Accessible Housing: The Dark Underbelly of the Bay Area
By: Jeffrey Shen
The Bay Area is known to be a wealthy, successful, and prosperous region nestled into coastal Northern California. The region inhabits many of the largest and most successful tech corporations in the world, with giants like Facebook, Google, and Amazon coming to mind. For many it is seen as the embodiment of an advanced and fruitful future, a location everyone wants to live and work in. However, situated under the gleam and shine of six figure tech salaries, prestigious universities, and seemingly endless amounts of capital is an insidious underbelly, which once exposed, reveals jarring realities — stark income inequalities, skyrocketing housing prices, and decreasing access to affordable housing. It seems almost as though the Bay Area is greater than the sum of its parts. This essay argues that the boom in industries such as tech and finance in the Bay Area has contributed to an increase in overall wealth, but has also increased inequalities in income and access to housing; moreover, the Covid-19 has exacerbated these pre-existing issues, as the lower-income and impoverished are disproportionately impacted by the pandemic.
The Bay Area on average is one of the wealthiest regions in the United States, housing some of the most experienced zip codes nationally, such as Atherton and Palo Alto, whose average annual incomes per resident is $144 000 a year. However, interspersed between wealthy neighborhoods also lie poorer neighborhoods as well. According to the Public policy Institute of California, in 2018 the Bay Area’s 90th percentile earners make $384 000 dollars a year, and the 10th percentile earners made $32 000 a year, meaning that top earners made more than 12 times as much. Moreover, 13% of the population in the Bay Area possess 75% of the wealth. This drastic increase in high income earners in the region is mainly attributed to the prevalence of high-tech jobs at large corporations. Within the last decade, the wealth of the upper-middle to upper class has significantly increased, whereas the overall wealth of the lower-middle to lower class has remained relatively stagnant, in contrast.
Since the 2008 Great Recession, the Bay Area has increased more than 800 000 jobs, many of which attract people from all over California, the US, and the rest of the world. However, the region has only added 173 000 housing units since 2008, creating a job-to-housing inequality of 5 to 1. This slow creation of housing can be partly attributed to building permit activity for construction projects moving relatively slowly, despite efforts made by local and state governments. Moreover, a large portion of the jobs created in the last decade have been very high paying, professional jobs, which have consequently created the nation’s most expensive housing market. While BigTech has created a booming economy, it also has led to a huge influx of high-earning populations flocking into the region, which necessarily pushed the existing population into the periphery. The average rental rate per square foot in San Francisco is $3.76, more than double of the US national of $1.73. This has led to a large housing insecurity issue, as housing is increasingly unaffordable, and the state’s efforts have not been able to meet the demands. When corporations like LinkedIn and Adobe move into a region, establishing their large campuses, their presence has almost always led to housing and transportation issues within the immediate vicinity. Local governments in regions such as Mountain View and Palo Alto have implemented taxes to address this issue; however, there have been calls for tech companies to be more involved in addressing the housing crisis.
The housing crisis in the Bay Area is not only an issue of economic class, but also an issue of race, as it disproportionately disadvantages people of color. The re-segregation of the region has become increasingly apparent, as Black and Latinx populations are being pushed out of certain neighborhoods into others. In 2015, 75% of the population that permanently left San Francisco were Black and low-income. There is an increasing trend of people of color moving out of the city and into regions such as Hayward, Oakland, and San Mateo County. This pattern reflects the out-migration of low-income people of color that has occurred in the US’s history before; the wealthy begin moving back into cities, gentrifying neighborhoods and increasing the cost of living, pushing pre-existing populations out of city-centers into periphery zones. These periphery regions are more likely to be underfunded and underrepresented in municipal government. In the Bay Area, white households are 3 times more likely to live in a neighborhood with greater resources than Black households. In Oakland, the homeless population increased by 47% from 2017 to 2019.
The 2020 Covid-19 Pandemic exposed pre-existing symptoms in the Bay Area, and highlighted structural issues regarding inequality that have existed for decades. The virus showed just how vulnerable the lower-middle to lower class is. As shelter-in-place was implemented, many service and hospitality industry people were forced out of a job; many of these individuals live paycheck to paycheck, meaning that following lockdown orders, many were unable to pay rent, and face potential eviction. According to a study conducted by the University of California, Berkeley, over 30% of Bay Area households do not have enough savings even for small emergencies. Moreover, a significant portion of the population is living in cramped, overcrowded conditions. Often, multiple families are living in a single apartment, which are usually only scantily divided using objects such as bedsheets. These families are also almost entirely composed of service workers, who do not have the luxury of working from home. This combination of overcrowding and in-person jobs means that it is nearly impossible to socially distance, and drastically increases their chances of contracting or spreading Covid.
By contrast, high-income earners working in tech and finance, who attributed to the high cost of living and housing insecurity, are relatively unaffected by Covid. Jobs in finance have only dropped by 2% between 2019 and 2020, whereas, by contrast, service and hospitality jobs have dropped by 55%. Moreover, those working professional jobs have the luxury of working from the safety of their homes, and have far greater capacity of preventing the contraction of Covid. Having the majority of professionals working from home has led to a negative chain reaction, as small businesses, and the service and hospitality sector are heavily reliant and supported by professionals. The high rates of professionals working from home has crippled several industries. Covid not only highlights these preexisting wealth and racial inequalities, but it exacerbates the issue; Black and Latinx populations are more likely to suffer from poverty, work lower-income jobs, and face eviction. 50% of Covid cases in San Francisco are Latinx, despite the fact that they make up less than 15% of the population. In the face of the pandemic, the construction of numerous low-income housing projects have also been halted. Covid has compounded the income disparities between low and high income earners.
Overall, the housing crisis represents only one facet of much larger systemic issues. Covid-19 has exposed the cracks that had already been present in the system for decades; the lack of robust social housing projects, the leniency towards large tech conglomerates, and the racialization of the housing market. Despite the prosperity and wealth that tech has brought to the Bay Area, it may also be the one factor that leads to its downfall. A system is only as strong as its weakest link, and in the case of the Bay Area, the prosperity of the entire region depends on the wellbeing of all its residents, not just that of the wealthiest. The devastating impacts of Covid will leave long-term scars on the Bay Area, as small shops, restaurants, and other businesses are rapidly closing. As unfortunate as the situation is, hopefully there can be a lesson learned from this experience, and the systemic issues that have been highlighted will finally be addressed, even if they are addressed a step too late. The information that is presented in this article can hopefully provide context to nonprofit organizations, who can focus their efforts and resources on those who are most impacted by the pandemic and housing insecurity.
