The “Housing Crisis” in San Francisco Strangles Demand

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San Francisco housing bubble buckles under its own lopsidedness

Here’s the other side of central-bank engineered asset price inflation, or “healing the housing market,” as it’s called in a more politically correct manner:

San Francisco Unified school district, which employs about 3,300 teachers, has been hobbled by a teacher shortage. Despite intense efforts this year – including a signing bonus – to bring in 619 new teachers to fill the gaps left behind by those who’d retired or resigned, the district is short 38 teachers as of Monday, when the school year started. Others school districts in the Bay Area have similar problems.

For teachers, the math doesn’t work out. Average teacher pay for the 2014-15 school year was $65,000. And less after taxes. But the median annual rent was $42,000 for something close to a one-bedroom apartment. After taxes and utilities, there’s hardly any money left for anything else.

A teacher who has lived in the same rent-controlled apartment for umpteen years may still be OK. But teachers who need to find a place, such as new teachers or those who’ve been subject of a no-fault eviction, are having trouble finding anything they can afford in the city. So they pack up and leave in the middle of the school year, leaving classes without teachers. It has gotten so bad that the Board of Supervisors decided in April to ban no-fault evictions of teachers during the school year.

Yet renting, as expensive as it is in San Francisco, is the cheaper option. Teachers trying to buy a home in San Francisco are in even more trouble at current prices. And it’s not just teachers!

This aspect of Ben Bernanke’s and now Janet Yellen’s asset price inflation – and consumer price inflation for those who have to pay for housing – is what everyone here calls “The Housing Crisis.”

As if to drive home the point, so to speak, the California Association of Realtors just released its Housing Affordability Index (HAI) for the second quarter. It is based on the median house price (only houses, not condos), prevailing mortgage interest rate, household income, and a 20% down payment.

In San Francisco, the median house price – half sell for more, half sell for less – is $1.37 million. According to Paragon Real Estate, if condos were included, the median price would drop to $1.2 million.

The median household income in San Francisco is $84,160, including households with more than one earner. So a household of two teachers with $130,000 in household income is doing pretty well, comparatively speaking.

The monthly mortgage payment for the median house in San Francisco, after a 20% down payment and at the prevailing rock-bottom mortgage rates, is $6,740 per month, or $80,900 per year!

So what kind of minimum qualifying household income would be required for the mortgage of a median house, plus taxes and insurance? For the US on average, $47,200 per year. In San Francisco, $269,600 per year. It would require a household of four teacher salaries!

Only the top-earning 13% of households in San Francisco can afford to buy that median house!

Other Bay Area counties have similar out-of-whack affordability rates: In San Mateo County (part of Silicon Valley), only 14% can buy that median home; in Marin County (north of the Golden Gate) 18%; Santa Clara Country (where San Jose is) 19%; Alameda County (where Oakland is) 20%. And so on.

And this despite the historically low mortgage rates. If prevailing mortgage rates rose to 6%, practically no one could afford to buy.

Then there’s the issue of down payment that the CAR so elegantly glosses over: the 20% down payment of for that median house in San Francisco is $275,000!

How are people going to save $275,000 after taxes while living and renting in a city that is as pocket-cleaning expensive as San Francisco? Saving $275,000 on a median household income of $84,160 while paying $42,000 a year in rent, plus taxes, utilities, food, transportation, clothes, parking tickets…..

Saving anything is going to be tough. But even if that household, using herculean discipline, can save 5% of its income a year (so $4,200 a year), it would take 65 years to save that down payment. Oh well. There goes the dream.

These are a scary numbers for the housing market! If only 13% can buy that median home – when in a healthier housing market, over 50% should be able to buy a median home – who the heck is going to buy the rest of the homes?

This puts a stranglehold on demand. To sustain these crazy home prices, San Francisco needs to bring in an endless flow of highly paid people, including absentee foreign investors, to replace the teachers and other middle-class households, the artists and shop keepers and office workers, and to push out city employees, nurses, and the like. That’s how the process has worked.

But that endless influx of highly paid people and investors is grinding to a halt. Some companies are still hiring, but others are laying off, and highly paid workers are just switching jobs rather than pouring into the city in large numbers. That’s a sea change for this housing market.

