The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

https://stanfordpolitics.com/the-shame-of-palo-alto-an-interview-with-kate-downing-on-affordable-housing-edddfe142d45#.60ip1iuro

by jseliger • 10 years ago

149 193 10 years ago

stanfordpolitics.com

jseliger• 10 years ago

Relatedly: "More housing density keeps Seattle affordable for younger residents:" http://www.seattletimes.com/opinion/more-housing-density-kee.... Seattle is doing better than SF or NYC: http://www.vox.com/2015/12/23/10657690/seattle-housing-crisi... but still not good enough. Tokyo should be its example: http://www.ft.com/cms/s/0/023562e2-54a6-11e6-befd-2fc0c26b3c....

ryporter2• 10 years ago

I moved from Palo Alto to Seattle in 2014. One factor was cost of living (including taxes), but another was that Seattle had a large number of very nice, relative new high rise apartments. I had my pick of great apartments, while in Palo Alto such apartments simply don't exist.

The housing problem in Palo Alto is not simply one of affordability. It's also a problem of desirability among those with the means to pay.

hkmurakami3• 10 years ago

It seems that we made a pact with the devil by positioning housing as an investment asset. By doing so, we've encouraged people to commit a very large fraction of their net worth into a rather illiquid asset, tying their financial fates to the future assessment of that asset. As a result, protecting the price and appreciation of this asset has come to overshadow the other crucial roles that housing plays in our society.

If I bought shares in AAPL at $50 (now $100+) and someone comes along asking that AAPL let them buy some shares for say, $65, I'm obviously not going to be happy since the value of my investment is under threat. This is the kind of reaction we've unfortunately promoted for ourselves. It didn't have to be this way, as other countries have shown us. But now that we're here, it's hard to imagine a way to turn back time.

vtange• 10 years ago

It's a double whammy when you also consider that property taxes are generally based on real estate value. City and local governments are dependent on that income and have little incentive to see real estate values (and thus tax) go down.

hkmurakami3• 10 years ago

That would depend on the price elasticity of the existing housing stock in response to each additional unit of housing that is supplied to the market. It's conceivable that the marginal decrease in tax revenue from the existing stock would be more than offset by the additional tax revenue from the one additional unit.

maerF0x03• 10 years ago

Also governments get tax not on the value of a single property but the cumulative value of the properties (emphasis on the plurality) .

If my 1M house gets replaced with 10x 250k units the government has 2.5x its tax base. See how affordability and solid tax base can coincide?

refurb• 10 years ago

But tax rates generally adjust for increasing housing prices. In my old hometown, when housing prices went up 20% in one year, tax rates decreased by ~15%, so overall the increase was about inflation. Otherwise you'd see city budgets double in only a few years in really hot markets.

Of course this doesn't work in California with Prop 13, but I've seen it in other areas.

dredmorbius2• 10 years ago

That's not the case, to a large extent, in California, thanks to Proposition 13.

The longer a property is held, the lower its assessed value relative-to-market. In cities with buy-an-hold populations (and Palo Alto tends to resemble this), that means a large part of the assessible property value is severely underassessed.

Mind: this means that surplus value of urbanisation goes to the property owner rather than to help provide city services.

The double-whammy is actually the opposite of what you suggest, and may well be a triple:

1. Prop 13 keeps property taxes down, meaning ...

2. There's an additional upside (and less downside) to inflating property values and ...

3. There's growing opposition to providing new and higher-density housing, as this would remove pressure from housing prices, and leave existing homeowners with a lower property value, itself useful for loan collateral, HELOC, etc.

Knowing long-time California natives who've been chased entirely out of the state, I'm starting to think the situation may become untenable. Or, perhaps, it's one more in line of economic population displacement, which began with Spanish missionaries displacing the aboriginal natives, American Anglos the Mexican successors to the Spanish, and now various new money, some domestic, some foreign, chasing out the 1950s - 1980s immigrant class, at least from the Bay Area.

digi_owl• 10 years ago

I ran into a claim some years ago saying that homeownership is policy because homeowners do not riot.

thaumasiotes• 10 years ago

Homeowners don't riot. Neither do married people.

But while there is good evidence that marriage transforms rioters into non-rioters, giving houses away doesn't seem to have much effect on the recipients.

Logically, if you want to tamp down rioting and your metric is homeownership, you should be trying to oppress non-homeowners, not trying to get houses to the people that don't have them.

jhulla2• 10 years ago

Housing is a taxpayer subsidized, inflation proof savings plan for the average citizen. It is also levered.

Open this chart of historical mortgage rates and click 'max': https://fred.stlouisfed.org/graph/?g=NUh

Since 1981, rates have declined and tax treatment has become more advantageous to existing owners.

