Why is Housing so Unaffordable in so many cities?

[the urban politician]

^ Nope.

You are evil and greedy. That’s my rebuttal

[Pedestrian]

It's always interesting to me that the group one might imagine least able to afford a place is the one that IS affording it:

Immigration keeps SF population growing even as locals depart
By Adam Brinklow Mar 27, 2018, 12:42pm PDT



The U.S. Census announced last week that the estimated population of San Francisco County grew by more than 8,000 people between July 2016 and July 2017 . . . . Which is surprising, especially given the steady stream of news lately about people planning to leave the Bay Area.

And yet, the population continues to grow, albeit at a smaller rate than in other post-2010 years. What’s the deal?

. . . On Monday, Paragon Real Estate Group economic Patrick Carlisle examined the census figures more closely and found that since 2015, San Francisco’s net domestic migration—the number of U.S. residents moving into SF versus those leaving—has indeed declined.

In 2016, domestic migration was down 1,334 people, almost exactly equivalent to the gain in the previous year. In 2017, the loss more than doubled to 2,689. So it appears a great many of those people saying they want to leave the city really did pick up and go.

But the population increased both years anyway, because the number of immigrants coming into San Francisco makes up the difference:

More people are NOT leaving San Francisco or the Bay Area than arriving. When you tally both domestic migration in and out (to and from other places in the U.S.), and foreign migration, more people are arriving than leaving.

It is true than in the past two years, domestic net migration has shifted to a net loss, but that deficit is still overcome by the large positive in foreign immigration . . . . In fact, net foreign migration has been responsible for most of San Francisco’s recent growth . . . .

https://sf.curbed.com/2018/3/27/1716...ncisco-paragon

[mhays]

Large inflow of tech people, an increase in roommates, and finally a moderate amount of new construction opening up.

[The North One]

Immigrants are really the saving grace of this country, we need as many of them as possible in our cities.

[mhays]

True. Also our tech dominance has relied on the world's best talent. And we count on immigration to keep the dependents/workers ratio in decent balance, all the more so as boomers start retiring en masse.

[Jonesy55]

Originally Posted by Crawford

The U.S. is almost certainly the cheapest first world country for housing costs relative to incomes. Look at Canada, Australia, Western Europe.

Americans are just spoiled when it comes to housing. They want to put 0 down on 3,000 square ft. mini-mansions with 3 car garage for like 250k, demand low taxes, good schools and within driving distance of amenities.

In, say, Germany, you'll get a crappy one-bedroom walkup apartment and you're paying cash, as mortgages are rare. And your income will be 30% lower.

Mortgages in Germany are less common than in some other European countries but they are not really rare, around 25% of households are living in homes that they are buying with a mortgage. In Netherlands and Sweden is more like 60%, in some East European countries it's under 10% which does make them rare in those countries I think.

[Pedestrian]

New record:


https://www.bizjournals.com/sanfranc...581#i/10851065

[Steely Dan]

^ jesus christ.

i mentioned this in another thread recently, but i have no freaking idea how middle class families can afford to live in SF.

if you're a family of 4 with a household income of $150K, you either have to suck it up and squish yourselves into a tiny run-down 650 SF condo, or you leave.

are there any middle-class families with kids left in SF? i can't imagine that there are any moving in.

[Crawford]

Originally Posted by Steely Dan

are there any middle-class families with kids left in SF? i can't imagine that there are any moving in.

Practically the entire western half of the city is middle class. There are countless ways a middle class family affords SF.

I doubt there are many middle class families with kids moving in, but that's true of any U.S. city. What middle class family with kids chooses to move into an urban core? That life stage usually involves need for more space.

