A new study published by the Center for Demographics and Policy titled "Building Cities for People" presents a new wrinkle in the age-old argument about supply and demand when it comes to dealing with urban housing shortages and rising prices. Author Joel Kotkin, who's currently an Urban Studies fellow at Chapman University in Orange, California and is a former San Franciscan according to SF Weekly, says that the problem with building densely in an urban area always comes down to construction costs — beyond a certain number of units per acre, as you go vertical, costs skyrocket for the building itself, and those costs have to be passed along to the buyers/renters.

Then you have the exorbitant costs of land itself in a market like San Francisco, where land prices have escalated hugely in recent years, meaning that developers have little interest but aiming for the top of the market in terms of unit types. There is little hope of turning a decent profit in a market like this by building so-called "middle-income" units, and there's no motivation to build without a decent profit.

"Once I started talking to developers, they pointed out that once your building gets higher than four stories, your price goes through the roof,“ Kotkin tells SF Weekly. “That has to do with seismic safety, the switch from wood to steel frames, bigger crews of union labor, lots of things."

As Kotkin writes in the paper, townhome building in San Francisco can cost developers more than double that of detached buildings, and units in a high-rise condominium building can cost "up to 7.5 times as much."

I've discussed the arguments about affordable housing here in the past, and further complicating the issue is that markets like ours have demand from far outside our immediate geographical area — like Manhattan and Miami, which are now going to see a crackdown by the US government on secretive real estate transactions for such properties, wealthy buyers from abroad are starting to snap up pied-à-terres in SF, as are wealthy buyers from the outer Bay Area.

To further counter the supply and demand argument, Kotkin points to places like Singapore which are already exponentially denser than SF, and where housing prices only come down when the government intervenes and converts buildings to public housing.

The new paper advocates for taking industrial and underused land and converting that to low-rise, less dense "starter home" type housing, like you see in the Sunset or the famous Levittown on Long Island, however there are plenty of sustainability arguments for building denser and closer to transit. Also, huge swaths of San Francisco are only two stories high, and five stories is where the construction cost issue creeps in, we'd still be better off building more four-story structures on as many sites as possible.

While Kotkin may have Libertarian leanings, the paper only bolsters the arguments of SF supervisors like Scott Wiener and Jane Kim who push for more government intervention. They say that the only pragmatic way to get more affordable housing built in the city is to require market-rate developers to build more of it as part of their luxury complexes. Kim just introduced a city charter amendment at the Board of Supes meeting Tuesday that would effectively double the affordable housing requirement asked of developers — despite some recent deals in which developers have agreed to 30- and 40-percent inclusion of affordable units (on- and off-site), the city currently legally requires only 12 percent of units in any new building of more than 10 units be set aside as affordable.

Meanwhile, while pushing for 100-percent affordable buildings may be noble, each such development will likely require the city to purchase the land at ever increasing prices, and the city can only afford to do that a finite number of times.

If you're interested, you can download the whole paper here.

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