With the current ZIRP/NIRP/QE regimes around the world, the leverage available to the average citizen has never been greater. That leverage has gone directly into housing.

If the leverage trends continue (see 'helicopter money'), housing (along with all other asset classes), will get further out of reach.

StanislavPetrov4• 10 years ago

It seems that we made a pact with the devil by positioning housing as an investment asset.

That was certainly a mistake, but the much larger mistake was made (and continues to be made) by the FED (and other central banks at the FED's insistence). FED efforts to prop up the housing and equities markets through QEinfinity, Operation Twist, the FOMC, and countless other FED mechanisms designed to prop up markets (and owners) at the expense of everyone else have led us to the situation we are in now. If not for FED chicanery, housing prices would fall precipitously to meet real demand. People would be able to afford a place to live and speculators would realize that homes are places to live and not investments.

If I bought shares in AAPL at $50 (now $100+) and someone comes along asking that AAPL let them buy some shares for say, $65, I'm obviously not going to be happy since the value of my investment is under threat.

If nobody was willing to to pay more then $65 for your Apple shares, then in a free market, like it or not, your shares are worth only $65. Just because they were $100 at one point and you "arent happy" that they arent still worth $100, doesn't mean the government should step in and offer $100 when the market only offers $65. That's the problem we have now. In the fantasy world that the FED is trying to propagate they can continue to offer $100 no matter how low the actual demand for your stock is. In reality, all their efforts to prop up your stock have eliminated free markets, dried up "real" liquidity, and massively disrupted equity, bond, fx, and all other markets. The longer they try to extend and pretend the worse the problem gets. For example, the bank of Japan owns over 60% of all ETF's in Japan. 60%!! Things are not going to end well.

jhulla2• 10 years ago

Get outta here with your free markets. In free markets, those that lose big get up off the table. In our TBTF markets, the bigger your loss, the greater the odds that your national Treasury will backstop you.

Have you helped out your local banker today?

ScottBurson4• 10 years ago

If not for FED chicanery, housing prices would fall precipitously to meet real demand.

Maybe in some places, but I don't think that would happen in Silicon Valley. As the article says, the population of Palo Alto doubles during work days. A lot of those people would rather live there than commute from wherever.

Silicon Valley is not a creation of the Fed.

hkmurakami3• 10 years ago

Re:AAPL

There's a market for $AAPL shares at $100+. Some people are happy paying this price. Some people think this is too high.

There's similarly a market for Palo alto houses at $2.5m. Some people are happy paying this price. Some people think this is too high.

When someone comes along asking AAPL to sell them shares of $AAPL for $65 when there's a market for them at $100+, you as the holder of other analogous $AAPL shares won't be happy since such an occurrence will diminish the value or your investment.

When someone comes along asking a city for as additional housing stock at $X << $2.5m, you as the owner of an analogous investment asset will respond to the threat of your investment coming under siege. Non-investment aspects of housing's role in society will be greatly diminished in the homeowner's mind, when the home represents 20-50% of their net worth (given that their minds have been conditioned to treat housing as an investment asset).

WWKong• 10 years ago

Well put. Most discussions around here take a simplistic position, "build more to drive prices down". And then wonder why it doesn't happen when the solution is so obvious. Because it is not only about new buyers but also about folks who have invested everything they have into a market that was already in place before they invested.

bufordsharkley6• 10 years ago

The "technically correct" way to fix this would be to remove the investment potential of housing by taxing away land value (the grand old panacea of the Land Value Tax[0]).

I think this is a good idea, but it's a disruptive one, and one unlikely to happen soon. But in the meantime, we might as well fix the policy that's in direct contradiction to this ideal:

1) Repeal prop 13. Full stop.

2) Intervene with exclusionary zoning on a state level. Zoning is, after all, a state power that is entrusted to cities. (Jerry Brown is already doing good work in this department[1])

3) Implement split-level property taxes a la Pennsylvania. There's work that demonstrates that this partial LVT had real benefits for Pittsburgh when it was under effect: [2]

[0] https://en.wikipedia.org/wiki/Land_value_tax [1] http://www.latimes.com/politics/la-pol-sac-jerry-brown-housi... [2] https://www.lincolninst.edu/subcenters/property-valuation-an...

all2well• 10 years ago

The thing about getting rid of prop 13 is you'd price out a lot of residents that bought a long time ago for something they don't have a whole lot of control over. If you thought that gentrification is bad now, churn in residents would got through the roof. Not to mention that you wouldn't solve the issue of shorter-term investments in land, or investments that include new constructions.

Honestly, the real issue in the bay area is there isn't enough housing, period. To solve this, build more housing, or build more infrastructure to enable people to live further away, or both. However, residents in the bay area have always been opposed to things like that.

nwenzel• 10 years ago

Given that a full repeal may be difficult politically, I wonder if Prop 13 could be limited to owner-occupied houses.

