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.
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.
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.
You'll get no argument from me on that front. I still believe tech companies should go with other locations now because there is already incentive and opportunity to do so.
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..
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.
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.
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.
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.
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.
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.
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.
"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.
Markets unencumbered by regulation are only magically efficient and/or arbiters of society's needs if you're a neoliberal fundamentalist.
For everybody else it's a (rather poor) allocation mechanism that implicitly favors monopoly power, wealth and corruption. Great if you happen to have a lot of wealth thanks to your connections in the Chinese Communist Party I guess, and are looking for an American bolthole. Not so great if you're an American primary school teacher who grew up in the Bay Area.
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?
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.