I'm always interested to hear how there's too little supply of housing in California, while no one seems to address the problem of demand.
There are 8.5 million people in California who were not born in the United States. These are tech workers from India, Mexican and Guatemalan agricultural workers, immigrants from every corner of the globe.
What they have in common is that they occupy housing space. This puts upward pressure on prices, given that there is a limited supply.
Why do we speak only of supply, and never demand?
Because no one knows what to do about the demand problem.
California has gone from about 16 million residents in 1960 to a projected 45 million in 2020.
I don't think the price of housing in California has much to do with Prop 13, tech bros, rent control, the cost of building houses, etc.
It has to do with population increase. But we can't talk about that.
299
@James - There has been enough food production to feed everyone on the planet until now, yet a certain number of people have been starving all along for human-caused reasons, such as war, land grabs by monied interests and "economic sanctions." [Of course, we're starting to see food production hampered by climate change, which will be a supply problem and make starvation much worse.] My point is that, until now, starvation has been a problem of distribution, not of "not enough food." The same holds true for housing. There is enough housing, and enough room for housing, across America, just not in the coastal cities.
The answer is rural investment and the creation of new economic centers.
73
@GP so the population and most of these 8.5 million immigrants in the state are coming to the state to work in the tech industry. But you don't see why people want to talk about tech bros and the industry. Yet you want to cite the components of the tech industry work force?
Ummmmmmmm. . .
36
@GP Jobs need to move to places where there is more space and a much cheaper cost of living.
Nevada and Utah in the West. Places like Pittsburgh and Albany in the East. It would be good for all involved.
50
NIMBY, NIMTO, BANANA, and Prop13. Whatever happened to telecommuting and Skype? If you can have call centers in Bangalore, you can have data centers in Dubuque.
15
Democrats control every important office in the state. They have practically obliterated the Republican Party here. If housing prices were the lowest in the country I can guarantee they would claim credit for it. You can't have it both ways. You can't avoid the blame when things go bad. That's the way it works for both parties. California is a good example of what happens when you have a one-party state. There is ZERO reasons a 1 bedroom apartment in the worst area of Stockton should be renting for $1200 a month. Or the 1-2 bedroom, cockroach-infested apartments in Manteca renting for $1800 - $2200 a month. You rent a 2 bedroom apartment in Livermore /Pleasanton you are looking at paying $2400 a month. On top of the outrageous costs, one must include the ridiculous requirements of earning 3x the rent, first, last and deposit of 1 month all due before you move in... even with an excellent 650+ credit score. How do average people afford this? They can't. That's why The working class is getting crushed by cynical politicians who have done nothing to address this issue. That's why we have over129,000 experiencing homelessness on any given day. The cost of housing is so high, they can work full time (and yes, many do) and still not afford a roof over their heads. Our minimum wage is now I believe 12.50 and heading to 15, but nowhere near enough to afford the high cost of living. I'm over Democrats in this state trying to deflect blame. They own this. Do something!
19
A 1960 declaration from then [SF] planning director James R. McCarthy where he was one of the first to warn against “Manhattanization.” Initially this phrase pertained to maintining views of the Bay but it soon became a general opprobrium against tall buildings and eventually development in general.
In 1961 a plan for Bay Area Rapid Transit (BART) was sent to the boards of supervisors of each of five counties.
In April1962 San Mateo County (south of SF and north of the Silicon Valley) opted out. Marin County (the northern end of the Golden Gate Bridge) followed soon thereafter.
These developments are a substantial segment of the roots of the Bay Area's housing & transportation problems.
7
We are where we are today in California because the Democrats have sold their soul to the activist left and their progressive co-dependents. State, county, & municipal legislators have made it impossible for new housing to be built. This is a Democratically controlled state from top to bottom. Affordable housing has always been one of the cornerstones of our party. This state should be a showcase of how well we can execute this policy. Instead, it's yet another example of our complete hypocrisy. It's symptomatic of a much bigger problem. The growing divide between some Democrats who want to practice what they preach & fanatical progressives who want to strangle everything. Environmentalists will go to the barricades to stop any housing projects from being built here. Mind you we are talking about affordable housing for working-class families. Thanks to their efforts the gateway to middle-class security, has been pushed way beyond their reach. The ease with which environmentalists can stop housing developments is a direct result of the numerous local & state laws that favor environmental concerns over affordable homes. The result: millions of hard-working people are without access to high-quality low-cost housing. The question needs to be asked? Do we need people in the party who are subverting core American values? If we can't fix affordable housing here then we are a joke. We all have a stake in solving this crisis. But our leaders here don't have the will to fix this.
9
NIMBYism is the highly coveted diamond standard in California. But there's no question The process by which a piece of land is approved for new construction can be incredibly cumbersome, time-consuming and risky. The typical approval time for projects in San Francisco is over a year. That doesn’t include when land needs to be “rezoned” for residential development, which can take even longer. A housing project often must go through multiple government agencies, including the planning department, health department, fire department, building department and perhaps most importantly, a city council. The California Environmental Quality Act, or CEQA, requires that local agencies consider the environmental impact of a new housing development before approving it. That sounds like a worthy goal, but the law has often been abused to prevent new developments -- even environmentally friendly ones with high-density housing and bike lanes. According to the nonpartisan Legislative Analyst’s Office, CEQA appeals delay a project by an average of two and a half years. This is unacceptable. By any rational standard, California has a severe housing crisis. You have teachers and other middle-class people sleeping in their cars. Emergency action is needed. But none will be forthcoming. Too many Democratic leaders have lucrative sweetheart deals with local developers who are the real beneficiaries of this crisis. At every level this is outrageous and I'm shocked we tolerate this.
9
It is the tech industry that has concentrated so many people in a handful of tech centers. We the people need to start managing that dynamic and working with tech industries to form more tech centers in cities with abundant capacity.
10
The companies won’t be able to attract workers since nobody will move out there with the crazy expensive housing.
4
I believe that federal oversight is required to force cities to provide adequate and affordable housing to serve its employment needs.
People look the other way in California because they're trying to build a utopia, where the laborors just appear, do the work and then get out of sight (often sleeping in their cars or under bridges). They're culture is too insular to be self regulating on housing.
It has to be federal. We need specifically defined metrics that cities must meet as a minimum standard for affordable housing. If they don't meet it, there has to be a steep penalty. It has to be steep enough to allow the federal government to build the necessary housing if they won't do it.
2
The tide of exploding population should have been stemmed by measures like the one child policy effectively implemented by China. Besides the exploding population overall there is also a problem of population density. The concentration of population centers such as the mega cities has resulted in the housing crisis and major problem of homelessness. Where do we go from here? No easy answers with the current immigration policies passed by congress. In future only orderly and limited legal immigration may stem the tide of housing crisis due to over population. As for the rest of the world, Canada, Australia and Russia with the least population density in the world could accommodate migrants and refugees much more than any other countries. Also the 5 most populated countries could build new cities and reduce the population densities in their exploding cities. The population of Mumbai (Bombay), India overflowed into a planned twin city and it is time for it to spread into another new triplet city.
With many Americans working from home, one no longer has to live in the megacities or high population centers. A person I know in my home town can work from home and his supervisor works from a different city and as more and more this happens hopefully more and more people will leave expensive places to more affordable places relieving the housing crisis.
11
Another bounce from the YIMBY "echo chamber." Read the research -- Upzoning single-family neighborhoods won't reduce housing costs for those who are truly "house-cost burdened."
In fact, in many circumstances it will lead to increased housing costs and displacement of residents in neighborhoods of color and poor neighborhoods.
You want to reduce the real housing crisis? Built more subsidized housing. Need the money for that? Tax the corporations responsible, i.e., the tech companies.
10
Amazon could have chosen a city that was affordable and needed an infusion of tech jobs--and invested money to educate this and the next generation of employees: an equitable societal contribution for all the taxes it hasn't been paying. Taxes that go to maintaining the roads that Amazon uses to make more money.
9
I wonder if the author has ever visited let alone lived in Silicon Valley. Big tech is to blame for the housing crisis. Apple, Google, Facebook etc have all expanded their headquarters there instead of using technology to develop a distributed workforce in areas where housing is more affordable. Yes prop 13 is a problem, but it doesn't take a rocket scientist to figure out basic math which is a huge influx in population due to increasing jobs with a fixed amount of land will lead to unaffordable housing.
25
"And it will take more than Apple and Facebook’s billions to fix it." Okay, but let's start with them. Seatbelts don't prevent all deaths in car accidents, but that doesn't mean they should be removed.
13
I remember a house bought for $32K in the early 1970s was sold for $86K in the mid-1980s. The owners bought a slightly bigger house on a half-acre lot for $250K. That was all in suburban Chicago.
For some areas, it was more than tax and land policies; there was, also, “White flight.”
1
I would add that Federal, State, and/or Local Governments demolished 'low income' housing past its prime and did not come close to at least a one-for-one replacement.
4
Quantitative easing by central banks, keeping interest rates unconscionably low for over a decade, has moved price appreciation forward by 50 years while wages stagnated, all giving rise to unprecedented wealth inequality fueling political extremism at both ends of the spectrum. Technology has nothing to do with it nor can technology do anything about it.
10
Hey, NYTimes, you can’t complain about both global warming with increased CO2 production and also “urban growth boundaries” and attempts to limit regional population growth. The truth is that no one has a right to live anywhere - you need a plan to house and feed yourself and, ideally have enough left over to support your local community. Any population of housed residents can only support a limited number of “residents” who are unable to meet those basic tenets of living.
9
More density in San Francisco.? That's Ms O'mara's answer? San Francisco is already more dense than any city outside NYC, and there is currently a huge construction boom in SF..and prices are still rising.
Traffic in the Bay Area is now worse than L.A...But Ms. O'Mara says to pack more in..more & more.
... You can do what you like in SF, but (without an earthquake) housing prices are not coming down ...
..Perhaps Ms. O'Mara thinks we should turn our cities into a Tokyo or Sao Paulo..covered in mega skyscrapers & crowded with faceless people... But that is not the answer...
..--- The only real answer is to limit the population. There is a sustainable limit to what any space can reasonably hold of human population. Blindly trying to pack in more people is leading to disaster..
..--Its time we face the fact that the world is becoming over-populated beyond what is sustainable, and the consequences are much more severe than merely over-priced houses in San Francisco..
25
The big Q is how many people can Bay Area accommodate - 20millions, 50 millions, 100millions or several billions. Everyone wants to live in the Bay Area, but the space is limited. How and who should determine who should and who should not be living in the Bay Area? Should the state run the lottery every year? Should the market prices resolve this? There will be winners and losers no matter what you do. A possible solution is to close/move UC Berkeley and Stanford as well as put a hard cap on the number of companies in San Jose - Menlo Park - SF.
2
Fascinating that a history professor wouldn’t mention anything about a severe recession that had a significant effect upon housing in California and elsewhere. Dr. O’Mara also neglected to inform her readers that California is not only known for the recent spate of wildfires, but for the very severe fault lines that play a very significant role on the ability to build, as well as the cost of building in earthquake country...none of which had anything to do with tech. But here’s what does;
*AirB&B, which has co-opted a fair number of available housing for short term rentals, helping create a rental housing shortage.
* All of tech’s workers aren’t young and highly educated. Like most large corporations, there is minimal work to do as well. Those paid by these large tech companies, often have 2 hour commutes to work each way, every day. Why? There’s an AFFORDABLE housing shortage, enhanced by low pay and these same companies who want to fix the housing problem, not making provision for their own lower paid employees.
14
All of what is written here is correct, yet it is largely beside-the-point. I have lived in the bay area for 35 years. It is already far too crowded. My 15 mile commute had risen from 35 minutes to 70 minutes in the span of a decade. Our BART train system is so overloaded that they took out 1/4 of the seats and put in NYC style hanging straps, along with hard plastic seats! I am retired now, so I limit my time on the roads to 10 am to perhaps 2:30 in the afternoon, beyond that it is gridlock. Same for using BART. Not that I can park at the BART station, as all spaces are full by 7 AM.
Thank God for Amazon, keeps me from having to drive to brick and mortar stores, add to the congestion.
We just cannot tolerate any more people and maintain any semblance of the lifestyle we moved to Northern California to obtain. The alternative is to evolve into New Jersey, from which I fled so many years ago (there are nice parts of New Jersey, but we couldn't possibly afford to live in them). Or worse yet, Los Angeles.
18
The tech bros, the developers and the city council are absolutely ruining Seattle. Seattle used to be a city of neighborhoods, of affordable single-family homes in walkable neighborhoods with parks and trees.
Now, in an effort to squeeze every tax dollar out of every square inch of real estate, the city allows developers to tear down the smaller houses and bungalows and replace them with yardless McMansions or with high-density view-destroying condominiums, or apodments where tech bros live in overpriced rat-sized units.
This is a tragedy. Seattle has one of the most magnificent natural settings of any city and it is all being destroyed in the name of profit.
20
Here in Berkeley there are about 1000 people unhoused facing a winter outdoors. There are also about 1000 units of housing diverted to tourists through Airbnb. The tech bros are responsible.
10
@jw The City's failure to regulate short-term rentals is responsible.
4
If houses keep going up in price, like here in the Bay Area, who is the next fool that’s going to pay $1.5M for a dumpy single family home? Most people I know don’t make six figures and even if they did why pay that just to put a roof over your head. The people who are going to make out like bandits are the people who bought their homes in the 70’s and 80’s. They’re sitting on gold mines.
5
@Wanglu60 -- and, more power to them. It will help finance their retirement years.
1
@ Dave in
San Francisco For heaven's sake, don't ask for reciprocal tax rates in Calif. Retirees & other expats are still flooding into Oregon, driving up already high property values, buying & flipping rental houses with many trying to get a state sales tax instituted (ostensibly to lower other taxes-huh?) & creating relative density anew here.
You were aware of the situation when you moved into the townhouse. Live with it. Vulture culture lives.
4
US city development is organized around financial profit, not human needs and desires. That's why most new development is hideous and destroys cities (which is why locals opposed it). That's why most people crowd into the remaining areas of organically grown (read: old) city left and prices explode there, pushing out anyone but the tech bros, making these areas socially blighted, i.e. so boring that even the tech bros can't stand it.
18
Remarkable that whether it be housing or climate change, never a word about population growth.
When I was but a child i nthe 60's, no matter how poor one could move to California and find a beautiful spot to live at low rent if one spent enough time.
Now of course every space is ferreted out, as every animal and plant is tracked down and pillaged.
but no one will talk about population; its impact on immigration and the huge numbers. So Margaret spin these articles and never talk about ponzi scheme economics and the impact of population --
21
Affordable housing, by and large, is built using federal low income housing tax credits; these are distributed by states and regulated like crazy. It is very, very difficult to build affordable housing and not very profitable, it is also extremely unpopular with those who feel they don’t need it; why would anyone who didn’t have to build it do so? This is why tech giants are being “forced” to do this because no one else can/will and if they don’t build it, no modestly paid humans will be around to staff those coffee bars and gyms and retail outlets and schools that their very well paid high level employees desire. To say that tech is not responsible for a housing crunch in a tech heavy area is ridiculous as it is true that finance incomes have had a major impact on affordability here in New York.
8
Even if SF rezoned, built up, and developed its few remaining open spaces, it simply wouldn’t have the infrastructure to support more population density. The streets are already clogged and broken. Mass transit is a joke, there just isn’t any. Crime is out of control. As is homelessness and street behavior. Water is increasingly scarce, and the bay increasingly polluted. The school system is absurd and failing. The city is straining to handle the population it already has. Unless bigger infrastructure issues are addressed first, simply adding more people will just make matters worse, not better.
To imply that tach doesn’t play a significant role in all this is inaccurate. The tech boom brought in a massive population boom to a fixed geographic area and that displaced a lot of ordinary people.
By yes, please do by all means fix the broken prop 13. It is indeed a disaster.
13
Even if SF rezoned, built up, and developed its few remaining open spaces, it simply wouldn’t have the infrastructure to support more population density. The streets are already clogged and broken. Mass transit is a joke, there just isn’t any. Crime is out of control. As is homelessness and street behavior. Water is increasingly scarce, and the bay increasingly polluted. The school system is absurd and failing. The city is straining to handle the population it already has. Unless bigger infrastructure issues are addressed first, simply adding more people will just make matters worse, not better.
To imply that tach doesn’t play a significant role in all this is inaccurate. The tech boom brought in a massive population boom to a fixed geographic area and that displaced a lot of ordinary people.
