[tedivm]

The real question is how do we push for that to happen. Most of the tech people I know move around- they rent one place for a few years, then end up in another part of the bay shortly after that. There's no real incentive for the politicians on the local level to give up power, and the state doesn't seem to care.

Regional governance seems to be the answer, but making that happen seems like an impossible task.

[danharaj]

The New York Metro Area might be a helpful model of regional cooperation. It has its own growth problems but the New York Metropolitan Area is home to 20.1 million people as opposed to the 7 million who live in the Bay Area and involves governments across four states.

[moultano]

Like everything else in California, we amend the Constitution. (Only half joking)

[abfan1127]

you could de-regulate the planning all together and the the market decide the best way to allocate resources...

[gnarbarian]

A city is a network. When you have high congestion for a central resource you should find ways to push that resource to the edge of your network. The resources are Jobs. Deregulation would certainly help, but that's missing the big picture.

Companies are focused too much on silicon valley. People are willing to live like animals putting up with appaling conditions and subjecting themselves to insane costs and commutes. They would certainly move a few hundred miles for the same job with decent rent 10 min from the office even with a pay cut. The market can fix this problem right now without deregulation. But it won't get fixed until more companies actually start hiring outside of SV.

[crdoconnor]

While you still have land ownership the market isn't fully deciding anything.

[superuser2]

The market decides human beings are not worth shelter, and you're suggesting it needs more power? What the fuck?

[HappyTypist]

The market certainly decided that human beings ARE worth shelter and more shelter should be constructed. More supply will result in lower prices. However, cities are barely approving residential zoning and this artificial distortion is amplifying the homeless problem.

As we have seen here, regulation like rent control is much more harmful than helpful. Rather than needing to cough up an extra $50 per month for example, you wait until the market rent is double what you're paying now - and naturally, get kicked out for one reason or another.

If zoning was dramatically curtained and / or abolished, the housing problem would be solved almost overnight. The high property prices ARE a market signal saying, build more houses. Regulation is preventing efficient markets.

[superuser2]

Certainly building more housing will bring down the price, and that will make life easier for tech workers who will still be well-paid. But that won't do anything for the homeless who are unemployed or making minimum wage, who are still going to be vastly outbid compared to tech salaries.

Given the geographical constraints and the velocity of tech growth, it's really unlikely that a free market would build so many units that all the high-paid tech workers who could possibly come to the Bay Area were situated, and landlords were forced to start catering to the working poor. We have to force them to, because market incentives won't.

[gnarbarian]

Companies could build offices in other towns. That's an option too.

[dragonwriter]

Oddly, one way to encourage that is to make the permitting process easier. Tech companies want to all be in the location, because its much more desirable to tech workers, and the belief that the best talent is worth the price means that money is made available for that.

Without the restrictions on development (which are designed to keep the area desirable, and succeed at that, as shown by market prices) desirability would drop -- because you'd have more people, and less money for services per person -- along with prices, and tech companies would be more likely to locate elsewhere.

[superuser2]

Yes, but as with landlords building low-income housing when there are high-income people left to serve, probably not one a rational actor will choose.

[landryraccoon]

Forgive me, I don't understand. Are you saying developers need to be forced to build housing? Developers will do anything to build more units, if you ask them to set aside units for affordable housing they will. In SF it's almost impossible for them to build anything..

[jmalicki]

It seems like observing behavior of market participants shows developers won't build affordable units if asked:

http://www.sfchronicle.com/bayarea/article/Developer-pulls-o...

[superuser2]

That "asking" is exactly the form of regulation I'm advocating. They won't do it out of the goodness of their hearts, but they'll do it if it's a prerequisite to build luxury housing.

[hkmurakami]

>However, cities are barely approving residential zoning and this artificial distortion is amplifying the homeless problem.

Aren't "cities" just manifestations of players within the greater market system coming together to assert their interests and preferences?

Or is this an example of how a group can act to block the proper functioning of a market, kind of like a cartel?

[superuser2]

Cities (and countries) are democratic communities that can choose to deploy markets if and to the extent that they are useful for some resource allocation problems. And they are quite useful. But communities come first; when the market does something that opposes its values, the community can and should override it. The difference between regulation and a cartel is that regulations pervert the market for public gain at private expense and cartels are the other way 'round.

[Decade]

The problem with that theory is voter turnout.

In San Francisco, the latest new regulation against housing was passed by a simple majority of the vote, with 8.5% of San Francisco residents voting in favor. In the latest election, the moderate District 3 supervisor was replaced by a rabid anti-growth supervisor with the approval of 12% of the district’s residents.

This is actually sort of by design. Americans in general are pathetic (I do not mean apathetic) about their civic responsibilities, but aggressive home ownership policies were pushed partly to get people more involved in politics. Turns out that this promotes narrow-minded personal interest rather than the good of society.

[abfan1127]

with the bay area experiencing high regulatory restrictions, I'd say more regulation isn't going to help. Milton Freidman has some good stuff on this - check out Free to Choose, its a video series.

[superuser2]

I am aware of the market-is-God talking points. The Bay Area's regulatory restrictions are doing exactly what they were intended to do: protect the views and increase the property values of existing owners by preventing new construction. In this case, regulation works as intended. It's just that the intentions were wrongheaded.

Removing the regulation would move us further towards "people with money can get housing." I want a livable city for everyone, including those without the resources to outbid me, and that requires different kinds of regulation.

[abfan1127]

thats certainly a valid opinion, however, with those regulations come housing shortages and conditions like in the Bay area. You've chosen an optimization, and like all optimizations, there are trade offs, and some of those trade offs are hard to accept.

Not to fully respond to your trollbait, but the market isn't god. Its just smarter (i.e. crowdsourced) than a few government officials about establishing what society wants.

[superuser2]

>establishing what society wants

When market participants are playing with roughly similar amounts of money, or at least roughly normally distributed amounts of money, sure. Markets give us the best consumer products. Part of how they do that is slicing the "budget" and "luxury" segments away into their own little worlds, where they don't do too much damage to everything else.

Inequality in the Bay Area housing market is so extreme that the best use of capital (in a market sense) is to exhaust it on the luxury segment and leave everyone else out in the cold. This might be "what society wants, weighted by salary" but that is importantly different from "what society wants" in this case.

Imagine if general income inequality was such that the auto industry found it optimal to produce only a few thousand Bugatti Veyrons, leaving everyone else in the cold. At the very least, we'd have to force it to produce some tanks and aircraft engines in case of war.

[crdoconnor]

"thats certainly a valid opinion, however, with those regulations come housing shortages and conditions like in the Bay area."

These are scapegoats. If the city started building social housing the shortage would be over.

If those pesky zoning regulations were eliminated property developers would flood in and build thousands of luxury apartments which would be bought by Chinese investors and left empty much like all the other property they've bought.

[landryraccoon]

I don't understand? The market values housing extremely highly, that's why rents are so high. Every single developer wants to build more housing, it's regulation that's stopping them. Is there an evil conspiracy (other than the government) to keep rents high?