Housing and Economics

There are several bits of news about housing on the Peninsula, seemingly unrelated but all pointing to the same thing: We aren't building enough housing in San Mateo County.

In San Francisco, they have begun building 12,500 units, right on the bay at Hunters Point and plans are underway to put thousands more right IN the bay at Treasure Island. Remember how some people were freaked out by the proposed 12,000 homes in the Saltworks proposal? The revised project, if it ever arrives, will be much smaller and dwarfed by SF development now. (Funny how no one ever gets upset when SF decides to fill in the bay.)

Why should we be upset if SF racks and stacks more people in their city limits? It's a simple matter of economics and supply-and-demand. SF leadership knows they have a housing problem. Too many people and not enough housing drives up the cost of housing. This has been exasperated by the newly rich employees at Google and Facebook who want to live in San Francisco while working on the Peninsula. They are driving bidding wars for available housing, increasing the cost.

Simple solution: build thousands of new residences to drive down costs, while the city and county of San Francisco build up their coffers with development fees and property taxes.

And everyday, thousands of these residents empty onto 101, and public transit, to get to their jobs on the Peninsula. There are already 40,000 of them going in and out of Redwood City to their jobs here.

The Patch published a story recently on how much it costs to rent a two-bedroom home in San Mateo County, and made the case that it would be impossible for someone working at minimum wage to make rent. That's true, but it isn't really a problem. According to the U.S. Census, there are less than 5,000 working at minimum wage in the nine-county Bay Area region, and all but a percent of them are either students, providing supplemental income to the family or living in shared housing.

In San Mateo County, the problem is not the lack of affordable housing, but the lack of housing at all. And the cost of housing is driven by that lack of inventory. San Mateo County needs to find the space to match San Francisco development, unit for unit. If you want to build a concrete canyon down El Camino, fine, but realize that is where the most expensive property on the Peninsula lies, and not the place you will find "affordable housing." That will come only after inventory exceeds demand. It's an economic fact of life.

Now, some people will say, "We have to force developers to build affordable housing." That's a great sentiment to rally the Occupy people, but you can't attract developers to build anything unless they can make what they consider to be a decent profit margin. Sure, some people will consider whatever that is to be obscene and will stomp their feet, call them names and hold their breath until they turn blue... but that won't change the developers' minds.

The reality is, we need housing and we need developers to do it. So let's put down the pitchforks and start working with them for a change.