I find it kind of mind-boggling to read an article like this and not mention why cities are so expensive. Is it because construction is expensive? No, it is because restrictive zoning does not permit an increase in supply, meaning nothing can compensate for the increased demand and prices go through the roof.
You can be in favor of restrictive zoning and still recognize that zoning policies are responsible for turning an increase in demand into a dramatic increase in price.
In the past cities were also highly desirable places for elites to live (think 5th avenue in the 1880's). But at that time the poor could also live there because construction was permitted. I don't advocate the massive slum-dwelling of that era, but I think it's important to recognize that it would be illegal to build Manhattan as it currently is anywhere in the United States now, or even in Brooklyn, despite intense demand for such density in areas like Silicon Valley. Essentially, the elite have made it illegal in most cases to construct their own preferred type of housing.
Triumph of the City - Edward Glaeser (on how cities are better than suburbs for their inhabitants, how cities foster innovation, how slums are not as terrible a thing as they seem, etc.)
The High Cost of Free Parking - Don Shoup (on how free parking (and free roads) distorts the market, causing an excess of driving and distorts the construction of cities. It also goes into other market distortions such as mandatory garage spaces, which end up as car subsidies, which ruin the layout of cities in the long run.)
I feel the same way and it drives me nuts. When I bring this up many people flatout disagree: they either say that the new buildings will be just as expensive, or (in the bay area) complain about earthquakes. It's a very pressing issue really exacerbating the effects of income inequality, and the saddest part is how self-imposed it is.
This whole thing ordeal really makes me wish for mandatory economics courses: this is one of the simplest, clearest cases of supply and demand, but it's so rarely perceived as such.
Having lived in SF and worked on the peninsula for 5 years, I can say that a lot of the earthquake proofing stuff is bunk.
Even if one agreed that limiting building heights to 10 stories significantly reduced quake-related casualties, there are plenty of places around San Francisco that should have higher-density buildings -- I'm looking at you, Mountain View.
Restrictive zoning is too broadly used here for me to agree. Does it apply to some situations? Absolutely. Does it apply to all? Of course not. Cities place such zoning regulations, not "the elite". Do the elite cause cities to do so? Absolutely, in some cases but certainly not in all (or even most?). Some cities prefer "more green space" than others, for example, and thus restrictive zoning is put in place to prevent over-development. You think "too few apartments" is bad? Try "We let developers overbuild during the last boom and, now that we're in a bust, there is 5,000,000 sq ft of abandoned buildings in a 1 mile radius". Many cities/towns work hard to restrict the areas of development so that the city "identity" is not eroded.
You can be in favor of restrictive zoning and still recognize that zoning policies are responsible for turning an increase in demand into a dramatic increase in price.
In the past cities were also highly desirable places for elites to live (think 5th avenue in the 1880's). But at that time the poor could also live there because construction was permitted. I don't advocate the massive slum-dwelling of that era, but I think it's important to recognize that it would be illegal to build Manhattan as it currently is anywhere in the United States now, or even in Brooklyn, despite intense demand for such density in areas like Silicon Valley. Essentially, the elite have made it illegal in most cases to construct their own preferred type of housing.