This is as close as you’re ever likely to see to an answer to life, the universe and everything.

It’s a chart that almost perfectly predicts the San Francisco housing market using only three variables:

1. The number of jobs located in San Francisco County.
2. The number of places in San Francisco County for people to live.
3. The total amount of money that is paid to everyone who works jobs in San Francisco County.

It’s all summarized in the formula at the top of the chart. If you gave me values for (1), (2) and (3) above, then I could predict to you with startling accuracy how much the median two-bedroom apartment in San Francisco will cost to rent in that situation.

It follows that if we could change (1), (2) or (3), then we could maybe change what it costs to rent a place in San Francisco. Here’s how Fischer summarizes a scenario in which, his formula suggests, apartment prices would drop 67 percent:

It would take a 53% increase in the housing supply (200,000 new units), or a 44% drop in CPI-adjusted salaries, or a 51% drop in employment, to cut prices by two thirds.

OK, so this would mean the way to make San Francisco as affordable as (say) Portland would be to either cut everybody’s salary in half, or fire half of them, or allow the city’s population to rapidly grow about 50 percent, to about 1.2 million, while the number of housing units increased even faster.

Shit.

But wait, you might be saying. Prague has about 1.2 million residents. Milan has about 1.2 million residents. Those are nice cities. It would actually be fine if San Francisco turned into Prague, especially if the prices went down by two-thirds.

That’s probably true. The problem is that rapidly turning into Prague would require thousands of developers to go bankrupt, because (remember?) rents would drop by 67 percent so all those developers would not be able to pay off the loans they took out to build those 200,000 new homes.

Come to think of it, thousands of bankrupt developers may not sound too bad to you, either. But believe me, it sounds bad to the developers. Which is why there could never be a situation where private developers would add that many new homes at once — they would stop building long before that return to paradise could happen.

okay, so can this model be applied to other cities to predict where to buy for the best return? 

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Instead, I’m going to close with a lesson for cities that are adding jobs and/or wealth faster than homes but are not yet San Francisco: Portland, Seattle, Austin, Denver, Minneapolis. Maybe Oakland and Los Angeles and San Diego and DC still, too.

For the love of god, keep adding homes. Keep adding homes so things don’t get any worse and you’re not trapped in a lose-lose-lose shitstorm like San Francisco.

And while you’re doing that…

Rent control? This particular renter is nervous but sure, maybe try it out as long as you are working hard to ensure that it’s not going to get in the way of continuing to add homes.

Endless sprawl? That’ll keep the houses cheap (just ask Atlanta, Dallas and Phoenix) but it fucks up the planet and it seems to make us fatter and lonelier, plus cars are expensive. So maybe try doing townhouses if you can. Townhouses are great. Cliff and Claire Huxtable lived in a townhouse. Duplexes are nice too. A lot of cities have actually made it illegal to build either of these. That is nuts.

Taxes to create public or other subsidized housing? The poorest people will never be able to afford market-rate housing, and people in cheap but livable little homes tend to get into much less trouble than people in tents. So yeah, probably it’s a good idea to use taxes to build cheap but livable little homes for poor people, while also looking for other ways to help people get out of poverty.

Mass layoffs? Well, apparently those would reduce rents but somehow I don’t think they’d get the mayor re-elected.

But whatever you do, definitely buy Eric Fischer a drink if you see him. He earned it.

I like the call to other cities to build more housing. 

He never does say where is good to buy.