By yes, please do by all means fix the broken prop 13. It is indeed a disaster.
4
Okay, fine.
Tech bros aren't the root cause of the housing crisis, but they are making it worse--and their efforts to "fix" it are a PR stunt.
How about that?
13
While I agree with everything you say. You ommited one crucial factor. We let the construction industry fail in the great recession. We went eight years without building new houses. the construction workers had to find a new way to make a living. A large number of cunstruction companies that existed in 2007 are gone. There is a huge shortage of skilled craftsmen.
4
Having lived in both LA and NYC, the author's emphasis on Prop. 13 seems ill-considered, as the availability of affordable housing in the NYC metro area is at least as dire as LA and SF despite New York's high property taxes. In other words, if they ended Prop. 13 in CA and instituted East Coast style property taxes it would probably solve nothing.
16
@William Johnson
It's not Prop 13. That's just an easy scapegoat.
5
@William Johnson Building to Manhattan densities hasn't exactly made Manhattan affordable either.
9
I was last in California desert 1979.
I thought it too crowded then. Once I tried to drive to the sea but the dark cloud of pollution turned me back at Riverside.
I’ll stay here.
Have fun!
5
Affordable housing is rising problem worldwide. It's unfortunate that so much city and state income comes from taxes on real estate. The idea that anyone can own land is outdated. So if the idea that people would be allowed to get rich squeezing others who need a roof over their heads.
3
Some interesting discussion here. It does make clear:
Be wary of simple solutions to complex problems.
I remember Prop 13 passed when I was in HS. Several people commented it would have this impact. Howard Jarvis was financed by commercial real estate interests.
Governments needs to stop handing out subsidies and restricted economic licenses. Taxi medallions is another case in point. So are peanut quotas. They always start with good intentions , or vote getting attraction. They end up getting distorted into tools favoring select, invariably wealthier groups.
Rent control in NYC is the same thing.
It is not hard , the real solution is a level playing field and build more housing. Or stop people from moving there.
6
Very frustrating all around. I have lived in Seattle since the late 70's and over the past decade the changes have been massive in culture, stress, prices and more. In the early 70's the wise people (not!), here voted down a mass transit program that would have been primarily federal funded. I understand that the money went to build MARTA in Atlanta. Now we have light rail confined to 4 cars max due to platform size and will likely be a rounding error in demand. We at least don't have the absurd property tax system that affords undue privilege to longevity. All save the very poor pay the same proportion of taxes based upon assessed value. And the taxes have gone up a lot over recent years due to various initiatives and value increase.
I am sure hoping things calm down as the stress on daily life here is tangible. I don't understand why in an information economy where data travels free, that we don't see much more exporting of tech jobs to smart places elsewhere in the country and world, where salaries are lower, cost of living lower, and people study harder.
By the way, we really need to put an end to illegal immigration. It is demoralizing for those who are told that laws matter, and those who worked hard to come legally. How many millions in CA are here illegally?
15
@Sad reality The fruits and vegetables won't pick themselves. If you replaced all the undocumented farmworkers with Americans, that wouldn't ease the housing crisis. It would make it even worse, because Americans would not be willing to live in the conditions that the undocumented workers do.
5
I started working in Silicon Valley in 1983, and there was already plenty of stress over housing. I wondered then why the companies didn't band together to do something about it.
Then there is the problem of what to do. There are only three things on the menu: stack them higher, spread them out, or price them out. That's it. Anything that is done will be some combination of those three elements.
Stack them higher: Who wants more high rises and more traffic?
Spread them out: Which open spaces should we cover with houses and apartments. Oh, yes, and you get more traffic too.
Price them out: That's the default. That's why it's so expensive.
Combine an area that's desirable with good jobs, and you get too many people. Prices rise until they can't afford to come here any more. Throw in foreign and domestic investors seeking a decent return, and presto! Bay area housing prices go ballistic.
17
So, the situation we find ourselves in is overdetermined by many factors--low taxes, zoning and density regulations, wealth disparities, and population growth--no surprise there for anyone who understands complexity and nuance. And, also, no easy resolution--despite some comments here.
Nonetheless, this paragraph stood out to me:
"While tech is not responsible for this state of affairs, it has helped maintain it. Research has indicated that tax cuts have little effect on overall tech investment, yet industry leaders have consistently lobbied for them. They seek low-tax environments and have taken full advantage of deductions and incentives to effectively zero out their federal tax bills. Their billion-dollar housing promises are only a fraction of the taxes they might otherwise pay."
How is this different from much of what Trump has done? And how do people think that someone like Warren will get elected? It's easy to cast blame on Trump alone, but self-interest and selfishness seem to be a longstanding condition in late capitalist America. We are all to blame.
6
Housing has become unaffordable for the middle class in many areas. Think about that. It's the middle class who are ending up homeless. (often hidden out of view, in their cars etc.)
This is a growing problem that won't get better until our middle class and working class citizens earn enough to afford - and I mean BUY - housing near work for less than 30% of their income. This is how simple the solution is. We need much higher wages for the middle and below.
5
The simple truth is that more people want to live in these more desirable cities, that have good jobs, restaurants, and entertainment. It's not that complicated.
7
The "fairest" least ugly ways to make more housing in the Bay Area: (1) Use state law to rezone to double the number of families per dwelling (2) Phase out rent control.
Doubling the zoning allowed number of families per lot still allows a "neighborhood" environment, which is socially healthy, and creates a huge number of potential rental units. If those rental units are not subject to rent control, then they will become available for renting, or sale, resulting in net decrease of renting cost.
No question that parking would become difficult and traffic could increase - but that would mean more reason for people to go carless/car-sharing and more passengers for public transport and ride sharing.
3
Do you actually live in the Bay Area or commute on public transit? Traffic is beginning to rival LA’s and public transit is at capacity. The idea that more people can do carless is a delusion.
We do not have room for greater density. Not to mention this is a seismically active region with an inept electric utility.
18
Where is it written that living in California is an entitlement or human right?
32
If we regulated auto manufacturing the way we regulate home building, then GM could only sell Cadillacs, no Chevys.
3
I am thinking that the author has not been to San Francisco recently. The "tech bros" are major contributors to the housing crisis. The starting salary at the tech firms are $120,00 per year and up. A lot of young adults with a lot of loose cash. The real estate brokers in San Francisco are now the wealthiest of the wealthy. Over 50 high rise condos are being built right now. Giant cranes dominate the landscape. Traffic is a disaster in the city as the "tech bros" lover their uber, and rarely walk 3 to 4 blocks. The lines in trendy restaurants are long and comical with all the "selfies" being taken. So yes, the tech bros are the main culprits of contributing to the housing crisis.
20
@Armo Even the techies can't afford San Francisco rents anymore. Our housing prices are being driven by dark (and dirty) money from overseas.
11
@Andy The techies are though. They are bunching up and creating cubicle space to live in. 4 incomes together, the downpayment, with an easy terms lender and voila - a housing crisis
2
If property taxes are indexed to values (as some in the comments propose), there is one problem not a single commenter has mentioned.
What happens when property values go down?
The obvious answer is, taxes don't. But even worse, in boom and bust cycles, sometimes values spiral upwards in unsustainable ways. So someone ends up with less equity and a high carry cost. I know several homeowners in different parts of Long Island, NY where taxes went through the roof during a recent boom, but stayed high despite foreclosures. And it gets worse, as officials there have a vested interest in over valuing properties to keep revenues high.
Finally if your goal is to eventually retire and have low carry costs, how would it be fair if one day Facebook moved in around the corner and your taxes go through the roof? How's that predictable or fair?
Personally I think a high income tax is more fair than funding municipalities via prop tax.
7
If the taxes are based on value of the house, they will go down with lower values. The foreclosures are result of not paying mortgages, not a value of the houses. And although it is unpleasant to pay more taxes when Apple moved in neighbourhood, the consolation price that you can sell your house for much higher price and buy the cheaper house in different areas. It is much more unfair for people in the same area to pay different rate of taxes only because they bought the houses at different time. How is fair for the new buyers not only to pay more for the house but also to pay higher taxes?
2
Instead of relying on 'grants' from corporate giants, how about properly taxing them instead? (let's not forget that Amazon literally paid zero taxes on billions of dollars in profit in 2018).
The United States is increasingly relying on the benevolence of corporations and plutocrats, which is not only unsustainable, but kind of insane.
Where is this leading? How long before Google and Facebook and Amazon create their own villages for their workers (I believe Google and FB already provide some sort of limited campus housing). How long before they launch their own currency? (Actually, don't answer that - Facebook is literally planning to do so). How long before workers start being paid in company scrip again?
The United States is increasingly descending into a dystopian tech-feudalism. We're blindly remaking our society into one in which serfdom makes a return. Insane.
(For any UK readers - this is the world Brexit is going to bring to your country.)
16
For all the hype about tech building the future they operate their own physical plant the same as buggy whip manufacturers—granted buggy whip workers didn't have razor scooters, free food and nap rooms
There are a number of comments on this thread asking the pertinent question, "Why do tech companies require their employees to work on site in the Bay Area?"
These are the same tech companies who gave us Lifesize, Skype, Zoom
Cisco WebEx, GoToMeeting, HighFive
Zoho Cliq and HipChat why not put their own innovation to work and disperse their workforce.
It will drive improvements in online security and increased bandwidth into the hinterland. Security proprietary technologies being the primary reason tech companies require employees to work on their secured campuses.
11
This article hits it on the nail. California needs to abolish the building restrictions limiting the construction of affordable units. Calif. needs to build like Tokyo, Vancuber, no more single family homes in dense areas (Bay Area).
2
@Socialist Are you, a "Socialist", actually advocating a free market in housing? There is a significant danger that entrepreneurs may become billionaires by building large quantities of affordable housing.
3
@Socialist We don't have enough water for Tokyo densities here.
Public transportation, the power grid and everything else would have to be greatly upgraded and could be (but probably won't), but there is no way to get enough water.
7
The best solution for the "housing crisis" is coastal cities/states would be for job-creators to move to other states and take their employees with them. Why should long-time residents of California have to see their communities get destroyed by unnecessary density and ugly tenement buildings?
20
You have nailed it. The cowardly politicians who "kicked the can down the road" for their own expediency are those responsible for this debacle. Even now, they deftly try to shift the blame on the success of those who drive the 3.6% growth of California.
1
As a native of California, I’m afraid it’s finished. I’ll never go back. Mexico is much better.
3
Excessive population growth over the last 40 years is to blame for the housing crisis. We never should have passed the 300 million mark.
19
If young people cared about having dense “walkable” cities, they wouldn’t just build thousands of apartment houses with no full-size grocery stores, pharmacies, schools, roads, trains and buses that arrived every 10 minutes, cleaners, restaurants, etc.
If this sounds like a nightmare to you, welcome to San Mateo, CA.
10
May we stipulate that the housing/real estate market is one of the most complex in our society? Can we stipulate that few, if any, politicians, beyond receiving large campaign contributions from developers, hardly understand this market?
Can we stipulate that the "affordability" crisis is on a parallel track with the fact that this nation has, tacitly and otherwise, allowed millions of "immigrants" (most from the rock-bottom tiers of their societies) into, say, California? Can we stipulate that The New York Times will never acknowledge this?
Can we stipulate that the writer's innocuous phrase, "...'impact fees' drove builders toward more expensive homes" is a gross understatement? Can we stipulate that government's answer to this is...more government intervention? Can we stipulate that this is borderline insanity?
12
Problem is made far worse by cuts to the Federal Income Tax that put $1T in the hands of those with few investment options other than to buy up housing units and/or stock market equities which is causing a bubble in both markets. Seen it with G.W. Bush and now again with D.J. Trump. It will end the same way.
Investors and REITs are buying up hundreds of thousands of homes per year to put into the rental market, to include the Air BnB scheme. As prices escalate our younger people are priced out and have to move further out to qualify for a mortgage which adds to commuting woes.
Corporate tax cut money went into stock buybacks, executive bonuses and robotic equipment to put more people out of work. Very little of that money went into building new factories in the USA. Trump's recent visit to an Apple plant in TX failed to note that this plant opened in 2013, years before his election.
Tax policy at the Federal, state and local levels is working against the average citizen and in favor of vested interests.
10
@Mike Real estate is also the preferred way to launder large amounts of dirty money. The Russian mob seems to prefer New York and Miami, criminal enterprises from the Far East prefer the west coast.
9
Stop placing blame on anyone except the local governments, and the people who vote them in, on any type of housing crisis. Tech creates jobs, and it’s not their job to create housing or redefine how their community operates.
Change zoning and property tax rules, and developers will build the housing. It’s that simple.
6
And who inherits and reaps the benefits of the huge return on investment when long time property owners in California pass away? Their kids do. How many kids want to give up their inheritance?
3
Seattle's problems are not the same as California's. Even with our large single family neighborhoods we have enough land zoned to meet our housing needs, just not as profitably as developers want, so they sit on their land waiting for more advantageous changes. I live across from a lot zoned for 16 apartments that has been vacant for two years. We also have comparably very limited opposition to development. Our entire council and the mayor are all pro-density.
What we have in common though is long term disinvestment by the state and federal government in affordable housing, and no restrictions on speculation, foreign capital flows, and vacancies. According to their promo materials most units built in downtown Seattle are primarily pitched to non-resident buyers. We are building far too few homes and too many storage units for money.
14
The $4.5 billion in funding for new housing pledged by Google et al. is perhaps 2% of what it would cost to build housing near their offices for the half a million new employees they brought to San Francisco and Silicon Valley over the past decade.
Tech companies pay sales taxes on their products and services not to the cities where their offices are, but to those where their customers are. Local politicians greased the wheels for tech expansion not in hopes of new tax revenues, but out of a mindless pursuit of jobs with no concern about where the new arrivals would live and or that we'd end up with too much of a good thing.
6
As a California homeowner I am eternally grateful to Howard Jarvis and Proposition 13.
9
The implication that Prop 13 contributed to the housing crisis is simply inaccurate and mistakes prop 13 as a cause rather than understanding the effect of prop 13 is exacerbated by the housing crisis. Local policy and regulations that primarily sought to limit growth by extracting as much as possible from builders and developers who would have happily filled the demand created by the burgeoning tech industry. Add to that foolish ideas like rent control, the ability for a single citizen to block housing in their neighborhood, and enabling land use policy by ballot box rather than good city planning and you have exactly the situation in San Francisco. Property values have soared as a result and, yes - those who were lucky enough to buy and keep before the boom pay less in taxes than someone who just bought into the market. This is a result of bad local policy, not a cause of prop 13. In addition, industrial or commercial use do not contribute to local taxes and retail - the source of local sales tax revenue, is dying in many of these markets as well. Local governments want everyone else to take on the "burden" of growth while their cities stay forever in amber. They can't have their cake and eat it too...
5
What went totally unspoken is the FACT that all of California's population growth now comes from immigrants and the offspring of immigrants. There has been zero discussion of exactly how many foreigners should come to the US until Trump...and the discussion has not been productive. California's population has gone from 15 million in 1960 to about 40 million today, all thanks now to immigration. So much for "sustainability."
18
Prop 13, the eternal left wing punching bag. Somehow, even with Californians having some of the highest tax bills in the country, all their problems are caused by taxes needing to be higher, never mind that Nevada and Arizona have accommodated even faster growth with much lower tax rates.
10
I have a co-worker from China who told me that she knows quite a few real estate speculators who live in China and invest in Bay Area real estate. She said they don’t even bother to find renters for their properties because between Prop 13 that fixes the property taxes, voters who suppress housing supply and the demand for tech workers, it’s a sure bet. Besides, dealing with renters is such a hassle. Easier to just buy and hold.
Prop 13 is such a huge giveaway to aging boomers (in my area it’s about $20,000 per home per year, even more for commercial real estate) that rich investors all around the world want in on the handouts too. So who’s paying? The rest of us.
9
@Cordelia -- a giveaway to aging boomers? They've paid their dues. Leave them alone!
4
It is true, the tech companies are not the only variable in the housing issue around their city hubs - but they play a huge role that was not mentioned by the author.
Tech companies utilize a lot of contract employees - a steady stream of workers who are in the area for six months or so. And these employees live temporarily in the high rise apartment buildings (which, contrary to a statement in the op ed, are where many long term members of the communities DO choose to live) are charged far more rent per month for their short term leases than those who sign the lease for a year or longer. There is always a steady stream of the contract workers, so despite the more frequent ‘overturns’ of the apartments, the apartment management companies can realize a greater profit by renting to them for a short term rate of almost twice the rent charged to long term renters.