Seems like that would hold true to its original purpose of not taxing someone out of their home, make investment in property somewhat less appealing, and provide a more predictable funding source for schools.

mchaver• 10 years ago

Which countries do you think handle housing well? Any references would be appreciated.

Noseshine2• 10 years ago

I myself know little about the subject, but since I followed the discussions I noticed the Singapore has been mentioned several times.

https://en.wikipedia.org/wiki/Public_housing_in_Singapore

    > The majority of the residential housing developments in Singapore are publicly
    > governed and developed. As of 2013, 80% of the resident population live in such
    > accommodation.

It's been an often used example because it is a market economy, no use pointing to a "socialist" country because nothing unexpected if they let government take care of housing.

I can only point to this example though, since it always seems to come up in these discussions, I cannot evaluate it.

EDIT: Aaaand it's come up in this thread too. Just search for "Singapore" to find the comments.

khuey2• 10 years ago

Japan.

nradov• 10 years ago

Have you actually talked to many Bay Area homeowners? The primarily reason that many long-time residents oppose new denser housing developments has little or nothing to do with property values. The real reason is concerns over quality of life, such as traffic, noise, pollution, school overcrowding, etc. You're not going to convince them to support higher housing density without addressing those concerns.

Personally I think denser housing developments in some neighborhoods would be a good idea. But the infrastructure improvements need to be constructed first, not as a reactive afterthought.

geebee• 10 years ago

I'm not sure that nimby behavior can be explained by a desire to maximize the cash value of a single family home. Keep in mind, owners typically own the land their house sits on as well. If I were allowed to purchase a SFH in palo alto, tear it down, and replace it with a four story apartment building, I would probably profit, even at these sky high prices.

This does come up in San Francisco as well. I live in one of the SFH zoned parts of SF, though we are all packed in there, houses are small, not free standing and backyards are small. A friend who lives nearby owns a SFH that is technically zoned R-2. This means that he could technically tear down his house and build two flats. This isn't just theoretical, it has been done on his street. I do believe that the value of the two flats would be considerably greater than the dollar value of his SFH (especially if nobody else did it, but even if it were widespread). He could still live in one of them, with the same square footage he currently has, and with the profits, he could pay off his mortgage and have an impressive chunk of change left over.

Hostility to greater density is a complex issue, but I really don't think that a drive to maximize the dollar value of real estate assets is the major factor here. If people were purely interested in maximizing this dollar value, I think they'd be agitating for the right to build, rather than the right to prevent their neighbors from building.

I think that a lot of bay area nimbys are long time residents who bought when it was less expensive and are well heeled enough that they don't really need the money, and anyway, where would they go? If they cashed in by tearing their house down and making a ton of dough, they'd try to move to... well, a medium density suburb with nice, old, historic houses, pleasant year round weather, a university nearby, a city with a good opera and ballet a moderate drive away, and... oh wait, yeah, palo alto - just. as. it. is.

To me, there's yer trouble.

sjg0073• 10 years ago

You'd have to get the property rezoned for multiple family occupancy.. Good luck with that.

ChuckMcM• 10 years ago

"Downing and her husband, an attorney and programmer, respectively, say they simply could not afford to pay almost $150,000 per year for housing alone while starting a family in Palo Alto."

It's interesting the difference a couple of miles make. $150,000 per year is $12,500 a month. The most expensive house for rent in East Palo Alto (3 miles away) is $6,000 (half that) and there are many choices under $4,000 per month. They could live in Gilroy and ride the train for free[1] for around $3,000 a month. They could do even better if they decided to rent an apartment or a townhouse instead of a detached single family home.

Whining about not being able to afford to live in a neighborhood where multi-millionaires want to live is not very productive. Unlike San Francisco there are a lot of housing options up and down the peninsula, and since they work (or used to) in Palo Alto it is extremely close to the train station (so an easy "no drive") commute, which saves them even more because the City pays for their rail ticket and they don't have to buy gas.

[1] https://www.cityofpaloalto.org/civicax/filebank/documents/40...

mbreese• 10 years ago

The $150,000 number is the cost of the mortgage needed to buy a home the size of the one they rented in Palo Alto [1]. The breakdown was that they rented the home with another couple for $6200/mo. If they wanted to buy a similar home, it would cost ~ $2.7M, thus the $12.5k/mo mortgage. They were already renting a place in Palo Alto at ~ $3100/mo. Their problem was that they wanted to start a family and needed more space. Doing so in Palo Alto was prohibitively expensive.

I don't think that she was whining about not being able to live in a neighborhood where multi-millionaire lived. It was about being able to establish roots anywhere in the Palo Alto area. It's all but impossible and it will become harder and harder to run a city where all of the labor force needs to be imported (police, teachers, city gov't, etc).

