Spectre film san francisco4/16/2023 The point is that if demand for high-end housing is not satisfied with new construction, that demand will flow to existing supply, putting upward pressure on prices right across the housing stock.Ī new piece in TechCrunch makes this point nicely in a very good explainer of the housing crisis in San Francisco. There is a team of wildcat subcontractors digging us a new wine cellar as we speak. Residents have to actively shoo away the builders trying to erect scaffolding, on the assumption that the owners will be wanting an extra floor or two on their house. You see this in London, for instance, where literally every house in the city is now being rehabilitated, including those that were rehabilitated last year. When new construction of luxury units lags, the very rich buy up older housing stock at exorbitant prices and pay to have them redone. The former point misses the fundamental fungibility of housing. The latter point gets causation the wrong way around given an unexpected decline in demand due to financial crisis or other shocks prices fall and interest in new construction dries up until existing inventories are cleared. Others love to say that price declines have historically gone hand in hand with falling construction. Housing affordability activists like to point out that most new construction is for luxury housing, meaning that supply of non-luxury units is not growing by very much. The piece nods to the idea that rising rents-or housing costs generally, in America and elsewhere-are about more than supply and demand. An analysis for The New York Times by Zillow, the real estate website, found 90 cities where the median rent - not including utilities - was more than 30 percent of the median gross income. The strain is not limited to the usual high-cost cities like New York and San Francisco. But that goal is increasingly unattainable for middle-income families as a tightening market pushes up rents ever faster, outrunning modest rises in pay. YESTERDAY the New York Times ran a piece on a brewing rent crisis in America:įor rent and utilities to be considered affordable, they are supposed to take up no more than 30 percent of a household’s income.
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