Everyone knows Bay Area housing prices are astronomical. But what keeps those prices so high?
The main reason is due to supply and demand. Job growth, natural beauty and other amenities mean the region has high demand but housing supply falls well short.
But there are other factors as well.
Jon Haveman, an economist with Marin Consulting, dug into why the region’s supply has fallen so short for so long — and why it is unlikely to change in the short term.
“The conditions that exist here don’t show a lot of evidence of changing,” Haveman told a forum sponsored by the San Francisco Planning and Urban Research Association. During the 1970s, Haveman noted, the pace of residential housing growth slowed considerably. Between 1940 and 1980, the amount of built-up square miles rose by more than 250 percent. But, amid anti-development sentiment in many regions, the amount of built-up square miles rose by just 9.6 percent between 1980 and 2010.
This despite the Bay Area having much more open space at its disposal. In fact, Haveman said, the region has built up 1,442 square miles out of a possible 6,900 square miles that could be developed.
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