You can buy a home cheap in Detroit, that’s not a good thing. Wouldn’t rising home values signal economic growth? As long as there’s room to expand I don’t see the problem. SF’s issue isn’t high prices, it’s archaic zoning laws that limit supply to keep prices high for home owners.
Economic growth that isn't evenly distributed is not good.
If you're a poor person, you'd (probably) rather have a cheap home in a poor city surrounded by other poor people, than be the poor person stuck in a gentrifying neighborhood which is getting increasingly hostile to your presence.
I think there are two issues here. First, housing is somewhat inelastic in that it takes multiple years to respond to a rise in demand and plan out and build new housing even with a reasonably fast permitting / approval process. Second, due to labor and materials costs, the price of housing in many areas is far below the cost to build new housing so housing prices will necessarily go up even with maximum build rates. This can create affordability difficulties for the lower rungs of income.
>Second, due to labor and materials costs, the price of housing in many areas is far below the cost to build new housing so housing prices will necessarily go up even with maximum build rates.
Specifically, the cost of land is what causes the cost to build to be so high. Owning unproductive land is cheap, and incentivizes simply holding onto it until it appreciates sufficiently.
Well the cost of land worsens housing prices, but even assuming the land is of negligible value the cost of construction itself will make new houses quite pricey compared to older homes in non-bubbly markets.
