Supply of housing in SF is limited (mostly due to the same sort of do-gooders who make infographics like this one), and demand is what it is, and that sets the price. Living in a 2BR in the city proper is not a necessity. It's a luxury. Living with one income in a two bedroom is by itself a luxury. There is no reason we should expect it to be affordable on a minimum wage salary.
Heck, when I lived in New York, I lived in a 430 square-foot apartment with a wife and a baby while making six figures. And I was a 35 minute train ride away from Midtown!
One concern is that jobs are generally located in the city. It's unfortunate that people who cannot afford to live in the city must also often make long commutes into the city. It'd be a shame if we said it was a luxury to avoid long commutes.
But it is a luxury... The demand for housing is affected by convenience. Those with more buying power are able to afford more convenient locations.
This is not unique to any particular city or country. I personally have experience with SoCal and Moscow. In SoCal, a 2br condo in Santa Monica costs the same as a house in a nice suburb, the difference is an hour+ drive. In Moscow, inner city is gridlocked 24/7 and unlike most of US, that's where the best jobs are, so the closer to downtown, the more expensive it is. Further out, prices are highest in walking proximity to a metro station (just like BART).
And then of course, the conversation turns to poor people using cheap cars to get there. And for once this is a "relatively" good deal for the poor, because the savings on car price more than make up for the difference in fuel costs for quite a distance (given that you can easily get a car $20k cheaper than a new efficient car.
Needless to say, this must be stopped ! "Not" because it makes life possible for a huge swath of poor people, that's not the problem. It pollutes ! "We" can't park anymore (because unlike poor people we don't arrive at work at 6am). "We" must stimulate public transport usage (without, of course, using it ourselves). Not that public transport even passes through the places where you'd live if you didn't have money, but who cares about that ?
I more or less agree with you - living in SF "proper" is a luxury good, kind of like living in the left bank of Paris. So I definitely don't intend anything that follows to be interpreted as a disagreement, more just... well, a riff on the theme, I guess.
Part of the resistance to this comes from the very recent memory of SF residents. The transformation of an SF address into a luxury good is very recent.
I'm acutely aware of this having grown up here. I have a friend whose father was a professor at SF state. He (largely on one salary) raised his family in a pleasant 4 bedroom (!) house in the inner sunset. Another friend's parents were school teachers, one part time elementary, one full time middle school. The had a modest but pleasant place a little further out in the sunset.
It really wasn't until the late 90s that almost all of San Francisco detached from the middle class. I'm wishy-washy on the term almost here... there are still affordable corners, I guess... a modest house in nice shape in the excelsior probably could crack $700. Is that affordable?
I lament this a little bit, but I'm not that outraged. There isn't much to be done. I do think that a creative culture (which includes tech!) can't really flourish in such an expensive city. It just limits options too much when you have to make so much money just to live.
Some of the loss is long term residents who give up on living here (my brother was a professor at SF State as well, he was barely able to afford to share a 2br apartment with a guy he knew from high school - contrast that with the 4br house one generation earlier. They've since left SF, probably never to return as residents, and a good thing for them that they did, because they wouldn't be able to chart their own course in life with that kind of rent).
But this isn't about localism or resenting people who are moving here. Let me put it this way - Harvey Milk became who he was partly because he was able to move to SF and find an inexpensive apartment. SF was once a place where very creative people who didn't really fit in could show up and find their way in life, and interesting things emerged from that. I think that was worth much more than widely available tech talent of VC funding.
One last thing, though - this bashing of "tech workers" is pretty horrendous as well. Like someone isn't allowed to come out here, take a job, and rent an apartment?
I guess I just see it as a done deal. The innovation of life, the kind nobody even understands well enough to fund, that causes people to scratch their heads and say "what are those people doing"? Hard to believe it will come from SF anymore. I'm as bummed as the next guy, I just don't really see any villain here[1].
[1] I know, I know, some people will say building codes are the villain. I'm not prepared to present a long defense because I actually can't rule this out, but I'm highly skeptical of this argument... I guess I'd just ask if building lots of high rise dense apartment buildings would have "saved" manhattan or the left bank of paris from culture killing real estate prices. To me, the real solution is that the creative people will move, locally maybe to Oakland, or that other cities will pop up (austin seems like a prime candidate).
