Hi Marcy,
You said, partly:
<< Here is an interesting take on housing ideas. Some of which I agree with; the conclusion I strongly disagree with: (1) In places like San Francisco, increased supply provided by the market will not satisfy demand or bring prices down, >>
After I read that article, I absolutely agree with the conclusion you "strongly disagree with." Indeed, the main thrust of the article is to disprove or repeal the Law of Supply and Demand. For evidence, just look at this paragraph:
"It's a complicated issue and you just can't quote Adam Smith in your Economics 101 textbook to say that's going to solve the problem," said Doug Engmann, a venture capitalist and original member of the Pacific Stock Exchange. He's referring to laws of supply and demand, which dictate that price equilibrium will be reached when quantity demanded by consumers matches the quantity produced by suppliers. "You have to understand how they work in special situations and you have to look at the situation that we're in," Engmann said during an interview in his financial district office."
I wonder if Doug Engmann also wants to disprove or repeal the Law of Gravity. If so, I know a bridge which I'd like to sell him and which he can jump off of to see whether he successfully disproved or repeal the Law of Gravity. But, try as he (and the others quoted in the article) may, he certainly failed to disprove or repeal the Law of Supply and Demand. He did, however, provide ample excuses and specious reasons for furthering his underlying leftist agenda of providing "affordable housing."
This is also apparently the agenda of the authors of the article, Dyan Ruiz and Joseph Smooke, as can be seen in their lead-off sentence, "Affordability for working-class people in San Francisco isn't going to come from letting profit-driven developers have their way. " (Just this one sentence, with code words, "affordability," "working-class people" and "profit-driven," are tip-offs to their leftist agenda in housing.)
Anyhow, here are a couple of things in the article I found most irksome:
Meanwhile, 50 percent of San Francisco households are living on less than $74,000 per year and over 110,000 San Franciscans live below the poverty line.
Remember what I said about "U Cities," where government policies support a flourishing "poor population," as it drive away the middle class? Well, here's proof. I'd bet that there's at least 110,000 homeless that aren't included in those figures.
Here's a helpful tip to all who are concerned with those "impoverished" households who can't "afford" to live in SF without generous taxpayer benefits and subsidies: Send them all to ghost towns like Detroit, Buffalo, and Rochester, where housing could be bought at "extremely affordable" prices. Why, these people could own their very own homes, which is, after all, the dream of all Americans. Admittedly, some of those houses will be "fixer-uppers," but I'm certain people from Habitat for Humanity will be more than glad to help these new homeowners. Besides, current welfare, er, low income assistance shouldn't stop for these people; it should be continued to help "stimulate" the economies of Detroit, and elsewhere. And to further stimulate those economies, current SF public assistance workers could also relocate with the newly relocated recipients and continue to receive their pay and benefits.
Once these people are relocated, their former "residences" could be sold to the highest bidders which should fetch hundreds of billions of dollars. Indeed, just imagine how the entire Tenderloin district can be redeveloped with new housing, numbering into the the hundreds of thousands.
Speaking of which, another sentence I find irksome is:
Say San Francisco pushed to flood the housing market with over 100,000 units in just a few short years in an attempt to lower prices. At that point when prices start declining, external pressures are going to kick in.
First of all, "flooding the market" with 100,00 new units to "attempt to lower prices," is not free market, but economic planning, which every lefty advocate. But because people are clamoring to pay top dollar for SF housing, greedy maternal fornicating capitalist developers will do their utmost to cash in this seeming gold rush and build as much housing as they can. That will lead to greater supply, which in turn will lead lower prices as dictated by the Law of Supply and Demand and Economics 101. But that sentence actually led to further attempts to disprove the Law of Supply and Demand.
I sometimes explain to "housing advocates" the benefits of building new housing, even if it's only for the "rich." Thus, suppose if 100,000 new units "for the rich" (or whatever the "market clearing" number may be) are built. Who will occupy them? Certainly the rich from out of town. And also the rich who live in town, who will move from their current residences. They will then create vacancies for new residents, some of whom will make "lateral moves," in quality, from their current residences. while some might occupy these vacancies as "upgrades" from their current residences. They in turn will create more vacancies, which will be filled in this way down the line.
There will reach a point when these lateral moves or upgrades will slow. At which point, property owners will be faced with vacant units, but they still have fixed costs, such as mortgages, taxes, and insurance, to pay. What to do?
As with any business that have a surplus of unsold goods, what do they do? They have a SALE, of course. This always means lower prices!
Guess what? Property owners also have "sales" in the form of lower rents. With this "domino effect" caused by an increase of new housing being built (or provided, such as allowing "empty nesters" to lease their excess spaces, or allowing Airbnb type outfits to flourish), this is how "affordable" or less expensive housing can be created.
More supply = lower prices. It's really that simple.
And as for your second objection to the article, "(2) prices can only be kept down with draconian (my word, not theirs) and aggressive measures such as rent control, prohibition of Ellis Act, eminent domain, subsidies, etc."
After I read the closing proposals for providing "affordable housing," I came to the same conclusion.
Anyhow, Marcy, thanks for referring the article and for your insights and for reading my prattle.
I hope your meeting will go well. I'd like to know whether the speaker will also try to repeal the Law of Supply and Demand as it relates to "affordable housing."
Talk to you.
Alton
