That's not the right chart. The rest of the country probably looks somewhat similar.
If you were to take historical data, California home prices were 27 percent higher than the U.S. median in 1960, then 35 percent higher in 1970. But by 1980, they were 79 percent higher, and then by 1990, they were 147 percent higher. (Fischel, 1995) http://www.hup.harvard.edu/catalog.php?isbn=9780674753884
In the early 1960s, California accounted for one-fifth of the housing permits issued in the entire United States. But this pro-development orientation shifted once the available flatlands in the Los Angeles Basin and the rest of the Bay Area got built out to the hills. It transformed the politics of all the suburbs toward growth control, as residents started fearing that multi-unit dwellings would start encroaching on their single-family homes and bringing poorer people (read: minorities).
It's more extreme in SF because we have water on all three sides, and are largely built out. There are only maybe 37,000 market-rate housing units too. The city has created 70,000 new jobs since Jan. 2010 and added roughly 10K residents per year since then. So, yeah, that's why we have the most expensive median market-rate rents in the nation.
Btw, the comparison to NYC isn't really accurate because you're comparing SF against all of NYC. Manhattan alone is probably more of an apples-to-apples comparison.
The chart was simply an observation that SF isn't "pulling away" from Los Angeles and San Diego, since their percentage movements are very similar. I.e., if there were something unique to SF that significantly affected prices (crazy laws, etc) it would follow that prices should rise faster than in other big California coastal cities.
If you were to take historical data, California home prices were 27 percent higher than the U.S. median in 1960, then 35 percent higher in 1970. But by 1980, they were 79 percent higher, and then by 1990, they were 147 percent higher. (Fischel, 1995) http://www.hup.harvard.edu/catalog.php?isbn=9780674753884
In the early 1960s, California accounted for one-fifth of the housing permits issued in the entire United States. But this pro-development orientation shifted once the available flatlands in the Los Angeles Basin and the rest of the Bay Area got built out to the hills. It transformed the politics of all the suburbs toward growth control, as residents started fearing that multi-unit dwellings would start encroaching on their single-family homes and bringing poorer people (read: minorities).
Today, California is this: http://www.nytimes.com/2014/09/24/us/a-california-dream-not-...
It's more extreme in SF because we have water on all three sides, and are largely built out. There are only maybe 37,000 market-rate housing units too. The city has created 70,000 new jobs since Jan. 2010 and added roughly 10K residents per year since then. So, yeah, that's why we have the most expensive median market-rate rents in the nation.
Btw, the comparison to NYC isn't really accurate because you're comparing SF against all of NYC. Manhattan alone is probably more of an apples-to-apples comparison.