> We have a nationwide shortage of housing.

First, you must understand that the population of San Francisco is growing, but slowly. Over the last decade San Francisco grew by just under 10%, which sounds like a lot, but it really isn't when looking at a larger data set compared to many other metropolitan areas. San Francisco is now the 17th largest city in the US, which I believe is unchanged from a decade ago. Looking at the data a huge number of cities are growing dramatically faster than San Francisco.

The fastest growing big city in the US is Seattle, which grew over 27% the last decade. That is a lot of growth, but Austin, Fort Worth, and Denver grew at nearly the same rates (26%, 26%, and 24% respectively) and the first two were 50% larger, which is a phenomenal amount of growth in raw numbers. This year Austin bumped San Jose to become the 10th largest city in the US and last year Fort Worth became the 12th largest city. 10 years ago Fort Worth was the 18th largest city in the US. In the next 10 years Fort Worth will also likely surpass San Jose and become the 11th largest city in the US, though its only the 5th largest city in Texas.

Why is it then that housing supply is a major issue in San Francisco, but not in these other cities that are growing so much faster? It cannot be due to geographic constraint, because Seattle and Dallas are geographically restricted as well, Seattle due to ocean and mountains and Dallas due to encapsulation by suburbs.

Secondly, when this conversation comes up people in the bay area tend to be unable to differentiate housing from houses. More specifically from any place to live versus owned single family real estate. This is likely due to restrictions on size and affordability not present in many other locations. There is a substantial difference with regards to equity, taxation, value, availability, and inflation.

Third, the actual data suggests absolutely no relationship between housing inventory and growth. Most people want to quibble about some high school economics class they once took with regard to supply/demand without looking at the data. The supply/demand relationship typical of retail does not apply to fixed assets. https://en.wikipedia.org/wiki/Fixed_asset

In high growth markets the speed of population growth is a direct correlation to the availability of inventory. This means that the more housing that exists for purchase the more the population grows to accommodate. When housing inventory shrinks, often because they can only build so many houses at a given speed, higher density housing units are introduced in place of single family homes, thus further accelerating the rate of growth. This is not observed in San Francisco because San Francisco is not growing that fast and has constraints on home ownership not present in many other locations.

Even more unexpected is that house prices, as in actual houses that people own, is only loosely associated with demand. In my area houses have increased in value about 34% over the past year and continues to climb, though very slowly now. That price growth was due to unassociated economic material constraints that have since recovered and now the supply of new single family homes are again exploding and new apartment complexes are popping almost as fast. Access to existing inventory was not interrupted and growth of new units did not dramatically slow during this price volatility, yet prices sky rocketed and demand remained constant.

https://worldpopulationreview.com/us-cities