| Thanks for this, I agree with everything here but you've illustrated things in a much more detailed and articulate fashion than I could have. My family owns rental property in the city, so perhaps I can add a little more color here. The reasons that the housing market is so messed up in SF basically boil down to the following: * Rent control - provides a huge disincentive for landlords to upgrade, invest in, (or for the unscrupulous) maintain their properties. It also artificially limits housing supply and saps liquidity, since people who've been in their units for long periods of time have distorted prices and very limited incentive to move or upgrade. * Onerous city bureaucracy and regulatory environment - the myriad, overlapping, and draconian sets of rules governing property development and ownership have made new development unnecessarily time- and capital-intensive. Oh, and there's always the tenant's union and the ridiculously pro-tenant judiciary, but that's a story for another day. * Prop 13 - basically this drives a distortion of property tax rates, with a disproportionate share of the tax burden falling on residential households and newcomers to the city/state. Note that as (relatively) long-term owners in SF, we've done very well thanks to (2) and (3). |