It comes at a time when a historic building boom is throwing thousands of high-end condos and apartments on the market every year, for years to come.

A housing market where only 13% can afford the median home, and only a minuscule number of people can afford the thousands of high-end homes coming on the market every year, will sooner or later buckle under its own lopsidedness. We’re already seeing the signs of that, as even San Francisco’s infamously soaring rents have hit the wall of reality. Read…  Big Unwind Begins in San Francisco, Miami, New York, Houston: Rents in “Primary Markets” Sunk by Apartment & Condo Glut

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  56 comments for “The “Housing Crisis” in San Francisco Strangles Demand

  1. Ptb
    August 16, 2016 at 10:33 am

    The trick in CA is to have a gov job in a small rural town. In the land of the blind…..

  2. Martin
    August 16, 2016 at 11:24 am

    Better to live in Dominican Republic with 20,000$ a year tax at 25% no household tax up to 135,000$
    Maid for 150$ a month no heating bills road tax 25$ insurance 2/300$
    Living with that type of pressure and stress life’s not worth it Plus giving those greedy bankers and landlords over the top rent to get a miserable possibility to survive
    Between the fed the gov the banks the money grabbing scoundrels that are plaguing USA it so sad to say that the standard of life and democratic so called way of living is a joke .gid bless the people who have to suffer it .

    • Chip Javert
      August 16, 2016 at 3:50 pm

      Yup. Everybody knows quality of life is better in the Dominican Republic.

      Well, except for government corruption (note 1) and the murder rate (note 2).

      Lovely place.

      NOTE 1: Transparency International shows corruption in US @ 16 out of 168 countries; Dominican Republic is 103 out of 168. (link:

      NOTE 2: Wikipedia shows Dominican Republic homicides @ 17.4/100,000 and USA @ 3.9/100,000 (link:

    • Mary
      August 19, 2016 at 6:47 pm

      Learn some punctuations. It might help to make some more money.

  3. Sergey
    August 16, 2016 at 11:47 am

    To be fair, very few people pay 42k. Reasons? Rent controlled housing and shared living. The majority of ppl, incl those in tech, rent rooms.

    • Jas
      August 16, 2016 at 4:04 pm

      Not everyone wants to live like their in college. Most people fall in love, want privacy and/or kids and a place to call their own. Eventually those folks either find that place or decide to move on.
      I live and work in SF and I have my own place, which I can barely afford, it’s almost 50% of my income at this point. It’s not sustainable but I’ve lived in SF 18 years, all of my friends and family are here. Picking up and leaving is easier said than done. It’s a dreadful thought quite frankly.

  4. August 16, 2016 at 12:00 pm

    If indeed San Francisco housing prices are pushing out nurses, as you state (whose average payrate is $50/hr … and that’s just to start; it can easily go over $75/hr, and the OT can make their salaries startlingly hi-tech-like) then what you are implying, is that Teachers too, need to make more than $100,000/yr. But instead of the Feds subsidizing it, as they do indirectly for nurses and everything else medical, the local taxpayers, who your article implies are already paying everything they earn just to have a tawdry place to live, will have to pay for salaries far in excess of anything their own jobs can afford to pay them. The irony in this, is not just that San Francisco has the least number of children per resident than any city in the US, but that the product of that ever-increasingly expensive education is a functional illiterate whose education, unless it can get him/her a toehold into a college they can’t afford to go to, will not get them the entry into the job market they need in order to pay for the college they need to get the job that’s going to help pay for that college (yes that’s right, cashiers at Whole Foods need a college degree to ring up overpriced produce and follow step-by-step digital instructions on a screen). How’s that going to work?

      August 16, 2016 at 2:11 pm

      Allow freedom. Allow property owners to BUILD. Allow Freedom and all this goes away.

      • August 16, 2016 at 3:00 pm

        My articles about the housing construction boom in SF will tell you that there are 62,000 housing units in the “pipeline.” Enough for about 130,000 people. In a city of 830K. That’s huge. The ARE building. Hence, the troubles in the SF housing bubble, with condo prices and rents both dropping now.

