California likes to pride itself as being home to new thinking and revolutionary ideas. But it’s also the place where discredited old ideas get fed enough oxygen to keep limping along and ensnare new followers.
Such as this old chestnut: Marin Post contributor Michael Barnes specializes in trying to convince readers that California does not have a housing crisis. Most recently, he looked at housing production in the state and said voila — no shortage! But he’s only going back five years, despite the fact that California housing production has had a decades-long dry spell.
It’s part of the never-ending campaign by some people to argue that the law of supply and demand doesn’t apply in San Francisco housing. Which is odd, because a shortage of housing means people either pay more for housing or they go elsewhere. Supply and demand. San Francisco is the poster child of housing supply and demand. And Rice-a-Roni.
“You can kill them, stack them up, or spread them out. But if they’re coming, they’re coming.”
— Peter Linneman, former Wharton real estate professor and founder of Linneman Associates, LLC
So Barnes & Co. probably were less than thrilled to see State Senator Scott Wiener (D-San Francisco) trumpet the advance of his latest housing bill out of committee and to the Senate floor on May 23. S.B. 79, the Abundant and Affordable Homes Near Transit Act, is one more bill that focuses on transit corridors as places to increase density with new housing. In addition to the obvious boost to the housing stock, Wiener’s office said in a release that “Many successful transit agencies in cities like Tokyo, Singapore, and Hong Kong raise revenue to support public transit by developing land that they own. In Hong Kong, the approach is so successful that the transit agency regularly turns a profit — in stark contrast to the many transit agencies facing major budget shortfalls across California due to slowly recovering ridership and the state’s low level of support for public transit compared with other jurisdictions.”
In 2015, I interviewed Dr. Peter Linneman, former Wharton professor of real estate and founder of Linneman Associates, LLC, who put in simple terms the choices we have when it comes to accommodating people who want to live in our cities:
“You can kill them, stack them up, or spread them out. But if they’re coming, they’re coming.
“You’ve got this notion of San Francisco saying we don’t want people to build, even as people complain that they can’t afford to live there. I have a nephew out there who can’t afford to live there, and yet he complains every time they build out there. It’s a fascinating sociopolitical question.
“There’s no mystery to lower housing prices. Just make it easier and faster to build. I stress the faster and the easier for the risk dimension. Risk is huge. . . . If you [raise] the entry fee, fewer people will come. Places like San Francisco have a very high entry fee for housing, and you have to jump through a lot of hoops and entry fees up front. First of all, that entry fee has to be captured eventually, but the extra risk discourages even more so.
“I’ve never really understood the political dynamics of it. There are people who make fortunes out of it. They bought in 1975 — nothing special, anywhere else in the country it’s $300,000, but there it’s $1.2 million. They have an incentive to [restrict new buildings].”
Headline of the week
“Workers are coming to the office more often, survey shows. Employers want even more” (San Francisco Business Times)
Go figure
2.3 million: Square footage of commercial space rented by the Presidio Trust, 900,000 square feet more than Salesforce Tower (San Francisco Examiner) . . . 1.1 percent: decrease in home median sales prices in San Francisco from April 2024 to April 2025 (Norada Real Estate Investments) . . . $229.6 million: amount San Francisco is estimated to take in during the 2024–25 fiscal year from commercial real estate transfer taxes, the first increase in transfer tax revenue since 2020–21 (CoStar) . . . No. 1: California is predicted to be the biggest loser among states that attract Chinese real estate investment; it attracts one-quarter of all international Chinese home purchases in this country, and the international trade tensions are expected to hit it the hardest (Mansion Global) . . . $21.5 million: amount of profit Sean “Diddy” Combs would make on the sale of his mansion in Los Angeles if he gets the asking price of $61.5 million; he purchased it in 2014 for a mere $39 million. It features 10 bedrooms, a movie theater, a spa house, a recording studio and more — it comes with the scandal of Combs’ trial for sex and racketeering crimes; one anonymous real estate agent said “I wish I could help, but no agents want to touch that house or be in any stories related to the case or the listing” (New York Post).
Say what?
“A year ago, I would’ve said an AI architecture firm wasn’t possible. But recent advances in AI’s ability to understand intent and deliver structured, verifiable outputs have changed that. Now, we can build tools that trace assumptions, reference real codes and assemblies and deliver accurate 3D models — something that wasn’t feasible just a few years ago.”
— Patrick Chopson, cofounder of cove architecture design firm in Atlanta
