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Venture capital spurs high rents. High rents absorb venture capital. The only way out of San Francisco’s vicious housing cycle is through better zoning: building as much housing as it takes to absorb the demand. But the soaring rents and the investment rush actually conspire against building more supply.

Homeowners who have turned venture capital into enormous property wealth don’t need any more housing. Many people who love San Francisco for its character (not its proximity to Silicon Valley) don’t want to build more housing, either. NIMBYists would rather try to destroy the demand (however that works), so they work to enact things like housing moratoriums.

That’s San Francisco in a nutshell, but it’s a profile built on stories and anecdotes. A new study attempts to back it up using housing data. Zumper, a (venture-backed) apartment-rental startup, deployed housing-cost data in an effort to measure the crisis. According to the report, fully one-third of the average San Francisco rent paid in 2014 can be attributed to venture capital.

But there are two major problems with this analysis.

“Zumper has found that for every $1 billion in venture capital injected into a local economy, 1-bedroom rents will increase $69 per month, and 2-bedroom rents will increase $99 per month,” the report concludes. In America’s tech hubs—namely San Jose, Boston, New York, Los Angeles, Seattle, and above all, San Francisco—venture capital is reportedly driving rents toward unprecedented extremes, it would seem. And since rents are rising, and tech money is out there, why wouldn’t that be the case?

Yet as Kim-Mai Cutler notes at TechCrunch, the study does not account for the glorious range of zoning regulations across American cities. This oversight means that developers across every city are ostensibly responding to the infusion of venture investment in the same way. In this universe, Houston developers would react to tech cash the same way San Francisco does, despite the fact that Houston is an order of magnitude larger than San Francisco in size and population, and San Francisco is a peninsula.

Local NIMBYism in highly productive labor markets is a national worry.

To say nothing of the fact that Houston has almost none of the zoning you see in San Francisco! If land-use regulations were not a concern, then rents would only rise as a result of supply being completely exhausted. That’s not the case anywhere. Supply is capped at artificially low levels for cultural, political, and financial reasons—for every city in this analysis. (Even Houston.)

“It was tough to isolate an apples-to-apples comparison for zoning regulations, so we ended up not including it,” a Zumper flack told Cutler, giving away the ball game.

Fortunately, this is not the only study to consider the way that Silicon Valley is distorting housing conditions in the Bay Area (and vice-versa). In June, Chang-Tai Hsieh and Enrico Moretti released a paper arguing that NIMBYism in New York, San Francisco, and San Jose—those three cities alone—amounts to a drag on national gross-domestic product of nearly 10 percent.

“Close to Facebook, Google, VMWare, LinkedIn, Tesla. . . . Bunk bed will be provided.” Craigslist

Local NIMBYism in highly productive labor markets is a national worry. It’s bad for the economy for so much capital to be invested in accommodating soaring rents for workers. Property owners win, workers lose, non-workers can’t even get into the race, and renters are treated to displacement and systemic abuses. There are solutions to this crisis: upzoning dramatically, taxing property wealth appropriately, and subsidizing housing costs for a larger share of low-income residents.

But identifying the right problem has to happen first. The infusion of tech billions, left unchecked, will not destroy cities. It’s the check that’s the problem: restrictive zoning policies that keep cities from building to meet their potential.

Top photo: lsmagilov / Shutterstock.com