        • Ehawk
          August 16, 2016 at 4:02 pm

          Those incentives on rent like a free giftcard or “one month off” are insulting to people.

          Condos, even if they drop 5 or 10% that’s now enough to fix the problem..

          wake me up when they drop like in 2008

        • humpty dumpty
          August 16, 2016 at 4:22 pm

          Yes the city is in a straitjacket, so now many city workers “relocate” to say Walnut Creek and take the BART to the city – try finding space even to stand in a car on any weekday morning – housing gets snapped up instantly in those outlying locations and prices are rising fast – over time this may reverse as the city housing prices decline – not sure what happens when the developers go belly up though. Messy place to live.

        • Ptb
          August 16, 2016 at 10:05 pm

          62000 new condos…By what year? Walnut creek averages $800k for a 3/2 house right now.

        • August 16, 2016 at 11:44 pm

          That’s a five-year pipeline. But some of the bigger projects may take a lot longer to be completed. And if the glut gets worse, some may never be completed.

    • Mark
      August 16, 2016 at 2:55 pm

      SF needs an a very high income tax on top earners and a 15+% tax on foreign investors. It would suppress the property values while paying for the teachers.

      Or decide not to have a functioning community.

      • Humpty Dumpty
        August 16, 2016 at 4:33 pm

        The higher the taxes the more wealth just goes elsewhere – and that does not suppress property values in some fine tuning way, it simply turns communities into wastelands – but then, who said SF is a “functioning community” since oh, about 1975? The entire Bay area could easily become Venezuela on the Pacific – so many of the tech companies are on the ragged edge, burning through venture capital that is drying up. Anecdote: check out the bridge from Oakland – miles of cars backed up in the cash lane and the FAST TRAK lanes empty – now why would someone waste all that time? No bank, no credit, no nada. Makes me wonder just how really tenuous the entire financial underpinnings of the area have become.

        • Toddy
          August 17, 2016 at 1:15 am

          Not very.

          By that math, 97% of the new jobs created will fall by the wayside. A certain amount is recycled as laid off engineers fund a new gig. But wait until capital flows back into other asset classes once rates go back up a notch.

          Then you’ll have a very rapid succession of events: VC funding dries up, companies shutter, workers move elsewhere, support industries falter, more workers flee expensive cities, until the spiral goes to a sustainable level.

    • Chip Javert
      August 16, 2016 at 3:54 pm

      San Francisco nurses’ pay CAN EASILY GO OVER $75/hr?

      That’s $156,000/year BEFORE overtime.

      I kinda doubt that…just saying.

      • Paid Minion
        August 17, 2016 at 5:02 pm

        Ten years ago, my ex- was making almost six figures as an RN out here in BFE/Flyover.

        At least according to her “Domestic Relations Affidavit”

  5. Curious Cat
    August 16, 2016 at 12:04 pm

    Seems to me to be the natural result of the concentration of wealth.

    In the old days, rich mill owners built houses for their workers. Can that be far away?

    • Chicken
      August 16, 2016 at 12:37 pm

      In Korea, Samsung workers live in the 2 hi-rise company dorms next to the factory I visited. There’s probably some minimum requirement of course but there were enough apartments for a complete workforce..

      San Franciscans can become the sardines they aspire to be.

      • Vespa P200E
        August 16, 2016 at 2:41 pm

        It’s common in Asia to have the dormitories next to the factories for the single employees or even older employees who leave their homes in Taiwan/HK to toil at the grimy factories (2 to room vs 8 and better canteens for salaried workers).

        Is Samsung plant you are referring to SBL in SongDo?

        As for the SF housing market – something has to give to reign in on the housing cost perhaps back to 2011 range.

        • Chicken
          August 16, 2016 at 8:15 pm

          Pretty sure it was Giheung but yeah, corporate dormitories are pretty common so not a stretch to see it happen even in SF I’d guess.

          If illegal, we all know laws can be slipped through to make it legal.

      • Kasadour
        August 16, 2016 at 3:10 pm

        Storage units for humans.

        • Paid Minion
          August 17, 2016 at 5:04 pm

          “Your Majesty, the peasants are revolting!”

          “Yeah, they stink on ice…….”