My lease renewal in downtown Seattle is almost due. I am dreading it.
8
California has a tax issue and California has a spending problem.
The last gas tax hike will be raided by Newsom to go to 'Climate Change' instead of working on roads. Bonds were sold for working on the roads in LA a while back.. again, raided by California. California can't stop raising taxes and spending elsewhere. It's a time honored tradition in the Golden State.
When they went to build affordable housing, the units are so expensive due to unions, consultants, etc, they're almost pointless to build. Everyone in California wants their hand in the honey pot and it to be passed down to the tax payer. Remember the $200m a mile rail?
Furthermore, during the explosion in real estate in the 70s, most middle class were squeezed by the rate hikes in taxes due to increasing property values. Now we're Monday morning quarterbacking because California still isn't getting enough tax revenue.
Again, The NYT does zero deep dive into California's incredibly irresponsible tax-and-spend problem. We're just assured more money for more bureaucrats is the solution.
Most tech bros I know that work there are closet Trump supporters because they see the failed Liberal state in action. And they earn a lot, too, so they're paying.
16
Housing crisis? SOSDD. Long before self absorbed Left Coaster tech "wiz's" were even born housing challenges abounded. Rather than whining about that, as the Socialists are want to do, people set about doing something about it.
1
Housing in coastal California will always be expensive.
The people that already own housing there.....and vote there....and file lawsuits there.....have no incentive to increase density......none.
I know this from friends who live....and own....in the San Francisco and LA areas.
California has 40,000,000 people.....it's full....sorry.
Or am I missing something here?
14
@Kenneth Johnson,
What you are missing is that the number of jobs is greater than the housing supply.
You can't have it both ways: expect to have a booming economy and a booming job market and not expect people to come and subsequently need somewhere to live.
2
More aiming at the wrong target. When Facebook was founded in 2004, there were 122,187,000 housing units in the United States. By 2018, that number grew to 134,449,000 units. The big difference (and challenge) is on another data line from the annual census - vacancies. Over that same period, the number of homes that could be used for housing but are vacant grew to just short of four million. Four million. What does it mean that housing prices rise astronomically and so many are homeless, while millions of homes sit empty as people, children, and entire families struggle to live their lives?
6
@Seth Eisenberg Some of those vacant homes are owned by foreign investors, often purchased with funds of dubious origin.
Others are in places that nobody wants to live.
6
The problem is Bay Area residents who have decided that every single piece of wilderness must forever be cordoned off from development.
2
@Will There are 49 other states where people can live. If you don't like California's environmental stewardship please feel free to move.
14
@Will There isn't any wilderness within commuting distance of the Bay Area.
3
Looks like @will doesn’t live here in the first place.
1
Seattle has no prop 13, pays plenty of property tax, and recently led the nation in new apartment construction.
Rents still go up, as construction cost is high. Many of these new renting voters are mislead by politicians into blaming tech companies and workers. On the strength of this voter block, we just reelected a communist who ignores problems like homelessnes in order to focus on blaming tech.
I think we will see more destructive socialist and communist policies if the response to this is not thought through.
New developement should produce owners, not just renters. The people clinging to prop13 are, in this respect, not crazy. The 20th century policy pf encouraging ownership was wise from the point of view of supporting both equality and political stability. It’s hard to see the value of Marx when you own skin in the game.
4
I don't think that the writer was born at the time the Garvis Gann initiative was passed. Proposition 13 devastated California's social, education, and in some respects, infrastructure projects. Where once the State hired, maintained, promoted workers who cared for the mentally ill, invalids, elderly and children, after Proposition 13, much of that ended. Proposition 13 and President Regan ran rough-shod on State assistance.
And here we are.
Ms. O'Mara has not been reading the Mercury News. Google basically has entirely devoured the City of San Jose.
You wrote, the Tech Youth, (I'am a Tech Old), want a walkable city. Really? The resident citizens of San Jose, the people who lived there before Google, Facebook, Apple, etc. looked at San Jose, made the downtown San Jose rolling rose garden and many other volunteers and countless city council meetings made the fabulous paved trails along the Guadulupe River, and the Guadalupe River Park and multiple Gardens, including a community garden.
So, please don't write the world that Google is going take care of anything. All they are doing is co-opting the hard work of elected officials, past and present, and the collective efforts of City volunteers, and concerned and imaginative San Jose citizens.
8
California has insufficient water resources for additional residents. It makes no sense to house more people there.
Build housing in regions of the country with sufficient water resources, such as the Great Lakes area and New England.
22
The usual Progressive nostrums and solutions herein this column. Marin County is over 80% protective, never-to-be developed land....And we are going to keep it that way.
San Francisco is already run by X-Gen and Millennial Progressives (Mayor is marginal) and look at the civic mess it now has, thanks to their policies.
Prop 13 is the only thing that has kept the state from driving even more people eastward. All of the fees, expensive and restrictive zoning regulation, additional taxes, etc., that make us one of the most over-taxed states in the Union, were passed by liberal Democrats in Sacramento in retribution for Prop 13.
Progressives will not be happy until we are completely subjugated; Prop 13 revoked and we get all those extra taxes and fees to boot. The November 2020 ballot will be the next showdown.
Think out of the box: Open up the Central Valley. Do public/private partnerships with tech to develop there. Modernize Route 99 (as promised for decades). Bring housing, affordable for all to an area that cries out for it.
10
I'm a fourth-generation Californian, born in SF in 1942, raised in San Jose, and lived in the south bay area until 2009. My daughter and her husband live in my Mt. View townhouse since I relocated to SW Florida. They're both school teachers and have the townhouse because I gave them a break on the price and helped them with a downpayment.
I couldn't agree more with Ms. O'Mara's excellent essay. She really nailed it. But, here in SW Florida, where 100s of thousands of boomer retirees come every year and tourists are the mainstay of the economy, affordable housing for all the low-paid service workers is equally a crisis.
Once the well-off retirees settle in they become NIMBYites. As I write this, they're battling the only affordable housing development in Charlotte County and defeating another one a few months ago. Near me, a developer has been given the go-ahead to build a series of 40 "Man Caves" for the wealthy to purchase (at $150,000) to store their boats, etc. It could have easily been affordable housing, but our County Commissioners only give lip-service to that.
It's truly a national problem with multiple causes, as O'Mara points out.
10
No need to focus on this issue.
Tech will provide the solution in the very near future as quantum computing and AI eliminate the need for 70 percent of tech's current work force.
2
Manhattan is very high density and doesn't have Prop. 13. Is housing affordable there? Most high cost areas including coastal California, Hawaii, and NYC have the same problem: limited land on which to build.
This is the reason why the big tech companies are now expanding away from the coasts (Amazon in Nashville, Uber in Dallas, and Apple near Austin). They got the memo.
19
like most housing "authorities" the author seems to believe that the answer lies in higher density. We should all live in high rise apartment buildings. There are two problems with this: 1) most people don't want to live that way, and 2) it hasn't increased affordability in the place that has embraced it most: Manhattan. Developing new centers of economic activity seems more promising. It looked like Amazon was going to lead the way in this, but they opted for existing economic centers areas where prices are already sky high. maybe they need to be bribed to consider Kansas.
16
Could you be bribed to consider Kansas?
2
One of the primary reasons for rising home prices are well meaning codes for safety, but also not so well meaning codes for raising revenue for the locations where housing is being built. Almost none of these changes are analysed to determine if these improvements have meaningful benefits or are simply "feel good" regulations.
1
It always comes down to the supply vs demand equation. If you reduce the production and availability of homes where people want to live, then voila, prices get higher. You make it more difficult to build new homes and then are surprised that prices get high? What did you expect.
Just putting more money into to process as the techs have proposed will only raise prices higher unless more land is made available,
2
The reason why the Bay Area appears full is not because of the people, but because of the cars. There is absolutely room for many more people, so long as they get to work by walking, biking, or public transit. Excessive parking requirements also drives up the cost of new construction, particularly for smaller units, whose required parking spaces are nearly as large as the units themselves.
We need more housing close enough to the major tech campuses that people can walk to work and not be forced to add to the traffic, as well as massive improvements in public transport. Corporate headquarters that are located next to transit stations, rather than forcing every transit commuter onto a company shuttle, would also help. The $100 billion proposed for high speed rail between LA and San Francisco completely missed the point. That kind of money could do wonders for transportation within LA and tye San Francisco Bay area.
1
@Eric Transit cannot provide the same level of mobility as cars. Besides, a 6 lane freeway is cheaper to build than a railroad.
4
CA certainly didn't help the housing crisis when it decreed that new housing had to include solar panels.
While these may be desirable for those who can afford them, adding that cost to new housing just puts a new home that much farther out of reach for first time buyers.
5
Prop. 13 should be repealed. My family enjoyed the benefit of living in a pre-prop. 13 house in old Palo Alto for 45 years. My mothers property tax was a quarter of what the young couple that moved across the street payed, as they moved in post prop. 13. Her house was twice the size of theirs, and was built on the largest parcel of land on her block. There has to be a more equitable solution to the tax issue than what is in place now.....
3
Do you think property taxes would go down if Prop 13 was repealed? How long would they stay down. Remember, public employee unions control local elections and they are interested in protecting their pension benefits.
4
@Dan C
It depends on how Prop 13 is replaced. One could replace it without changing the aggregate revenue initially. Instead of protecting only existing homeowners, a new law could control the overall growth of property tax revenue so property tax increases would still be limited but all owners would be taxed the same on their property values.
@todd sf --so what if your Mother's house is larger. Your Mother is retired and lives on a fixed income while the "young people" have high-paying jobs. They are already belly-aching about their college debt. Now they want another break? I have a suggestion: if they cannot afford to live in California move and work elsewhere in the US.
2
I’ve been thinking we’ve been living in an alternate universe for a while, but this confirms it. How is it The Times doesn’t employ journalists who don’t know who Roland Arnal and Ameriquest or Mozillo and Countrywide, non-judicial state, the model for what it is? I’ve got an idea, bring back Louise Story and let her do her job.
3
Why can’t we just blame Trump? Every liberal hates him.
10
@John Bowman
Conservative absurdism at its most stark.
5
It's immigration. Bring that down to zero (legal and otherwise) and costs will come down.
11
@Kim
immigrants built and continue to build our economic vibrancy.
1
@all fear is rational Economic vibrancy is the last thing we need.
2
Why don't you address housing DEMAND in the supply and demand equation? You imply that the only solution is to infinitely increase supply until our towns, cities, states and country are transformed into a single urban metropolis with overcrowded public spaces. Why not restrict new jobs in states like Califoria and encourage them in depopulated states? Why not set national immigration policy to stabilize or reduce our population? How about discouraging the rich from squatting on multiple high acreage home sites? Wouldn't these things quickly stabilize and lower the cost of housing. I expect you have even better demand side solutions than me. True? Why are you silent?
10
Says the guy who is already in San Francisco...
2
Because there is no way to address the demand side of the equation. You can’t legislate away people’s desire to live in the most desirable cities.
Banning job creation? What planet do you live on? The problem isn’t that people want to live in great cities with great jobs, the problem is that the entrenched interests of the NIMBYs is preventing the market from responding to supply and demand as it would naturally; the problem is on the supply side.
6
@Scott,
You seem to want it both ways: a good economy but fewer people moving in, which is a nice fantasy but not how the real world works.
Im the real world, a vibrant economy means people coming to take advantage of opportunity and, needless to say, all these people need somewhere to live.
In the real world, restricting economic growth does result in fewer people moving in. However, it also results in fewer opportunities for yourself--be it job opportunities or, if self-employed, diminished business opportunities--and also results in diminished property values (if you own a home).
You can't have it both ways.
Too much money in the hands of people who profited by just acting and seeing what happened and who guessed luckily. They inevitably create problems because they have no inclination nor reason to consider what they do with any wisdom but still can use their wealth to do as they wish.
Prop 13 might have to do with other problems in California, but has really nothing to do with the housing crisis.
The main problem is the lack of real rent control, the uncontrolled "gig" economy generated by the like of Airbnb, and the crazy idea that a house is not a place where to live but an investment.
Lack of rent control leads to absurdities such as a $3000/month average rent for a studio in San Francisco.
The "gig" economy leads to massive disappearance of rental units, owners can make much more money simply renting by the "weekend", or "week", or "month".
And the house investment craze fuels it all: by a house for one or two of three millions and you must rent some of it at exorbitant prices to cover you mortgage payment. And the lack of legislation lets you do it.
Silicon Valley rides it all: opposing legislation to fix the problems, getting "no taxes" deals with municipalities that strain local tax revenue, promoting huge commuting economies (what happened to telecommute?) which collapse the housing markets and the infrastructure of whole regions.
6
One of the few things that most economists agree on, is that rent control makes housing shortages worse.
9
@randomxyz I doubt that is the case, and I doubt the situation can be any worse than it is in San Francisco now. $3800/month median (not average) rent for a one bedroom.
Rent cost should never be allowed to increase more than the rate of inflation, or around 1-3%. %.
1
Are you an economist? What are your assertions based on?
1
Proposition 13 undoubtedly locks-up existing housing by giving long-term owners a strong disincentive to moving, even if they have far more house than they want or need. Same as rent control/rent stabilization in New York City.
11
@Joel - There were propositions (60 and 90) that addressed that, too. Someone in California actually has the opportunity to buy a house, live in it for 15 years (while their kids grow), and then sell it for enough to recover the interest and tax payments they've made. Prop 13 makes home ownership affordable, by keeping payments predictable.
9
@Lou I don't understand your comment. The Proposition 13 disincentive is that once a long-term homeowner sells it will be much more expensive (in terms of real estate taxes) for that individual to live in the new house that he or she buys.
2
@Joel Uh, no. If the homeowner is over 55, they keep their lower tax basis if they move into a house that has a similar market value. If they are under 55, they can take a gain and know that their bill won't be horribly different. Someone moving from a $400,000 home to a $700,000 home will only face a $3000 increase in taxes. Compare this to some cities in Illinois, where a $500,000 home is taxed at $20,000/year. Nobody faces a surprise tax bill with Prop 13 - it's predictable, and fair.
6
Non-California coverage of Prop 13, that grossly misunderstands the situation. Prop 13 was a response to a ton of people moving into the state, driving up property values, and making it unaffordable for people to stay in their homes. It limited taxes to 1% of the property's 1978 value (or purchase value for later homeowners), and allowed increases of only 2% per year. Despite Prop 13, real estate revenue has grown faster than the economy. Long term employers are also protected by Prop 13, keeping jobs in state. https://www.kqed.org/news/11574585/despite-proposition-13-california-property-tax-revenue-has-soared
8
The tech companies could expand into Detroit. That way, their employees could live like kings and Detroit would receive new lifeblood. There are plenty of first rate universities within 200 miles of Detroit from which to draw.
20
Detroit sounds amazing. Somehow, you prefer Portland, OR. Why? If you prefer a safe west coast cities, why should tech workers not?
1
Actually, the tech companies *are* a significant part of the problem. Instead of spreading out the jobs with satellite offices throughout the country, they are concentrating them in a few select locations. This drives housing prices through the roof in those locations, forced people with the right skills to all live in a couple of regions, instead of staying close to family, friends, and heritage.
Both the communities highly impacted by tech and smaller cities throughout the region would benefit from spreading different departments of these companies around the country. Not just an Amazon H2 but dozens of satellite hubs throughout the country. This would bring money and jobs into places that need it without concentrating extreme wealth in a couple of places.
24
This article misses the point. Many people don’t want to live in small-minded town USA. They moved to large population centers to avoid the undeserved mistreatment.
9
When you say this to what part of the country and what towns?
4
@SW -- Well, then they should not complain.
It might take more than Facebook to fix it but that doesn't let them off the hook. Articles like this help these billionaires skirt their responsibilities. They can pitch in with hundreds of millions right now and they are not so, yes, they are to blame.
3
LBJ proposed Fair Housing Legislation in January, 1966. It quickly went into national bipartisan black hole Congressional limbo.
Dr. King 's 1966 Chicago fair housing marching advocacy campaign failed to generate the legislative and popular support that had won the day in Montgomery, Birmingham and Selma Alabama
Until April 11, 1968 when the fair housing bill was signed into law within a week of the assassination of Dr. King and the ensuing urban rebellion.
But the law has weak investigation techniques aka testing, limited penalties that neither deter violations nor restore justice to the victims of housing discrimination.
