Tuesday, February 10, 2015

The Only Thing That Will Fix a Housing Shortage Is More Housing

A shortage of affordable housing has been a huge problem for urban areas, and a recent pair of charts from Trulia’s chief economist really highlights a big issue with housing development in the US. For the past few years, housing development has grown the most in suburbs and less in urban areas, but the price of housing in urban areas is rising the fastest. Basically, the housing supply in urban areas is not growing quickly enough to meet demand.

This problem has been illustrated perfectly in San Francisco. The city’s population has grown rapidly, but the growth in its housing stock has lagged behind. Since 2010, the population of San Francisco has increased by 45,000 people, but the housing stock has only increased by 7,500 units. With that kind of population growth and the relatively meager amount of housing development, it’s really no surprise that housing prices in the city have skyrocketed.

A similar phenomenon is happening in San Diego, which was recently named America’s least affordable city by Realtor.com. San Diego is slated to have 590,000 more people by 2050, and the only way to accommodate all these new residents is to increase the city’s density and develop more housing.

Developing more housing is what Austin did in response to its growing population, and it’s had some promising results so far. Though the cost of housing in Austin rose for the past several years, the addition of 10,000 new units to the area last year seems to have somewhat stabilized rents. The occupancy rate in the Austin area dropped by 4% down to 94% last year, the lowest it has been since 2012. While we have to see how the housing stock will hold up over the years, it’s no question that some cities, like San Francisco, would probably benefit from an increase in housing development.


Anonymous said...

Or the Peninsula could shoulder their fair share of housing tech workers??? SF cannot, and should not, be a bedroom community for the tech industry that has its center some 50 miles to the south. And there is plenty of housing being built in SF, but when rents are $3000 for a studio apt, who is being served??

This blog post adds nothing to the ongoing discussion of gentrification and the housing shortage in SF.

Pantograph Trolleypole said...

Neither did you since you didn't leave your real name. Posting anonymously always gets things done.

Sure the Peninsula could shoulder more housing too. That's the point, build more housing everywhere.

And why does every post on housing have to be about gentrification? Sometimes it's just about building housing supply.

JD said...

"And there is plenty of housing being built in SF"

"when rents are $3000 for a studio apt, who is being served??"

These statements run pretty contrary to each other. Anyone who thinks there is anywhere near enough housing being built is delusional, to put it bluntly.

The Peninsula and South Bay have their own housing shortages, and these too need to be addressed. But San Francisco is not a bedroom community for the tech industry due to pricing or availability - the South Bay (outside of prime PA and MV) is cheaper. People pay a premium to live in the city, and will continue to do so. You can accept or ignore that as you wish, but its the truth.