"I do think that a creative culture (which includes tech!) can't really flourish in such an expensive city. It just limits options too much when you have to make so much money just to live."
This is exactly why I moved to Portland, Oregon instead of San Francisco 4 years ago. We've had a very strong creative tech scene here, that has not had the same levels of cost pressure. It emulated the situation during the Homebrew Computer Club days in Silicon Valley, it had the formula I thought would make it a good place to do tech startups.
The affordable cost of living has allowed me to work on projects I otherwise would not have been able to in SF, because I simply couldn't have afforded it.
Concernedly, Portland rents/houses have been trending upward recently, largely due to a lot of people moving here from California. It's my hope that Portland is able to maintain that balance of affordability and ambition... we'll see.
Concernedly, Portland rents/houses have been trending upward recently, largely due to a lot of people moving here from California. It's my hope that Portland is able to maintain that balance of affordability and ambition... we'll see.
Well if we could stop telling everybody about it... ;)
Love this post. I agree with almost everything you wrote here. One thing I would respond to is the notion that tech industry workers are somehow inherently not creatives or artists. The best programmers and designers I know here are without exception creative, thoughtful people in many other areas of life. The ones who choose SF over the valley may trend even more in that direction.
I didn't express that well. Some of the highly creative people who are displaced (or who never show up) are tech people. I'd even say some of the well funded tech stuff is interesting and creative as well.
I always thought of tech the way you described it, as part of the slightly quirky and interesting culture.
> The innovation of life, the kind nobody even understands well enough to fund, that causes people to scratch their heads and say "what are those people doing"? Hard to believe it will come from SF anymore.
I don't really know much about the history of SF. Can you give some examples here?
>>430 square-foot apartment with a wife and a baby while making six figures
Just because you chose a horrible situation doesn't mean that should be the mean. Many people live in a dirt-floored hut with no electricity or running water and that doesn't indicate that we should find that to be acceptable rather than trying to raise the global standard. That sort of thinking led to the ridiculousness that is SF/NYC real-estate.
There are other parts of the country where you could be living in a house you've purchased and still make "six figures."
No, what led to the ridiculousness of SF/NYC real estate is do-gooders talking about what we should find "acceptable" and what we should do to make things "acceptable." The do-gooders who complain every time you want to tear down low-rise development to build high-rises, the do-gooders who want to impose rent controls so old people can hang on to their apartments while younger people are priced out, etc. The housing market is like a balloon--you push on one end, and it inflates somewhere else.
I'm hardly a free-market true believer. But this is a basic bit of micro-economics: supply and demand of housing. If demand is high, you'll minimize prices by allowing supply to grow to accommodate demand. If you don't allow supply to grow, prices will explode. You can't legislate away the mechanics of the housing market.
This should probably be the number of such jobs needed to rent a room walking distance to BART or Caltrain in the whole bay area. But then it wouldn't have an obvious agenda.
Is anyone surprised that cities are expensive or that a city that dramatically restricts construction of high density housing is even more expensive?
I'm a socialist. I believe in Universal Housing (that is every one should be guaranteed/given shelter (also healthcare, education, and sustenance)). But, I definitely don't believe in Universal Housing for whereever you want to live.
I'm thoroughly unconcerned that it requires 4-8x times minimum wage to live in of the best / most popular cities in the world.
Around 1991 my self and 3 other 20-21 yr old college dropouts moved to SF, rented a two bedroom. Can't remember wages, doubt minimum wage cause most jobs pay more than that in SF. I did temp work, two waitresses, and I don't remember what 4th did. There were trade-offs. But we wanted to live in the city even when everyone else our income bracket was being forced out to Oakland. I lived all over SF for 14 years with increasing income and decreasing roomates. It'd doable, if you want it bad enough.
> Capitalists can answer this easily: exploiting workers by paying them less than a living wage raises the rate of profit.
Yes, nothing increases profits like dead workers. Mwahahaha. adjusts monocle.
Anyway, the answer you're looking for is that when workers can't afford to live in a commutable distance to a given job, the supply-pool of workers for that jobs goes down. When the supply goes down, the price goes up (or other measures to increase the supply kick in).
