Friday, April 26, 2019

Wiener/Breed: Simple-minded on housing

The London Breed/Scott Wiener idea of what's needed: have the state compel local governments to build housing along transit corridors, which is simple-minded and wrong-headed. 

A comment to the Chronicle story that has Breed's tweet:

Price theory works for manufactured goods and commodities but less so for housing. Real estate involves a fixed amount of land within city boundaries. Increasing demand for this land will not increase the supply, so the price must rise with demand. As demand increases for a limited supply of land, the price will increase as long as there is anyone anywhere that can pay the price. Building higher increases the value of the land and building higher raises the cost of construction. Increasing density raises the price of housing.

The problem with housing in San Francisco: the demand side of the equation dwarfs any possible supply solution. Scott Wiener's bill will essentially get more market-rate housing built, since housing is provided by profit-oriented developers, regardless of how much "affordable" housing the law requires.

And "affordable" when talking about housing in San Francisco should always be in quotes, since it's a term that's defined by an area's median income (AMI), which in the Bay Area is approaching $200,000. And high-density housing is more expensive to build.

Not surprising that Mayor Breed gets this wrong. See also Supervisor Breed swings and misses again.

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1 Comments:

At 5:34 PM, Anonymous Anonymous said...

"And "affordable" when talking about housing in San Francisco should always be in quotes, since it's a term that's defined by an area's median income (AMI), which in the Bay Area is approaching $200,000. And high-density housing is more expensive to build"

Agreed!
These housing developments also involve tax breaks subs from "affordable housing" bonds and measures.

 

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