re: Silicon Valley real estate is just stupid

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Could get interesting if more people in Silicone Valley start working from home and the need to be close to the office diminishes.

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I was thinking the same thing but of all places, why wasn't Silicon Valley the first to adopt this model?

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I've shared this before but this in front of the house I grew up in Palo Alto. My dad paid the rent by working the floor of a lumber yard:

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My current house would cost about 4.5 million at that price per sq/ft

I guess people that work there that make 150k just commute 2 hours or never own now?

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I don't think it ever really will.

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Same with beards. Remember when people thought that the clean shaven look would make a comeback? Looks like beards are here for good.

How do people afford these notes? Do they just make a ton of money?

I bet the neighbors are a sight to see

That’s at 150k house outside of Cali.

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How do they maintain diversity?

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That’s for everyone else..

Supply and demand.

More people want to live there than can actually live there.

California and the Bay Area have a bunch of stupid laws and regulations, but your typical California goofiness isn’t really at fault here. Regulations (or lack thereof) are overrated in terms of affecting housing prices. The Bay Area is already the densest area in the country other than Manhattan. There’s only so much more density you’d be able to create even with the most lax regulations, and FWIW lower taxes increase - not decrease - prices. Imagine what would happen to house prices there if they cut their tax rate in half . At any rate it is perfectly reasonable IMO and not typical NIMBY to want to keep your city a little below Manhattan-level density. At some point maintaining the general character and aesthetics of an area does become more important than packing as many people in as possible.

Housing costs are little more than the inescapable law of supply and demand. A ton of rich people + highly desirable place to live + geographically limited (it’s a tiny peninsula). There’s no housing policy in existence that will make it affordable. Low supply + high demand = expensive. For similar but inverse reasons Houston is cheap because it is a large, flat, objectively undesirable sprawled out location with no real geographic limitations. Low demand + high supply = cheap. Has little/nothing to do with their infamous (but not really true) lack of zoning.


I’m not saying housing policies can never play any role, but their effect is dramatically overblown by those on both sides of the political spectrum tbh. The story of housing prices in any area is written almost entirely by the most basic equation, and there’s just not much you can do about it. That said, it is of course much easier to decrease supply than it is to increase supply (I.e. easier to make prices go up than bring prices down), but that’s not really what’s going on in Sam Francisco.

Final point: even if prices were artificially, dramatically inflated due to San Francisco’s housing policy (which they’re not, but just playing along), that doesn’t mean those policies are objectively bad. They’re of course bad for renters or anyone hoping to move there, but the flip side is that they are good for residents there who already own. So from that perspective, any policy inflating housing prices are rational and serve the interests of Bay Area homeowners. Practically speaking, the single biggest step a government can take to reduce your wealth (if you’re a homeowner) is finding a way to decrease housing prices in your area. Just food for thought