Except they won't be dead, they'll just be living very badly, and end up costing more to society due to using services (some study showed that a homeless person in new york costs around $40k extra in services compared to "median" people... why not just hand the guy $40k?).
People living on the edge end up costing more to society, it's an externality not taken enough into account in the labor market.
Your sarcasm betrays an ignorance of the history of the relationship between Capitalists and labor, especially during the Industrial Revolution (European and American) and the several decades thereafter.
They literally did not care if their workers died. So workers were employed in deplorable conditions for less-than-livable wages, in order to maintain high profits, simply because the Capitalists could get away with it. I don't know what makes you think the Capitalists of today are significantly different from those of yesterday in this regard. The key difference that separates them, as I see it, is that today Capitalists may (notice the "may"--it isn't guaranteed) be prosecuted or, worse (to them) fined, if they violate labor laws.
And do you have actual evidence to support your second assertion? Especially in the case of the Bay Area in general, or San Francisco in specific?
As a matter of fact, yes. The easiest, simplest, cheapest way to increase profits is to cut wages while encouraging uncontrolled reproduction and forcing self-sufficient populations into the labor market. That gives you an abundance of labor power so large that you can pay them sub-living wages and not run out of workers when they drop dead.
It especially helps if you can finely calibrate things so that they drop dead slowly, particularly after having children. A worker who drops dead of a heart attack or snaps their neck somewhere in the range 40-55 is optimal: they've reproduced sufficiently to replace themselves in your labor force, but they didn't get old enough to be owed a pension.
The way to keep them alive that long while paying a sub-living wage is a simple little thing called Food Stamps. The government makes up (most of) the difference between the wages you pay and the actual cost of staying alive. You thus reap profits that are effectively subsidized by taxpayers while still being able to claim that you're an independent company operating in the free market.
And you know what the best part is? After a few years or decades of this, you can turn around to the government and complain about how much public debt they've got and how high their taxes are! You can then set province against province or nation against nation to compete to subsidize you the most, all the while maintaining your self-image as a heroic free-market ubermensch.
But, I definitely don't believe in Universal Housing for whereever you want to live.
Interesting. How do you think such a system of Universal Housing should work? One alternative is to build high density public housing which, IMHO, has been shown to be an utter disaster from which many poor communities are still suffering.
Another alternative is to incentivize the poor to leave high cost areas and spread out to where they could be housed more affordably/safely/sanely. I'm not sure that's as terrible an idea, but it certainly has downsides, including potentially sacrificing whatever culture and community already exists in poorer areas.
I am not a socialist; my currently preferred form of welfare is simply to give people cash (and more cash, rather than less, if they obtain a job). But I'm definitely curious to hear the other side.
Sure, but is that enough? How do you create "Universal Housing" if some poor person living in San Francisco stubbornly refuses to buy a bus ticket to Montana?
So while having 4 incomes is recommended for living there, it isn't actually needed. You could live there on a smaller income by being careful about your smaller expenses.
Actually, in SF many landlords want to see proof of earnings and require you to be earning 3x the rent. They don't give you the option of living frugally to afford the rent.
If you're not going to say that affordability is roughly 3x rent, then you shouldn't be using gross pay, you should be itemizing. "Roughly 3 times" always seems to be a fudge so you can use gross pay instead of analyzing everyone's taxes and number of mouths to feed - and results in a rough estimate of affordability.
The problem with the 3x approximation is that other expenses don't really scale with rent. If you spend $1000/month on food and $2000/month on rent, and then move to a $3000/month apartment, your food cost isn't going to change to $1500. Sure, the local grocery stores and restaurants might be a little more expensive, but not much.
And $1000/m for food is actually really high. That's if you eat lunch and dinner at restaurants every day and don't worry about the price. Figure $500 for food, $500 for health insurance, $150 for transit... it's not adding up to twice rent.
A 4x factor sure sounds very high, though maybe the costs in SF (or in the US in general) are different to my own;from my experience over the last 6 years, living in a variety of setups in different cities in Europe, I spend 50-60% of my monthly outgoing on rent (then about 10% on bills, 10% on transport, leaving ~20% on misc and recreation). A 2x factor seems much more reasonable.