I know this is already starting to become an issue with some departments at Stanford where it's very difficult to recruit/keep faculty and postdocs due to the cost of living in the immediate area.

[1] https://shift.newco.co/letter-of-resignation-from-the-palo-a...

dekhn12• 10 years ago

So, the argument is based on her insisting that she had to buy a house in Palo Alto. But renting a place large enough would have been much cheaper than that $150,000: $5k/month gets you a nice 4 bedroom.

I don't think her math adds up. She's just insisting that she has to buy, and it has to be in Palo Alto. Neither of those are truly requirements for her, so the $150K quote is specious.

EDIT: I acknowledge $5k is not realistic in PA. 6k is, however.

dekhn12• 10 years ago

$2.7M house in PA -> $1.2M house in San Mateo. less than 30 minute commute (it takes me 20 to go from SM to PA on a moderate traffic day).

arkadiyt• 10 years ago

"They can move elsewhere" is not a reason to not build more housing - it is reasonable (and desirable) for people to live in the city that they work in. If your argument is that they can pay 3,000 a month for the privilege of living 50 (!) miles away from work in Gilroy then that still doesn't do anything for the "teachers, police officers, and other working and middle class people" - you know, the people who actually keep the city running.

vasilipupkin4• 10 years ago

Indeed. but it's also unreasonable to expect that homeowners in a city should not be able to decide how much building they want to allow in their city. I mean, it's a Bay wide problem, why can't all the building be done right outside Palo Alto? why does Palo Alto have to shoulder the solution to this problem? I don't have a dog in this fight, but I certainly can understand current homeowners. They want to keep their city a certain way. Why can't they ?

toomuchtodo3• 10 years ago

Or move the jobs out of ridiculously high COL areas?

An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

sjg0073• 10 years ago

The teachers, police and fire fighters all moved out a long time ago.

twblalock6• 10 years ago

For those who aren't familiar with the Bay Area: East Palo Alto is a high-crime city. It is not the eastern part of the city of Palo Alto -- it is not even in the same county. It has such a high rate of crime that there were no grocery stores there for many years, because the shoplifting put them out of business. There are frequent gang-related shootings. And yet, it still costs more to live there than it does in most of the United States. That's pretty good evidence that we need more housing.

diamondtrim• 10 years ago

Fun fact: Antarctica got its first ATM before East Palo Alto did. (Both in 1998)

ojbyrne• 10 years ago

East Palo Alto's crime rate has dropped significantly in recent years and is rapidly gentrifying.

http://www.paloaltoonline.com/news/2015/10/12/report-violent...

twblalock6• 10 years ago

Whining about not being able to afford to live in a neighborhood where multi-millionaires want to live is not very productive.

You make it seem like solely a demand-driven problem, but supply is being artificially restricted, which is a form of protectionism that is unbecoming of the otherwise highly capitalist homeowners of Palo Alto.

The point has been made well here: http://marginalrevolution.com/marginalrevolution/2016/08/col...

"The people who bought their homes a long time ago lucked into a windfall and they resentfully lash out at anyone trying to cut in on that windfall. But notice how un-American these claims are. The current residents want to protect their gains by telling other people how they can use their property. When a new restaurant starts to take patrons from an old restaurant we generally don’t think that the old restaurant–the long-term resident–has the right to prevent the new restaurant from opening. The same is true, by and large, for new technologies and ways of doing business. Yet when it comes to residential land we give the old residents a veto on the new."

karma_vaccum12312• 10 years ago

Multi-millionaires? ProfessorVille has numerous Billionaires on a single block.

Agree on the sentiment though...arguing for affordability in PAMPA is a lost cause

maerF0x03• 10 years ago

Seems to be the same old story we've long known. Government interference in markets leads to distortions. Yet year after year we act surprised. And when it comes time to setting up a government, we vote for the person who promises to spend others' money on our pet project.

jhanschoo2• 10 years ago

I'm tired of hearing the ideological position that government interference is absolutely bad. I live in a city-state where government housing and policies and strict zoning at once makes housing affordable for the middle and lower class insulated from fluctuating rents, and protects public spaces from overdevelopment in a land-scarce island.

bufordsharkley6• 10 years ago

I'm curious to here more about how this policy works.

I would be skeptical that the claim that a land-scarce island should be wary of overdevelopment-- I would think sprawl would be more dangerous (and density would be welcomed).

In practice, strict zoning tends to create sprawl-- when density is outlawed, the displaced people need to live somewhere... and thus the footprint of cities grows wider and wider.

xapata• 10 years ago

You're right in one sense -- all government (in)actions should be considered, not an "interference" per se, but a choice made with at least some understanding of the consequences on society.

