Jobs > Housing

The Daily Post blessed us with an article about the trees that couldn't find the forest if they had a compass, Google maps and a dozen Boy Scouts.  The headline was "Area adds far less housing than jobs:  14,900 new homes for 52,700 workers".  The thoughtful response to such a headline is a) Apples are not oranges and b) Where the heck is the water going to come from for that many people?   If you wanted to add a c) and d) go for schools and police/fire, but let's just focus on a) and b).

Unfortunately I cannot make fun of the journalist because the article has no byline.  But let's just enjoy the confusion shown by the second paragraph:

The number of new housing units, mostly apartments and condominiums, was much less than the 52,700 new jobs estimated by the California Employment Development Department to have been added in the nine-county Bay Area last year.

The next sentence begins with "the imbalance....".  Umm.  What imbalance?  Who says that is an imbalance?  Who knows how many of the new jobs went to existing Bay Area residents?  Or how many of the new arrivals found space in existing dwellings?  Is that 3.5:1 ratio a problem?  Who even knows if either of the figures are correct?  I'm not sure I have any confidence in any local agency to get within +/- 20% of the actual numbers.

Better to ask, "If we essentially created a brand new city of 15,000 homes, where is the water going to come from to service those homes?"  But that is not politically correct in today's supposedly environmentally and socially conscious mindset.  Kind of sad what passes for reporting these days.

Comments

[Charles Magnuson]

I don't think the apples to oranges argument stands.

The Bay Area does not have a severe fire or police shortage, ignoring the fact that cities are having trouble hiring emergency workers because those workers can't find places to live. We do not have a severe education problem, ignoring the fact that local schools can't hire teachers because teachers cannot find affordable places to live. And finally, we definitely do not have a water shortage by any measure. Even in the thick of the most recent drought we still had plenty of water for residents to use. Again and again it is easy to see that housing is the primary problem facing the Bay Area. Those other subjects you point to are not problems. They are not limiting factors.

Sure, employment and housing numbers can be misrepresented or not fully explained, but arguing about the exact way the numbers are portrayed ignores the undebatable fact that the SF Bay Area has an extreme housing shortage, possibly the worst housing shortage on this planet.

[Bruce Dickinson]

Joe, some of the stats that Bruce Dickinson had my guys pull up for me on San Mateo County shows that population growth outpaced housing growth by a factor of 2:1 over the past decade. This is probably as apples-to-apples as you're gonna get and the reason why bay area real estate has approximately doubled over the same timeframe (measuring from the trough).

Chucky - worst housing shortage on the planet? That would likely mean that the Bay Area has the highest prices on the planet, which is definitely not the case!

Let's also not forget what happened in 2000-2001 when the tech bubble burst. All of a sudden, there was a big housing oversupply, 12% unemployment, much lower traffic (especially commuting to the south bay), tons of restaurants and business closing, cities had bloated deficits and debt due to lower tax revenues, etc. The Bay Area is very highly levered to the boom-bust cycle of the technology and real estate businesses, so any real supply/demand analysis really has to be looked at over long periods of time. Today's shortage will be tomorrow's over-supply just like it was in the many past recessions.

Once this latest bubble bursts (and, don't worry, it will), all these issues we speak of will go away for a while, only to resurface sometime later...perhaps!

We should also not forget how bad policy in San Francisco, via rent control statues, has contributed to crowding out new residents. A price ceiling has been placed on rents, which means that rents and consequently real estate values get artificially inflated for new residents, while long-time residents under rent control effectively receive subsidized housing.

If you get rid of rent control, the overall supply/demand balance will improve as rental properties and rental prices are treated equally and have the same price equilibrium, overall price pressure for newer properties declines (and rises for older ones), and the market for newer property rentals won't put as much pricing stress on owned real estate.

Why do you think the smarties on this website know rent control is a big problem!?!?

[[email protected]]

Isn't it ironic that the only people who complain about Rent Control are the people who do not pay rent?

[Phinancier]

There is another phenomenon that has arrived in the last decade--home-sharing via AirBnB and the like. None of that formerly empty space is taken into account by the 14,900 units. I have a long-term AirBnB across the street from me that has 6-8 young techies sharing a 3/2. They actually go to work somewhere so it isn't a hacker-hotel per se. When one leaves another moves in. No new house in the count, 8 jobs in the other count.

[Phinancier]

And I should add, this is not a bad thing. Not always great for parking but they are good neighbors as much as any of the others.

[Bruce Dickinson]

Holly-baby, I gotta tell ya, ya gotta explore the space and really start taking to people who aren't 70 years old.