You won't find an apartment in SF with a 2x ratio, landlords will run screaming away from you. This is a city where you line up with other prospective tenants to see apartments, and deals are sealed frequently on the spot - and where bidding wars are not unheard of.
If you come to SF intending to rent an apartment on a 2x factor, you will be homeless.
The insane rents in SF is an express of the extremely constricted supply - which has other effects beyond merely just rent. It's a landlord's market and they can afford to be extremely choosy about who they rent to.
I've found NYC almost as bad. Just being able to afford the rent isn't enough. Here, yearly income 40x rent is standard, and sometimes even that's not enough.
Since I'm doing contract work and don't have a regular salary, one landlord told me outright that even though I had demonstrated I could pay, he wouldn't rent to me because he "wanted a more stable tenant".
It feels terribly insulting to be told that, and makes me long for a humbler city like Chicago or Minneapolis, where if you have money, a landlord will take it without nearly this level of nonsense.
Or Berlin. I looked at apartment prices there and began to feel quite jealous of the Germans :)
It's starting to. Having been here since ~2008 - there was literally no new construction until about last year. And now there are about a dozen high-density apartment buildings going up (on Divis, Market, Duboce, 3rd, etc.). Likely that the greater housing crisis coupled with an explosion of local jobs at the same time greatly increased the burden.
Read her other posts. It's basically the same litany of views (supporting highly paid municipal workers and rent controls while opposing aggressive policing) that have pushed people out into the suburbs, simultaneously destroying American cities while putting their finances in shambles.
Rent controls decrease supply. They help the few (mostly old) people who get in early on them, but raise prices for everyone else. Highly paid municipal workers require high taxes to support their salaries and pensions. Housing prices and taxes are key reasons people cite for moving out of the cities into the suburbs.
Housing prices and taxes are key reasons people cite for moving out of the cities into the suburbs.
Regarding housing prices: this may be true in first-rate cities like San Francisco or New York, but here in St. Louis (and in dozens of similar cities in the U.S.) housing is usually cheaper in the city's core. People left for the suburbs to get more space, because they had automobiles, because the housing stock in the suburbs is much newer, because blacks were moving in, and because of crime levels (some real, some perceived).
Desegregation and crime were major reasons, sure, but housing prices and taxes didn't help the situation. And today, even though there is a big trend of young people moving back into cities, questions remain about whether they'll stay while taxes ratchet up to support underfunded pensions, etc.
Also, rent controls depress the quality of housing stock.
Well, if someone was born, grew up, and spent their whole life in SF before being forced out by rent increases... why not? Should we just say it's perfectly fine that housing markets keep forcing the middle and working classes further, further, ever further out of the urban cores?
As long as new people keep being born, they're going to have to live somewhere. You can choose the Greenwich Village route which SF seems to be doing and maintain the outward appearance of the place at the cost of that place becoming ever more exclusive, or you allow as much new development as there's demand for and the place starts looking different but doesn't become any more exclusive. It's worth emphasizing that this doesn't have anything to do with Capitalism. In a command economy you'd see the same thing with the powerful using their influence to get slots in the city, and the same sort of outflow of existing residents.
Maybe if SF succeeded from the US and California and ran a tight immigration policy you could make stasis work, but somehow I don't think that's in the cards.
It sounds like you are suggesting a rather perverse sort of inheritance where the "right" to San Francisco stock is granted to those who are born into it irregardless of that man's wealth, merit, or ability.
Allocating resources this way would be bad enough if housing stock was a public good, but it's not. It's owned by landlords who are then required to subsidize the lifestyle of the beneficiaries of this "right".
If TPTB wanted affordable housing, they'd get out of the way, ditch rent control, let developers build more of it, and subsidize rental for the poor.
There's one showstopper problem with a more free-market approach--the overriding purpose of rent control is to subsidize rich parasites like Charlie Rangel. It would be a lot harder for such people to have their housing paid for by others if subsidies were explicit and means-tested. Sure, poor people wouldn't come out worse, but they're not the ones making the rules.
It sounds like you are suggesting a rather perverse sort of inheritance where the "right" to San Francisco stock is granted to those who are born into it irregardless of that man's wealth, merit, or ability.
Hmm... owning a city as a cooperative? I don't see why not. There are certainly institutional frameworks in which it can and would work.
