alexis de Tocqueville, it was actually written by Joseph de Maistre in 1811, but probably still applicable today.
Ain't that the truth! Which makes me sad for America that we have such a dysfunctional government that spends 1.4 trillion/year more than it takes in, provides sub par services at every turn, and has no plan for a turn around. Congress has lower popularity than prostate exams: presumably because at least some guys get a thrill from foreign objects shoved up their ass.
Homeland security is preparing for a protracted war against the civilian population, perhaps due to the above ranking and fears about what it could mean should it slip below monkey poo levels.
We are still sending our young people to be maimed on the battlefields of Afghanistan, a nation that can give us nothing but heroin to poison the rest of our young people, and of course, more enemies to shoot at.
The list goes on. Either we aren't in control, or worse, and Toqueville's words apply to us.