Most mornings I receive an email from 48 Hills that keeps me up to date on doings in our city. I recommend this coverage; it is worth the additional email box pollution.
Yesterday, I was absorbing the latest outrages: Mayor Lee and powers-that-be are beating up on our homeless people as politicians who feel their support slipping usually do. That's what they do always do and we can protest it, but it is likely to remain popular.
A short sentence in an article about increasing the minuscule sum developers of new residential and office buildings pay to offset the costs their profitable enterprises impose on the city stopped me cold. Here is that sentence:
In most of this country, that probably seems counterintuitive. I grew up in Buffalo. I don't think they'd say that in Buffalo; they'd bend over to attract builders. In parts of California -- think Riverside or Bakersfield -- likely the same.
But San Francisco is such a desirable location that the normal rules of supply and demand are flowing backward. There is NO reason to believe that developers can't pass through to their rich clients any increased costs the city imposes on them. Tech innovation winners and overseas buyers are snapping up luxury condos here as fast as the developers can throw them up. (Mere tech workers are beginning to the feel the pinch of high rents themselves.) Winners want to be here (or to have a pied a terre or investment property here.) And their companies want the prestige of locating some of their business here. They'll pay. We don't have to be beggars here; given land scarcity and high demand, we couldn't kill the goose laying the golden egg if we tried.
This is hard to get our minds around; it's not how urban economics have worked in most cities for a very long time. But it it is how supply and demand are working in San Francisco at present.
You'd think this would be a no-brainer. Here's the grown-up policy argument from the same article:
The Mayor is expected to veto this minimal increase. The rest of us will continue to get ripped off to support the moneyed invasion.