Two related Pulitzer Prize winning plays based in a fictional South Side Chicago neighborhood provide a better insightful glimpse of the enduring dilemma of fair housing and income inequality than historical reality. See Lorraine Hansberry's ' A Raisin in the Sun' and ' Clybourne Park' by Bruce Norris
But see ' The Case for Reparations' by Ta- Nehisi Coates from ' We Were Eight Years in Power; ' Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership' Keanga Yamahtta- Taylor
5
The author goes on for 4 paragraphs before mentioning the word ‘traffic’. Even short commutes here in Silicon Valley are already ungodly miserable. Public transportation is almost non-existent here, but we are lectured about the need to build more high density housing to bring in an unlimited number of additional people. This place is not Manhattan. It sprawls from south San Jose to Marin County, Santa Cruz to Tracy. There is no subway.
The housing/crowding crisis cannot be fixed by massive building in this already over-crowded area. It will be fantastically slow and expensive and ultimately futile. Instead, lets use tax policy to encourage (force) future business and housing development outside the existing area of the valley. California is huge and mostly empty. The solution to this problem is available, if we are willing to ‘think different’.
19
Thank you!
4
This is wrong on every level. All you are saying is that the genesis occurred some time ago, but it would be idiocy to say that the "tech bros" are not involved in it now- they are, to the hilt. My son's small house in Seattle is valued at more than 3x the far larger house I owned in Davenport Iowa. With 1 bath, no air, and a kitchen 2 people can stand in. I could not afford to live there.
5
Greater housing density? Sure, why not screw up the environment more and take away open space. This is not a solution. It’s an easy fix that the planet and the rest of us will pay for into the future.
16
High density housing is far more ecological per person than low density... consider how much land you have to clear to house 100 people in a single tower or block vs. single family homes, not to mention watering all those lawns, keeping the air warm/cool with all that extra surface area, etc.
4
This whole “tech bro” label needs to stop.
It’s terribly distracting and adds nothing to the argument. In fact, as the author wants tech professionals to emerge as champions of economic inclusion and diversity, using this term is wholly inappropriate.
I work in Big Tech alongside many fine women and men, none of whom are “bros.”
The Bay Area is also home to other affluent groups that need to be called out. Marin County is devoid of big tech, yet has resisted housing development ferociously. San Francisco hosts banks, hospitals, drug discovery, and law offices, all paying professionals who could lend their talents too. Let Ms O’Mara call on them - preferably not as “med bros” etc - to share the load.
9
@Eric ... said the tech bro.
3
Immigrants constitute 27% of California's population. Amazingly, immigration is not mentioned in the article. The New York Times: if we don't print it, it isn't news.
18
And where do you live, Margaret? From someone who has lived in these areas of California ravaged by housing shortages the past 40 years, all I can say is you would have to be blind to not see that tech has been the primary contributor to the housing shortage the past dozen or more years. You really don't think that Apple has gobbled up large portions of Cupertino, Google Mountainview, or that Facebook has taken over swathes of Palo Alto and Menlo Park? That tech has radically transformed San Francisco and forced large numbers of lower-income people (a relative term in the Bay Area) out of SF, Oakland and other cities? There have been rising housing costs across the US, indeed the world, that predate the appearance of the late 20- and early 21st-century dominance of economies by tech.
I don't see how anyone with any sense of impartiality or sound economic and social judgment can actually look at how the Bay Area has become housing hell except for those who make around 200k per annum and then try to shift the blame from where it fully needs to be placed.
Just another example of millennial tech privilege trying to obfuscate their obvious contribution to an ongoing problem.
15
First of all, tech companies with revenues over a certain amount who do business in CA (not with their HQ there) should be subject to a 10% revenue tax surcharge. Any land owned by them should be taxed at a rate commensurate with the highest tax classification (industrial if need be). The revenues should be devoted to developing affordable, sustainable housing and associated infrastructure.
Do you tech moguls ever look out the window? Those flames you see are the direct result of the growth you constantly tout. Libertarianism out, social responsibility in.
5
@Rich888 how did you calculate 10% surcharge?
1
Define “tech company.”
1
This article continues the misinformation of Prop 13. Prop 13 limits the increase in property taxes to 2% and sets the tax rate at approximately 1% of purchase price. Yes older folks who have lived in their homes for 15 years or more benefit from the low basis but the alternative for the vast majority of those residents is for them to be forced to sell and leave California (many make that choice). To say cities have no interest in developing new land for housing is just wrong. Given current prices property taxes from new housing (1% of very high prices) generate more property tax revenue than almost anywhere else in the country.
5
Prop 13 was passed because of the large number of homeowners who lost their homes due to the annual reassessment of property values. It was happening all over CA, but especially larger cities such as San Francisco. BTW I am a fourth generation San Franciscan and my mother was in the real estate business at that time, so we lived the problem.
7
Thank you Mark. California public employee unions are busy spreading misinformation about Prop 13. They want to repeal Prop 13 to protect their current gold plated, and underfunded pension plans.
5
I agree that the California housing crisis has been 40+ years in the making. Another factor that contributes to our outrageous housing are foreign investors who buy properties strictly as an 'asset' and not a home. Much of this investment comes from countries like China and India.
Local governments can do more to incentivize more, denser housing but the harsh reality is that this crisis was caused by 40+ years of bad housing policy, and other factors, and will not be solved overnight.
8
Put the jobs elsewhere. Instead of insisting on higher density housing in already bursting big cities, put the new business hubs in smaller, cities that need jobs. The restaurants and amenities will follow. Spread the joy.
9
On this issue, ample blame exists to be apportioned among many and "tech bros" most definitely should be on the list.
7
The real reason for ridiculous home prices that no one ever addresses? FEWER AND FEWER PEOPLE BUYING UP MORE AND MORE OF THE REAL ESTATE. It's incredible that this is barely ever mentioned as a reason. Developers have had phenomenal success in manipulating this story. This is not a simple supply and demand situation because we no longer compete against each other for homes. Ask anyone who has tried to buy and you will hear the same stories of all-cash purchases after over-asking bidding. The rich park their money from tax breaks and increasing personal wealth in real estate and push more and more people out of the market. They bid the prices up among themselves, as individuals or corporate entities, buy them up and rent them to ordinary people. We are fast becoming a nation of renters and serfs.
42
After trying for months to buy a house in the Bay Area because our jobs are here, I developed an intense hatred for Prop 13. How are young families supposed to break into this housing market when no one around them is incentivized to move? Would you even want to live in a neighborhood where there is almost no turnover in housing? We have a toddler and an infant, and we struggled to find "family friendly" neighborhoods unless, of course, everyone in your neighborhood can afford $2M+ homes. And the homes cost that much because inventory is so low due in large part to Prop 13. It's a vicious cycle. It turned me off to the Bay Area so completely that we're moving to the East Coast instead.
8
@KC
Get back to us when you're 65 or 70, have worked all your life to save for retirement and pay off your mortgage, and are ready to live off savings and fixed income.
Then tell us how very fair it is to have property tax laws changed under your feet so that you can no longer stay in your home.
16
Thank you, Jules. You describe our situation exactly. Prop 13 is not the reason we don’t move (in fact, we could “ take our property taxes with us” if we chose to move to one of several Bay Area counties, thanks to subsequent state propositions). We stay because we like our house and neighborhood and after 35 years of ownership, we’d pay huge capital gains if we sold. We’d probably have to move if Prop 13 were abolished, but I question that KC could afford the new taxes if he could afford to buy our house. Blaming Prop 13 is simplistic, it seems to me.
6
@Liz Randal
This doesn’t explain why you should be able to pass your special tax base on to your heirs. How many generations of your family should be able to live off their neighbors tax payments?
2
Blaming the housing crisis on urban planning and single-residence zoning is goofy. Too many people want to live in too small an area, would Ms. O'Mara line the coast with hi-rise apartments? While coastlines become overcrowded, the midwest is dying. How about creating incentives for young people in Iowa and Ohio to stay in their home state, and for coast residents to move to the center?
24
I am surprised that real estate issues - ie.lack of affordable housing, upkeep / repurposing of existing structures, tax breaks given to developers, etc... have not become a political platform for candidates in New York and California. This is long overdue.
4
As a senior citizen who has lived in the same Victorian house in San Francisco for nearly 40 years, I have obviously benefited from Prop 13 (unfairly perhaps). But if we were to sell the house and downsize there are ways to keep the low tax rate. Much harder to avoid is the very real capital gains tax that would be due; several hundred thousand dollars. Now obviously many people would love to have this "problem," but for us it means staying in our larger than necessary house, because we would have a lot less to buy a replacement. So we will stay here probably until one of us dies, eliminating the tax because it's community property. Not sure how big this problem is, but I'm guessing there are lots of seniors reluctant to move and free up houses for this reason. There is a $500,000 exemption of course, but that figure is a bit outdated given the skyrocketing costs of housing.
22
If we as a nation would tie the minimum wage proportionally to the cost of housing (not an unreasonable approach) many MANY more people would be able to buy a home. Not the whole solution, but how can people reasonably buy real estate when wages for most lower and middle-class workers have been stagnant, at best, for decades?
14
Lol how generous does your pay need to be to cover a $2500 1-bedroom? Many tech workers are in their 30s living with roommates as if they're still students. The housing crisis is not an "affordable" housing crisis. We all know "affordable" is code for people who can't afford to live here under any circumstances. There's no reason I should have to commute 2-3 hours a day while the person who cooks my lunch (or doesn't work at all) is given brand new public housing a few miles away.
14
You don’t have to. You can always move somewhere else without a long commute.
2
This article ignores the obvious underlying causes of this problem: human overpopulation and unsustainable growth that drives government revenues and nourishes its existence. "Jobs, jobs, jobs" is a false mantra that conservatives and liberals have all embraced without foreseeing its impact. It' econ 101: supply and demand. There are too many humans and not enough natural resources, including land, to support them. The vicious cycle will not stop until we control our population size and density.
29
Excuse me. I live near Oakland California, Alameda is separated by an artificial channel used by ships. Housing is being constructed in Oakland and in Alameda at a furious pace and has been being constructed for at least a decade. The free market here is hardly chained by excessive regulation or snooty liberals.
As a result we have plenty fo $2,500 per month studios filled with techies who are camping out in our city without really committing. At the same time the size of the tent cities under our freeway ramps is growing with people displaced by the expand land of condos. Next time spend some time here before you write. Don't just ask your friends in Real Estate.
15
This is the standard tech response, to shift blame for housing inaffordability to obtuse local government and racist home owners. Here in Seattle, however, both affordability and homelessness exploded when Bezos decided to move Amazon's HQ to the South Lake Union neighborhood just north of downtown, and extorted a generous state tax incentive for doing so. The influx of 50K well paid tech bros ser off a feeding frenzy among developers who undertook a massive replacement of affordable rental and owned housing with luxury condos and mini mansions targeted at the techies. Many who could no longer afford housing were pushed onto the streets. Amazon dragged its feet at acknowledging its contribution to these problems and its efforts to help are largely cosmetic. When the city council voted to impose a head tax to get Amazon to contribute its share to dealing with homelessness, Bezos pressured the mayor and council members into shamefully repealing the tax one week later. In the recent council election Amazon contributed massively to the Chamber of Commerce PAC in support of pro Amazon candidates. Amazingly, only one of their 7 candidates was elected, and there is renewed talk of a head tax. Microsoft is more enlightened in acknowledging its contribution and contributing to fixes, partially to tweak Bezos. Tech companies are not solely responsible for these problems, but they do play a large role and should contribute to solutions.
14
Most of the homeless is mostly drug addicts moved from other regions in the last five years. The council uses these people to direct fire at tech workers and score cheap political points. The council does nothing for them, watching them die in the gutter.
5
There is no housing crisis.
There is an income crisis.
Fix the latter and the former will quickly recede.
16
At no time in human history has it been less necessary to live in places tied to a particular industry. Since the dawn of the personal computer, finance is less tied to Wall St, insurance to Hartford and so on. The very tech industry that causes so many to flock to tech hubs is the same industry that made it unnecessary to do so. Declining cities of various sizes offer less sprawl, lower costs and more room for growth than the Bay Area, NYC, etc.
22
Your portrayal of the lack of upzoing in Seattle is disengenious of course. Seattle has extensively upzoned around transportation hubs. You can see the development from your window at the UW. There are significantly more apartment dwellings than ever before and housing prices in Seattle are now barely going up. It is again a buyers market. Year after year, Seattle has hosted more construction cranes than most cities around the country and there is a reason. We are building housing. Unfortunately, all these apartments and apodments will be owned by developers and investors. The ground under our feet is shifting away from a complex land ownership pattern of many working class and middle class families, to a monopoly of global investors. How is that going to impact democracy?
23
Sorry, housing shortages have gotten MUCH worse since you guys arrived. Also the public transportation problem. I'm sure it wasn't intentional. Stuff happens because consequences are never considered ahead of time. It'd be nice if people made PLANS, just in case.
13
In the 1980's, San Diego's downtown began a 30-year redevelopment boom, during which all of the low income housing was replaced by high-rise luxury condos, owned by investors who rent them at rates affordable only to the wealthy.
The previous occupants of older, single occupancy residential hotels were evicted as their low income residences were torn down, and the homeless population has skyrocketed. Our elected officials give a lot of lip service to the low income housing problem, but the NIMBY's and wealthy real estate developers (campaign contributors) block any real attempt to solve the problem.
4
Location, location, location. The Tech bros drive the prices up
because they can afford to pay it. For, example during the 70's
and 80's people with modest incomes could afford to own homes
in the Southern California beach communities or San Fransisco for that matter. Not anymore. It's economic inequality. Blame
Wall Street for that.
7
This is a conundrum for liberals. They love densely populated cities but hate development and developers. They want low cost housing for the working class but they are only willing to do virtue signaling mandates on developers knowing full well a few thousand units won't make even a dent in the problem. My solution would be to take vacant space and derelict neighborhoods south of market and create an ultra high density zone. Many small apartments targeting single young people. All street level would be interesting retail, bars and restaurants. The high density creates a buzz like Ny or Hong Kong. Instead liberals always fight against density so you get these boring lifeless neighborhoods.
31
@Aurthur Phleger
I'm not sure liberals are against high density housing. Portland is very liberal and they have more of the kind of housing you describe than Bakersfield CA which is very conservative and has single family separation by income sprawl.
13
Our local "liberal" government (which even dares to call itself "progressive" - gag me) and African-American (!!) mayor only allow dense development in minority neighborhoods, not white ones. They permit developers to pay fees in lieu of taxes and to break affordable housing laws and to build on parking lots. So we are all supposed to be human sacrifices for white people (young tech families with multiple kids) to move in and ruin our neighborhoods. Hey, the suburban life and American dream were only for white people in the first place! The rest of us had better "get out."
3
@Aurthur Phleger
Right, cause conservatives love living in rat holes and/or tacky dead towns. This is not a political partisan issue (no matter how much you want to blame liberals). And, since you want to make this partisan, I'll point out that the last part of your comment describing your perfect neighborhood is exactly what you get all over the liberal blue states. Visit New England and learn what can be done.
7
Actually, the tech bros are major contributors to the housing problem, which is why it has gotten dramatically worse since 2012 when Facebook went public. There is absolutely no reason why these companies need to have all tens of thousands of their employees based on a strip of land about 20 miles wide (Silicon Valley). It is cruel to the employees who have to endure astonishing commutes getting just so the masters of the universe they work for can have their offices only five minutes from the wealthy suburbs they live in. They should move most of their employees out of Silicon Valley and into places that actually need the jobs and that employees can afford.
I am part of a family that has been in Palo Alto for four generations. I can't afford to buy a home here. That's okay - there is no reason why I should be entitled to live here. But seemingly every week a new office building goes up within a mile of my house while absolutely no new housing goes up. These companies are not entitled to this place, either.
And, by the way, housing prices are skyrocketing in many "ripple effect" places (Austin, Denver, Boise) places that don't have the property tax structure or zoning laws.
344
@Kattiekhiba Mayor Breed is trying to override the limits on office building in SF. We are screwed. :(
4
@Kattiekhiba I'm Palo Alto born and raised, totally disagree. The reason no new housing goes up is because our county and city doesn't permit new housing unless the developer builds or contributes to new public housing construction. Obviously this is going to result in little or no new housing. We need more housing for people who can actually afford to live here. And tbh, no matter how many generations your family has lived in PA, if you didn't come back earning 6 figs, you shouldn't have come back.