Guess what, Bruce Dickinson does, and what I hear is new immigrant families moving into the bay area and complaining of high rents. Most of these people are young, and are not in your co-hort. Being new families, they don't have the benefit of incumbency in staying in the same apartment for 20-30 years, they gotta pay a higher market rate that is distorted by those who won lottery tickets and got in at the right time and paid below market rent for years (and won't move out due to this price control).

Now many of these newer renters have families with children and would love to have access to schools. Why should they not be given a chance to access more properties at a market clearing price vs the person who was in the same place for decades and is crowding out new residents because of a subsidy? It simply isn't fair.

Also, don't forget that rent control actually makes real estate prices HIGHER, so yeah, thanks to rent control, I and every other homeowner are richer. If we really were into maximum self interest, I would want every bay area city to move to rent control!! But of course, Bruce Dickinson isn't advocating this, due to the fairness arguments above.

In 2016, despite 52% of Burlingame's population being renters, one of the highest proportions of multi-family populations in any California suburban city, the measure was resoundingly defeated with the "NO" vote at 68%. If there is any likely place for it to pass, it would be in a city with a high rental population.

The good news is, thankfully most Burlingame residents are smarter than the average bear have taken a basic college level Economics 101 course (and passed) and know the consequences of price controls. Plain and simple, price controls cause shortages! And guess what else? When shortages occur, prices go up!

Seriously, folks, when Bruce Dickinson is done teaching here, the upshot is ya'all be wearing gold-plated diapers! *wink*

[hillsider]

You are wasting your breath dear Bruce. S/he can't comprehend the big words.

[[email protected]]

Good to read that you are "Still above Ground" Hillsider.
I get your POV Mr. Dickenson.
However, I believe that you are using a "Broad Brush," painting a picture that will only effect long term investors, and not do much to address the needs of the current "Infrastructure" that supports every day life in Burlingame, San Francisco, etc.
"Infrastructure" being Gas Station, Waiters, Illegal Construction Workers, and healthcare workers who take care of the infirm.
Those people need a support system that is just not there because there is no Rent Control..
Quite Frankly, this type of conversation should be a warning to any Old Person wondering who will feed, and bathe them.

[Joe]

@Charles Magnuson - I am sure glad you aren't in charge of public safety. Really? Your quote "And finally, we definitely do not have a water shortage by any measure. Even in the thick of the most recent drought we still had plenty of water for residents to use." Where did you get YOUR facts? I don't see any in evidence. But even Willie Brown in today's Chron felt it worthwhile to note the line of questioning to Dianne Feinstein at her recent big ticket fundraiser:

Di flies: I went to George and Charlotte Shultz’s home for a big fundraiser to re-elect Sen. Dianne Feinstein. The senator was at her best, making just a few brief remarks and then opening the floor for questions.

They centered around water needs, the possibility of impeaching President Trump and Brett Kavanaugh’s confirmation hearings to the Supreme Court.
------------------
Again, glad you aren't in charge of anything locally.

https://www.sfchronicle.com/bayarea/williesworld/article/He-took-on-climate-change-Will-Michael-Bloomberg-13231408.php

[[email protected]]

Sen. Feinstein has been portrayed as incapable of preforming her duties.
Politics can be a very dynamic Profession.
What were your impressions of the Senator's cognitive skills?
Will she be able to fulfill another term?
Has anyone asked her why she wants to continue as Senator?

[[email protected]]

Dear Joe,
I thought "Name Drops" were exclusive to Mr. Bruce Dickenson comments.
Nevertheless, I am surprised George Shultz, and his wife are still involved in politics.
What is your point in mentioning George Shultz's home?
Kind of Creepy if you ask me.

However, I have been considered Creepy too.

Was Mr. Bruce Dickenson there?

[Joe]

Did you not follow along that it is Willie Brown doing the name-dropping?????

[Bruce Dickinson]

Joe, let's face it, the answer is no.

Given we're on the subject of rhetorical questions, here's another one for you: Is Holly-baby's failure to explore the space and catch all nuances in any way correlated with Holly's stubborn, narrow opinions?

Bruce Dickinson calls 'em like he sees 'em!

[[email protected]]

According to my "sources," I believe it was Mr. Brown Willie who appeared to "the casual observer," a Shell of a man.
Farewell Mrs. Feinstein.
Farewell Mr. Willie.
Lets get behind Kamala Harris!
KH for President of the USA.

Please all, do what you can keep the Ex Mayor away from KH.