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The New York Times reports that in three counties in California’s Bay Area, a family of four with a household income of $117,400 is now classified as low-income. This is the threshold in San Francisco, San Mateo and Marin counties used to calculate entry into local and federal housing assistance programs.

“To generate the number, officials at the Department of Housing and Urban Development factor in the median income and average housing costs in an area. The second-highest threshold is in Honolulu, according to the agency — but the third is also in the Bay Area, in Santa Clara County, the heart of Silicon Valley. The New York City area, where a family of four earning up to $83,450 is classified as low-income, came in at No. 9.”

Locals in the three California counties see the tech industry as bringing highly paid employees into the region. Housing, transportation and food have also increased in price. “It’s arguably the most expensive city in the country, so what that translates to is really not that much money,” said Ed Cabrera, a Housing and Urban Development spokesman who is based in San Francisco. “Especially with children in an area where properties are considered affordable if they’re going for half a million dollars.”

For a two bedroom apartment in San Francisco, “fair market” rent is determined to be $3,121.  The median house price is now over one million dollars in San Francisco. Many residents travel far inland to afford housing, adding to very long commutes. As Ken Cole the Housing Director of the county observes, “What it means on the ground is that teachers, first responders, people who grew up here of average income are being forced out by the high prices.” 

Building high density accommodation close to commuter rail lines and increasing rent control are two methods he believes can provide more affordability. His words also ring true for Vancouver, where affordability for middle-income earners is very challenging. “The very success of the place undermines the viability of life for at least the lower half, if not the lower two-thirds,” Mr. Walker said. “And those are the people who get forgotten in the narrative of the glamour of tech changing the world.”

If low and middle-income people cannot remain in San Francisco, the Bay Area’s reputation as a diverse and innovative economy will diminish. As Kate Hartley, director of the San Francisco Mayor’s Office of Housing and Community Development, said: “the harder it is to house our artists, teachers, restaurant workers, health care providers, the more we put that great spirit and strong economy at risk.”


Photos: Hotpads.com & Zillow

Comments

  1. Housing affordability is becoming a concern for cities globally. As the majority of the world’s population has now settled in cities and that urban proportion of the population continues to grow rapidly, the pressures on finding shelter will continue to grow. Land use efficiency needs to become the primary focus. Old theories about what cities look like and how human settlement should be planned are becoming obsolete. Trying to adapt old ideas as the new realities unfold makes little sense.

  2. “teachers, first responders, people who grew up here of average income are being forced out by the high prices.”

    From another perspective, they are being “forced out” by their relatively low incomes. Perhaps salaries for these professions should be tied to the cost of living in the municipalities they serve.

    1. That would be great. Then all the real-estate agents and the owners of property would know they have a willing and able market for high prices. Prices can then only go up and up more and more.

      The rest, all the ‘other’ workers, meh – tough. Actually, tougher.

      No matter the cost San Francisco then becomes a ‘strong buy’.

      1. Not necessarily. Those who do get salary increases can still choose to buy homes in lower cost areas and commute, but now they would be adequately compensated for commuting. Likewise minimum wages could be tied to average incomes of a municipality and minimum wage employees could choose to live in lower cost municipalities and commute and would now be compensated for commuting.

        Property taxes would have to go up somewhat to pay the added salary expenses of public employees, and this would mitigate home price increases (but not rents).

  3. Which city anywhere has tackled this affordability problem successfully, and how? What can Vancouver learn from this city?

    1. Tokyo has. The japanese government did it by streamlining zoning into a handful of inclusionary categories regulated at a national level, removing almost all local obstructionism to development.

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