24
@Wes Yep. Someone gave permission to build offices but no new housing. And someone else voted for them.
24
I own my own home. I am old.
When I die, you are welcome to take your "fair share" (or if you prefer, your "fare share").
In the meantime, my property taxes increase 2% every year, roughly in line with inflation (excluding the local assessments in the People's Republic of San Francisco, which, incidentally, I am happy to pay).
Until I die, please leave me alone.
146
@Padonna An increase of 2% per year is almost certainly not in line with the growth in the value of the home you own. You do benefit from this system.
I hope you can also see how artificially high rents propped up by supply constrains such as zoning and limited property tax increases limit the possibility for members of younger generations, even those earning very good salaries in tech an other fields, to own a home like you.
63
It depends on what your property taxes are. My friend in Florida pays about $1200 a year, and I pay about $1200 a month (it goes up every year). My salary and income don't keep pace with property tax increases, nor with Trump attacks on high tax states (which, by the way, subsidize low tax red states). Offers on my home have been lower than what I could get from eminent domain, so I'm waiting patiently for developers who will probably demolish my home.
37
The fact that your artificially low valuation can be passed on to your heirs is rubbing salt into the unfairness wound.
75
The western US 'appears' as if there is limitless room and resources ... the reality is it is not. San Diego, Los Angeles, the Bay Area, Portland and Seattle are crowded and highly urbanized. Outside of these coastal metro areas, the reality is there is not a lot of room or water and where there is limited valuable agricultural land (think Central and Willamette Valley) is displaced. The rest is mountainous and high dry terrain. The eastern coast with it's broad and deep spread of small towns surrounding major metros is so very different.
For those who believe the answer to west cost population demands is Manhattan/Brooklyn style density built atop earthquake faults and landslide / fire prone hillsides, sorry those of us who live here are not interested and as local citizens and tax payers it is our right to democratically oppose those who do.
I think we all need to recognize there are limits to growth and those limits so long unrecognized are now impossible to ignore. The US in it's coastal environs is truly 'full' ... if we wish for it to remain remotely affordable or environmental sustainable, we need to ask ourselves what population cap is in order (it is) ... 400m ? 500m ?
I suspect the truth is we are already well beyond what is an environmentally sustainable and certainly socially desirable population cap. It's time we set our greed and asset growth pyramid schemes aside and think long term about our and our children's futures.
261
@cs Respectfully, I think the reasons you cite for stating that the 'Bay Area is full' are incorrect.
If you have concerns about earthquakes look no further than Tokyo - it has immense density and engineers have had no problem protecting their city and it's towers from strong earthquakes. And regarding fires, look to Melbourne Australia, they've had no problem expanding while managing the risk of bush-fires - there is plenty of space to develop in the Bay Area where the risk is negligible.
Moreover, if you genuinely believe there are technical limits to the density of neighborhoods, you should have no problems removing the legal barriers - they won't be reached anyway.
54
@Lucas how well do you know the Bay Area ... ? how often have you waited an hour to cross the bridge into SF or skipped back a station or two in downtown SF to make a standing only BART train back to the East Bay ? I've lived in NYC and seen how unhappy and grim folks are commuting 90 minutes in on the A train from east New York. Just because you can pack 38m people into Tokyo metro (or 18m into NYC metro) does not mean we want, need or should do the same here ...
Between the Hayward fault and the bay, it's a few short miles which is diminishing to due sea level rises.
The belief that we have NO choice but to grow until we can't stand the density any longer is entirely false and threatens not only our immediate quality of life but that of all life on the entire planet.
It is time to stop ... and realize ... unbridled capitalism and population growth is killing us and all other life on the planet. Plain and simple. We have to slow down/stop or the decision will be forced upon us.
123
@Lucas
CS is sooooo Bay Area. Commuting to the East Bay on BART is light action. What is not light action is trying to get across the Bay Bridge during rush hour. This is the kind of problem that dervelops when you don't have a Metro Area wide agency that can transcend
local political boundaries.
El Camino Real is a thoroughfare which stretches from San Francisco through the Silicon Valley to San Jose about 45 miles or so. In a more sensible world it would lined with multi-unit housing (think 3-5 stories) and have public transit running down the middle of it.
Unfortunately, it goes through many small juristictions and to quote commentator CS (on another issue); "sorry those of us who live here are not interested and as local citizens and tax payers it is our right to democratically oppose those who do."
San Francisco badly neds to expand its airport. If this gets done, it probably involves filling part of the Bay. If a baby was born on the same day as this concept first entered the political arena, the baby would probably be able to graduate college before the project got completed, such would be the endless litigation process.
29
Everyone is correct. I am one of those benefitting from prop. 13. Many of us will be "passing on" soon and the state will benefit from new property tax values even under prop. 13. However, with all due respect to the author, having lived my 60 years in "SoCal", I believe the 800 pound gorilla that very few people recognize is the twofold problem of the incredible amount of vacation rentals (a local researcher estimated 200,00 in LA county.. San Diego estimates 20,000, they are everywhere people, everywhere, and there is not much enforcement of vac. rental zoning laws) and the very low interest rates that pours gasoline on the already hot housing market jacking up prices like 2007.There are millions (?) of people who are buying and selling multiple homes on both coasts, and the "flipper" or "investors" are either raising rents to very high rates or flipping or vac. renting. The low interest rate cheap money allows millions of Americans to travel and rent houses in prime neighborhoods @ $300-$500 per night without blinking an eye. I know, they are on my street !! There is so much easy money flowing thanks to a misguided notion from the Fed (and Capt. Bonespurs et.al.idiots) that we can just keep spending like there is no tomorrow. What we need is a good recession. Is it a housing crisis or just another overheated housing market? Not everyone can live in California, or New York or Seattle or Savannah. Housing Crisis ?? It's a Low Interest Rate Crisis !!
120
@BackHandSpin
It’s ironic that during the last recession the headlines and media were lamenting the drop in real estate prices.
9
Good comments, Until you said we need a recession.
Please do not forget the many individual homes that were lost by families in 2007 only to be purchased by corporations and mega realtors and investment groups, diminishing single home ownership and changing lives, neighborhoods and cities and suburbs. Someone always does well in a recession. At the expense of others.
29
We have the highest property taxes in the nation, and no Prop 13; the only tax cap we had for just a few years will probably soon be revoked. Our housing crisis is probably just as bad as California's - high rents, inflated home values, governments allowing developers to break affordable housing laws. But the NY Times keeps saying the birthrate is low! Here, the birthrate is at baby boom levels. The techies, in addition to invading our 'hoods, are breeding like rabbits.
15
This article misses some important points. Chief among these is the fact that proposition 13 applies equally to all realty: residential AND commercial. To the extent Prop 13 acts as a drag on residential construction, it also acts as a drag on commercial construction. Yet, the author seems to assume Prop 13 is limited to residential realty.
The solution, it seems to me, is two fold: end Prop 13. And, enact a HUGE homeowners’ exemption indexed to housing inflation.
56
@deranieri
Why should housing be privileged as an investment? It receives preferential treatment that other assets don't get which have clearly exacerbated price inflation. The fact that gov't policies put real estate on a pedestal ($500K capital gains exemption upon sale; the "step-up" in cost basis if the home is passed on to heirs (while CA property tax cost basis remains what the parents paid for it! Sweet-- best of both worlds for the inheritor!)...
Based on the commercial construction activity in SV I've witnessed, it hardly seems like prop 13 has acted as a brake on development. Cities are desperate for the tax revenue office buildings bring; they want to do as little as possible to build housing. Places like Palo Alto, Mtn. View, & Santa Clara's population swell during the day due to the jobs/housing imbalance while in San Jose, the population actually decreases because they are in effect a "bedroom" community for the aforementioned cities.
4
@deranieri : Prop 13 is a homeowner exemption indexed to housing inflation. Without it, everyone except C-suite types would have to leave. There would be no municipal workers, no low or middle range tech types, and no teachers. Prices would have to come down by 75% or all those people would leave. Also the price crash would bring down the mortgage industry.
Prop 13 was passed in desperation to keep the state functional.
3
@deranieri
The homeowners exemption is certainly one way to mitigate the problem. As far as reforming Prop 13, if you can voters to go for it is to limit the aggregate property tax increases to an acceptable number - 2% is probably too small. All property would be reassessed so there would be no disparity in taxes.
Short of that, the young people could support a new proposition that would lower their property taxes to the lowest rate per square foot in their neighborhood. Where the state make up the lost revenue is another story. No one worried about that when Prop 13 passed, so why should we worry about it now. Maybe a new tax revolt by the young and overburdened would shake things up a bit when the rich boomers watch their services being cut because they don’t want to pay property taxes on their Prop 13 babies.
1
The situation in California is absolutely shameful. Far too many people pay almost no taxes. I live in a townhouse and pay $20k a year in property taxes. Meanwhile a neighbor across the street own a house with twice the square footage and pays only $1500 a year in property taxes. The only difference is I’ve only been here for 3 years and they’ve been there for over 30 years. How is that fair when they get exactly the same services I get?
When someone complains they have the temerity to trot out their condescending entitlement and shout us down for our presumption because we’re going to drive grandma out of the home she’s lived in all her life. So why the inheritance benefit too? Why also commercial buildings?
The system is very broken, and if something isn’t done to fix it, a rebellion will come and many more will be hurt than need to be.
373
@Dave I don’t disagree — and I’m one of the people who benefits from Prop 13. Back in 1978, if the California Legislature had any sense, it would have enacted a huge homeowners’ exemption, indexed to HOUSING inflation. Prop 13 would have been history. But it’s important to remember that Prop 13 affects residential AND commercial property, which is positively insane.
74
@Dave
Dave, I also benefit from Prop 13 with low property taxes, having been in my home for over 30 years. I understand the frustration.
However, they do rise a bit every year. My tax is more than double what it was 30 years ago.
21
Think about all the rich people in NY who get rent control, and it's the same thing. But living all my life in NJ has given me absolutely no benefits, none at all. Even NY is better than here.
11
A friend has an ocean front house in Laguana Beach worth several million. She acquired the house from her husband and has a Pre Prop 15 tax bill of about 10K. He neighbor with a lesser house pays about 100K. The irony is she can't afford to move to smaller house in the area as her taxes will go up!
It makes no sense.
286
@Dennis Given the scenario you describe, I suspect your friend is old enough to take advantage of the ability to transfer her tax basis to a new residence.
19
@Dennis ............poor thing
12
It’s Prop 13; and yes, it makes no sense at all. All sorts of people would love to sell and move, but don’t dare because under Prop 13, they will pay many, many times more in annual property tax on a newly-acquired home. It is badly distorting the already horribly twisted Calif housing market.
30
I served on Jerry Brown’s first housing task force and very few of our recommendations were implemented. The critical issues are restrictive zoning, litigation threats arising out of the California Environmental Quality Act, prevailing wage rules where there is governmental involvement and increasing rent regulations that work to stifle new construction. Unfortunately even if all of these blockages to housing were lifted tomorrow, it will still take years to a make a real dent in California’s housing crisis, but you have to start somewhere.
110
@David Shulman
Finally, a comment from someone who knows what they are talking about! I would add - litigation threats for all condominium projects and really burdensome code changes - such as the new one that will add tens of thousands to the cost of each single unit by requiring builders to provide enough solar power to run the entire unit, instead of making the utilities take responsibility for making power generation sustainable.
17
@David Shulman The housing crisis involves increased demand, not just supply. Ask yourself what California looks like when, from 16 million in 1960, we get to 45 million in 2020, and possibly 100 million in 2100. Is the solution really to build more houses?
19
@GP
Yes, the solution is to build more houses. The myth of California overpopulation is NIMBYism with a proper intellectual veneer.
27
Something is terribly wrong in the US with the insane levels of property taxes you pay. In France there would very likely be riots if we had to pay such rates. What exactly is this money doing? Why doesn't the Federal government, with its ability to raise funds by allocation, paying for these services and public goods?
Moreover, you don't even get health-care unless you buy insurance. What a nightmare.
American exceptionalism I guess. Probably that's how Trump will be re-elected too.
245
@CL,
Here in the United States, states are given a fair amount of discretion for how they collect revenue and what kinds of taxes to impose--some states have no income tax but most do.
Property taxes are a function of local government--the Federal Government does not collect property taxes--and are the primary source of revenue for services like public schools.
34
And, it must be said, funding public schools with property taxes is an absolutely terrible way to be funding public schools. Public school should be funded from the federal level.
169
@CL. I agree, but the underlying assumptions governing taxes also betray differences in French and American attitudes. If one owns a house, the taxe foncière is generally 1% if the property is the principal residence, 3% if a secondary or tertiary residence. If one rents and pays the taxe d’habitation, there are reductions based on the number of children residing with the family in the house or apartment. Those kinds of distinctions are foreign to Americans, who claim to be family friendly, but not when it comes to public policy. And as our president can attest, the real estate industry is loaded with tax deductions that enable large-scale property owners to pay little if anything to support the community in which they acquire their wealth.
23
Its becoming increasingly clear that limiting taxes on long-term owners is bad policy. It just forces governments to raise taxes excessively on newcomers. It would be much better to remove these controls and dramatically raise the homestead exemption so that taxes are affordable for families that reside in their homes. This change would help to drive out speculators who would have to pay more in property taxes to make up for the lower property taxes assessed on primary residences. The reduced speculation would limit excessive growth in property values and allow more renters to become buyers.
151
@T we think alike.
5
@T The NYC equivalent is rent stabilization and rent control. It is wonderful for those lucky enough to get heavy subsidies on their rent, and of course, they never move.
But newcomers wind up paying ridiculous rents and living with multiple roommates. Deeply unfair.
9
@T Newcomers pay a 6% commission to realtors - it's baked into the listing price. What prop 13 means is that the transaction price is your basis for a 1% tax, and your taxes increase 2% per year. Speculators are short term investors, and would pay not only the 6% commission but also a higher basis. Unless they rent, improve, or live in the home, they will lose money.
4
Not a bad analysis. Still, like most writers who blame Prop 13 for CA's housing woes, O'Mara misses the mark in three ways. First, an unintended consequence of Prop 13 was crating a de facto split property tax role. Chevron never sells its refineries. Large land owners ended up paying much lower property tax rates than home owners. Also, cities immediately figured out how to replace property taxes with endless user fees like landscaping districts, big permit fee, etc. If these highly regressive faux taxes were added in, the property tax rates would be much higher than it seems. Finally, property tax rates were rapidly rising in the 70s. W/o Prop 13, CA would likely have giant property tax rates like NY and NJ and little new housing, due to idiotic zoning and NIMBYs. It's just easier to blame Prop 13.
6
Jeff Bezos is personally worth $120 billion, Bill Gates $110, Apple literally is sitting on $250 billion in cash stashed in off-shore accounts, and Amazon paid $0 in federal tax last year with a net profit of $10 billion and homelessness is rampant in Seattle and San Francisco and I'm not suppose to think that a few billion of that money couldn't put roofs over these peoples head? Huh? Look, you may be a cheerleader for Silicon Valley but common sense should tell you that your premise is wrong.
7
I find it hilarious as to how out-of-touch the political narratives of both the left and right are on this issue.
Right-wingers claim that liberal-dominated cities such as San Francisco and Seattle are bad for business. That's the exact opposite of reality which is these places have TOO many jobs (and too many high paying ones) relative to the housing stock.
Leftists condemn Big Tech which is creating all these jobs. Okay, so let's impose high taxes and business-killing regulations to drive all these companies out of state. So who's going to pay for all those taxes to fund the generous social services that leftists want?
Not to mention everyone in these cities proudly proclaim to be "pro-immigrant," yet don't want people coming to their neighborhoods because of congestion fears.
Hypocrisy all around!
9
Sorry, but - we have a housing crisis on the east coast, too, and it has nothing to do with being "tax averse;" and zoning laws, I have discovered, are only for white people. Every law is broken in OUR neighborhoods, including affordable housing laws, all to lay out the red carpet for the invading techies. We have the highest taxes in the country. Overpaid, overrated, overbreeding tech people can afford to pay them, so, yes, they ARE creating inflated home values, inflated rents, and inflated families, as well as inflated traffic, chaos and waste. And they are invading and destroying minority neighborhoods, not to mention the destruction both the tech industry and tech families are doing to the environment. We call them "the locusts" because they invade, do their damage, and will probably flee once the kids are grown, while the rest of us are left to clean up the mess they made.
3
It all comes down to low housing density and NIMBY!
