Solving Silicon Valley’s Housing Problem In One Fell Swoop – Build More Houses

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The Guardian has one of those interminable pieces bemoaning one of the minor problems of the word. Rich people in Silicon Valley are having to pay a lot for their houses. And yes, by any global or historical standard those who come to clean those houses in Silicon Valley are rich.

The Guardian also demands some sort of solution to this problem:

Sales like this may be a harbinger. As the tech companies Uber, Airbnb, Lyft and Pinterest prepare to go public, thousands more instant millionaires are expected flood the market in San Francisco and Silicon Valley. All the while, the middle class and working poor are scrambling for shelter. IPO talk is bringing “a resurgence of buyers’ confidence into the market”, said Judy Citron, one of the top realtors in the region. OK, great, more cash around.

“This area may have the greatest concentration of wealth in human history,” said Lenny Siegel, the former mayor of Mountain View, whose house is valued at $2.5m. He purchased it 40 years ago for $112,000. Many in his boots would be happy, but he is not. There is no longer any room for teachers, medical technicians, firefighters or construction workers, who may drive two or more hours and sleep in their cars for an hour before work to avoid longer commutes. “It’s not sustainable,” he said. Renting a bed in a van here costs between $500 and $900 a month, said Maria Marroquin, executive director of the Day Workers’ Center in Mountain View. Gardeners, cleaning people, babysitters and dog walkers cram into small apartments, sometimes 12 in two bedrooms, according to Marroquin.

And it appears that we need more housing around too. So, how do we deal with this?

Well, one answer would be to use the cash around to build more houses. And this would in fact solve the problem. We even can see the solution in the specific photograph the Guardian uses to illustrate the story:

Build houses on the green bits

See all those green bits there? Open land? Go build houses on those bits.

But, but, you say that’s protected land! Parks’n’stuff. OK, fine, then have expensive houses. After all, they’re not making land any more so it’s something in scarce supply. And what’s worth more? A roof over the heads of a family or somewhere to go gawp at squirrels? The answer being, of course, the roof, unless you’re very rich indeed in which case why not the tree rodents?

That is, building in the parks and over the protected land is a pro-poor policy. And aren’t we all supposed to be that these days, pro-poor?

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Rhoda Klapp
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Rhoda Klapp

Why wouldn’t we let the free market do it? My brother-in-law was offered a job with a well-known non-profit (I’m sure Mr. Musk wants it otherwise, but there you are). He could not even think about buying a house there to rival his old Kentucky home, around 4000 sq ft, $400K. So he didn’t go. And soon the firemen and cleaners and the rest won’t be able to go. No interference should be necessary.

TD
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TD

Having dabbled a bit in housing development, I have been told many times that the market doesn’t produce the housing that society needs. People want to buy them to be sure, but they’re not what society needs.

Rhoda Klapp
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Rhoda Klapp

Society doesn’t really buy houses, people do. And it seems that no amount of fiddling with the market makes it work for ‘society’, it just shifts the distortions.

TD
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TD

Ah, but some people buy houses that others wish were never built, and to the extent that the latter can obtain some power they will justify their position in terms of defining what society needs and not in terms of their own self interest.

Rhoda Klapp
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Rhoda Klapp

Well, evidently, society demands that these green spaces and lovely views where I live be preserved and all those other people can be housed over there. Waaaay over there.

That what you mean?

TD
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TD

works for me

TD
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TD

Every community in California is given a housing quota. In the case of the San Francisco Bay Area, about 55% of the quota is for “affordable housing”, which is deed restricted for 30-50 years and must be rented or sold at below market rates to people whose income qualifies them for such housing. Many cities meet the 45% market rate quota (which is often met by high density condos, so the supply of single family homes remains limited), but most fail to meet the 55% affordable quota as these are unprofitable to build and require subsidies. Parcels zoned for affordable… Read more »

Pat
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Pat

To answer your last question, no
We are supposed to spout support for the poor as that enhances our social capital. We are supposed to enact policies that enhance the social capital of the influential, who have plenty already (that’s what makes them influential) and aren’t short of a Bob or two in any case. We are not supposed to enact policies that in any way adversely affect the influential.