The nature of the subject matter covered here leads to relatively few commenters (even though readership is still over 200 visits/day), despite the extraordinary importance of subjects covered. Frankly, without commenter Geoman's quality + quantity of comments over the last decade plus, we would not be above minimum comments level for a viable commenter community.
I haven't thought about giving recognition for the best comment of a particular year in the past, but a comment several months ago has stood out as exceptional. At 1026 words, it is article-length in its own right. It is from commenter HB :
Kartik, Geoman,
Yes, status symbols and prop 13 may be contributing but the main reason for SV housing bubble inflation is regulatory.
In my view, the pivotal legislative change that made this possible happened subtly some decades ago (1970s) when California mandated the creation of regional planning powers (region-wide urban boundaries and such) enabling housing supply restrictions under the appealing name of "smart-growth", a marketing name for a host of housing supply restrictions which in reality is a pretty dumb suicidal move that voter-lemmings seem to easily embrace the world over. So now due to the regional planning committee powers the residents of Silicon Valley cannot only block new development in their own cities but, more importantly, can block the creation of even new cities in their entire commutable region, plus also block housing supply increases in neighboring cities. Were it not for that, some cities would see opportunity and break ranks and increase housing supply, or entire new cities would spring up nearby to be quickly populated by new residents from the rest of the country/world and professionals escaping SV housing prices. Businesses would then follow the migrating and expanding talent. But all this can -- and is-- blocked by the expanded California regional housing powers which have been populated by an enviro-NIMBY coalition, with many voters openly approving and even more voters silently consenting, as in the case of busy immigrants.
For example, one of the potent repressive housing supply restriction tools of "smart growth" is the ability of any minority to block developments that would benefit large majorities.
A small five person minority group of "native" established stay at home housewives, who lucked out and bought their SV houses in the seventies, who realize they got a good deal and want to freeze their good luck in time, who spend their ample idle time picking invasive weeds on some SV hillside, can go to city hall and block an entire housing project for two hundred or more immigrants or out of Valley Americans with thousands of times the productive modern world capacity compared to the five housewives. And, as Kartik points out, the two hundred immigrants and their families are too humble in their new environment and primarily too busy to go down to a city hall where the voice of the housing project blocker (by legislative design) has many times the power of the housing project promoter in the fist place. Also the five housewives have an immediate (short sighted in this case indeed) stake in blocking the project, while the immigrants' increased housing supply benefit (from the specific project) is much more vague and diluted -- yet just as real.
A typical similar aspect of these dynamics can be seen at the beginning of the development cycle. Farmer Bob, farmer Jay, farmer Ben, and farmer Don each own one hundred acre farms. Farmer Ben subdivides his land and sells it for housing, initially affordable. Five years later two hundred families move in the area. Five years later the residents create a "Save the Bob Jay and Don hillside coalition" and under California's *mandated* regional planning can -- and will -- block development on Bob's Jay's and Don's land who, after all, have become a small powerless minority against the holly enviro-nimby alliance of new residents. Suicidal policy aside, one should also not overlook the fact that Bob's, Jay's and Don's land is de-facto in large part confiscated by a majority who does not want the three remaining farmers to do to their land what was done to build the very housing where the current newly established majority just started living in. Such theft is (or perhaps should according to some views) be protected from democracy by the constitution, but apparently, in practice it is not. Indeed, the main function of a constitution in a democracy is a rather broad contract to not screw each other when we get the majoritarian opportunity. At least that is in the American constitution. Without it the feeling that "some day, in some way, they will come for you too" breaks down societal trust, and the country becomes the basket case nation that is the rule in most of the world where developed nations are the exception -- and developed nations that at least match average world growth (i.e. they are not in decline) are an even rarer exception. Also, not coincidentally, our newly formed one hundred California households and the regional powers granted to them by the legislature can block an even bigger majority of, say, three hundred new very competent households from moving into their area from the Midwest or the rest of the world, thereby blocking the even bigger potential newcomer majority before they even get the chance to vote.
So Silicon Valley residents will continue their agonizing commutes from their cubicles to their crummy houses, during which long commutes they will dream of making another half million dollars at their cubicle (that is one million before taxes and deductions) so they can add another bedroom and bath to their old house. Now, mind you, these are supposed to be some of the select smartest people in the nation/world!
As is often typical, the roots of a region's decline are inconspicuously established in the success phase of the cycle, when they are hardly noticed. But predicting when exactly the decline starts is virtually impossible for everybody, except perhaps a few very enlightened and also perhaps lucky very intelligent people. Until then the fear of missing out keeps pushing most of us towards inflating the bubble and the eventual destruction of the very area we like.
Kartik mentions in his opening statement how odd it is that the technology industry has so little awareness of this. Indeed the general behavior of the electorate on this issue is completely irrational -- and suicidal. Talking about shooting yourself in the wallet.
Geoman's comment about his parents illustrates in many ways the case of those offspring that are priced out of the SV area -- and its potential opportunity -- which over a lifetime might have been many times over the parents' house cash out, especially in households with more than one child. This blocked migration, in turn, imparts an even larger missed opportunity on the rest of the world who would greatly benefit from the foregone increased innovation, and thus an even faster ATOM.
That is quite the epic comment, and you should click on the link and read the whole thread above and below it as well for context. This sort of legislatively-derived resource misallocation, combined with low technological innovation in the construction and communication sectors, has caused this problematic state of affairs and delaying the puncturing of this bubble that has gone on longer than many of us expected. One could say that there are at least four technologies working against this sort of resource misallocation, but at the same time, the centralizing forces of being an economic hub also work in favor of ever-greater centralization.