As for the problem of interfering with the market... One issue is that a well-functioning market depends on the idea that price captures all information. This is central to the idea of the "invisible hand" guiding individuals to arrive at the correct level of supply to optimally satisfy demand. When government actions set prices, the market participants no longer receive the correct information. In turn, the market will arrive either at too much supply (and waste) or too little supply (and unsatisfied demand).

In the case of housing, the government usually takes action to set prices for some homes lower than what market forces would arrive at. Therefore, the market will under-supply and some folks who want housing will not have it. The answer is to either allow prices to move without intervention or for the government to subsidize the supply of housing.

pif• 10 years ago

Which city-state are you talking about, if I may ask?

vadym9093• 10 years ago

I'm surprised that none of the YCs startups have tried to solve this problem. People really want 'affordable housing' and YC's motto to its startups is to 'make something people want'- so what gives?

tachyonbeam2• 10 years ago

Housing is not just an app...

I'd like to see someone mass produce stackable prefabricated units out of pieces and assemble them into multi-floor apartment buildings, increasing the number of aparments on offer very fast and driving costs down. Unfortunately, I think the problem here comes down to regulations. It's hard to acquire land. Much of the bay area has laws preventing you from building new housing much higher than a few floors. The property taxes are very high, which also makes it difficult to offer low cost housing.

My general impresion is that the bay area does not want to grow... Or at least, much of the existing homeowners, the NIMBY crowd, don't want it to grow. They want tech people to get out and for things to go back to how they were in the 1980s, while maintaining the price of their own homes as high as possible.

geekbeast2• 10 years ago

Like this? http://www.abc10.com/news/local/sacramento/modular-apartment...

JoshTriplett• 10 years ago

Housing prices depend on availability, and housing density is controlled by regulation. No amount of innovation can fix a zoning problem.

vadym9093• 10 years ago

That is why a startup is needed. Airbnb and Uber showed how to get past regulations.

prostoalex• 10 years ago

Does the problem scale beyond Palo Alto and San Francisco? Do residents of Topeka or Detroit have similar issues with housing affordability?

lindenksv116• 10 years ago

The problem in the Bay Area is that since 2010, we added about 500,000 jobs and only 50,000 housing units. Roughly speaking, jobs gives you a sense for demand and housing units give you a sense for supply. Our jobs-housing ratio is completely out of whack. That's what makes the Bay Area so expensive. I actually don't believe any of the nonsense about this being a "destination area" or that there is "insatiable demand" - the demand is directly driven by job growth and you can see that plainly. People are not moving here from Nebraska and taking on housing that is multiple times more expensive just because it's pretty here- they're doing it because they got a job offer here. So no, Topeka and Detroit don't have this problem because their jobs growth isn't so far out of whack from their housing growth.

davidw11• 10 years ago

Yes: California is exporting a steady stream of people to Oregon, which displaces locals and irritates some people. We're not building fast enough either and may simply not have the capacity, short term.

deegles• 10 years ago

On a similar note, I find it profoundly ironic that the hub of "technology will save the world" ideology hasn't fixed other local issues like homelessness.

eip• 10 years ago

You have to admit that the bay area has a higher class of homeless though. Where else do you see homeless people with brand new $300 REI tents and iphones?

superuser2• 10 years ago

Startups solve problems where a small but clever resource commitment (some programmer-hours) can have an outsized impact.

There is no elite team of 10 or 1,000 that can press the right buttons on their Macbook Pros to bring more land into existence in desirable areas.

Being a landlord is pretty much the opposite of being a startup.

fhrui• 10 years ago

I found these whining hypocritical and snobbish. I can't afford a house in Palo Alto even if I work there. I don't complain about it just like I don't complain about not being able to purchase a luxury car. I don't expect the people who CAN afford these things to just lower the price and give them to me.

Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redwood City, just to name a few. Why doesn't the author want to raise her kids there? BECAUSE SHE DOESN"T WANT HER KIDS TO GO TO SCHOOL WITH THE AVERAGE JOE! She wants her kids to go to a school where Joe Millionaires send their kids, while only paying the price of an average Joe. How could that be possible?

Her mentality is the same as that of the people she's accusing of not making a change. She just makes less money and she's loud.