  6. michael
    August 16, 2016 at 12:31 pm

    No it is the result of a tsunami of fiat lending. Its a big club and you are not in it.

  7. OutLookingIn
    August 16, 2016 at 12:41 pm

    Mortgage Backed Securities – Both Residential & Commercial

    These are derivatives, with most probably a triple ‘A’ rating.

    Who owns these derivatives? Where do they live?

    In your pension fund. In your insurance company. In your banks “assets”. In your municipal “investments”. In your brokerage house bond account.

    What is their loan-to-value ratio? The latest at 110% and heading higher.

    This sector is getting ready to fall on it’s face!

  8. upwising
    August 16, 2016 at 12:55 pm

    You failed to even touch on the dysfunctionality of SFUSD. One has to have worked for that organization to have any grasp of snake pit that thrives in the District Office [formerly “135” (135 Van Ness) now “555 Franklin”] and its countless “administrative satellites” around The City. If given a choice of paying one’s entire SFUSD salary (or more) in rent for a glorified closet or living in a semi-rural aerie, being paid the same salary and avoiding interactions with layers of incompetent “supervision” from SFUSD toadies, what would most teachers choose?

    • Chip Javert
      August 16, 2016 at 4:01 pm


      Well in Wisconsin, roughly 60% of the union teachers left the union when it became a right to work state. The %age will probably increase as more grandfathered union contract expire.

      So I’d guess 60%.

  9. Paulo
    August 16, 2016 at 1:24 pm

    This is an example of total dysfunction. I’m surpised the school district needs only 38 teachers? One would think they would be down 3800! Why on earth would anyone accept a teaching job in SF?

    For contrast: In my small Canadian area (nearby village of 350 people) you can rent a nice 1 bedroom apartment for $450.00/month. Or, you could buy a nice home (3 bedroom with basement) for $175,000.00. Starting teacher salary approx. $50,000. Seniority with a masters degree = $85,000. Why would a new teacher consider living and/or working in a SF, or our version of same, Vancouver?

    I am sure there are many versions of my example all over the United States? My relatives are from Minnesota. Smallish town, nearby city, peace and quiet, good fishing, all the amenities, and housing is affordable.

    My parents moved to Bay Area in 1954. (Walnut Creek). They left in ’68 due to the changing lifestyle, Hunters Point riots, and the Viet Nam war. They left a new rancher with a swimming pool on 1/2 acre. We were surrounded by rolling hills (oak trees), walnut orchards, etc. We even had an olive grove. I look at the same neighbourhood now, on Google Earth, and I cannot even find our street, let alone where we lived and played. It is all one giant sub-division and busy highways.

    Whatever and regardless, I scratch my head in wonder how this is continuing? My nephew lives in Novato. He commutes 1.5 hours to work each way, everyday. He paid $750,000+ for a little rancher, almost 2 years ago. Insanity. He lives on a gerbil wheel of commuting, long days, and everything else a young family must deal with. One day he’ll wake up and wonder what he did with his life?

    The time to have moved to SF was 50 years ago. Unless you are extremely well paid, moving there now means you are a wage-slave with a zip code. In our own family experience I would guess that to live the same lifestyle my folks did back in the early ’60s you would need a salary of at least $500,000+ per year. Clearly, that doesn’t seem likely at all, and certainly not for teachers with a 5 year college degree to pay off. My Dad had a high school diploma and ran an insurance agency. Nowadays, he couldn’t even land a job in a car wash.

    • ru82
      August 16, 2016 at 2:31 pm

      Thinking out loud…the pension will be very good.

      I am guessing the pension for a San Fran teacher with 30 years is probably $80k to $90k a year. Take that and move to a cheap housing state and live like a king in Flyover land. I am guessing a teacher in the Midwest wtih 30 years of experience probably only gets a $35k /year pension.

      So a retired family of 2 teachers could earn $160k to $180k / year via pensions and live like a king in a different state?

      “After more than three decades in the educational system as a speech and language pathologist, Lisa Chattler is beginning to contemplate retirement from the Los Alamitos school district.

