San Francisco's Housing Stats Confound Even the Best of Minds
|A nice place to live...|
Slate's Matthew Yglesias was puzzled by Republicans' visceral hatred of all things San Francisco, stating the only problem with San Francisco is that that "there's not enough San Francisco."
Cavalcades of people should be moving here, he continues, "But in fact total population growth in the San Francisco and San Jose metro areas has been rather slow, since for people to move there we'd have to build more houses. Zoning and other permitting restrictions have tended to make that quite difficult" -- thus jacking up housing prices.
That makes a lot of sense. But, counter-intuitively, it's not entirely true.
First off, San Jose, unlike San Francisco, is not an area known for its aversion to development. It's a big place -- and it's getting bigger pretty fast. In fact, San Jose and San Francisco are the quickest-growing cities in the state.
That's not to say San Francisco is rolling out the red carpet, housing wise. In 2011, according to the Planning Department, the city added 418 new housing units -- total. Certainly if this number were massively accelerated, then the city's sky-high housing prices would plummet, right? Well, not exactly.
In 2001, the city commissioned a study in part asking just that question. It found that, if, somehow, the city underwent a 10 percent augmentation in owner-occupied housing, median prices would drop by 4.1 percent.
So, if 12,000-odd owner-occupied units were dropped into the San Francisco market -- a fantastic number -- then the median price would drop around $35,000. This is not a significant price decrease in terms of the cost of San Francisco real estate, where the median price for a home hovers in the vicinity of three-quarters of a million dollars.
Demand here so far outstrips supply that even a fairly sizable buildup would do very little to drive prices toward sanity.
"If you look at housing production in San Francisco, the more we produce, the higher prices go," Teresa Ojeda, the manager of the Planning Department's information and analysis group, told us last year. "Prices are pretty much determined by ability to pay. If people have money to pay, prices will go up."
The problem with San Francisco is there's not enough San Francisco. And there may not be a solution for that.