How bad is the rental market in SFO? This bad: San Francisco Landlord Tells Tenants: Make $100K, Have 725 Credit Score
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San Francisco is what happens when a desirable city doesn’t build housing. This is why it’s so important we vigorously combat the same brand of rent-seeking NIMBYism in Vancouver.
http://www.economist.com/blogs/freeexchange/2014/04/housing-markets
The TechCrunch article referenced in Spank’s Economist article is one of the more enlightening reads of the last few months (http://techcrunch.com/2014/04/14/sf-housing/).
One of the more relevant factors that appears to play into this which is somewhat unique in CA is Proposition 13. With revenue from property taxes effectively capped, it provides a strong incentive for cities to develop other land uses that generate incrementally higher revenue from sales tax or business tax (ie: basically anything except housing). In the process, housing is forced further and further to the periphery of the region and inner city rents rise….dramatically in SF’s case.
Absolutely.
The TechCrunch article explained a lot. The effects of rent controls on public attitudes towards development was interesting. Many renters are paying rent so far below the market level they have no interest in seeing increased housing supply, because such a large amount of housing supply would need to come online for them to be affected by market forces.
There are a variety of policies and sentiments conspiring to constrain housing supply in San Fran, and the result is extremely high prices.
What also fascinates me is that in San Fran, as here, the basic economic facts of the debate are not accepted. Basic axioms of economics like supply and demand are not accepted. People invariably act in their own interest, and they alter the facts so as to make it appear that their private interests align with the public interest.
Every action has a consequence, and this is the consequence of rent control, development controls and capped property taxes. Only more supply eases rents, nothing else, in the long term.