"The real issue is simply N > M, where N is the number of bedrooms needed in San Francisco, and M is the number of bedrooms in existence in San Francisco. As long as N > M, then there will be winners and losers."
No. This is a toy economic model that doesn't account for time or land constraints.
The benefits of construction do not immediately and equally accrue to all market participants. In cities where essentially all new construction is infill (i.e. San Francisco), new units will displace older, cheaper units (not always, but it does happen). Therefore, until supply actually exceeds demand, you will have winners and losers, and you must account for the losers.
Additionally, an any realistic model of housing, you will see that new construction will continue not until housing is as affordable as existing stock, but only until it is no longer profitable to build. It is expensive to do infill development, and therefore unlikely that any builder will continue to generate supply until prices match those of older properties. It could easily take decades for new construction to lower housing prices. For example, New York, Paris and Tokyo are far more dense than San Francisco, with more liberal development rules, yet are the some of the most expensive cities in the world in which to live.
It is thin gruel to say "I'm sorry you lost your currently affordable housing, but come back in 20 years, and everything will be affordable!" But this is essentially the response you are making.
No, it's the pigeonhole principle. There is no level of economic sophistication that can sidestep the basic problem of an insufficient number of homes in the area.
That is just ignoring even the most basic economics. The quantity isn't relevant without price. The problem here isn't economic sophistication so much as few people other than timr seems to have actually read just a normal economics textbook and understood what it actually says. That most of his comments are downvoted without relevant rebuttal just shows that.
The price depends on the quantity. Price is not baked into the walls, but comes from market conditions. How you can deny that and then claim the high ground about understanding economics is beyond me. This is incredibly easy to check: physically identical homes go for wildly different sums in different markets.
Timr argues above that 1) construction will take time, and 2) it will only continue as long as it’s profitable. No disagreement there. We need to be planning for the long term as well as the short term, and profit margins have a long way to fall before reaching zero.
No, what he is essentially saying is that far earlier than you can produce enough housing so everyone can live in the bay area, the cost of production will be higher than what people who want to live there can afford.
N > M. We need more homes than we have. That is not an economic model. That is a simple, relatable, metric.
That is the best property of the YIMBY movement. Whether “missing middle” small apartment buildings or “social housing” hundred-unit buildings, all of those are illegal in places where they should be legal. It can be summed up in a simple metric. We need more homes than we have.
If we need 20 years of building, then we better get started now.
No. This is a toy economic model that doesn't account for time or land constraints.
The benefits of construction do not immediately and equally accrue to all market participants. In cities where essentially all new construction is infill (i.e. San Francisco), new units will displace older, cheaper units (not always, but it does happen). Therefore, until supply actually exceeds demand, you will have winners and losers, and you must account for the losers.
Additionally, an any realistic model of housing, you will see that new construction will continue not until housing is as affordable as existing stock, but only until it is no longer profitable to build. It is expensive to do infill development, and therefore unlikely that any builder will continue to generate supply until prices match those of older properties. It could easily take decades for new construction to lower housing prices. For example, New York, Paris and Tokyo are far more dense than San Francisco, with more liberal development rules, yet are the some of the most expensive cities in the world in which to live.
It is thin gruel to say "I'm sorry you lost your currently affordable housing, but come back in 20 years, and everything will be affordable!" But this is essentially the response you are making.