Our house in the middle of ... a housing crisis.

This post is part of a series, click here to read others on this topic

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Our house in the middle of the street – in the Bay Area in 1982, when that song was first released – would have rented for about $1,376 (in today’s dollars)[1]. I first moved to the Bay Area about twenty years after (coincidentally, about when Our House was re-released on a Madness greatest hits album) into a cute little in-law unit in Berkeley, walkable to BART, the “gourmet ghetto”, and all the conveniences of living near a college campus. I recently saw that rental listed on craigslist for more than double the amount of rent I was paying back in 2002-ish. Today, the average rental price of a 2-bedroom unit in the area is $3,200[2]. Madness indeed.

Last week, we moved my partner from the city to the East Bay, officially entering him among the ranks of urban professionals leaving the city for the East Bay’s promise of lower rents, a backyard, and good schools for our young children. As we look for a new place to rent, we find ourselves up against limited housing stock and increasing demand as couples just like us are pursuing the same thing. With all of us clamoring after that same promise, we make it ever more difficult for any one of us to actually achieve it. And so families are also leaving the East Bay for greener, less expensive pastures elsewhere.

The rising cost of living in the Bay Area will come as no surprise to anyone reading this blog post, and, as a consequence of this trend, the Bay Area leads the nation in net family outflow. Indeed, this regional trend dominated the nation’s migration patterns in the first quarter of 2017[3]. And just like those other Bay Area families in search of a more reasonable cost of living, my partner and I have considered a move to Sacramento where we spent a lovely working vacation week recently, and Seattle, where he and I first met eons ago. Sacramento is the most common in-state city that Bay Area residents move to, and Seattle is the most common out-of-state locale that receives net outflow from this region[4].

High housing costs coupled with stagnating wages is increasingly putting pressure on families, who stand to save more money by moving pretty much anywhere outside of the Bay Area[5]. My partner and I have good jobs with good incomes and we feel the economic pressure that living in the region bares down on us all. My partner even works in tech, but that is also no longer enough to make families stay. Sadly, we are not alone in this. A recent report from the Department of Housing and Urban Development that calculates income limits for housing assistance based on median family income and cost of housing set the “low income” bracket for a family of four in the Bay Area at $117,400[6]. Only in this region can a family of four can be pulling in a household income of $117,400 be considered “low income”!

Meanwhile, truly low-income households are particularly vulnerable when the average costs of housing and childcare in the San Francisco-Oakland-Hayward metropolitan census area run as high as $84,800 annually[7]. Even for those families fortunate enough to be earning that $117k, they’d have to spend half that on childcare! And so, families leave.

In San Mateo and Santa Clara Counties, 47,000 new jobs were created in 2017, while only 12,000 new residential units were permitted[8]. This housing crunch has reached crisis levels as more and more people are having to pay half or more of their incomes to keep their families sheltered. More families are having to crowd into apartments that are too small, doubling up with other friends and families, and forgoing other essentials such as health care and gas or electricity to pay their rent. And so, families leave.

A report by Children’s HealthWatch[9] finds a family’s struggle to pay the rent to be associated with a host of negative repercussions on the health and well-being of parents and children alike. The study reports that children in families who have been behind on rent in the past year are at increased risk of developmental delays and other poor health outcomes. The stress of struggling to pay rent is also associated with maternal depression and poor health outcomes for mothers that are similar to the depressive symptoms and health experiences of mothers living in homeless shelters. Thus, being late on rent not only puts a family at risk of homelessness, but also puts family members at risk of poor health outcomes. We know from robust bodies of research literature that health and social outcomes are inextricably tied. And so, families leave.

As the Bay Area and California state overall continues to lose working families who are being replaced by high-income singles, we hasten our already fast approach to a drop off a demographic cliff where we will have fewer and fewer youth available to support a large and increasing aging population[10]. Moreover, we end up with a monolithic, culturally pallid region comprised only of those with the financial resources to stay.

So how do we get families to stay?

One potential path to alleviating some of the housing pressure may be provided by Proposition 10 if it passes in November. The California Democratic Party recently endorsed Prop 10, a ballot initiative that would repeal the 1995 Costa-Hawkins Act and would allow cities to expand rent control restrictions to the much-needed newly created housing stock across the state[11]. You will have the opportunity to vote on this initiative in November.

In addition, increasing the stock of affordable residential units is a critical component to addressing the housing crisis and exodus that exacerbates the demographic cliff. While negotiating between developers, local municipalities, environmental advocates, zoning issues, “NIMBYs” (Not In My Backyard), and “YIMBYs” (Yes in My Backyard) is a tall order, as the fate of SB 827[12] can attest to, more housing units must be made available to address California’s crushing housing shortage. If the mass exodus out of the Bay Area continues unabated, the outmigration of jobs will surely follow. Addressing this housing crisis is imperative if the region and the state hopes to maintain its economic growth and dominance into the future. The song Our House evokes images of happy children playing, mum keeping house, dad getting ready to go to work. Our house was our castle and our keep. It’s not just a lovely sentiment. The housing piece is foundational if individuals, families, and communities are to thrive.  

California is a glorious state. You can go surfing, hiking, and skiing in the same day! The weather, the cultural diversity, the ingenuity, and the creativity that switches this place on are what keep us here despite the challenges that come with it. But people are leaving and fewer are coming up to replace them, which brings us back to the central theme we’ve been discussing in this series. This state, and the nation as a whole, is faced with what I’ve been calling a “demographic cliff” caused by a large cohort of aging and retiring Boomers and a steady decline in fertility that will leave a contracted economy in its wake with fewer labor force entrants to replace the exits. However, we can buffer ourselves against such economic contraction by acting now to bolster the state in a few of the ways this series has touched on:

  1. invest early and often in our youngest because we will have to do more with less in the future,
  2. welcome immigration and the myriad contributions immigrants make to this state, and
  3. ensure everyone has access to affordable housing so that we all can stay and contribute to the vibrancy of this great state.

References:

[1] Average rental price of a 2-bedroom unit, calculated using https://www.bls.gov/data/inflation_calculator.htm by the author of: https://medium.com/@mccannatron/1979-to-2015-average-rent-in-san-francisco-33aaea22de0e

[2] https://www.rentcafe.com/average-rent-market-trends/us/ca/oakland/

[3] https://www.redfin.com/blog/2017/04/movement-out-of-california-driver-of-u-s-migration.html

[4] https://www.redfin.com/blog/2017/04/movement-out-of-california-driver-of-u-s-migration.html

[5] https://sf.curbed.com/2017/3/7/14845804/families-cost-san-francisco-suburbs-zillow

[6] http://fortune.com/2018/06/28/san-francisco-housing-crisis-low-income-families/

[7] https://sf.curbed.com/2017/3/7/14845804/families-cost-san-francisco-suburbs-zillow

[8] https://www.sfchronicle.com/business/article/Study-finds-job-growth-outpaces-housing-in-Bay-12649438.php and http://extras.mercurynews.com/blame/

[9] http://childrenshealthwatch.org/wp-content/uploads/behindcloseddoors_report_jan11-.pdf

[10] http://www.sandiegouniontribune.com/opinion/the-conversation/sd-california-losing-low-income-people-gaining-wealthy-people-per-report-20180221-htmlstory.html

[11] https://ballotpedia.org/California_Proposition_10,_Local_Rent_Control_Initiative_(2018)

[12] Note: supporters of SB 827 were dubbed “Yes In My Backyard-ers, or YIMBYs. https://www.citylab.com/equity/2018/04/californias-transit-density-bill-stalls/558341/

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