Gentrification
Gentrification has been dominating the Bay Area ever since the technology industry began prospering in the area. This process made the price of goods, services, taxes, etc. go up as Silicon Valley became increasingly desirable to reside in. The housing market is an important sector to look at when talking about gentrification in Silicon Valley. The housing market is elastic in price, following the demand to live in the Bay Area skyrockets.
It is unrealistic for young people, who work minimum-wage jobs, to live in the Bay Area on their own. In a recent study, the National Low Income Housing Coalition concluded that to afford an average one-bedroom apartment ($2,500 / month *underestimated*) in San Francisco, the person must earn at least $99,960 a year. For someone who is working a $15 minimum-wage job, this would mean they'd have to work more than 128 per week. The problems behind gentrification for the younger population doesn't just occur in San Francisco, Oakland and Berkeley also sees this issue. According to the study, to afford a one-bedroom apartment in Alameda County's (includes Oakland and Berkeley), the individual would need to earn about $74,000 a year. If you work minimum wage, that means 107 hours a week at $13.23 (if you work in Oakland)! On top of the high priced housing market, young people often have student loans to catch up on- making it nearly impossible to buy property (in the long run, buying a house is more economical than renting).
The issues of gentrification have not been left alone. In recent news, teachers in Oakland battled the issues of gentrification for a little while now. The teachers argued that it was impossible for them to live in the area and continue to teach with the wages they were paid. They ended off their seven-day strike today (March 3rd, 2019) after a deal was made that gave 3,000 teachers an eleven percent raise over four years and a one time bonus of three percent. Although these teachers were able to achieve success in their strike, there are still many individuals in need of a change as they struggle to battle the housing market.
Should the government set a price ceiling / impose some sort of limitation on the housing market?
Source:
https://www.vice.com/en_us/article/a3qg54/this-is-how-people-can-actually-afford-to-live-in-the-bay-area
https://q13fox.com/2019/02/28/worries-of-gentrification-as-the-first-ever-luxury-high-rise-condominium-breaks-ground-in-chinatown-international-district/
https://www.sfchronicle.com/bayarea/article/Oakland-teachers-to-vote-Sunday-on-contract-13659602.php
It is unrealistic for young people, who work minimum-wage jobs, to live in the Bay Area on their own. In a recent study, the National Low Income Housing Coalition concluded that to afford an average one-bedroom apartment ($2,500 / month *underestimated*) in San Francisco, the person must earn at least $99,960 a year. For someone who is working a $15 minimum-wage job, this would mean they'd have to work more than 128 per week. The problems behind gentrification for the younger population doesn't just occur in San Francisco, Oakland and Berkeley also sees this issue. According to the study, to afford a one-bedroom apartment in Alameda County's (includes Oakland and Berkeley), the individual would need to earn about $74,000 a year. If you work minimum wage, that means 107 hours a week at $13.23 (if you work in Oakland)! On top of the high priced housing market, young people often have student loans to catch up on- making it nearly impossible to buy property (in the long run, buying a house is more economical than renting).
The issues of gentrification have not been left alone. In recent news, teachers in Oakland battled the issues of gentrification for a little while now. The teachers argued that it was impossible for them to live in the area and continue to teach with the wages they were paid. They ended off their seven-day strike today (March 3rd, 2019) after a deal was made that gave 3,000 teachers an eleven percent raise over four years and a one time bonus of three percent. Although these teachers were able to achieve success in their strike, there are still many individuals in need of a change as they struggle to battle the housing market.
Should the government set a price ceiling / impose some sort of limitation on the housing market?
Source:
https://www.vice.com/en_us/article/a3qg54/this-is-how-people-can-actually-afford-to-live-in-the-bay-area
https://q13fox.com/2019/02/28/worries-of-gentrification-as-the-first-ever-luxury-high-rise-condominium-breaks-ground-in-chinatown-international-district/
https://www.sfchronicle.com/bayarea/article/Oakland-teachers-to-vote-Sunday-on-contract-13659602.php
Definitely a serious problem, but two things come to my mind when reading. Are those house prices averages or minimums? I have a feeling supply and demand would create a market such that some land lords price rent cheaper in order to attract renters who will pay a premium for the location and not necessarily a great apartment.
ReplyDeleteSecondly, what can we do about this? The Silicon Valley is in high demand and as a result it is going to be highly expensive. If we set a price ceiling then maybe some of the culture and power of the Bay Area would fade. Is that worth it to maintain our archaic culture? It might be, but I'm not sure where I stand.
Gentrification is definitely a significant issue. It forces people, who make up the culture of that area, to move out. As a result, while some people may look at the overall effect of gentrification - that a neighborhood improves its economic status - ultimately gentrification is negative because the improvement comes at the cost of forcing out the old culture of the area.
ReplyDeleteI do not think that the government should directly intervene. This is because, as mentioned in class, creating a price ceiling below the equilibrium price creates a shortage and does not fix the problem. Instead, the government (more on the local side) should encourage the community, especially more affluent members, to raise awareness and ultimately address the issue. For example, the governor of California asked Mark Zuckerberg and other members of the private sector to help solve the problem. While not perfect, this is more optimal because it means money from the area is going back into the community rather than settling for a hard fix.
https://www.marketwatch.com/story/will-a-blockbuster-year-for-tech-ipos-lead-to-even-higher-home-prices-for-san-francisco-2019-02-05
https://www.theatlantic.com/politics/archive/2015/09/this-is-what-happens-after-a-neighborhood-gets-gentrified/432813/