By David M. Greenwald
We got a little bit of a reprieve over the last 15 months from the housing crisis. COVID shutting down in-person work and universities. Eviction protection. At some point all of that will run out. And we will be right back into the fire.
Last week, just to illustrate how bad things could be, the San Francisco Chronicle ran an article on rent in San Francisco. (“‘These numbers are mind-boggling’: It takes how many minimum wage jobs to afford S.F. rent?”)
Using numbers from the National Low Income Housing Coalition, the Chronicle reported that it “takes a household income of $68.33 an hour — more than four times the local $16.32 minimum wage — to comfortably afford a two-bedroom apartment in the San Francisco area.”
Just to put that into terms—that is a household income of $11,200 per month or about $134,400 yearly. That’s just to rent a two-bedroom.
They write: “The coalition’s annual report measures affordability based on the federal government’s longstanding ‘30% rule,’ which says no more than 30% of one’s income should be spent on rent to leave money for food, health care and other necessities. Using federal wage and rent estimates from 2019 to 2021, the coalition found that’s a tall order in the San Francisco metro area, which also includes Marin and San Mateo counties, where the fair market rent for a two-bedroom apartment is still 
around $3,550.”
They add, “By those metrics, the Bay Area and nearby Central Coast are home to all four of the nation’s least affordable rental markets. After No. 1 San Francisco, No. 2 is San Jose and the surrounding South Bay suburbs, where it takes $58.67 an hour to afford a two-bedroom rental. No. 3 is the Santa Cruz-Watsonville metro area ($58.10), and No. 4 is the East Bay region encompassing Oakland and Fremont ($45.83).”
“These numbers are mind-boggling, and they’ve only gone up,” said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California. “We can no longer justify being the most expensive. That’s not the identity that we should be holding.”
I was reading an op-ed in the San Diego Union-Tribune this week from Castro Ramirez, secretary of the California Business, Consumer Services and Housing Agency, a Sacramento resident.
She argues: “Californians also need Congress to invest in bold, long-term solutions to ensure a just and equitable recovery.”
Her solution: expanding and enhancing the Housing Choice Voucher program.
“This would be nothing less than transformational for Californians and people across the country,” she writes.
The big problem—“rent and housing prices have far outpaced wages in communities across our state, disproportionately affecting communities of color and low-income households.”
Further, “the supply of housing is not keeping up with demand, especially for the lowest-income households, resulting in a shortage of affordable housing.”
The data she cites shows, “More than 4 million people in our state are paying more than half of their income to cover housing costs. That number includes more than 1 million children and hundreds of thousands of seniors and people with disabilities.”
So she argues: “While the House of Representatives and the Senate have made significant investments to keep individuals housed through the American Rescue Plan Act, they now have an opportunity in recovery legislation to bring significant relief to Californians.”
Nationwide, she continues, these types of programs including housing vouchers and rental assistance which “have helped lift millions of working families, seniors, children and veterans out of poverty.”
The problem is that “the program only has enough funding to help 1 in 4 eligible households.”
“Housing vouchers have widespread, proven results,” Ramirez writes.
They decrease housing instability and homelessness.
In addition, “vouchers create opportunities for families and individuals to access quality schools and services.”
Crucially, Ramirez argues, “they help counteract the pervasive and long-lasting effects of discrimination that continue to reduce economic and housing opportunities for communities of color in our state and across the country.”
Further, “Housing vouchers have shown to reduce family separations, school absences for children and intimate partner violence.”
Clearly, we need to increase the supply of housing which is a huge cause of this problem. Clearly, we need to find ways to stabilize rent. But these vouchers can work to reduce the burden of housing costs, allowing families to be able to better afford things like food, medication and other necessities.
“By stabilizing individuals and families, housing helps entire communities thrive. Expanding housing vouchers is crucial to keeping Californians in their homes and out of homelessness and building a brighter, more equitable future for our state,” she concludes.