[Steely Dan]

Originally Posted by Crawford

There are countless ways a middle class family affords SF.

i'd love to hear more about these "countless ways". because from where i sit, it seems a bit preposterous to me.

from a different thread, pedestrian said that the cheapest condos in san francisco start at $750/SF (i would have to imagine the SF costs of SFH's are even higher).

a middle class income of $150K roughly buys you a low-end 700 SF condo in san francisco ($525,000), on the absolute cheapest end of the spectrum. that's nutso.

maybe some people just bite the bullet and make it work with a family of 4 in a shabby 700 SF one-bedroom, but uhhhhhh...... no thanks.

Originally Posted by Crawford

What middle class family with kids chooses to move into an urban core?

well, my middle class family with kids did.

and countless more of our peers' families as well.

but maybe it's just a chicago thing? because middle class families actually can afford to buy family-sized homes in the urban core?

[JManc]

Originally Posted by Steely Dan

i'd love to hear more about these countless ways.

Yeah, same here. They may eek out an existence but that's probably it or were lucky enough to bought in decades ago when the CoL was far cheaper. Otherwise, you'd have to be making serious bank to be able to live there and able to buy toilet paper and have electricity all at the same time. And also eat more than Ramen Noodles.

[Crawford]

Originally Posted by Steely Dan

i'd love to hear more about these "countless ways". because from where i sit, it seems a bit preposterous to me.

The vast majority of households aren't non-homeowners actively in the market for a house. They already own a house, rent, or have other arrangements.

If you aren't actively in the market for a house, it doesn't matter if homes cost $1 or $1 trillion. The run-up in home prices only negatively affects a small proportion of households, which is, in part, while SF still has so many middle class households.

Originally Posted by Steely Dan

my family did.

and countless more of our peers' families as well.

No, you did the same thing as practically everyone else. You moved further out, for cheaper real estate, with more space.

[Crawford]

Originally Posted by JManc

Yeah, same here. They may eek out an existence but that's probably it or were lucky enough to bought in decades ago when the CoL was far cheaper. Otherwise, you'd have to be making serious bank to be able to live there and able to buy toilet paper and have electricity all at the same time. And also eat more than Ramen Noodles.

Forget middle class; there are even many poor people living in the middle of Manhattan.

I can assure you they have toilet paper, and aren't sustained by ramen noodles. They probably live better than 90% of U.S. households in their income bracket.

[Steely Dan]

Originally Posted by Crawford

The vast majority of households aren't non-homeowners actively in the market for a house. They already own a house, rent, or have other arrangements.

If you aren't actively in the market for a house, it doesn't matter if homes cost $1 or $1 trillion. The run-up in home prices only negatively affects a small proportion of households, which is, in part, while SF still has so many middle class households.

huh?

i was talking about a middle class family that doesn't already own property in SF that desires to own a family sized home.

if my wife was job transferred to SF tomorrow, we'd either have to make some SERIOUS sacrifices on living space or simply not live in san francisco proper.

a middle class family from, let's say denver, could not afford to buy a family-sized home in san francisco proper. they absolutely would be able to do so in urban chicago. that's the difference.

Originally Posted by Crawford

No, you did the same thing as practically everyone else. You moved further out, for cheaper real estate, with more space.

actually, we moved a bit closer in to the urban core. (6000N, 1400W to 4600N, 2500W, mostly a lateral move, but a bit closer to downtown none-the-less)

[JManc]

Originally Posted by Crawford

Forget middle class; there are even many poor people living in the middle of Manhattan.

I can assure you they have toilet paper, and aren't sustained by ramen noodles. They probably live better than 90% of U.S. households in their income bracket.

They're on food stamps and living in subsidized or rent controlled housing then. Poor people in NY also get HEAP...assistance with heating. People in higher income brackets actually have it tougher believe it or not. Case in point. My best friend from high school was poor, very poor, she applied for TAP (NY financial Aid) and PELL (FED Aid). Between the two, she got a few thousand to live on plus money for tuition and books. I got 50 bucks. Again, people on middle class incomes (if they weren't fortunate to have bought early in SF or locked in on a rent controlled apartment in NY) will struggle.

