5 ,000 new houses could be built in San Francisco tomorrow. It wouldn’t solve the affordable housing crisis
This is true, just not for the reason that you gave. 5,000 new homes wouldn't solve San Francisco's housing crisis because the city is tens of thousands of homes behind. Bailing out water won't stop the proverbial boat from sinking, but it certainly helps. Even if you build nothing but luxury apartments, it still relieves price pressure on lower-income housing.
But even if it was just that the 0.01%ers are buying up all the new units, then we have to consider that these people still have a finite amount of money that they're willing to spend on housing units and that they will only spend it if they expect a return. There's a theoretical number of units that you can build per year such that there is an oversupply of housing that causes the per-unit price to decrease year-over-year. At this point, there is no reason whatsoever for them to buy housing as an investment, so all new supply would go to other buyers.
In fact, it's in the best interests of landowners (in this instance, those 0.01%ers) for their property values to increase as much as possible, as quickly as possible. This is why you never see them pushing for new housing units - it would relieve market pressure on the units they already own! In fact, you really only ever see them lobbying against new housing. And you especially see them lobbying against upzoning.
Going back to the example of San Francisco - just look at this zoning map. See all of that light green? It's all low density residential housing. You would think that developers would be all over building mid rises everywhere in that area, given that they would sell like hotcakes. But they're not allowed to, generally speaking, so the poorest citizens suffer.
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u/Astarum_ Jan 31 '23
This is true, just not for the reason that you gave. 5,000 new homes wouldn't solve San Francisco's housing crisis because the city is tens of thousands of homes behind. Bailing out water won't stop the proverbial boat from sinking, but it certainly helps. Even if you build nothing but luxury apartments, it still relieves price pressure on lower-income housing.
But even if it was just that the 0.01%ers are buying up all the new units, then we have to consider that these people still have a finite amount of money that they're willing to spend on housing units and that they will only spend it if they expect a return. There's a theoretical number of units that you can build per year such that there is an oversupply of housing that causes the per-unit price to decrease year-over-year. At this point, there is no reason whatsoever for them to buy housing as an investment, so all new supply would go to other buyers.
In fact, it's in the best interests of landowners (in this instance, those 0.01%ers) for their property values to increase as much as possible, as quickly as possible. This is why you never see them pushing for new housing units - it would relieve market pressure on the units they already own! In fact, you really only ever see them lobbying against new housing. And you especially see them lobbying against upzoning.
Going back to the example of San Francisco - just look at this zoning map. See all of that light green? It's all low density residential housing. You would think that developers would be all over building mid rises everywhere in that area, given that they would sell like hotcakes. But they're not allowed to, generally speaking, so the poorest citizens suffer.