ScottBurson4• 10 years ago

Your theory doesn't explain why she's moving to Santa Cruz -- the schools are nothing special there.

lindenksv116• 10 years ago

We're moving to Santa Cruz because we wanted to live in a walkable area. If you travel up and down the peninsula, any house near the walkable downtown area is going to be $2M+. Yeah, sure, you can buy for less and have to travel by car absolutely everywhere. But why spend $1.5 to live in a dead cul de sac when you can spend the same money to live in a lively walkable area near the beach? If you're going to hang an albatross around your neck, you better think it's awesome. We're sick of driving everywhere and we want our kids to be able to go bike around the neighborhood safely.

bufordsharkley6• 10 years ago

1) Exclusionary zoning is a problem-- it's keeping those out except those who are fortunate (rich or lucky), and not paying for the privilege. It's a country club atmosphere, but with Prop 13, without the requisite fees (which should go back to the community at large)

2) "Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redwood City"

Their houses sell for less than Palo Alto/Atherton, but they're far from reasonable. An artificial scarcity of land has driven prices up everywhere.

moultano• 10 years ago

Many cities near Palo Alto have houses at a reasonable price

LOL

stretchwithme• 10 years ago

Neither Hilliary nor Trump will stop feeding this monster.

ermterm• 10 years ago

As much as I appreciate all these articles expounding the plethora of issues stemming from housing in the Bay Area, I can't help but feel thoroughly discouraged.

It seems that despite an abundance of chatter, we'll never see any change. If things were going to be fundamentally different, any time soon, we'd see indications of that. Instead it's just articles. Articles, on articles, on articles.

davidw11• 10 years ago

The sfyimby people are quite active - they go to local meetings, get out the vote and otherwise engage with the political process.

lindenksv116• 10 years ago

Don't be discouraged! YIMBY groups are popping up all over the Bay Area working to make a difference in their cities. Join a group's mailing list and show up at your city council when they ask you to. Easy. Bring enough friends and we'll see real change.

Live in Palo Alto: paloaltoforward.com Live in Menlo Park? www.imaginemenlo.com Mountain View? http://balancedmv.org/ San Francisco? http://www.sfbarf.org/

Some headlines: http://gizmodo.com/yimby-groups-are-organizing-across-the-us... https://nextcity.org/daily/entry/who-are-yimby-first-meeting...

http://www.forbes.com/sites/scottbeyer/2016/06/30/what-is-a-...

ryporter2• 10 years ago

I think that California will eventually be forced to change as more and more people migrate to states to like Washington. The data only goes through 2010, but the Tax Foundation has a nice table for net migrations from state to state. [1] Also, anecdotally, try call up a moving company and inquiring about a move from the Bay Area to Seattle. The typical response I received was, "Oh, no problem. We have a steady stream of trucks moving people up there."

[1] http://interactive.taxfoundation.org/migration/

will_brown• 10 years ago

While it is fine to call out the City Council, I am surprised there wasn't an acknowledgment that the City Council is a reflection of the will of the people in the City. If it were really an issue to the community they would elect new Council persons.

Since the majority of the stakeholders on this issue likely can't vote to change the Council because they don't live in the City, I would recommend a boycott. One thing the transit workers could do is organize to the extent they don't buy anything within the city limits. No gas, no food/lunch, no shopping, no entertainment, etc... Once you get local business behind a political issue the rest typically fall in line or they may find themselves ostracized within their own community.

lindenksv116• 10 years ago

The problem with the "will of the people" is outlined here pretty well: https://www.washingtonpost.com/news/wonk/wp/2016/08/10/why-c...

A small minority of NIMBY homeowners can capture and control a city council fairly easily. When you are well off (and are retired or independently wealthy and don't work...) and you're in a town of 65,000, that really means there are maybe at most 1000 people actually going to City Council and paying any attention to it. That means that if you've lived there for 30 years, you know all of them and your networks are very deep. So, a small minority who has time and resources can effect a lot. And meanwhile young people, working people, people with young kids, people working 2-3 jobs, etc they're not paying attention, they don't have those deep networks, and frankly they only show up to vote in presidential elections. Plus, people who like how things are going, don't really dig into this stuff and have no reason to think anything is wrong. If you think Palo Alto "is on fire" and "going to hell in a hand basket" because you have to drive by a new apartment building, then you show up to council and you show up to vote. But if you have no issue with new buildings, you've got no reason to show up and you're far less concerned with voting. So, problem #1 is that people who are most affected are not paying attention or do not know that they should be paying attention.

Problem #2 is as outlined in the article above. When every city council is captured by existing homeowners, no town decides to add housing. Every town prefers to add jobs that bring in tax revenues but thinks they have little to gain from allowing more housing, because of the attendant infrastructure costs (like new schools). And so collectively, they make choices that drive up the cost of housing, drive people away from jobs centers, create homelessness, and which contribute to income inequality as people spend more and more money on housing because of an artificial constraint on housing supply. Added together, this stuff hurts our economy and it's killing off the middle class.

youngButEager• 10 years ago

The east coast of the USA was settled first, recall. What did they do back east to 'solve' this problem of "we're running out of space"? They increased the density of occupants per unit of land -- they built UPWARD.

That will have to happen here too. It's already happened in LA.

There will always be crybabies like this attorney during the growing pains of a popular 'destination city.'

