Opposition to Affordable Housing in Marin

Marketplace, on NPR, is running a series that deals with affordable housing in Marin County. Marin County is just north of San Francisco, a wealthy, democrat-voting, suburban and rural county, whence "liberal lion" Barbara Boxer hails.

George Lucas, of Star Wars fame, owns a former dairy farm in Marin County. He has offered to build affordable and working-class housing on his property, out-of-pocket. Local residents are opposing his plan. They cite weak reasons like potential traffic, or aesthetics.

In reality, this comes down to "I was here first!" and "Not In My Back Yard!" [NIMBY]. To get a good flavor of the situation, it's very informative to listen to the story from NPR, especially the town hall meeting. 

Wealthy homeowners in the Bay Area are so unwilling to live people who are not as wealthy as they are. They can't imagine that the people who pick the crops, clean the homes of the wealthy, work in their gardens, and teach in their schools, might have to live somewhere nearby.

The standard refrain is that "those people" can just live farther away and commute. The problem is that there is no "farther away" with both affordable housing, and efficient transportation infrastructure. Living more than 20 miles from your workplace is a terrible idea in the Bay Area, because the roads are clogged with congestion.

The Housing Crunch Continues

In the SF Bay Area, the housing crunch, complete with spikes in rent and home prices, continues. I've maintained the whole time, that the housing prices are not even justified for high-paid tech workers. Most people who work as engineers in this area cannot afford to purchase a house, and even finding reasonable rent is difficult.

The local news featured this article recently. It's anecdotal, but the premise is that even google software engineers have a difficult time finding housing in Mountain View.

Housing Affordability in San Francisco [and the Bay Area]

If you live in the Bay Area, you know that the cost of living is high. By "cost of living," I don't mean food prices, fuel prices, or many other goods and services. I mainly mean the high prices for renting or purchasing property.

While many areas offer an array of low-end to high-end housing solutions, where the renter/buyer can adapt his budget to the options, San Francisco offers almost no availability at the low-end, and almost everything else at high-end prices, with premium-end a growing market share.

There is an array of historical reasons behind this strange, skewed distribution of housing options. The underlying reason is a geographically constrained area, with ample economic opportunities, which attracts a lot of people from all over the world. This underlying problem is exacerbated by Not-In-My-Backyard policies that make it difficult to develop higher-rise, higher-density housing.

Prop 13 severely reduces liquidity in the property market, because if you already own property and decide to move, you stand to increase your tax burden; all property owners stay put. Finally, rent control ensures that renters also stay put.

In 1978, people got tired of property tax increases, so they passed Prop 13 to limit/eliminate property tax increases, and consequences be damned! In 1979, San Franciscans got tired of rent increases, so they passed rent-control, and consequences be damned! Each of these policies are best-described as a "We were here first!" tax on newcomers.

Down where I live, on the Peninsula/Silicon Valley, there is no rent control, but rents are still very high. We have similarly high demand for housing here, and many high-paying employers nearby. One additional reason appears to be monopolistic ownership of rental properties. The same 2-3 companies own all the apartment complexes in town, so they alone control the going rents.

So what's wrong with high rents/home prices? Well, for the lower-income, they're a massive burden. For the middle and higher-income, they're a huge waste of resources. The excess money someone spends on rent or mortgage could go to purchasing other goods and services, creating more economic activity. 

In any case, there's a great article on techcrunch that details the housing situation, and historical factors in San Francisco. It's well-researched, and a long but informative read.