What the hell does Washington have to do with local zoning laws?
San Francisco is a densely populated city with very little land. However, buildings taller than 4-stories are outlawed. If a couple of 20+ floor apartment complexes are built, you can be rest assured that the more typical / mundane housing will become available for the rest of the citizens.
SF needs more housing, period. Local laws are what is screwing the pooch on this one.
Its things like QE2 that are creating demand for real estate. The tech boom is driven by venture capital, which is driven by cheap money. And real estate is financed by it as well.
Making it easier to build would help too, of course. But building HAS been going on. Isn't Rincon Hill 50 stories tall? Did zoning prevent it?
The techboom was happening long before QE2, QE1, or the 2008 crisis. In case you haven't noticed, Google's been around since 1998, founded near the tail end of the previous tech boom. They didn't suddenly hire all of these Googlers in 2008, Twitter, Apple, Facebook, Amazon, etc have been hiring like crazy for a long time.
I dunno, call me crazy, but maybe this time, it's time to let go of the libertarian 'gubmint did it' angle and admit that natural booms exist.
Natural booms do exist. Technology booms do occur. I'm not arguing that they don't. What I argue is that expansion of the money supply exaggerates unnecessarily and causes other damaging distortions.
Government is the use of force. It makes sense that it is sometimes damaging to distort economic choices. Moreover, there is little proof that all the interference has any benefit. Usually, they benefit a tiny group of well-connected individuals, with the rest of us paying the costs.
Well, another way of looking at the excesses of the market is that the rest of the world had a glut of savings, while America had a huge trade deficit and a lack of saving, so this naturally dictates a capital account surplus/net capital inflow.
People in Europe and Asia have to put their money somewhere, and if the US is generating higher returns for less risk, they're going to go there, for either safety or opportunity. So if you have a huge influx of funds hungry for American assets, it is no surprise you see asset price inflation, as well as cheap, easy money.
You could argue that perhaps, if it weren't for the fact that the US dollar is the world's reserve currency, we wouldn't be able to print dollars and run a trade deficit, and foreigners would never be storing up huge amounts of dollars to reinvest or loan to the US, but you could just as easily argue that raising taxes would increase national savings and reduce the trade deficit.
Yes, there is a net capital inflow. If you're building a lot of oversized houses and financing a trillion dollar annual budget, you need to import everybody else's savings. I don't think financing these unsustainable things will be a good investment in the long run.
San Francisco is a densely populated city with very little land. However, buildings taller than 4-stories are outlawed. If a couple of 20+ floor apartment complexes are built, you can be rest assured that the more typical / mundane housing will become available for the rest of the citizens.
SF needs more housing, period. Local laws are what is screwing the pooch on this one.