      Chattler, 61, expects to have a decent pension. It will come to about 90% of her final salary, which is in the range of $100,000, including a benefit bonus she earned by reaching the 30-year career threshold. A teacher who served forty or more years receives a monthly pension of $8,924 ($107,088 annually).”

      • Chip Javert
        August 16, 2016 at 4:43 pm


        You guessed wrong about the San Francisco teacher pension (which is actually part of the CalsTrs pension system).

        Retiring at age 55 with 30 years teaching and final earnings of $100,000/yr gets you a $4,200/month pension ($50,400/yr).

        If your final year pay was $75,000, your pension is $3,200/mo ($38,400/yr).

        I sincerely doubt a significant number of teachers make $100,000/yr, even in their final teaching year.

        Here’s the link so you can use it yourself (link:

      • CrazyCooter
        August 17, 2016 at 2:12 am

        Don’t plan life with a ruler – it isn’t linear.

        I like to present the problem as this:

        Life is a constant process of figuring out where the rail road tracks are (problem 1). Figure out problem 1, and problem 2 is getting the hell out of the way. If you get this far, problem 3 is figuring out how to set up a station, a town, or at least a water tower and make a business – this is entrepreneurship.

        Pensions won’t be around because they can’t be paid for – but believe as you wish. Younger generations without the burden of home ownership are simply going to pack and move to greener pastures if they have the skill set to do so – exactly the kind you want to keep local and milk taxes from (the bottom 50% of the public are liabilities).

        Personally, I am still trying to figure out the right business to step into as I get older – otherwise I starve in old age.



        • Brian
          August 17, 2016 at 4:56 pm

          No chance Cooter. The spiral continues as younger citizens mired in debt of all forms are unable to save in any way, shape or form. More and more will be needing government pensions to survive in their retirement years as they scrape by during their working lives. More for homes. More for food. Less in salaries (take home $$$) and less in pensions? Not happening.

          Business advice? Home based Dental Equipment Technician. Contract your self out. Anything Medical/Dental is a growth industry. Not my current line of work BTW ;-)


  10. nick kelly
    August 16, 2016 at 2:27 pm

    Indeed two teachers (there are many such couples) aren’t doing too badly at 130K. In fact they are close to being the one percent they will frequently blame for everything. Within the top five percent anyway.
    Plus they have about a 160 day work year- in fact the only way to properly measure teacher pay ( same with post secondary ed) is pay per day- about 400 each per day for the couple.

  11. Chip Javert
    August 16, 2016 at 4:14 pm


    The $130,000 teacher couple is nowhere close to family 1%-ers ($375,000 in 2014). So they are still ok complain about rich people.

    At $65k income per person, each ranks in the 81% of individual incomes

    At $130K as a family, they rank as 80% of family incomes


  12. Guido
    August 16, 2016 at 4:20 pm

    Hi Peter Thiel (copycat) here,
    Have you guys not heard about the challenge I threw out to students to drop out of school? I just did not expect the teachers to quit. That said, it is all for the best. I never went to school (that’s what I believe anyway) and look how well I turned out. Anyway, I say good riddance to the schools. Let’s close them and build more incubators there.
    Since we are on the topic, I think the teachers and students should embrace e-classes. This way, we can hire teachers from poor countries for a penny an hour, while students can pretend to be listening to classes while they post selfies on Snapchat or whatever else I happen to invest in. By not studying these students can drop out of school too. The more the merrier.
    See you guys in 500 years. We can compare notes on how my plans turn out. Oh wait, I realized that most of you will be gone by that time. Hey, what can I say? Too bad, you did not drop out of school, make money, and become obnoxious like me. Ah well…

    Caveat to those who dislike anything I say. Just say Gawker 10 times…

    • Chip Javert
      August 16, 2016 at 5:33 pm

      Ok, I’ll grant your post is attention seeking.

      It’s just not credible. Wouldn’t want your incubator dudes designing any bridges.

      Didn’t rise to obnoxious. Sorry. Give it another shot.

      • August 16, 2016 at 6:37 pm

        I thought Guido’s post was hilarious, and dripping with deep and dark sarcasm. Did I read it wrong?

        • chip javert
          August 16, 2016 at 9:13 pm

          Maybe not…

        • polecat
          August 16, 2016 at 10:30 pm

          no, you didn’t Wolf…….

