Will Home Ownership Ever Be Possible In The Bay Area?
Photo of a home for sale sign.
Life in the Bay Area is expensive, that’s not a secret and has been reiterated numerous times. It’s becoming cliché to write articles bemoaning the current state of the housing crisis in our region. However, despite how cost prohibitive it has become, home ownership is still a goal we should aspire to. The question is how do we do it and how will it affect our future if we don’t?
The gap between the median home value and median income in the Bay Area’s major cities is as large as the Pacific Ocean.
The average price of a home in San Francisco is $1.5 million according to Zillow. In Oakland, it’s $984k and in San Jose the average cost of a home is is just behind San Francisco at $1.4 million. In contrast, the median household income in San Francisco is $120k. Oakland’s is $80k and San Jose’s is close to SF at $117k.
The gap between the median home value and median income in the Bay Area’s major cities is as large as the Pacific Ocean. If this doesn’t change, the majority of Bay Area will never get to experience home ownership. And there’s something tragic about that.
Home ownership has been an anchor to prosperity for many in the middle class. The erosion of our collective ability to purchase homes where we’re from —where we live and work isn’t acceptable. We’ll never be economically stable if we’re perpetual renters. Without property, our lives will be subject to the unpredictable nature of the housing market. When demand is low, this can be a good thing. The pandemic, despite its devastating effect on every other aspect of our lives, had a corrective influence on rental prices. As demand increases, rents will increase with them. The instability of the house market is easier to adapt to when you’re young, but as millennials age and settle down, these rapid changes will prove burdensome to most.
The image of the average person in the Bay Area is that of a faux-progressive millionaire, awash with tech money, sipping third wave coffee while stepping over numerous homeless people asleep on the sidewalk on their way to a yoga class or some other annoying thing rich people do on their narcistic journey toward self actualization.
I want to be able to lay down roots where I’m from, and that is feels less likely every day.
That’s how the world sees us, but that stereotype couldn’t be further from the truth. We make a lot of money from a national perspective. With the money I make here, I could easily be the emperor of Ohio. But I don’t want to be the emperor of Ohio. I want to be able to lay down roots where I’m from, and that feels less likely every day.
Are we doomed? Probably. But there are ways to fix it. It’ll take a lot of work, but it can be done.
The Bay Area is dominated by the Democratic party, but not all Democrats are created equal. Some are no different than the Republicans that people in the Bay love to criticize, they’ve just mastered the art of manipulation with progressive sloganeering.
The first step to combat escalating home values is introduce legislation that would limit or outright ban foreign investment in the housing market. The reason why the median price of a home is detached from the median income of our workers is because the demand for housing isn’t being primarily driven by our workers, instead, it is being propelled by investors from all over the world. Not trying to sound like a nativist or a nationalist, but this needs to fucking stop.
Another interesting idea would be to price cap what a house can be sold for, depending on the value. Say a home was purchased for $30k and with inflation that would hypothetically be around $150k today. We could have a law capping what that home could be sold for. This theoretical home was purchased for $30k back in the ’70s, which is now $150k, the seller would only be able to list the house for $450k, keeping it within reach of people within the median income bracket, while still making a sizeable profit.
And there’s always the construction of new housing, and more importantly, new affordable housing. In order for that to occur, we need to eliminate bureaucratic red tape that makes the process take decades for even a single project to be completed. According NBC Bay Area, the California Debt Limit Allocation Committee is the one that funds affordable housing for the state, but the process has become competitive, and whatever is cheapest wins, creating a race to the bottom, which in high cost markets like Los Angeles and the Bay Area, the chances for funding are low.
The Bay Area feels different than the rest of America, but that doesn’t mean we should be deprived of our shot at the American Dream.
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