Rising prices of houses predate the Flintstones. And Tech Bros made it worse.
1
There also will have to be a lot of pushback against real estate developers who want only to develop fancy properties and have no interest in building affordable housing because they don't consider it profitable enough.
1
This is a common canard, that the problem is developers won’t build affordable housing. Of course they don’t want to, but who cares. All that matters is that a home, apartment, condo or whatever, regardless of affordability, is built. A room is a room is a room. The rich person moves in the new luxury condo, the middle class person moves into the place the rich person was in and the poor person moves into the place the middle class person was in. Fairly simple economics.
2
This reads like Ms. O'Mara has never been to silicon valley and has just borrowed her analysis from Thomas Sowell. Many factors limit buildable space, in-fill construction, and population density on the "Peninsula", first of which is that it IS a peninsula, limited by mountains on one side and baylands on the other. Much of the potential real estate was developed in the 50's and 60's into tract home expanses, many of which featured houses no bigger than 1300 square feet. Further, these suburban style housing tracts are largely connected by winding, narrow streets which don't lend themselves to mass transit lines and can barely keep up with current traffic loads.
While Silicon Valley is now aggressively building higher rise and more dense housing around existing transit lines "surface traffic" can still be maddeningly slow, freeways are clogged, and there is no remaining open corridors for further transit lines. Add to this the high tech industry salaries and you get seven figure prices for two bedroom town houses, and buyers lining up to nab them. What regulations would Ms. Omara propose to change these realities? Does she favor eminent domain condemnation of single family residences that command $2-3 million price tags to open up transit corridors? It's just so easy to blame government and "greedy" homeowners and move on.
16
Us "tech bros" get bent over the barrel on rent by the landlord class who benefit from prop13 and the housing crisis.
Why does prop13 apply to rental properties and commercial properties?
They cry about the hypothetical little old lady getting run out of town due to price increases but really they just want suck as much money out from renters and block new development.
And don't forget the low tax is passed by inheritance, hurrah for the California landed gentry!
6
What we need are new cities. Public transport mainly by monorail. Cultural (arts, crafts, sports, hobbies) facilities built-into the design of housing areas. Both single family and apartment living. Maximum height, five storeys. State-of-the-art communication with hubs. Short commutes locally to workplace and education. It is not easy. It is dead easy and there is design capacity, land, technology, materials and capital galore to do it.
2
@pedroshaio
Except CA has reached their limit on water.
5
Where exactly is it “easy?”
some of the No Cal areas you mentioned will be underwater in the not too distant future; I would rethink the suggestion that building near or on the waterfront is a good idea.
3
I spent more that 40 years in California and I love it - as do many others. There will long be a housing shortage no matter how much housing gets built as long as California remains "the Golden State".
3
I used to be a Yimbyer, but maybe the answer isn't to cram as many people into these cities as possible and turn Seattle into New York. If the tech companies want to solve this problem then open up smaller offices all over this country. Why shouldn't there be a 50 person office in Elmira NY? Allow your workers to work remote and keep most of their salaries. It's a huge country, there's no reason everyone needs to live in the same 10 cities, not to mention this will vastly improve our politics.
30
This story parallels what is happening in Austin. It is another example of the “Californication” of Austin.
The city wants to change the zoning to allow/force density in my neighborhood which is primarily nice single family dwellings near downtown. (The mayor apparently will benefit greatly with his real estate holdings if it passes which is a another story.)
We are fighting it. But with my property tax being SO high, I feel justified in not wanting to be neighbors with condos, apartments and “affordable” housing.
Am I part of the problem? Guess so.
Not everyone can live exactly where they want. I’m pretty sure that many of our 100 people per day moving here are from California and they probably think it is cheap here!
22
Austin use to be one of my favorite cities. Not anymore. High taxes, high home prices, awful traffic.
4
Even as Winter approaches, after reading the article and seeing the comments, I can't help but think that I did well moving from Seattle to Detroit back in 2000.
6
Maybe one should look at the bankruptcy laws? Would housing be more affordable if all the participants’ risks in building, funding, and acquiring habitats were more equitable during economic downturns, or times of high inflation?
2
If the tech giants really are doing this on their own, how about just decentralizing a little, and setting up campuses in the (very affordable) Midwest. Just a thought.
19
@Skip - you have bad weather. Nobody wants to live there. And then there's also the other things your state doesn't have, like legal pot and good wine.
2
We're having a similar conversation in Salt Lake City right now. We're a satellite tech center, not a major one. However, our population is expected to double in the next few years. Things are getting crowded. We are also mostly zoned as a single family or commercial. We don't have the same tax problem of California exactly. However, watching the housing market is extremely interesting.
Here's how things are working out. Young professionals prefer to live in the more densely populated Salt Lake area rather than the relatively sleepy suburbs. With an exception for some young families, young people want walkable communities and public transportation. Specifically trains that run on time. You walk, bike, scooter, to your nearest train station for work and commute down to Sandy or wherever the latest startup is building an office. You live in the city though.
This of course drives up both rent and housing prices. Sharing a single-family with renters becomes the de facto "affordable" housing and new construction is all condominiums aimed at reverse commuting professionals. Lower income families get pushed west where public transport, especially trains, is less available, less convenient, and less likely to become available.
Meanwhile, commercial businesses are sitting on property that should become residential expecting the value of the lot, not the business, to appreciate. Developers of course promise buses will fix everything. Ha. The upshot is a housing crisis in the making.
10
Proposition 13 may or may not been good for the individual (jury's still out about that), but it was a disaster for California and the people living there. Be careful of what you wish for/work for.
6
@sjs - having lived there at the time, I can tell you that most people were getting taxed right out of their houses in the 60s and 70s. After prop 13 passed, they could stay, which was the goal of the legislation. The jury came back a long time ago and declared it a resounding success.
People like to complain about Prop 13, especially outsiders like yourself. But the facts are that housing crises are complicated, with many factors both obvious and obscure. Nobody wants to accept that the feasible land was built out before 1990 in the state. When a commodity becomes scares, price goes up. Sorry, but that's just how it works.
Then there's the water crisis, which again people like you seem to think doesn't exist. It's probably the biggest check on new building that we face, and no amount of money is going to change it. We are a desert after all.
6
I was offered a position in San Jose by my employer.
When I looked at the housing stock, there was a 1,000 square foot bungalow for sale... at $2.1M. It made Manhattan, where I lived at the time, look relatively affordable.
Then I investigated the tax situation and realized I'd be paying top dollar in property taxes with my neighbours pay 1/2 to 1/4 the rate.
Then add the horrible driving experience, fires, mudslides, droughts..... it wasn't worth it. California has been polluted by overpopulation and bad policy.
No thanks.
63
In interesting article as far as it goes but much too light on reliable cited research and data to be very persuasive.
1
As long as developers' cash puts politicians in office, nothing will change.
5
Meanwhile in Massachusetts the traffic is moving toward gridlock, mass transit is not getting adequate spending, and real estate is being bought by investment firms who jack up rents. High tech is moving here and creating a similar intensity in housing while not contributing to mass transit. Taxation of high tech business is a contributor wherever they are. You would think satellite offices in low density areas would dawn on these firms and that remote work would increase. I know all those after hour get togethers to plot your next job are easier in Palo Alto. But really? Learning French as fast as I can and heading to the EU. Not going to areas in France others go to tho. Heading for a university town with good early music, train access, and interesting international population.
4
"The spiraling housing costs in West Coast tech hubs are the result " of a constant influx of people.
The population of the Bay Area has more than doubled in my lifetime. Likewise, the population of California has more than doubled. If the amount of available land had also more than doubled, there'd be no problem. Fitting twice as many people into the same amount of space is not so simple.
Large amounts of what was formerly good farmland has been repurposed for housing, and it's still not enough. There will never be enough; demand will seemingly always outstrip supply. Unfortunately, the only solution to the housing problem that anyone seems able to see is on the supply side. California's population needs to be stabilized, for more reasons than just the housing issue.
Honestly, I had to check to see if Ms. O'Mara was a property developer; I still wonder if that's her side job, she sure sounds like one.
16
@SB thank you! Maybe these tech companies should build and prosper in areas that could use their business and need the jobs?
9
After living in various towns in California including Thousand Oaks, San Francisco, Eureka, and Marin County totaling 35 years I retired to Provence.
The view out our windows includes vineyards, Mount Ventoux, and rolling hills. The only outdoor sound is silence and an occasional bird chirping.
I recommend that all Californians, surrounded by 40 million neighbors, consider reinventing their lives in a more serene and affordable environment.
9
I remember when Prop 13 passed. I was in my early 20s and voted against it. I fully expected the US Supreme Court to knock it down because it violates the Equal Protection Clause of the Constitution. It's terrible public policy.
10
Another way of looking at this, is that California - indeed America - is as big as it can get and maybe bigger. If people were redirected from California to other states that would help in the short term. If legal and illegal migrants were directed to other countries that would also help.
Requiring employers to pay real, as opposed to illusional, wages would help to by reducing the low-wage population, propping up celebrity estates and mansions. Which would reduce the demand for Illegal, and temporary visa, labourers.
Ms O'Mara is correct that the infotech industry did not create the problem but the solution is political not philanthropic. If the tech companies have spare money they should lobby Congress to support population control, globally and especially in the major source countries for migrants.
12
@Philip Brown I agree, real wages are the other piece of the equation. Your logic falls apart, however, when you start scapegoating immigrants and women. Setting aside your claim that immigration is a significant factor increasing unmet demand in CA's housing market (most planning studies show this not an issue) consider places like England, or indeed the whole of the UK: smaller than California with bigger populations. They welcome immigrants (arguably, until recently) and have considerable population growth despite limited land, without the kind of housing problems you see in California. Puzzling (and frightening) to me when people look to disciplining women's reproductive capabilities and low wage precarious workers as solutions, before policies aimed at public housing, affordable housing, more equitable tax policies and land use planning.
6
My sister lived in Redwood City. The fact that she had to move to Sacramento is very much the fault of the Tech Bros. Redwood City has always been a haven for the working class. That's over forever. The working class can just move to the Central Valley where they have to keep the AC turned on all day.
12
“There has been a huge shift in the tax burden to young families from older homeowners and owners of businesses,” the Times noted in 1988.
and those younger families post 1975 California are today's older homeowners selling homes they bought in 1970s San Jose for $50K and getting $2 million+.
These retiring boomers—with their 4,000 percent windfall profit property sale— are recreating the housing shortage they experienced as "young families" in Prop 13 California and burdening today's "young families" in places like Bend Oregon driving up home prices creating a crushing housing shortage and homelessness with a view.
Conservative ideology's 'beggar thy neighbour economic policy' is the root cause.
5
This is what hypercapitalism has wrought. It is insanity writ large.
My parents moved our family to San Jose—Johnson Ave. off of Prospect in the northwest corner of San Jose up against the borders of Saratoga and Cupertino—in 1965.
My parents paid $32,000 for a five bedroom, three bath, 2000 sqft two story on an 1/8 of an acre and sold it a decade later in the low $50K.
Today Zillow estimates its value at just over $2 million.
At the time there were still apricot, walnut and cherry orchards and cutting apricots was a summer job opportunity for high school kids.
14
A big part of the problem is overpopulation, and another big part of the problem is speculators, especially real estate investment trusts, which buy multiple lower-cost properties in relatively marginal neighborhoods, These are properties that in the past could have been purchased by first time buyers, but the REITs remove them from the market, wait a bit, then dole them out after adding hundreds of thousands of dollars to their costs. Today I walked by a home in my very nice neighborhood that I know went for $200K in the mid-eighties. It's now valued at $5 million. I don't see how this situation is sustainable.
36
The author does not mention the unnatural, exploding population growth that is the direct result of a haphazard immigration policy based on supposedly humanitarian values with disregard to practical consequences. It is not a coincidence that the housing crisis and mass immigration both manifested in the 1970s.
24
@Grunt
sorry but the notion that there was a housing crisis in 1970s or that mass immigration "manifested' itself is pure poppycock.
2
@Grunt Sorry, but what kind of population growth is "natural"? The white, colonial kind that appropriated the state's "natural" abundant resources in the 19th century?
3
Real estate developers used to slap up thousands of single family houses. They raked in billions of dollars and left an infrastructure mess behind them. For decades the cost of infrastructure to support new development was paid by residents, the developers paid very little. Now the impact fees are very high, that's because current residents don't want to subsidize builders.
Obviously there needs to be more new construction. There need to be changes to zoning that will allow higher density. If single family homeowners were allowed and encouraged to add more housing to their existing home, creating a duplex or adding an apartment over a garage or a small house in the backyard; there would be more housing options. It would also be a way to generate extra income for existing homeowners.
4
@Sharon
Higher density housing is not the solution - just a short-cut to insanity. The solution is fewer people in California and everywhere else.
7
Instead of a "hey, we didn't create this problem" defense of Bay Area tech workers / companies, long-term residents wonder "why do you all you multi-billion corporations have to be here or stay here?" Why not allow your employees to live / work in more affordable communities around the country? If you're the wizards of innovation, show us how nimble your companies are in spreading out your workforce and relieving the housing and infastructure stress you've accelerated in the Bay Area.
42
@Steve We should send the tech billionaires to fry in Sacramento and declare Redwood City a safe haven for the working class.
But please don't believe their hype about nimbleness and innovation. It's just about the cash for them.
9
The societal changes over the last 50 years from a one income family with few or no elders to support to a two income family with at least one elder that needs some type of medical/practical assistance has made relocation more difficult. A family can't stop paying and move some place cheaper until both adults can get a new job and neither fear leaving an aging parent. People keeping paying exorbitant rents and property taxes that eat away at was once a Middle Class. I am glad both partners in a relationship can work and that our parents are living longer but we need policy based on how we really live.
20
The housing crisis is a quagmire. Once we own a house we want the price to go up. We do not want to see our property taxes go high even if the city provides more services.
Uneducated laborers displaced middle class and educated into suburbs and have lowered standards of living in the city. Educated people living in the suburbs cannot socialize like the rich over a country club. So the culture and hence the society and politics suffers.
Gentrification is a good thing for society. We want educated people to socialize closely and not live in sleepy suburbs. Some increase in housing density would be good. However, increased density could lower the quality of living in the city.
The only reasonable solution to the housing crisis is high-speed rail. Build high-speed rail from SF to Sac. A three-bedroom house in Fair Field costs 300,000 and on high-speed rail one can travel to the city in 20 minutes.
5
@DipThoughts A fallacy per paragraph. (1) Most people do not look at their house as an investment anymore. (See, at most recent: housing bubble of the late aughts.) At best, it's a forced savings mechanism with a mild tax incentive. (2) What city have you even lived in? The urban core of most cities these days is unaffordable to "uneducated laborers." Much of exurban sprawl is actually made up increasingly of less educated workers. (3) Gentrifications has nothing to do with socializing. Gentrification is about pushing prices up, often to the detriment of neighborhoodliness. This can be googled and researched for better understanding. (4) High speed rail is not a singular solution, even not a singular solution for California. Have you considered transport times to/from the high speed rail lines? What happens when those lines are built and prices spike around the stations? You might look to the NE for models on this already existing problem. That 3-bed in Fair Field will no longer be 300K after the singular solution of high speed rail comes on line, and then you have a new problem to solve.
You might try reading this article, because it has some ideas about systemic amelioration.
Sorry to burst your multiple bubbles.
2
The housing crisis is the fault of Democrats, environmentalists and those who fund them. Around San Francisco there is a lot of derelict industrial land which has sat unused for decades because government rules and regulations prevent it from being redeveloped. I am thinking of the Dogpatch and the Central Waterfront, Treasure Island, the former Alameda Naval Air Station and parts of the Presidio. The responsibility for the housing shortage falls on the Democratic political elite which has run San Francisco for decades, and the environmentalists which are against building anything anywhere.
Across the country, cities run by Democrats like San Francisco and New York are desperately short of housing. This benefits existing landowners, who see rising prices due to the shortage of supply. Cities run by Republicans have ample housing because they have fewer zoning rules and believe in growth and sprawl.
Sprawl is what environmentalists and their billionaire backers call middle class housing. Being pro-sprawl is vital to having affordable middle class housing.
9
Both Treasure Island and Alameda NAS are being developed, not sure about the others. But yes, it’s taken too long to start the process
2
@Schrodinger maybe more people want to live in Democratic led cities? :)
6
Saying that an huge influx of highly compensated workers into areas where they can greatly out bid the average renter or home buyer is not part of the housing problem in a city like my own simply defies logic.