          I’m still trying to wipe the ‘drips’ from my eyes!

      • CrazyCooter
        August 17, 2016 at 2:19 am

        School is a waste of time – it isnt’ about education anymore.

        I have a four shelf book case that has more knowledge than anything I got in high school and college combined – at maybe 20 bucks a book. Subjects might include petro-sciences, such as pipelines, refining, production, sanitation/water systems, psychology of war and how it basically screws up most folks because they aren’t warriors, lots of stuff on cooking, will durant, accounting, various horn books, such as real estate, economics/finance/monetary/banking, and so on.

        Screw education – big waste of time.



        • Mike G
          August 17, 2016 at 4:25 pm

          Now try getting a job utilizing all that knowledge and self-education without a credential. You’d never even make it to the interview list. This country has become as ossified as Europe (or more so) when it comes to educational credentialism. HR departments are so rule-driven and risk-averse that nobody gets a chance without that expensive magical piece of paper.

    • micromacroman
      August 16, 2016 at 7:34 pm

      Education itself is not over rated. The quality and quantity is dismal and overpriced. My best employee dropped out in 9th grade. Reliable, dependable, hard working and focused. A great learner who is self taught. Like myself. Even though I have a college degree. I have learned more knowledge and skill just off the internet that I ever learned in school. The best skills for employees are never learned in schools, because they are never taught. They have to do with individual characteristics like work ethic. Honesty, loyalty, courage and faith.

    • Lex Lutheran
      August 18, 2016 at 2:58 am

      Thumbs up!

  13. Gregg Armstrong
    August 16, 2016 at 6:00 pm

    The initial signs of hyperinflation are rapidly increasing prices of real assets. The Goldman Sachs’ Feral Reserve System’s wealth effect program is in reality a hyper-inflationary policy that worked. The bottom 80% can no longer afford to buy a home, not just in San Francisco, but anywhere.

  14. NotSoSure
    August 16, 2016 at 10:12 pm
  15. Ricardo
    August 16, 2016 at 11:44 pm

    SF, the next Detroit/Milwaukee/Philadelphia/Chicago.
    It ain’t worth sh– allready but leases are not expired.
    And we pay more for housing than your gracious estimates indicate.
    Plus transportation, parking, food, schools,…..

    And we pay to subsidize that cranky upper-crust right wing granny in her mansion and forty rentals. (thank you prop 13)
    And we pay for those lazy f—-ers thousands of units of free housing and food and community organizations. (thank you Limo Liberals)
    And we pay for those thousands of junkies rolling in from accross the nation. (thank you corrupt government and LPs)
    We pay for more derelict housing being rebuilt for more derelicts along Market St. and downtown. (thank you again, all the above)

    Man wanted to pass me in traffic today but I was boxed in by other cars, so he waived his pretend gun at me and he tried to confront me by stopping next to my car and when I finally managed to merge into traffic. I ignored him cause I sure don’t want to be blamed for provoking him while my four year old sits in the back seat.

    We have to drive everywhere because public transportation has gotten to dangerous. This costs several hundred extra dollars a month in parking plus a huge amount of wasted time.
    So when that dipsh—tt sales person tries to sell you on the convinience of the rail systems, calculate the true cost of commuting, even within City limits. Note to out of state persons -BART, the main rail system, is used by transients as a warm sleeping pad, so it is very risky with fleas, lice and contagious diseases. But so are local lines rail and buses. And the derelicts don’t usually just stink and pollute peacefully, no Sir, they like to make trouble and threaten violence.

    Can’t walk like we used to, to damn dangerous. To damn filthy.

    Man masturbating openly in the plaza at One Maritime Plaza week before last. Great place to run a business. Caked human feces on the sidewalks in most of anywhere east of Van Ness. Dog feces on most of the lawns. Men with hatred chiseled into their ugly faces assaulting people with wanton abandon. (soon comes the battery stage). Police can’t do much ’cause the statistics wont look good and our Limousine Liberals will charge them with bias. Dope needles littering the streets and parks and the City’s solution is to place more dope needle recepticles in parks and libraries!

