Upzoning Will Make Things Much Worse Before It Makes Them Better
The city will demolish a lot of affordable housing now to build luxury housing later
Under state laws written by Scott Wiener and signed by Gavin Newsom, San Francisco is legally required to create an astounding 82,000 new housing units. To do this, Dan Lurie has created a new zoning map with raised height limits to encourage the demolition of old buildings including residential buildings. It will cause the demolition of many thousands of older housing units.
You may ask, why is that bad? Don’t we need more housing units? Won’t that bring down the cost of housing.
Think about it. The new housing laws encourage the demolition of old housing to create new housing. In ten years we may have more housing, but before that happens there will be a lot less housing making the housing shortage far worse.
Will it even work? Cities usually build more housing by building in undeveloped or vacant areas. Demolishing old housing to build new housing has rarely even been tried. The only city in North America that has done so is Vancouver. The result was that prices went up and Vancouver now has the most expensive housing in North America.
According to Zillow’s chief economist:
“There’s a growing divide in the rental market right now,” said Zillow Chief Economist Dr. Svenja Gudell. “Very high demand at the low end of the market is being met with more supply at the high end, an imbalance that will only contribute to growing affordability concerns for all renters.”