Of course competition for limited resources drives up prices, but the ability of tech industry workers to pay well over the odds for housing leaves not only hourly workers scrambling for housing, it forces middle class salaried workers like teachers, police officers, and nurses out of the very communities they serve.
Tech industry workers can start to help the communities they are joining by reigning in the attempts of their own industry leaders to buy politicians that will not tax their companies, or in the case of my state, will not fix a regressive tax system that guarantees a lower tax rate for the wealthy at the expense of the poor. Amazon and its leaders just poured an astounding 1.5 million dollars in to a race for seven seats on our city council, leaving many of us in this city sickened by such a naked attempt to buy favor.
I will support your generation in advocating for housing density and better transportation. Will you also work to equalize the tax burden with your less well compensated neighbors, even if it means you will bring home less money? This being neighbors thing is a two-way street, you know.
23
I found the attempt to blame tech workers for all problems, in favor of communist politicians who do nothing to be sickening.
Seattle has out of control homelessness our council lets them die in the gutter. Most of this council is not from here, has not done anything, and blame others to protect their jobs and score cheap points.
2
Homelessness is not unique to Seattle, nor is it out of scale to the challenges that other expensive west coast cities face. Please stop pretending that it is.
I have lived in two expensive east coast cities and three expensive west coast cities over the last four decades, all on a teacher's wages until I married one of those tech bros myself. As a spy in the house of money, I still interface with students and families everyday who live on the financial edge of chaos and I see how little it takes for a working family to find themselves on the streets. Add the opioid crisis to the causes of structural poverty and other forms of social disorder and you have a perfect recipe for disaster.
What we are living with in Seattle is not solely the fault of tech bros, but it is created by four decades of assault on the public good & the social safety net by the kind of people that make the salaries that tech bros do. My question is whether any of them will step up to fix the underlying problems of poverty that exacerbate what should be the rare case of homelessness in such a wealthy nation. If my meetings with some of the denizens of Silicon Valley are any proof, I don't have as much hope as this author does that they will solve these challenges.
5
Facebook, Google, and Apple are not being altruistic in developing housing on their former campuses — they are maximizing development returns on land they no longer need, and keeping it out of hands of other tech companies.
15
Unfortunately everything that’s being built here in Denver is 100% designed for and aimed at tech bros, and the apartments are anything but affordable. What will happen to all these overpriced cubes when the bros outgrow them?
13
@Elaine,
Affordability is a real issue in Denver; however, blocking new construction or implementing strict growth limits, as some people here are trying to do, will only make the situation worse.
" tax cuts have little effect on overall tech investment, yet industry leaders have consistently lobbied for them".
Yes, and that includes lobbying a state where the governor is democratic, and the party holds supermajorities in both houses of the California State Legislature. Unfortunately, it seems that even democrats are not immune from lobbying forces (e.g. legal bribing). We should expect much more from them.
1
@SPA
Why? They are, after all, politicians. The best that money can buy. If you have it.
1
There is a huge political bias against really -solving- the 'housing crisis'. While there is lots of discussion, and pledges and plans, there is nothing like the real action that will actually solve the housing crisis in California. First, a definition: by 'solving' I mean that an ordinary middle-class person, making the median income for the area, can afford to buy the median priced house. And by 'afford' I mean spending a multiple of the median income similar to what is needed in Oklahoma, Texas, Indiana, or Georgia... Currently, the median priced house is about 10x the median income, maybe more. In many parts of the country that multiple is 5x or less. So for the 'housing crisis' to be solved around here, the price of housing -across the board- would have to drop to about 5x the median income. Which means that people who paid 10x a year or two ago would be deeply 'underwater'. And that people around here who bought 30 years ago would see half or more of the "value" of their house disappear. That is not going to happen, politically. So we revert to the politically feasible alternative: giving away money. The issue then becomes two questions - where does the money come from, and who gets it? That's what all these new housing solution initiatives need to figure out. Meanwhile, many well-employed middle class people are frozen out of the housing market around here. Build more, lower prices across the board, and let the market function? Or give away money? Two bad choices.
10
Without arguing blame, the California housing crisis has a fundamental problem. There is a finite amount of water in California. We must face the constraints. We need to enact population limits.
27
@Martha E. Ture We can bring water from Oregon and
Washington. However, we still need zoning laws to maintain the quality of life. I think zoning laws are working as population limits. The problem is in the inner cities where poor people accommodate multiple families in single-family houses we break the population limit laws.
@DipThoughts
Water from Washington or Oregon would be expensive. Possibly too expensive for base-wage workers to drink.
Taking water from other states places pressure on their environments and merely staves off the day of reckoning in California.
Bottom line: California has to shrink!
10
@DipThoughts
"We can bring water from Oregon and
Washington."
I do admire your optimism, however displaced.
3
If California could some how build all the housing it needs the infrastructure to support it would not be there including schools, transportation, water, and public services. Our schools are already overcrowded, our roads are overcapacity, and our water can barely keep up.
43
@Lake thank you! It’s articles like this that makes the situation worse.
7
Abolish zoning, and housing will "magically" appear.
Zoning is an unconstitutional taking of the value of land.
2
@Jonathan Katz So you'll be delighted to have an autobody repair shop move next door or perhaps a bar that features live bands and a 2a.m. closing time?
Abolishing zoning isn't guaranteed to make housing appear, magically or otherwise.
35
@Jonathan Katz
There is almost no zoning in Maine. I suggest a trip up there before you advocate no zoning. I'm pretty sure you won't be pleased with what you see.
4
@Stephanie Wood
What??? What are you talking about? Where are you getting your information?
Current birth rate for America is 1.80 per women (which is below replacement rate). For Whites its 1.64 (only Asian have lower 1.52). For Blacks its 1.79. Get your fact straight, Ms. Wood, before you start to speak.
www.statista.com/statistics/226292/us-fertility-rates-by-race-and-ethnicity/
1
A professor at the University of Washington (which is in Seattle) should know more about what has gone on here.
Yes the city is overwhelmingly zoned single-family (like most western US cities), but the city has not "steadily expanded single-family zoning." To the contrary, single-family zoning has not expanded at all in many decades; in fact it has contracted in the past 40 years, if only moderately.
Yes the city has "abandoned plans to increase housing density in some neighborhoods under pressure," but it nonetheless has increased housing density in most neighborhoods.
Seattle has led the nation for several years now in the number of construction cranes, despite being nowhere near the size of New York, Chicago, or Los Angeles. Most of those canes are building apartment buildings, the rest are building office buildings, primarily for the tech industry.
Starting annual salaries for tech workers with a newly-minted bachelors degree average about $110,000 here, slightly less than in the Bay Area. That is more than most people will ever earn in their lifetime, and those salaries are driving rents to the neighborhood of $4 per sf per month, which many non-tech people can barely afford if at all. Just ask professionals in the commercial/multifamily real estate industry; I work in that industry and hear this every day.
The tech industry is part of the problem whether historians want to admit it or not.
66
@TOM
The source of the problem is that the growth in employment exceeded the growth in the housing supply and hence the shortage of living space. If more housing is to be built, the solution well may be to do what New York City did a long time ago: build up rather than build out and build up to a much greater rate than they have done before.
In the meantime, I don't think that getting in the housing business is a good move for either Amazon or Microsoft. That is no their job. At this point, the job is for the Seattle, Redmond, and Kirkland city governments to authorize denser housing. The only other alternative is for the divine AOC to be dispatched from New York to teach the residents of greater Seattle how to drive large numbers of tech jobs out of an area. She has the experience.
13
@TOM
Seems to me that the real estate industry - with its desperate desire to squeeze every last cent out of that square foot of space - may also be a significant part of the problem.
3
@Philip Brown right. As someone here noted, if there was a guaranteed income of $1000, rents would rise by $800. Historians might note that when Pullman increased salaries he also increased the rents on company housing, followed by strikes and riots. No matter what we’re told about the rights of the wealthy to keep everything for themselves, human beings will struggle against that.
4
There's plenty of land in California for plenty more people. It just need to be done correctly -- build walkable cities around mass transit rather than car-centric single-famiy sprawl.
15
@Nicolas Benjamin There's no water for more people. Everything is allocated and those with the allocation will fight tooth and nail to keep it.
15
@ILoveHelloKitty, farms in the Central Valley use more water than residents. Much of that is used inefficiently, as well. You are correct, that water should be a concern for all the residents and businesses of this state, but more efficient use would help as well as reclaiming and recycling waste water.
4
@Nicolas Benjamin says the person in Queens. :)
5
Anytime you concentrate jobs in a relatively small location, as by setting up an Amazon Distribution Center or an Apple Research Center within an urban center---where transportation to and from employment is slow and crowded and coming to work or going home become tedious and long because of the crowds, housing nearer employment will shoot up in value---it's the law of supply and demand . Shorter distances adds time to life and being with family---which makes location, location, location the chief determinant of prices. The poorer will be priced out of the area and the wealthier will move in. You will have gentrification nearer the employment and homelessness further away. Who is to blame?
Spreading out the job centers might work, but concentration of production saves a considerable amount of money.
7
Why is it that the TECH companies continue to force most of their employees to work onsite? Allow people to live and work remotely and transportation costs and overcrowding will be much-reduced, while emissions go down.
23
One of those tech companies was interested in my spouse, but forbade distance work. We didn’t want to move because of the housing costs and miserable car culture.
I can see paying $$$$$ to live in New York or London, but a suburb? Ya gotta be kidding!
2
So,
Aging boomers got theirs. Everyone else can pound sand.
And in other news...water is wet.
22
Also the children of Boomers benefit...After living poor as a Manhattan creative in a rent-controlled flat I just sold my boomer parent’s suburban NJ house ($700K purchased for $30K in 1970s) ...Folks go to cheapo Florida for the duration, I pocket $500K...
2
Surprise, aging boomers are not all rich, most of these wealthy tech folks are much younger than boomers. Aging boomers are going to get screwed, because they had to survive the 2008 crash etc. They are living in tough, cutthroat times. The younger generation will probably have a country like Canada or Sweden to grow old in, where they will be taken care of. No such luck for aging boomers, who will probably lose everything they have, only to be warehoused in shared-room, Medicaid nursing homes.
10
@Heard You Paint Houses
Agreed. When the Boomers die off, it will be the greatest transfer of wealth this country has ever seen
3
In light of your last paragraph about what Seattle and SF might look like if they became more engaged w their residents' housing needs ....
Tada...I offer you Stanford University which has just bought an apartment complex of 110 units, giving priority to those who make under 25K.....
Stanford also took the initiative to ask their neighbor Menlo Park, if they might build a 200+ apartment plus commercial mall which will be completed in 2or 3 years.
https://news.stanford.edu/2019/11/22/stanford-adds-workforce-postdoc-housing-redwood-city/
I am sick, sick, sick, of all the building in Silicon Valley and right in the midst of it. My little (?) town, Redwood City has built over 9000 more living units in the past 10 years, making driving a nerve racking experience even if just to go to the grocery store or local elementary school's soccer game. ...I welcome our residents to move out of this glorious state.
9
@Stephanie Wood
infrastructure such as bike lanes and pedestrian overpasses and underpasses solve a lot of that problem. But, who pays?
@Dolly Patterson I wouldn't look to Stanford, or any top university, as paragons of virtue.
These behemoths pay almost no property taxes thanks to their non-profit status. As they've expanded, they convert properties from contributors to takers. They still required infrastructure, like roads and transit, but pay nothing for those services.
Oh, and Stanford pays its football coach $4.1M a year, not including benefits. That's not about education. That's about vanity and profiting from favorable tax treatment unavailable to lesser organizations who pay the freight.
7
I lived in Seattle and then worked in Morocco for a few years recently, so I flew through Europe. Well, I read about a 'housing crisis' in Seattle, Vancouver, London, Dublin, Paris and other cities. We've sold-out the workers and enriched the few. We have done this, maybe unwittingly, maybe apathetically, maybe because we're bad at citizenship.
Believe it or not, billionaires should not exist. This concentration of wealth and power and property is bad for society, community, democracy. Of course it is. Our ignorant 'what the market will bear' attitude is leading us into climatic destruction. The worst offenders are those that profess to love God, but their refusal to deal with climate change is damning the holy planet and it's divine species. Too sad for words.
I'm tired of the excuse that, 'If we tax the rich, then they won't be motivated to lead us like we need them too'. That's a lie, that helps the rich gain more and more of this holy land and control of our politics, laws and land. We've got to rise to the occasion.
Food, housing, safety: our most basic needs. Well, if we're damned into paying the rich rent for our entire lives, then, what kind of life is that? Serfdom? Slavery? Sycophants?
'We the People'. We. We must stop being so selfish and greedy and help one another, love one another and build the more perfect Union. Today, we face the reckoning.
180
To maximize profits, business owners have an incentive to get the most work out of their laborers while paying them the lowest wages possible. They also own the end product that is the result of the worker's labor, and ultimately profit from it.
To maintain their position of power and privilege, the bourgeoisie employ social institutions as tools and weapons against the proletariat.
The government enforces the will of the bourgeoisie by physical coercion to enforce the laws and private property rights to the means of production.
The media and academics, or intelligentsia, produce propaganda to suppress awareness of class relations among the proletariat and rationalize the capitalist system.
Organized religion provides a similar function to convince the proletariat to accept and submit to their own exploitation based on fictional divine sanction, which Marx called "the opium of the masses."
The banking and financial system facilitates the consolidation of capitalist ownership of the means of production, ensnares the workers with predatory debt, and engineers regular financial crises and recessions to ensure a sufficient supply of unemployed labor in order to undermine workers’ bargaining power.
Marx felt that capitalism creates an unfair imbalance between capitalists and the laborers whose work they exploit for their own gain. In turn, this exploitation leads the workers to view their employment as nothing more than a means of survival.
3
Isn't it interesting that taxing the rich (taking money) is a disincentive to effort, but giving poor people money is a disincentive to effort?
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Overpopulation, scarcity of land, NO those are not the problem, even though thats what many think.
For example, Hong Kong is 427 square miles with a population of almost 7.5 million. Contrast that with Los Angeles which is larger at 502 square miles but with a population of 4 million.
The problem lies with the lack of political will to reduce red tape and allow developers to build UP. Building high rises that don't cater just to the wealthy seeking penthouse views, but to moderate income families would help. Local zoning laws in numerous parts of California limit building heights to only 3 stories.
Commuting long distances even by high speed rail seats up time away from family and other pursuits. Also thinking that every family wants to live in a California style ranch house is a fallacy.
Proposition 13 made it possible for seniors living on fixed incomes to stay in their homes. The whole reason it came about was because numerous elederly, living on fixed incomes, who often owned their homes outright were not able keep up with steadily increasing property tax increases.
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@A P
Visit Hong Kong or, better still, live there. If that is all you have known it is tolerable, otherwise it is the anteroom to hell.
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Big tech is the problem.
Spread out your workforce and the housing crisis will solve itself.
This is not rocket science.
Yes, I understand that not many people want to live in Sheffield, MA, but if there were jobs that people wanted, like Amazon web services developer, people would move there and the area would improve so that lots of people would want to live there.
Keep doing that and we have a real solution.
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I hear this in Seattle a lot. I feel like, even when prople hated finance the most, nobody told Wall Street they had to leave NYC.
I do not find it acceptable to have a stance that a particular kind workers is unwelcome in cities.
The cost (tax, rent) of being in cities I think will go up, but there is enough value in concentration of tech workers in cities that this pattern will continue as long as safety and amenities permit.
4
@stan That's pretty absurd. It's not as if a majority of people living in the bay area work in tech. It's just a massive hub of industry and culture, much like NYC.
People choose to live in the bay area because it's beautiful, has excellent outdoors, a world-class symphony, good food and great coffee. Many (most) of these companies do have other campuses spread across the country and the world.
They should be as welcome to choose to live there as anyone else.
2
Airbnb has taken tens of thousands of affordable housing units off the market.
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Yes — it is a major problem in many, many areas.
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@Harris silver
Here in Seattle, the city council has enacted many draconian landlord laws. Landlords can’t get a full security deposit up front, can’t screen for criminal history, and can’t collect damages if the renter claims they are a domestic abuse victim; in addition, they are forced to take the first qualified person who shows up — no personal judgment allowed. And in some cases they have to pay relocation assistance.
Is it any wonder many small landlords are choosing to do Airbnb instead?
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@Harris silver You are correct, it's causing a crisis in Phoenix.
