Silicon Valley Bay Area, a Housing Affordability Crisis Engulfing Everyone

People living in their trailers in Silicon Valley (John Orr / Daily News)

San Francisco     I have housing market fatigue.  Everyone rich, poor, and in the middle have a housing prices horror story throughout northern California.  No one seems untouched from the impact of this crisis, and it dominates almost every conversation.

  • A friend told me she was visiting Birmingham for the first time to spent time with a 30-year long friend of hers who was a lifelong San Francisco resident who had moved to Alabama to be closer to her daughter after being priced out of the city.
  • A colleague told me his house was now appraised at $2 million, but his unit in the basement was being written up for ceilings that were under height and would cost hundreds of thousands to get to code.The solution turned out to have the specs designed and submitted to the city for a construction permit, and then to renew it every two years for lack of financing.
  • Another told me his unit was declared illegal by a disgruntled neighbor but after a notice was affixed to his door he called the city inspector in San Francisco and finally on the phone asked was there any way to “fix” this problem and was advised by the inspector that he could “deny entry,” so he did four years ago and that was that, indicating how much city employees empathize with longtime residents.
  • A school in San Jose buys up any house that comes up for sale around its borders for cash in order to provide housing for teachers. Another created a program to match down payments with that of teachers so they could buy.  Another was buying an apartment building with eight-units to house beginning teachers.
  • Someone else who had bought a condo in San Francisco told me of building meetings they were having regularly now to deal with fears that maintenance fees would force them out.
  • The neighboring cities of Santa Clara and San Jose sued each other over claims that large developments would create traffic and housing problems, and finally settled to allow them to move forward.
  • Apple ditched plans for a huge expansion and consolidation of its office space near its new Steve Jobs designed spaceship location because they didn’t believe their workers could find housing, and instead were adding over a million  into a seven building campus in Austin, Texas, likely moving the housing crisis there, hundreds of workers are filing transfer papers.

This is just the tip of the iceberg, and doesn’t touch what’s happening to lower income and working families.  Home ownership is an impossible dream. Affordable rents and shorter commutes are much the same.

This isn’t sustainable, and no one seems to have a solution.

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Inclusionary Zoning Lite and Little

New Orleans     Catching up on back papers I found both the interesting and the disappointing.

Let’s start by keeping it positive and look at something called RentCheck, which is an application designed for tenants, but gaining some support by landlords, finding it useful enough that they have downloaded it in 40 US states and seven different countries.   RentCheck charges renters $20 per lease and landlords $5 per month to manage properties using the app. The app “…allows renters and landlords to complete a standardized rental inspection with smartphones.  Users can track the condition of a property using time-stamped photos and get access to inspection records at any time.”  This stops the problem of landlords showing up unexpectedly and of tenants having to prove the conditions of the apartment are the same as when they rented so that they are able to recover their security deposits.  If it works, it seems like a win.

On the other hand, we fight for inclusionary zoning everywhere in the world when it means the development of more units of affordable housing, so it seemed like good news seeing a headline that the New Orleans City Council had finally adopted a plan for such zoning in the city, especially since real estate and business interests had tried to get the state to prevent them, forcing a veto from the governor.  The plan seemed pretty complicated though.  It’s not a citywide requirement for developers, but instead is based on maps – that have not been generated yet – that will focus less on areas plagued by dislocation or gentrification, and instead on areas close to public transit and job centers.  Are developers even interested in those areas?  How does this not ghettoize affordable housing rather than beating back gentrifiers?

According to one of the local papers,

“The policy requires a developer building five units or more to make 10 percent of rental units affordable to anyone who earns 60 percent of the area median income, or about $30,000 for a two-person household.  The requirement also applies to homeownership, but the area median income in that case is higher, set at 80 percent, or about $42,000.”

The CEO of the Home Building Association is screaming like a stuck pig that this plan isn’t “workable,” is “anti-business,” and will push developers into surrounding parishes without any restrictions.  Meanwhile to put some sweeteners in the pot for the developers, the city is willing to allow more density, reduce parking requirements if close to a bus stop, and shrink the size of a lot size.

All of which is so much hooey, and this is the punch in the gut to dash any hopes that inclusionary zoning lite or whatever was just passed will really increase affordable housing in New Orleans:

“Consultants told city officials to temper their expectations.  If New Orleans had enacted such a policy five years ago…just 126 affordable units would’ve been created based on projects built since then.”

All of which makes this a drop in the bucket compared to the oceanic problem of affordable housing in New Orleans or any other city thinking about inclusionary zoning.  Why would politicians take the heat and lose the campaign contributions for something that only yields 25 new affordable units per year?  Why pretend to deal with the issue, rather than meeting it head on?

Very disappointing!

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