By : sfchronicle – excerpt (audio)
The new paper argues other factors besides development restrictions are behind rising home prices.
Perhaps the most contentious debate surrounding the Bay Area’s housing affordability crisis is whether building market-rate homes restrains rising costs.
Most housing researchers say it does. Increasing the number of homes, they argue, means homeowners and renters have more options to choose from, forcing sellers and landlords to moderate their prices. Those findings have galvanized pro-housing advocates and California lawmakers who are pushing to make home building easier. San Francisco Mayor Daniel Lurie, for example, has proposed allowing taller buildings along transit corridors in less dense neighborhoods.
But a new paper from researchers at the University of California and the Federal Reserve of San Francisco challenges that stance. It specifically calls out the Bay Area, saying that whatever the reason is that homes are so much more expensive here than those in Houston, it’s not because it’s easier to build in Texas…
The paper measured changes in housing units, home values and for-sale house prices from 1980 to 2020 across U.S. metropolitan areas. The authors then compared the trends between places where housing is harder to build — whether because of policies or geographic constraints — and areas where it’s easier to build…
Vancouver-based economist Michael Wiebe made a similar critique, and also argued that looking at constraints at the metropolitan level could obscure potential connections between total income and building challenges. The report’s authors, who declined to speak on the record, responded to his critique in a follow-up paper. An additional analysis, they said, showed those connections aren’t strong enough to affect the results… (more)