[DiversityinSV]

The data is nationwide. But California proves this NOT to be the case.

Sunnyvale/Mountain View have experienced 4 years of building new housing without limits, yet every year is more expensive. The new units (rental or for sale) are way higher than the average rent or price. (e.g. ALL the new housing being built now in the peninsula is priced at $1MM or more) I fail to see the point of pushing for new unregulated housing here besides saying in 30+ years the middle class will move to housing built for the rich now. Sure... In 30 years the middle class won't exist. (and in SV I give it 12-15 years)

[AndrewBissell]

The claim in the article and from building proponents is not, "building market rate housing will prevent housing costs from increasing, regardless of all other local market factors." It's: "building market rate housing will result in lower housing costs than would have obtained otherwise."

Where would rents and real estate prices have gone without the new building you're lamenting?

[nostrademons]

Sunnyvale & Mountain View are interesting cases because nearby employers have experienced hyper-growth and we haven't had a recession any time in the last 4 years.

Rents absolutely did go down in 2009, oftentimes way down, with apartments that rented for $2000+/month in mid-2008 going for $1400/month by mid-2009. There's no incentive to drop rents as long as everybody is making more money and the apartments aren't lying vacant. There's a pretty strong incentive when people start getting laid off and moving back in with parents or roommates, and places aren't renting at any price.

[rst]

It also neglects a huge factor in several hot markets, particularly New York: rich out-of-towners buying apartments as investments, and leaving them unoccupied. The owners aren't living there, and the buildings are typically reworking or replacing former residential units where people actually resided, so the net effect of that new construction is that the stock of housing available to house people who actually live in the city is reduced.

[danieltillett]

This problem is so easily fixed via the tax system I am surprised it has not been done already. Just tax high and rebate for residency.

[Radim]

Too naive, I'm afraid (as well as, in my opinion, misguided).

Just put yourself in the shoes of the investor. Government announces they're gonna make you pay through your nose if no one "lives" in your apartment.

Leaving aside the dubious morality of such penalization (it's a slippery slope!), is your reaction going to be "Oh noes, I am ruined! Better sell my apartment now."? Or can you think of half a dozen simple, practical ways around it?

I bet you have already.

[spc476]

Florida does this already, the Homestead Exemption, which taxes homes (condominiums and townhomes, etc) by lowering the home appraisal by $25,000 (for tax purposes). But it only applies to one house as long as you designate it your "permanent residence" (so if you only live in Florida part time, you don't get it). Somehow, we still have plenty of apartments here in Florida.

[danieltillett]

It is very hard to get around residency because someone living at that address needs to pay income tax. You can even rebate back the occupancy tax via the income tax or sales tax systems.

If you don’t want to do this you can do random surveys of the suspect property (say any property without a taxpayer) and if it is unoccupied more than a few times and not registered as unoccupied then a big fine results.

Finally, the owner does not need to sell, just have tenants. What you want to avoid is housing sitting empty or only being used as a holiday home a couple of weeks a year.

[Radim]

Right. Let's send a secret police on "random surveys" to "suspect properties", checking to see who lives in people's homes :-)

Did I mention "slippery slope"?

You don't have to be a diehard libertarian to find this whole concept somewhat creepy.

[danieltillett]

I hate to break it to you but there are dozen of authorities that can come around and inspect your property whenever they want - this slippery slope has long gone.

I have no problem with someone with the appropriate authority politely knocking on my door to see if I am home if I am claiming a large tax refund for living there. The IRS and its fellow ilk are far more intrusive - the IRS makes my life a pain as it is and I am not even a US taxpayer.

[LukaAl]

I don't get that. What kind of investment is? I buy an apartment that has for sure some expenses related (concierge of the building, taxes) and depreciate over time hoping that prices will go up? Why not renting that apartment? I mean seriously... Why I can't rent that apartment for few thousands dollars a month? A 1M$ apartment that rents for 4k$ a months returns 4.8% before taxes and expenses, probably 2.4% net. Not a great returns but relatively low risk. And then, if market price raises more than inflation, I could have a good return once I sell it in the future. The same apartment, empty, give me money just in the future if prices goes up. Do you have any statistics for this issue besides anecdotal one that is what I found?

[skybrian]

What do you mean no limits? Building housing north of 101 has been entirely blocked until recently.

[bagels]

What's north of 101? The freeway generally runs north/south, so there'd be an east/west division.

[nostrademons]

Not in Mountain View & Sunnyvale. The peninsula curves around at the bottom, so north/south routes like 101, 82 (El Camino), and 280 go mostly east/west, with 85 branching off as a north/south spur. The "north" side of 101 is the side closest to the Bay, where Google is. Throws a lot of visitors for a loop.

[toast0]

Through the peninsula, especially in mountain view, it runs from southeast to northwest, north is towards the bay; south is towards the mountains. ca-85 is much closer to north/south through mountain view.

[DrScump]

... until it's East/West from Saratoga on.

It gets more fun in the East Bay: you can be going Eastbound on 580 and Westbound on 80 at the same time (it's a shared road)!

[DrScump]

101 is more East/West at that point, until it bends around the bay at Whipple.

That whole area is direction-impaired. The city of East Palo Alto is northwest of Palo Alto and in a different county!

[throwaway60453]

Yeah, San Carlos air traffic controllers get pissy when you announce northbound over the 101 and you're really flying due west, with the sun in your face even.

[DrScump]

If you really call it "the 101", they will peg you as being from SoCal.

[elgenie]

From the appendix of the report mentioned in the no doubt well-perused article (http://www.lao.ca.gov/Publications/Report/3345):

"""We use data (.xlsx) on Bay Area census tracts (small subdivisions of a county typically containing around 4,000 people) maintained by researchers with the University of California (UC) Berkeley Urban Displacement Project. This dataset included information on census tract demographics, housing characteristics, and housing construction levels. We focus on data for the period 2000 to 2013."""