[zachmu]

What you're missing is the incredibly vocal activist culture in cities like SF and Seattle, who demand that any new multi-family housing built include below-market-rate units. (These cities also typically extort new developments with expensive "link-up fees" but that's beyond the scope of the supply-and-demand issue).

The obvious fact that these requirements make it harder for developments to pencil out and therefore decrease the amount of new units built will never, ever occur to these activists.

[ianburrell]

Lots of cities came up with an arrangement to build low-income housing by having developers build low-income housing. My impression is that this wasn't activists driving it but cities finding an easy solution. The activists are now bought into the solution as way to get low-income housing.

This sounds like a good idea because it taxes the ones making money. But the result is that less housing gets built because of the extra costs and it tends to be luxury housing so developer can make money. I also not sure how much a few low-income units increase the diversity of neighborhood.

The solution is probably just tax all developers and use the money to build low-income housing. Or even better, tax everyone. Diversity can be better accomplished by building low-income housing throughout the city. Better to mix low-income housing with cheaper market-rate housing.

[chii]

Or, these activists are actually saboteurs, using the requirement for below-market-rate units as a form of barrier to prevent actual constructions from happening!

How can it not be obvious that forcing below-market-rate units into a development will force the developers to suffer losses?