For now, think of turning the Peninsula into tall buildings, concrete and asphalt. Think how the picturesque drive up highway 280 to San Francisco from the South Bay will be affected.

Everyone wants the nature. Not the tall buildings, concrete and asphalt.

Crybabies need to do precisely what this gal chose -- LEAVE. There's the door. That's how markets work -- when the price of a good or service is too high, demand drops. Well, she's a living example of a smidgen of demand disappearing.

People who don't like markets should move to Venezuela or North Korea or Cuba.

bufordsharkley6• 10 years ago

What you're missing here is that the market delivers rent to the holders of a natural resource (land) far in excess to its marginal product-- which is to say economic rent.

Landowners in the Bay Area are rentiers, and unless we enact policy to reverse this, we'll never have a competitive market in housing.

lindenksv116• 10 years ago

There is no free market in housing. Supply is very tightly constrained by the city via a system of very stringent zoning (3 stories max most of the city, only 3% of the city is even zone for multifamily housing) and taxes. What you see happening in the Bay Area isn't the result of the laws of supply and demand, it's the result of the laws passed by city councils. There's no developer in the world who wouldn't love to build more housing in one of the most booming places in the country. They're not not doing it because it doesn't make financial sense or because there's no demand there. They're not doing it because the housing market in the Bay Area has been regulated to death.

raldi• 10 years ago

For now, think of turning the Peninsula into tall buildings, concrete and asphalt.

No, the opposite. Urban density reduces sprawl. The more people you can accommodate in the city core, the less you need to spoil the surrounding countryside.

sctb• 10 years ago

crybabies

Personal insults are not OK on Hacker News, please leave these out of comments.

davidw11• 10 years ago

Relevant:

http://marginalrevolution.com/marginalrevolution/2016/08/col...

http://marginalrevolution.com/marginalrevolution/2016/08/lai...

https://www.washingtonpost.com/news/wonk/wp/2016/08/10/why-c...

http://www.nytimes.com/2016/07/04/business/how-anti-growth-s...

http://www.bloomberg.com/view/articles/2016-07-27/zoning-has...

Get involved:

http://sfyimby.com

http://www.strongtowns.org

Animats• 10 years ago

Palo Alto has the problem that people don't leave.

It used to be a college town. University Avenue had four bookstores. But then people stopped moving away. About a decade ago, Palo Alto did a survey of residents to find out how long they intended to live where they were. Most said they intended to live there for the rest of their life. This implies Palo Alto becoming a retirement community.

University Avenue now has zero bookstores.

kleiba• 10 years ago

Bookstores are certainly disappearing in other cities as well due to economic pressure from online vendors and ebook readers.

karma_vaccum12312• 10 years ago

Not just Palo Alto but California-wide....Prop 13 makes dying of old age in the home you raised your children in the cheapest option. Literally anywhere else people move to, even a downsize, will result in higher property taxes

Related to this is the shabby conditions of many homes...the aged can't afford to renovate, but they also can't afford to move. They die in a tear-down

ben_jones• 10 years ago

Is living in the Bay Area a privilege or a right?

ctulek• 10 years ago

That is the core of this discussion I believe. Bay Area is really hot as a place to live and many real estate investors are very much aware of that. I can assure you that most of the new housing put there just becomes a big target for the investors. I believe most of new housing won't be available to low income families but immediately go to the real estate hunters. Right now, there is a huge global market hungry to invest to Bay Area.

In that respect, I support the housing is limited, instead we should push more public transportation, we should push more on new hot zones for commercial zones, outside of the current ones. This is the best way to balance housing and traffic.

lindenksv116• 10 years ago

It's not a privilege or a right. But it's a smart policy that will make us all richer, healthier, and more environmentally friendly. You can read more here: https://medium.com/b-copy-com-longform-content/why-can-t-tho...

karma_vaccum12312• 10 years ago

We'll kill the golden goose and eventually companies will leave. They can't afford to pay workers 3x the competitive rate just to support housing costs.

bluthru• 10 years ago

The person who cleans your office's bathrooms shouldn't be burdened with a long commute.

jurassic• 10 years ago

I get depressed every time I think about the Bay Area housing situation. As half of an early-30s professional couple looking at our baby clock and anxious to start a family, I don't see how I can possibly provide a middle-class lifestyle for children while staying here. The choices are to join the bleeding edge of gentrification by moving into a slum like East Palo Alto or commit to severely degraded quality of life that comes with a megacommute.

