A Different Cause of San Francisco's Housing Problem

There is certainly no shortage of coverage of the ongoing debate in San Francisco, with protests, rising housing prices, and this guy.  They keep it interesting!

Having lived in San Francisco twice before, I know a bit about what is going on.  I don't live there now, and I can't call myself a life-long die-hard San Francsican, so my opinions are probably biased or probably perceived as unimportant compared to those who do/are.  But I have lived there long enough and in enough different places in the city to know a sliver about what's really happening.

First, the common facts:
- Housing prices have skyrocketed in San Francisco, up over 13% in one year.  If you had invested at the very top height of the housing boom in 2008, and sold today, you would have made money
- Rent prices increased by roughly the same amount
- Over the next 25 years, another 150K people are expected to move into the city

This sets up a pretty logical supply-demand problem.  The conventional thinking is that the problem is a short supply of housing coupled with a surge in demand from tech workers who either work at startups in the city or commute by shuttle down to the south bay.  And the prices are rising as a natural economic result.  However, I think it doesn't ask the deeper, and more interesting question: why?

Multiple quotes have hinted that it is very difficult to get new housing in San Francisco -- probably because most current residents don't want massive high rises blocking their view (also sometimes passed off as "don't want it changing the skyline/culture of the city" ).   So the very rich people who own very expensive houses in the city don't want anyone else to come in and "ruin" it -- surprise, surprise.  It's not all that this is wrong, per se, but it's a story that could be true in any city anywhere.  This can be fixed by building more housing units, getting more city permits expedited, working out high rises with NIMBYs, fixing rent control rules, etc.  Typical, every day city-planning problems.

The supply question is pretty straightforward, but the more interesting question, one that illustrates how people behave, is: why is demand surging in San Francisco?  For a slew of these tech workers that work in the South Bay (I used to be one of them!) the prospect of living in the city as opposed to somewhere closer to work is, well, nearly silly:  Commute 2+ hours a day on a cramped bus in some of the worst traffic in the US, get home late at night, pay one of the most outrageous rents in the world (insert New York and Tokyo laughing here), deal with freezing cold weather, lack of reasonable public transportation, chronic homeless problems, crime, and more... why?  Most of these articles just say young people "prefer the culture of city".  As if they were going to museums all weekend.

Now for something completely different.  Let's look at a map.

This is a rough travel route from the city down to Facebook main campus (the leftmost pin).  Google and Apple are the middle and lower-right pins, respectively.  If you draw out a line from each of these pins to the city and spin it around in 360 degrees, the commute could take employees of these companies to almost every city in the bay area (and from Apple, all the way to Garlic Capital of the World.)  Granted, the traffic on some of these routes are worse than others, but you get the point: since these employees could live in any place in the whole bay area, why live in the most expensive, "problematic" one?  San Jose is much closer, why aren't employees flocking there and gentrifying those neighborhoods instead?

There are a couple of hypotheses -- San Francisco:

• Is the only city in the area where you can walk to restaurants and bars, and generally live without a car
• Is the only city in the area where there is a significant population of singles  (Santa Barbara is #1!  It worked for me...)
• Is the only city in the area that is not one gigantic strip mall

Indeed, if you ask any of the young people who live in the Bay Area, the common refrain is "if you're single, live in the city".  And "downtown Palo Alto is 'ok'", maybe because of all the Stanford students.  And therein lies the problem.  Check what rents are like in downtown Palo Alto -- not too different than San Francisco.  Who knew that young single people want to live next to each other?

San Francisco is perceived as the only halfway decent place to live if you are single (and "University Ave is ok, I guess") in that entire radius.  Why isn't San Jose perceived as good for dating, as it is bigger and over a million people call it home?  Because to meet anyone, you have to drive there, and there is actually no "there" to drive to.  Downtown San Jose?  Yeah...no.  It's a lovely place for families, and is a very nice place to settle.

What's the real problem with San Francisco's housing?  San Jose.  Young single people commuting 2+ hours on buses every day are running away from the south bay to the lone island of not-needing-a-car-and-might-actually-meet-someone town.

How do we solve the ongoing housing problems in San Francisco?  One solution is to build a whole bunch of high rises in one of the most seismically active places on Earth, cramming more people onto landfill, and have the same problems in 2 years.  The demand will rise to meet the supply, and those new units will fill up and rent for outrageous prices, and we've just hit refresh on the whole issue.

Instead, the area could design a place for young, single people somewhere else.   It's not like they haven't tried.  (But it's still not the right formula:  you still need a car to get anywhere.)  Make it so they don't need cars, so they can walk to many bars and restaurants, has housing that isn't all tract houses, and live in a place that has things to do for single people without kids.  And isn't freezing in the summer.

Since that takes decades to build, even with the right political will, why not improve the public transportation that takes people to and from the city?  Imagine a train that ran once every 20 minutes, had 3 stops, ran 24/7, and got people to the city in under 30 minutes (and had a stop in the Mission, and in Northbeach)?  There would be a lot more young people living at the stops in the south bay.

I'm sure that my opinions may be lost in the sea of others' opinions on how to fix the problem.  And maybe these ideas aren't unique.  But can't we agree that fixing some of the problems of San Fran's housing might lie in fixing the system that generates the demand, rather than just bailing water?