A guy just transcribed 30 years of for-rent ads. Here’s what it taught us about housing prices
Michael Andersen
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I think the part about Rent Control is particularly of interest, as the debate regarding its impact on rental prices is often debated, but it seems reasonably clear that it does indeed slow gentrification and keep long-term residents in homes, which is generally considered a good thing for strong communities. The Economist noted that, when Boston removed rent control, 40% of tenants were pushed out, leading to one of the fastest gentrifications of a city in modern American history.

If you look back to the 1980s in San Francisco, people understood the interplay of jobs and housing well. The hotly debated Proposition M was passed in 1986 to slow office development, limiting the number of jobs that could exist within the city of San Francisco. The reason for this was simple: limiting job growth within the city limits would keep housing pricing from rising drastically at the same time. It passed at a slightly weird moment, following a series of development booms in the early 1980s.

I have to agree with most of your conclusions, and note that housing, employment, AND transportation, must be scaled simultaneously, or we end up in imbalanced situations, and we can’t simply focus on one without the other. (We also need to pull housing from real estate speculation. A vacancy tax would be a great start.) I also think there’s a fair amount of room for some interesting (dare I say, more socialist?) concepts to address housing protections, which certainly brings up a number of questions regarding who gets to live here. (ie., is money the best metric to make that determination?)

Ultimately, I think all of these have to be diversified better across cities, and across regions, and much of that happens with better mobility. California needs stronger, more attractive, walkable, vibrant cities that are easily interlinked with each other. One of the best ways Europe has been able to keep better affordability in their world cities is through an incredible transportation infrastructure. Paris is addressing their (already much less insane) affordability crisis by doubling down on the suburbs and building 1,200 miles of new subway connecting suburban Paris. They also have connections from Paris to major cities across the country and Europe within a few hours by high speed rail, allowing for job and residential sprawl—without relying on low-density suburban sprawl with a single urban downtown core.

I don’t honestly believe we can simply build our way out of this mess. But I think there’s a combination of:

Organic Growth

The long tail of individual and small-scale housing development through a better upfront city and neighborhood-level approval process.

Transportation

A massive urban, regional, statewide, and interstate transportation investment to allow for…

Zoning Diversification

Job and housing diversification should be able to exist in all parts of dense, urban environments, not focused solely on urban cores of employment with large swaths of residential. This is the only way we can limit our sprawl impacts and create a larger number of smaller footprint human-scale communities.

Limits on Housing as Speculation

With confined boundaries, our ability to scale is inhibited by a mostly developed environment. Even if you would like to see a more dense San Francisco, it’s as much a social and cultural choice as an affordability one, as you cannot scale housing that requires demolition at the same rate as unbridled employment growth. (Likewise, it can create scenarios like Detroit should those booms crash.) Housing speculation can be linked to the economics of a region, limiting profit in booms and limiting losses in busts. Variable vacancy tax rates are a great way to start addressing this.

Better Tenant Protections

There are moments when we boom and moments when we bust, but as Eric has shown us, our median rates have been increasing at around 6% per year. Imagine a tenant model where that increase is higher for those whose incomes rise at or above that rate and lower for those who do not. If landlords can expect to see an average growth in rent at ~6% per year, but the distribution of how that gets paid is aggregated across the city, we can level out the playing field somewhat for who absorbs that cost the most. If we applied an income-weighted rent increase model, landlords would be seeing the same median rents today, but the percentage of income to rent an apartment would go from what it is today:

Percent of income needed to afford a median San Francisco apartment rent today, by income bracket.

to something closer to this:

Percent of income needed to afford a median San Francisco apartment rent by income bracket, using an income-weighted rent increase model

(That’s far from perfect, but it’s much more approachable.)

We have a lot of opportunities to find the right balance of protection, investment, housing growth, job growth, and diversification needed, and it will take a whole lot of political will and intelligent people willing to take risks and think outside of what exists today.

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