I don't mind leaving and I probably will, but I do resent it when people act like two highly-educated and gainfully employed young people wanting to live where they work is some kind of unreasonable millennial self-entitlement.

lisper11• 10 years ago

Wanting to live where you work is not "unreasonable millennial self-entitlement", but wanting to live in PA is. PA is one of the best places on earth. That makes it a scarce commodity. A lot more people want to live there than can possibly live there without fundamentally changing what makes it a nice place to live in the first place. If everyone who wanted to live in PA did it wouldn't be PA any more, it would be Westwood.

davidw11• 10 years ago

If some of the area were more like this:

https://goo.gl/maps/h6VUZB7hVZs

Wouldn't it still be a pretty desirable place to live because of access to so many things, high paying jobs, a great climate, etc....?

lpolovets2• 10 years ago

Not sure what part of the bay area you live/work in, but where have you been looking? I bought in Redwood City last year and the prices, while high relative to the rest of the country, are probably manageable for many professional Bay Area couples. You can get a decent 3 bedroom for $900k-$1.2m, which is probably ~$3k-$4k/mo for [mortgage + property taxes - tax breaks].

TheCoelacanth• 10 years ago

Wow, only a million dollars for a 3 bedroom house. That's so affordable /s

omilu• 10 years ago

commit to severely degraded quality of life that comes with a megacommute

Do not under any circumstances concede to a megacommute, any other option is better than that. You might as well concede to chopping your right arm off.

sjg0073• 10 years ago

EPA will gentrify. It already has in some respect. Right now elementary and middle school are bad but for high school you end up in Menlo Atherton. Charter schools exist and Zuckerberg is working on something.

ScottBurson4• 10 years ago

Kim-Mai Cutler's excellent and thorough analysis from a couple of years ago [0] is still broadly relevant, though I think there have been some changes -- the whole Google bus thing blew over, I guess, and Mountain View's city council got largely replaced, the new council being more housing-friendly. But there's still a lot in here that's applicable.

ETA: Oh, and here's a great piece on Henry George [1].

[0] https://techcrunch.com/2014/04/14/sf-housing/

[1] https://techcrunch.com/2016/01/29/nothing-like-this-has-ever...

_ph_2• 10 years ago

We see the same problem here in Europe, maybe to a less extreme extend. We have a few economy hotspots with rapidly raising real estate prices. One fundamental problem is, that those people, who could change things have litte interest in changes. Homeowners like to see their property value rising and for cities life is easier without a growing population.

If one says: let free markets take care of that, the problem is exactly that there are no free markets. A free market would mean, that anyone owning a piece of land could build there without limitations. But zoning laws and building size regulations prevent exactly that. As a consequence, building permits have exploded in value like taxi concessions once did. They are no longer tied to the economy of building/owning a cab, but of a limited market.

Munich is one of the most expensive cities in Germany, but it is closely surrounded by farmland. The housing problem could be solved easily, if more of it were allowed for building. But as this happens only at a very small speed, land value can multiplay up to 100x when a building permit is issued. This multiplier shows how skewed the market is.

narrator• 10 years ago

No owner of an oil company wants to live next to a refinery. No owner of an auto plant wants to live next to the plant. In the Industrial era, owners wanted to live far away from where the work was done because it was ugly and polluted. This created the suburban pattern and cheap housing close to work for workers. This is basically Oakland.

Rich Tech entrepreneurs, executives, highly paid programmers, and VCs want to live close to the tech "factory" and they want it to be a nice place. They don't care where everyone else who works there lives, just as long as they don't screw up their nice neighborhood with excess traffic, pollution and density.

It's as simple as that. All this stuff about economic policy and zoning laws and the general decline of western civilization is a whole lot of overanalyzing, IMHO.

whack• 10 years ago

I used to live in Silicon Valley for many years. Devil's advocate: Why should Palo Alto provide affordable housing? People who want affordable housing can find it in Menlo Park, East-PA, Mountain View, all of which are just minutes away from Palo Alto. The reason why people don't want to live there, is because they want to live in a neighborhood that's as exclusive/upscale as Palo Alto. And yet, if Palo Alto gave in to demands for Affordable Housing, it would lose that very upscale/exclusivity that people are seeking in the first place.

I've always argued that San Francisco needs more affordable housing, because it's not just a neighborhood, it's a city. Anyone who lives outside of SF has to expend considerable effort in getting to SF, hence why the city has a duty to provide affordable housing within the city. However, this argument doesn't apply to Palo Alto. It might be a city, logistically speaking, but given its small size and extremely close proximity to other "cities" around it, it's really more of a neighborhood than a city. And I don't see the evil in having some neighborhoods within a metro area that are more upscale/exclusive than others.

khuey2• 10 years ago

None of those places are affordable anymore, with the possible exception of parts of East Palo Alto (and even that pool is drying up fast).

The problem with your logic is that just about every city on the peninsula has decided it can be the "exclusive/upscale" neighborhood in the region. And the ones that aren't on board with that can't possibly make enough of a dent in the regional jobs/housing imbalance on their own to matter. Thus people commuting to Palo Alto from Gilroy and Tracey.

The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

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