Really glad we finally got that Pete's Harbor plan behind us, but we will be facing more opposition to development no matter where it goes, so it might be helpful to put some of the terms in perspective. One is the pejorative "gentrification."
There has been a lot of negative discussion about gentrifcation of communities in the Bay Area, most notably in San Francisco where people are protesting tech workers that commute down the Peninsula. But I came across some interesting data about those workers that we might all like to think about.
Most of these workers fall into the age bracket know as “millennials” or 28 years old and under. We like to think that they are awash in cash and are using it to bid up rentals in the Bay Area. But this is the reality.
Millennials graduate from college with close to $20,000 in student loan debt and $100,000 if they went to graduate level. They have to start paying those loans on day one of their job. Those new jobs pay them less on entry than what previous generations received, if they can find a job in the first place. Millennials also pay more into Social Security than they pay in income taxes, even though most expect Social Security to be dried up long before they reach retirement age. They are propping up the system for the rest of us.
It’s true that the millennials' entry into the workforce has caused rapid increases in rent over the last decade. Rents have gone up 50 percent in major metropolitan areas in the last ten years, not just here in the Bay Area. Even with home prices falling in many regions as a result of the mortgage crisis, median home prices have skyrocketed across the country, severely limiting affordability for first-time buyers and putting market pressure on rent prices.
Are the millennials bidding up the price of rent? In a few cases for some of the best properties that may be true, but overall the prices are going up because supply is extremely limited and landlords can command the price that the market will bear.
Depressing the inventory of available homes even further is the belief that stopping development will make people go away. That is true to some extent.
There are communities, like Pacifica, that have effectively brought development to an absolute stop over the past few years. Of course that has resulted in a very real possibility of bankruptcy for the city because property values of what does exist have dropped so precipitously and continue to drop because of dwindling services.
The tech firms in the Silicon Valley aren’t going anywhere anytime soon. They are hiring like drunken sailors in the red-light district on a 48-hour pass. More and more young people are moving to the Bay Area while a very small number of disgruntled well-to-do tax payers are leaving. Gotta find a place to put them all.