1
I live in a lower property tax state and have the exemption from increases available to those over 65. But if I make over $60,000 annually they can still raise my assessment. I don't understand how people can be paying $1500 a year on a house worth millions in San Francisco. I do not think we should create a system that guarantees that the old folks will have to flee their homes and go where ...? But this is clearly a very unbalanced system which pits the generations against each other and is not doing the municipality a long term good either. Building more high rises does not solve this problem . Is tax control as bad as rent control ?
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Don't worry, New Jersey is making up the difference, we pay $15,000 a year even on homes with no driveways, and our techies are pricing us out here, too. Same problems as California, but with very high taxes. Techies can afford high taxes.
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@Consuelo Just a reminder, Proposition 13 is Statewide, not just San Francisco.
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@Stephanie Wood I pay $13k a year in San Francisco, tiny house. I’m not sure why the author has decided to not do any research or talk to people that actually live here.
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This is a very complicated problem. I live north of Seattle. As a widow, I live in the home my husband and I planned as a kind of grandparent's home.
My husband passed away. My dream home, not fancy, but lovely, has risen so in value along with taxes I can no longer afford it. However, the new "affordable housing" is more than I can afford due to the "income requirements" unless moving into a studio apartment.
Washington has a very high sales tax. That sales tax plus property taxes has cut off allowable deductions. Singles over sixty-five have been hit!
Much as I realize studies say those over sixty-five receive more benefits, incomes have risen for many of the new companies making those of us much older without retirement accounts quite compromised.
It is a complicated problem as I stated earlier. Although my home has value, the types of housing for people of my era still eliminates approval for most financing.
I don't feel sorry for myself, but as again stated: this is a complicated problem.
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@Tanis Marsh Ms. Marsh: Have you considered a reverse mortgage (I’m not in finance; I just follow the news & research subjects that interest me)? The way you describe your situation, it seems like a reverse mortgage might be worth looking into so you can stay in your “lovely” home, have a financial cushion, and not go broke paying taxes. Consult a financial advisor you trust.
@Tanis Marsh
Perhaps you can get a contractor to subdivide the house and share it with a renter/family. If it has at least 2 bathrooms already and only needs a small kitchen to make the other half habitable? I don't know what the laws are. And you should find out the rules and protect yourself legally. My son and his wife live in Seattle and even though he is an attorney they have still needed to subdivide their house into an upstairs and downstairs flat in order to pay the mortgage. And people are doing so throughout the neighborhood.They do not operate an Air BnB. They take in only long term renters-just now a family who had to come to town for a relative's serious illness and will be there a while. They have had other people for 4-5 months who have short term work. They share the laundry facilities on a schedule. They can be choosy and have not had bad experiences. My children grew up in a 3 and 1/2 bathroom house with 2 fireplaces and 2 living rooms. Now 2 of them are contracted down to one bathroom houses due to high costs. And that big house is sold to some empty nesters with lots of grandchildren. Things are difficult now for so many people. Middle class expectations now cost rich people's salaries. Don't sell your house until you have explored options. Because as you note it is not easy or cheap to move either.
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I see a lot of comments that seem sensible, but so far only one that mentions public transportation or a lack thereof. I have to wonder if high speed rail wouldn’t take pressure off of housing prices to some extent by allowing people to live further from work without having to waste years of their lives in slow moving traffic on the freeways. And for the life of me I cannot understand why high speed rail is not built along existing freeway corridors already owned by state or federal government.
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@JMK - if you build high-speed rail in the freeway corridors, it is too visible to an unstated reason why high-speed rail gets pushed back on so much. Imagine watching trains go by at 200mph while a truck full of goods is driving up that same corridor averaging 50mph, maybe. High-speed rail is a possible passenger commuter attraction, but if built is a sure thing for cargo. Airlines and trucking companies will make sure building a network of high-speed rail is difficult, even without the NIMBY of anyone living near the tracks. I think Musk is on to something with his underground tubes, if we can figure out how to build it economically enough, even for cargo-only, moving quantity, weight, and volume cross-country in hours instead of days is a market.
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@JMK
Building high-speed rail simply expands the opportunities for real estate speculators to gouge people. Unless your politicians miraculously grow backbones and introduce restrictions on speculation.
1
While the author gets some things right, and the history she presents is interesting, the article is full of the usual clichés, and so she gets plenty wrong:
1) High urban housing costs are a problem in most developed countries. Just ask someone in Berlin.
2) Prop 13 primarily shifted the property tax burden from commercial to residential property owners.
3) The state's Construction Industry Research Board (CIRB) reports show that local govts have approved thousands of housing units that aren't getting built. The bottleneck is also the building industry.
4) There has been an incredible amount of housing built in the Bay Area. Just take a ride to Fremont on BART to see all the new transit oriented development (TOD). Or check out the new TOD near the San Carlos Caltrain station in the heart of Silicon Valley.
5) Oakland is in the middle of a housing boom--so much so that some economists like Ken Rosen at the UC Berkeley business school worry that housing is being "overbuilt."
6) Building housing is now so expensive in Silicon Valley that builders there report that even luxury housing is no longer profitable.
7) Bay Area homeowners would be far more supportive of density if they had any reason to believe the new housing would go to current low-income and other residents, and not to high-income tech workers pouring into the region.
8) Tech workers care about the homeless and poor? Just take a walk down Jessie St. in mid-market San Francisco.
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@Michael Barnes number 7 is right on. I live in Bernal. No low income housing built here just condos that sell and are empty most of the time.
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@Michael Barnes
1) Many countries have far more dense, public housing that is subsidized and affordable for locals. Look at Singapore. Berlin is still relatively affordable compared with other European capital cities. Most big cities in Europe and Asia have massive investment in housing blocks. Something you rarely see in the Bay Area compared with say, Chicago.
2) Perhaps by some metric of total tax revenue lost, but it has obviously pushed the tax burden onto newer home owners vs long-time owners and inheritances.
3) True
4) Mostly false. These figures are easily proven. Compared to population growth the Bay Area has created almost no new housing at all.
5) Maybe at a micro, short-term scale.
6) True. This is primarily due to a lack of skilled workers who can afford to live within a 2-hour commute.
7) True, so I hope you are contacting your elected leaders to support new laws and zoning regulations that promote high density apartment buildings with below-market rents. Apartments cannot be bid up by investors and more supply means that the calculus to buy gets even worse that it already is.
8) Obviously there is no reason to believe a tech worker cares any more or less about the homeless and poor than the rest of the population.
5
Absolutely all commentary I've seen about housing in California focuses solely on the question of supply. No one seems to ask about why there is a concentrated demand. Enterprises know that there are two vital things they need to grow expeditiously: New blood, hence the need for housing, and experienced workers, for which reason they concentrate their growth in areas where they can poach talent from the competition.
As a retired engineer, I know that there are thousands of bright, talented engineers graduating from schools throughout our nation, but the industries that hire them choose, for that reason, to create most jobs in a limited number of metropolitan areas. And pundits repeatedly decry those who already live there for being unwilling to sacrifice their quality of life for the sake of someone else's return on investment.
29
@D E Ungar - Nobody is being asked to sacrifice their quality of life. We are just asking that people not exercise raw political power to steal affordable housing from the poor in order to inflate their single-family home property values. I am more concerned with rampant homelessness and housing non-affordability than the imaginary threats to suburban "quality of life" if we ever get serious about building dense, walkable, bikeable, transit-friendly, mixed-use neighborhoods for people again.
2
Minorities are being FORCED, not ASKED, to sacrifice THEIR quality of life whenever techies want to move in. They have completely destroyed our neighborhoods and want my home for free. I'm waiting for eminent domain. Sooner or later they will take whatever I have left, I just want them to pay for it. Dreading something like deed theft every day, so I've had to insure myself against that.
3
Two issues underly the California housing crisis, and similar crises: wealth concentration and overpopulation.
Until these are recognized and dealt with, don't expect progress in the matter.
50
When this essay isn't just dead wrong, it just passes on platitudes generated elsewhere. There is significant tax incentive in CA to create new housing, because property taxes are based on the latest sale price. I pay $13K a year in property taxes, having purchased a house relatively recently.
That is not to say that Proposition 13 is fair, it just isn't the reason housing is not being built - the opposite is true, the newer the housing the greater the tax revenue. Our housing crunch is really based on the cost of construction first, and opposition to new housing developments second. The cost of construction is driven by two trends: most importantly, construction wages are decent. This is the price we pay for not having a large underclass of underpaid laborers. Secondly, the legislature and even more significantly the state's regulatory agencies have been on a binge of code revisions since the 80s, and have given little thought to the impact on the cost of construction.
Given a choice, I'd rather rein in regulation and subsidize housing so that those who make less than construction workers can afford a home without rolling back wages.
4
@Pete This is a bit off your points, but for me, a widow, my property taxes, and all WA State property taxes are limited to $10,000 due to the new tax law. As one old enough not to mention, that hurts!
2
@ State Taxes for singles are limited to $10,000 in Washington State.
Wow, compared to NJ, Washington State sounds cheap. NO limits here for seniors or singles, and you pay school taxes until you die.
1
Essentially what you're saying is that the state is going to give some folks, who are either lucky, or politically connected, or of the right race or ethnicity a few hundred thousand dollars and every one else is going to pay for it. And at the end of the process they'll be clamor of those left out for more of the same ad infinitum.
11
@imamn Thats what we do in Boston and everyone loves it, esp. the people on the wait list.
It's ironic that the most liberal cities that preach for helping the homeless like Seattle and San Francisco have some of the most restrictive zoning laws that prevent the construction of affordable housing.
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@Lin San Francisco is the densest City in the Bay Area. Restrictive zoning indeed.
8
Where to begin.
Jeff Bezos, when compared to his Bay Area peer group has not done a bad job in Seattle. Amazon has revitalized an area between the downtown core, and Lake Union creating substantial economic activity in what was formerly amorphous indistiguable urban warehouse zone. Have there been externalities with adverse impacts? Yes. That is part of any positive change.
In the Bay Area, Silicon Valley is a collection of suburban municipalities that have become host to one of the key economic centers of the planet. You exit Hway 280 onto Sand Hill Road and you could think you're in horse country.
Land use patterns are breath takingly wasteful. Is going to change? No way, Jose! These folks got serious cash and connections and they'll fight tooth & nail against change.
Having had it for all their lives, New Yorkers can not appreciate the benefits of a relatively integrated transportation system and the ability of the Port Authority to be able to cut across political divisions to get things done. Raise a toast to Robert Moses!
Having lived in St. Louis, a city that has experienced a 63% population decline ( http://worldpopulationreview.com/us-cities/st-louis-population) since 1950, it will be interesting to see if Jack Dorsey's (head of Twitter), decision to develop thiere can have a positive impact on that city. Truth be told, Twitter has had a positive impact on the formerly downtrodden Mid-Market area of San Francisco
16
@David Trotman Dave, Please keep in mind that much of that land along Highway 280 is undeveloped because it is watershed land, especially around the Crystal Springs reservoir--clean drinking water is important, too.
27
@Michael Barnes, you are correct that much of the undeveloped land in the Bay Area is watershed. On the Peninsula, the East Bay and Marin.
One of the reasons people come to California is to take advantage of the Open Space that has been set aside by previous generations.
I lived in California for much of my life, and to build over all that “horse country” off Sand Hill Road would be to ruin the very reason many of us came here and stay here. Much of the development that occurred on Sand Hill was on “horse land” that I hiked and road on as a kid.
I tend to agree with many other commenters on this article, why don’t the tech companies develop more workplaces in parts of the country, like St Louis, that need the jobs and the revitalization that comes with it?
7
@Jane K
I actually saw a horse as I was once turning off of Hway 280. The land to the west is watershed area and should probably remain as such. The example was used for illustrative purposes for those persons who have never been here. Citing the anonymous single story office boxes surrounded by parking lots doesn't give a remote reader an idea of the massive contradictions that exist in the Bay Area land use patterns.
About 15 years ago I stumbled accross a really bizarre sight, on one side of the street was a Cisco Systems building about four stories wrapped in reflective glass and across the street about 60 feets a way was a field of 8 foot tall corn plants. It speaks to the pace of change and the realty that alocal political structure set-up in the days of agricultural fields is controlling a far different economic engine.
1
Maybe I missed one little pertinent word : Overpopulation.
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@Phyliss Dalmatian
Obviously, you've never driven through the vast empty lands of California.
5
@Phyliss Dalmatian No one wants to talk about that. No one.
21
@Phyliss Dalmatian From 16 million in 1960 t0 projected 45 million in 2020. But we can't talk about that, because there isn't anything to do about it.
21
Here in Denver affordability is a growing problem and although not on par with San Francisco yet, it could get there if the NIMBY "pull up the drawbridge" mentality prevails.
You can't have it both ways: i.e. expect to have a growing economy but not expect people to come here in search of opportunity and subsequently require somewhere live.
35
@Louis
Well put.
However, Denver can expand horizontally up to the mountain range.
San Francisco is surrounded on three sides by water and on one side by a mountain. Expansion is not an option.
The only option is urban infill. Not a bad option, but it needs to be managed well.
Apart from this, "affordable housing" is a smokescreen. Who can afford these "affordable housing" units? Only those to be exempted through a lottery.
Good thing I am old.
1
@Louis We don't want our economy to "grow" anymore. It's gotten so expensive for everything, not just housing, that even people who already own their homes are leaving. Companies need to move some of their employees elsewhere. It's the people that run the companies that want all of their employees here, not the actual employees. The quality of life is getting worse for most people.
14
If you really want things to slow down then enact policies that slow down economic growth, though this falls into the category of "be careful what you wish for" and would likely have some unintended consequences, not all of which would be positive and not something I would necessarily advocate doing.
Blocking housing development without also addressing economic growth results in a housing crisis--as long as there is economic opportunity people are going to come.
The system is working just fine for many Californians. The house they purchased decades ago has increased in value at an astonishing rate and their property taxes are very low. With cash out refinancing, many long time homeowners can live an excellent lifestyle far beyond what their career earnings would provide. That some people are homeless or that their children cannot afford a home doesn’t matter. I sense crocodile tears from many who bought homes for $50,000 that are now worth millions. There is no impetus for change.
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It's the voters--the older, single family homeowners--who have benefited with their booming property values while younger folks are priced out of the market. Let these homeowners, many of whom claim to be liberal, demonstrate that they care a whit about other people by voting in a manner that hurts themselves while helping others. (Don't hold your breath.)
76
Many older, single homeowners would like to sell and move, but can’t afford the higher tax burden of even a smaller home in a familiar area. Prop 13 is a disaster for several generations. It badly needs reform.
14
@tanstaafl
This "liberal" did exactly that, voting against a bill that would have benefited me personally. It would have created a break for people over 55 who sell their long-time home and buy another.
My conscience could not have voted for anything that depletes property taxes, which goes to local schools.
Maybe you can take your sniping at liberals to a different publication, Texas.
4
@PetesieNC
The law allows them to move their low tax basis with them to the next property.
3
Our Golden State needs more high density affordable housing built around its transit hubs and less NIMBY-ism from nearby cities that keep resisting further residential development in their exclusive enclaves. Easier said than done...
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@J. Grant Pacifica would be a good place to start. Raze all the ranch homes with RVs in their yard and put up multistory condos instead. Start a whole new school system from scratch, given the status now. It is a very short commute into SF and therefore a great place to stuff a lot of people in.
9
@J. Grant
More residents would require more water. And there isn't any more water.
5
Density is density. More people mean that we need to rebuild the suburbs with higher density arrangements or let costs for single family homes explode.
4
Please don't try and convince a Silicon Valley homeowner that "residential use . . . generates limited property taxes." I am lucky that I bought long enough ago that my annual wealth tax, sorry—property tax, is "only" $20,000. Judging by the comps new homeowners are looking at more like $50,000/year.
20
If you had bought your house back in the 70s or 80s you'd probably be paying $10K (or less) in taxes each year. In many Bay Area neighborhoods, that is often the situation.
4
@Fedee
e.g. from a Zillow entry for a house in Mountain View, Ca. that sold in 2017:
YEAR PROPERTY TAXES CHANGE TAX ASSESSMENT CHANGE
2019 $22,619 +1.1% $1,909,440 +2%
2018 $22,367 $1,872,000 +1465.3%
2017 $22,367 +1218.6% $119,595 +2%
2016 $1,696 +9.8% $117,251 +1.5%
2015 $1,545 +0.7% $115,491 +2%
7