—David M. Greenwald reporting
The simple fact is that the normal workings of the housing market supply/demand curve are not going to provide a solution to housing affordability, so subsidies, whether in the form of housing vouchers or other methods (Section 8 comes to mind), appears to be the only way to effectively provide a solution to the problem.
That is also true for housing affordability for students, with the housing subsidies coming as part of an overall affordability of higher education program.
The challenge that vouchers face can be seen in the current implementations of Section 8. Many landlords specifically exclude Section 8 tenants from their complexes.
Maybe.
Of course, this is completely irrelevant for those who benefit from rent control in places like San Francisco. In which case, half-time at Starbucks might be sufficient.
I know someone who pays extremely low rent, in a high-end neighborhood. A two-story unit, and a garage. (And unlike Affordable housing or vouchers, income is not involved in that equation, thereby not hindering further income growth.)
The person you refer to – when did they start renting?
A long time ago, obviously.
That’s one of the problems with the Costa Hawkins law.
But of course, anyone renting “today” would eventually enjoy those same restrictions.
Of course, a lot of tenants have been benefiting from the “ultimate” in rent control, in the form of the eviction moratorium.
Exactly. But anyone moving in today can’t because they have to make $140,000 to afford it.
I’d suggest repealing Costa Hawkins. However, your article claims $68/hour – for a 2-bedroom.
But actually, what (exactly) is the problem if residents who don’t live in a particular city can’t afford to move there?
My article also cites the source of that claim
I’ve never been a believer in the 30% of your income goes to rent rule. I’ve rented and bought houses over my lifetime and most of the time I had to pay over 30% of my income for rent or house payment and my family got by just fine.
You will have difficulty getting accepted to rent in Davis apartment complexes if you don’t meet this income requirement. And the application fee is non-refundable.
How about all the illegal immigrants we now have streaming across our borders due to Biden’s policies? Should we also be providing them with housing vouchers?
That still doesn’t take away from my point that I was able to afford paying much more than 30% of my income towards my rent/house payment and get along comfortably.
Why not? Some place will always be #1.
I take it that you did without the daily “avocado toast” at the local establishment. (Relax folks, it’s just a joke.)
But it is true that those who are determined generally find a way to get ahead. (The best opportunities for some might not be in the Bay Area, anymore.)
But I still haven’t seen a response to my question (regarding what exactly the problem is, if non-residents can’t afford to move to a particular city).
Oh you’ve seen it, they say it’s racist. Like everything else it’s always about racism.
* Carbon footprint if they have to commute from outside of town
* Gentrification
* Studies have shown health impacts
* Lack of access to quality schools and services
* It’s not just lack of being able to move, it may also be displacement, in ability to stay
There are a lot of studies on the impacts of Gentrification, here is one from the CDC – https://www.cdc.gov/healthyplaces/healthtopics/gentrification.htm
All of these impacts are the result of pursuing “economic development” beyond what a given city actually needs for its existing population. But again, the “ability to stay” and benefit from “good schools” and “good health” is not necessarily one of the problems, with effective rent control. (Unless they’re “gentrified out”.)
I forgot about that recently-created claim.
Like I said, I’ve been impressed with the arguments used over the years in support of development. Seems like they’re always on the cutting-edge of the latest concerns, whether it’s “green development”, “global warming development”, or “social justice development”. Am I missing anything?
Perhaps the “social justice development” is their best one so far, since anyone opposing development now is obviously a racist, or a supporter of racist systems. Just yesterday, one of these advocates said that housing prices have to be reduced by 90%, to ensure diversity. And yet, the vast majority of YIMBY types appear to be white, and support policies which create displacement.
But unless all skin colors have the same average level of income and wealth, and all housing prices are the same throughout the United States, it seems unlikely that true “diversity” is a realistic goal in housing (or anything else).
Then again, things change over time (demographics, etc.). No neighborhood or city remains exactly the same, over time.