Further, you could take inheritance tax from the value of the urban citizenship when someone inherits it by coming of age as a citizen/resident of the city. If someone couldn't pay the tax (which could be charged as a portion the market price of rent/purchase in that city), they would be forced out of the city, as today. However, when their citizenship/residency right would be outright sold, the tax would be less than 100%, so they would at least partially recoup on a financial level the loss of their home.
Sounds like a bizarrely good idea. Thanks for thinking of it.
... because it's such a great idea for your housing to be tied to your employment, and for your employer to have direct control over your housing situation...
I can see it now, "Johnson, if you don't work the next 3 weekends I'll fire your ass, and per city law you'll have one week to get the fuck out of town to make room for the next SF-employee".
I cannot see any way in which "everyone who works in SF deserves to live in SF" can be implemented that won't make it even more inhumane and tyrannical than the free market it's replacing.
Richmond is a great part of town, my friends used to live there and I enjoyed visiting them. But the transit accessibility is terrible. Even with express busing it takes up to 40 minutes to get downtown. If they put in better mass transit options, it would be a much more suitable place to live and I think you would see this map even out more.
That said, the people that live there tend to be older families that have been in SF for a long time, and to them that's probably not a high priority (they often live under rent control and probably don't work downtown in tech). If you change the status quo, you threaten their ability to live there by raising prices.
I don't think this is going to go away until the exorbitant valuations on tech startups does. It's the main force that's driving these price increases, just like it was during the first bubble.
What do the numbers you get when you hover over a neighborhood mean? They seem to be somewhat contradictory.
Household income to afford this rent is always way higher than the median income of those who actually live there. Is there an error in the way these numbers are being calculated or am I misunderstanding the headings?
1) A mismatch between the "2 bedroom" metric
and the actual mix of occupied dwelling spaces.
2) Marginal demand - current supply and demand has
more effect on currently available properties than
on previously existing leases. If rent control is
in effect, long-time rentals may cost much less than
the current market rates.
As a purely informational resource, can someone add how those minimum wage earners can avail themselves of affordable housing, which seem to dot every neighborhood in the city?
One thing to note is the word "Average". In the financial district, for example, the apartments along the water have far higher market rates than those even a few blocks away
Why not? FiDi is home to some of the most expensive luxury units in the city. This fall, voters will consider a proposal to build new luxury units along The Embarcadero.
I thought the same thing too, but I guess if there's two of you working, then two minimum-wage jobs "should" work. You can apply the same sort of reasoning by assuming 2 people are paying for it
Still frustrating that people will somehow defend the minimum-wage/rent disparity.
I agree that getting by in SF on minimum wage jobs is likely impossible, but at the same time for most of human history separate bedrooms have been a luxury.
It'd be interesting to find out if two people could afford a studio or 1-br for 4 jobs or fewer. (I'm guessing not, but you never know.)
For most of human history indoor plumbing has also been a luxury.
Though you're right that a 1-br + living space should be "decent" for 2 people (the 2-br probably has a living +kitchen too, so is probably not bad in living arangements). Studios are usually a pretty tight fit (euphemism) for 2 people I'd think though.
I've lived in a couple of studios with my previous SO, for something like 3-4 years. In a huge number of ways I prefer it to live living in a 2 bedroom like I do now (however I much prefer living with my wife, so....)
It enforces a minimalist aesthetic, excellent cooperation, solid space management and living a good chunk of your life out of the house. Which makes for a nice lifestyle.
However your mileage may vary (and I think it certainly matters that we chose to live this way, and where not forced to...)
I don't know what size your studio was, but as a student I've been in studios around 18m2, and I fill it up well enough with my own stuff. Might be more due to my hoarder personality than other things
Perhaps because a 2br is typically less than 2x a 1br. So you can divide these numbers by two and also give the city an affordability benefit-of-doubt that people would pool living spaces.
No worries, the government subsidizes the living arrangements of the lower classes so that they can continue to live and breed in pathological concentrations in expensive cities. The supply of people to mug/rape you is still higher than out in the suburbs.
Heck, when I lived in New York, I lived in a 430 square-foot apartment with a wife and a baby while making six figures. And I was a 35 minute train ride away from Midtown!