[Dowwie]

In a realistic scenario, de-regulated zoning around San Francisco would benefit developers and lenders while worsening the financial burden of the middle class.

If zoning were de-regulated around San Francisco, I doubt that many of you would pay much less than what you'd pay now for housing, assuming you're not making less than the AMI.

San Francisco had an Area Median Income in 2014 of $83,222. Those who make below this qualify for affordable housing. If you want to imagine what kind of housing policy the bay area would implement, look to what the DelBlasio administration is doing [1]. In 2015, the AMI for a family of four in New York City was $86,300. According to the DelBlasio administration's plan, "there will be affordable housing available for each level of income from “Extremely Low Income” to “Middle Income.” The middle group, “Low Income” will benefit the most, receiving nearly 60 percent of the 200,000 projected units. Each of the other levels of income will receive eight to 12 percent of the units."

So, given that you wouldn't qualify for affordable housing, you'll end up buying new property at market-driven prices. If developers were to flood the market with thousands of additional units, how would that affect prices? If you were a developer, wouldn't you try to maximize profit for your investors? With that given, developers would collude. They'd roll out new, optimally priced units over time. They'll make excuses to policymakers as to why projects are delayed.

Today, the middle class can't even get a chance to buy something that it can't afford. With de-regulated housing, the former constraint is lifted and new homeowners will be heavily debt-burdened with super-jumbo non-conforming mortgages. However, you'll have somewhere to live.

[1] http://www.amny.com/real-estate/affordable-housing-in-new-yo...

[AnthonyMouse]

> If you were a developer, wouldn't you try to maximize profit for your investors?

Selling 1000 units at $2000 is more profitable than selling 500 units at $2500. Moreover, collusion is a) illegal, allowing us to smite them with the Hammer of Antitrust Enforcement, and b) assumes there are few enough developers that they can actually do that without anybody defecting, which seems unlikely.

> In a realistic scenario, de-regulated zoning around San Francisco would benefit developers and lenders while worsening the financial burden of the middle class.

Your proposed alternative to increasing supply once to reduce prices is to keep supply constrained and subsidize rents forever.

There is no way out of the fact that increasing the housing supply is the only real solution, and that requires zoning regulations to be relaxed so that it can actually be increased. If you then have other problems with increasing the housing supply, you fix them, because one way or another there needs to be a lot more housing.

[makomk]

Selling 1000 units at $2000 is only more profitable than selling 500 units at $2500 if those units cost nothing to build. That's very far from being the case.

[raldi]

But economic analysis indicates that building even market-rate housing drives down prices for everyone: https://www.bloomberg.com/view/articles/2016-05-18/want-chea...

For example, the thorough analysis above indicates that increasing San Francisco's housing supply by 30% would cut prices in half.

[madgar]

> look to what the DelBlasio administration is doing

The man's name is Bill De Blasio.

And the AMI used for affordable housing is so high, it's a joke. They include Westchester, Putnam, and Rockland counties in the calculation as a blatant concession to the real estate industry.

The "Low Income" units are further broken down into 40%, 50% and 60% of AMI, and nearly all the Low Income units being built are for that "up to 60% of AMI" range. That ensures they have the largest possible pool of applicants, and since the units are awarded by lottery, the new affordable housing units will take just as long to get into as a decade-long public housing waitlist.

There is a lot to criticize about our actual implementation of the affordable housing - from both business interests and progressive interests. This suggests that this is one of those politically Hard Problems that most politicians will always avoid like the plague.