Of course, if you want to make a given area less-affordable, just invite in the technology industry. Austin, Texas is also experiencing that now.
The technology industry itself already has a reputation for non-diversity (and sexism) in employment, let alone its impact on diversity in the housing market. And yet, the growth advocates rarely claim that this is “racist”.
So you realize that you asked why it’s a problem and then when I showed you, you completely shifted the conversation. Are you conceding the previous point?
Your points misidentify the source of those problems, as noted. Nor are they entirely accurate in the first place, as noted. As such, you’ve shown nothing.
You’ve also totally ignored my response.
I am prohibited from responding further today, by your commenting policy.
Nothing prevented you from giving a more fully thought out answer in your last response.
We could build an ‘innovation park’. That would increase rents! Problem solved.
So, going back to this (since you didn’t like my answer), none of the impacts you describe will occur, if folks cannot afford to move into a particular area (such as the Bay Area).
So, again, I’d look at what’s driving the desire to move to a particular area. It’s jobs.
So if a community keeps adding jobs (beyond what it already has), this will (by definition) create a situation that will result in the impacts you describe. And in the case of some place like Davis, it will also be used to justify more sprawl.
But you are advocating for all people to be able afford to live in high-end areas by making them infinitely dense, so everyone can enjoy the services there. But what happens, we empty out the ‘slums’. And the density increases gentrification, unless you subsidize everyone below a line, a line that keeps moving up as you create new poor by bolstering the old poor above the new poor. At some point it becomes communism with the added bonus of everyone living in San Francisco, Berkeley and Davis, and holes where East Palo Alto and Pittsburg once were.
Unless there is actual shortage in land, the root cause of unaffordable housing is charging someone beyond the cost over a living necessity.
The situation is the same as profiting from charging people for air to breathe.
A person who needs necessary living space does not need a subsidy or voucher if society simply doesn’t let people hoard living space beyond what one needs.
So, if there is a landlord owning a lot of land and profiting from people who need a place to live, the solution is not that society shall chip in to pay that landlord to house the poor. But to tax that landlord until it is unaffordable for the landlord to rent seek. (Or outright make it illegal to own more than one’s own residence.)
Then the subsidy/voucher that society shall fund is building and repair costs, not “paying rent”.
Once a housing unit is built, there is no rent to be paid. If a person give away part of their sole residence to house someone, then they should be eligible for some kind of reimbursement while there aren’t enough housing.
But if a person has a business to house people, they shouldn’t be getting a voucher unless the voucher is below “market price”, the reason is that rent seeking while there is a housing shortage shall be illegal to begin with.
Wow… the implications of that are truly staggering…
Wow… a reimbursement is inconsistent with the concept of “give away”… are you talking ‘tax deduction for charity’?
Again, the implications of what you’ve posted are staggering…
That’s really nice. The numbers that is.
Despite this, I have a friend who lives in San Francisco and has been renting a room in an apartment for a couple of years and makes just above minimum wage and isn’t even working full time. She manages to save a little money. Though her financial situation isn’t great, she gets to walk in Golden Gate Park every evening, swim in the ocean, has entertainment all around her. That’s a choice she makes. But it’s not sustainable, and she pays for it, in lots of ways.
Only a 1/4 of people can participate in a program funded by a temporary massive federal program that will end, and the answer is to fund all of it with vouchers from, I assume state money? Isn’t gonna happen. Again, like all the giveaways, we’ll end up with a ‘few lucky lottery winners’ who get the A-fffffordable units and the rest ‘lose’ — or wait — for years — and don’t you dare make more money and lose your place in line!
And in case y’all don’t understand economics, the massive infusion of free money will push rents up! Hurting all the rest of the people left. That’s called warping the market. This also happens when massive loans are available to college students – it pushes up tuition because there’s more cash for the corrupt universities to take in. It’s called warping the market. And if you warp the market too far, it’s going to crack like the foundation slab in a seaside Florida condo and bring the whole economy down on top of it.