Tuesday, January 28, 2014

Can we build our way to affordable housing?

From the Office of the Controller
By Calvin Welch 

The price of housing and the dramatic increase in evictions have once again propelled housing affordability into the forefront of debate in San Francisco. The usual suspects make the usual arguments: if we only unleash the power of the market by removing “regulations” (rent control, height limits, density requirements, traffic analysis, take your pick) from our over-regulated housing market, we could have affordable housing thanks to the immutable “law” of supply and demand.

The graph above shows that in 41 of the last 65 quarters housing production increased in San Francisco and that with that increase in supply THERE WAS AN INCREASE IN PRICE, standing the normal “supply and demand” assumption on its head in San Francisco.

This graph is not an isolated “data point.” In fact, between 1960 and 2010 San Francisco has built nearly one and a half housing units for each new resident: our population increased by 64,000 during that period, yet we have built some 92,000 homes and condos. No major housing development has ever been turned down in San Francisco during that period. Over the last decade alone, San Francisco has exceeded its market rate housing production goal of some 11,000 units by over 50%, building some 16,500 market rate units from 2000 to 2010....

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5 Comments:

At 2:18 PM, Anonymous Anonymous said...

"between 1960 and 2010 San Francisco ..population increased by 64,000"


In 1970, SF population was 714,149, while in 2010, it was 805,607 - an increase of almost 200,000. So it's hard to see how from 1960 to 2010 it increased by only 64,000.

 
At 2:19 PM, Anonymous Anonymous said...

Source for the last comment:

http://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&hl=en&dl=en&idim=county:06075

 
At 7:49 AM, Anonymous Gregski said...

In order to stand the supply-and-demand assumption on its head one must demonstrate some facts about demand, not just supply. This article does no such thing.

The increase in San Francisco's resident population is not equivalent to the increase in demand for housing. In all likelihood demand exceeds the increase in supply and that is why the price of housing continues to increase.

Now, if prices were increasing while vacancy rates were also increasing THAT would indeed propose a conundrum to market theory.

 
At 7:14 PM, Anonymous Anonymous said...

Gregski - Rob published that little snippet which was full of holes because that is his way. Pick 1/2 of the facts and come to a bogus conclusion that economics don't work.

 
At 10:03 AM, Anonymous Anonymous said...

"In 1970, SF population was 714,149, while in 2010, it was 805,607 - an increase of almost 200,000. So it's hard to see how from 1960 to 2010 it increased by only 64,000."

Yeah, you think that maybe, I dunno, the population had dropped at some point? Maybe sometime in the 80s? Then came back up again?

 

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