The San Francisco Bay Area is an interesting place. Housing prices are through the roof (hehe) and increasing by an average of 5-20% per year for the past 20 years. This is largely driven by an increase in land values, as the SF Bay Area has very high incomes and rapid hiring, but geographically constrained area for settlement, leading to a supply and demand issue that has been driving up home prices to astronomical levels.
Interestingly, nearly all homes in the Bay Area are one-story, as opposed to the two-story homes so common elsewhere. I'm trying to square this with the relevant economic factors and I'm coming up just a bit short. Why would a land-dominant housing market lead to below-average construction of larger houses, when the relative cost of building a second floor is lower than it would be in a market where land is cheaper?