    And if you are comming from the Pacific Rim, you should reasearch San Francisco’s dirty litte secret before you listen to your cousin’s bullsh– about Gold Mountain and wipe that hopium with reality. More like Black Ash Mountain.

    This will also wipe out demand in due time.
    Leave it to the very well off and the scoundrels, there is no room left for the middle.
    Here, the middle is basically poor.

  16. patrick k
    August 17, 2016 at 7:54 am

    As a long time resident of SF/Sausalito/Mill Valley the numbers you present haven’t really changed that much since the late70’s. Yes, there were periods of more affordability, but basically it has always been “insane”. What I find more amazing is that there seems to be no end to peeps making ever greater sacrifices to live here. When we moved into SF 28 years ago, the rent was absurd, but after 28 years in the same rent controlled apartment it seems free compared to what others in the building are paying. That’s the hook–now we can’t afford to leave! ;~)

    As to the units coming online they will depress prices temporarily, perhaps a few years at most. Then if history is a guide, off to the races again. SF’s land is fixed at 49sq. miles. What will suffer, and already does, is street congestion. Hopefully self driving cars will solve that problem. Longer term my guess is SF will become a larger Monaco.

    • Andy
      August 17, 2016 at 10:07 pm

      Pfff.. Monaco.. I smell piss all the way walking to work from Battery to Beale.

      • patrick k
        August 18, 2016 at 6:39 am

        Find different streets….haha. The smell of piss is a SF tradition, sort of like Paris and dog shit.

  17. August 18, 2016 at 5:32 am

    Re: And this despite the historically low mortgage rates. If prevailing mortgage rates rose to 6%, practically no one could afford to buy.

    Hang on, pretty sure if this happened housing values would fall wouldn’t they? Or are you saying rising interest rates will have no impact on housing prices?

    • August 18, 2016 at 7:36 am

      I think you missed the implication: If rates rise to 6%, and practically no one can afford to buy, prices will get crushed. You have to have buyers for a market. If there are no willing and able buyers, the market freezes, and prices collapse until there are enough willing and able buyers.

  18. Oneyedjack
    August 18, 2016 at 6:47 am

    This week, Palo Alto, California passed a vehicle dwelling ban. People found living in their vehicles will be charged with a misdemeanor and face a maximum penalty of six months in county jail, a $1,000 fine or both. The criminalization of homelessness with laws like this, actually creates more homelessness and greatly increases taxpayer costs. When a person just loses their job and apartment, they often will sleep in their car, or find a old RV on Craigslist to live in. Obviously, they are extremely low-income, so they do not have the ability to pay a fine. If they don’t pay the fine they go to jail, or they may go directly to jail, which taxpayers pay for. Either way, their car or RV is impounded causing them to be unsheltered homeless, which then causes a different and more tragic issue, and taxpayers pay for that too.Sad,very sad

    • Petunia
      August 18, 2016 at 9:17 am

      People living in their cars in Palo Alto are not necessarily poor. There are people in SV making over 150K and homeless. This law is probably a way to eliminate the embarrassment that Palo Alto feels from people in the top 2% of earners in the country being homeless in their town.

  19. whirly
    August 21, 2016 at 10:29 am

    I live in SF (rent controlled) and what you also need to know about the SFUSD is there is a lottery system. You aren’t guaranteed your local school or any school nearby. My daughter just turned 5 and we put in 30 elementary school choices for the lottery last winter and got a low-performing school all the way across town – about a 30 minute drive in traffic (far from our workplaces). We didn’t move up to a better choice in the next few rounds of the lottery. We got a spot in a private school in Oakland near my work. We opted for that instead. We plan to leave the bay area (my extended family is in the pacific northwest) by next year. The streets here are not safe and the bay area does not support families – esp. SF. And let’s not forget this drought! Everything is brown and dry. Who wants to buy a $1 million house in walnut creek and live in a dirt patch with brown hills all around and traffic everywhere? I loved the bay area but that bay area is gone now. I’m not the only one in this bind. My doctor told me this week that her 6 year old son is not in school because she couldn’t get him a decent school choice in SFUSD in the lottery. She told me all the private schools in the city are fully enrolled.

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