[Crawford]

Originally Posted by Steely Dan

huh?

i was talking about a middle class family that doesn't already own property in SF that desires to own a family sized home.

OK, but, again, that's a small minority of households anywhere. "Non-owners actively trying to buy".

There are many middle class households in SF, and they'll remain regardless of home prices, because it's irrelevant unless you're renting and actively seeking to buy.

If your house was magically worth $10 million tomorrow, it wouldn't force you out of your house. You might be incentived to sell and cash in on newfound wealth elsewhere, hypothetically, but you aren't being forced out.

[Steely Dan]

Originally Posted by Crawford

OK, but, again, that's a small minority of households anywhere. "Non-owners actively trying to buy".

but that's precisely the group i was speaking of, having just recently gone through the process of buying our new home here in chicago. i'm not talking about people who've lived in and owned their home for decades.

in chicago, regular old middle class families can afford to jump into the home ownership game. in san francisco, if you don't already own some insanely valued property that you lucked into decades ago, you're SOL.

[edale]

Originally Posted by Steely Dan

but that's precisely the group i was speaking of, having just recently gone through the process of buying our new home here in chicago. i'm not talking about people who've lived in and owned their home for decades.

in chicago, regular old middle class families can afford to jump into the home ownership game. in san francisco, if you don't already own some insanely valued property that you lucked into decades ago, you're SOL.

1) Incomes are significantly higher in SF than they are in Chicago. My sister moved to SF from Chicago a few years back, and more than doubled her salary.

2) You're comparing a city of 49 square miles to one that is 234 square miles. Of course Chicago is going to have more affordable options in its city limits. If you included some East Bay locales, like parts of Oakland, Richmond, Albany, etc. the differences might not appear so vast.

[Steely Dan]

Originally Posted by edale

1) Incomes are significantly higher in SF than they are in Chicago. My sister moved to SF from Chicago a few years back, and more than doubled her salary.

salaries are no doubt much higher in SF, but not everyone is making double.

i couldn't find city proper median incomes, so county data will have to suffice for the sake of comparison:

median cook county family income: $65,039

median san francisco county family income: $93,391

so median family income in SF is roughly 44% higher than chicago.


that is quite significant, but when median list price per SF is 500% higher in san francisco ($202 vs. $1,049), you might see why the situation in san francisco looks a bit unbalanced from my chicago perspective.


btw, none of this is to say that SF isn't wonderful or "worth every penny" to live there or whatever. SF is fantastic, but the price of home ownership there is "jesus fucking christ!!!" high when you have a conventional middle class american perspective. that's all.

to those of you who can afford to own there, kudos.

Originally Posted by edale

2) You're comparing a city of 49 square miles to one that is 234 square miles. Of course Chicago is going to have more affordable options in its city limits.

yes, chicago proper is much bigger, and that does help keep it more affordable, but even if we look just at downtown real estate, chicago is still retardedly less expensive.

i own a small 500 SF highrise condo in the absolute heart of down chicago (with a giant balcony overlooking the main branch river canyon no less) that is worth roughly $375/SF. my guess is that a similar highrise condo in the heart of downtown san francisco with a giant balcony and a nice view would be worth at least triple that price per SF.

[chris08876]

Originally Posted by the urban politician

^ Nope.

You are evil and greedy. That’s my rebuttal

In Louis's defense, the high cost of upkeep and maintenance of a property is a factor in rent prices. Don't forget about taxes and other expenses.

Rental properties can be profitable, but they can also be financial burdens, especially in the early stages (of you bought a fix-me-up property) or when a property needs maintenance. As the landlord, the cost is all on you.

Piping, sewer, boilers going.... permits... roofs, and so on. Its damn expensive, so $1300-1450 for 2 beds and $1550-1750 for 3 Beds is reasonable IMO.

If he doubled those, he'd be greedy, but thats quite reasonable, especially if he provides free gas and/or water.

Don't forget, the landlord is often at incredible legal risk if shit doesn't get fixed.