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Does Affordable Housing Cause Bay Area Rents Skyrocket?

Activist groups disagree on how best to stop techies from hiking up rents in the Bay Area.

By Jeff Vasishta February 13, 2017

As techies have flocked to the San Francisco for work, rents have skyrocketed. For some local activists, the objective is not how to pay high rents but how to keep out those who have caused them to escalate. Tech workers have found themselves in the cross hairs.

Bloomberg reports that the some activists in the liberal city, known for tolerance and acceptance, are getting downright Republican when it comes to the invading hordes of techies, paying around $3,500 a month to rent a one-bedroom apartment. Eyebrow raising measures such a proposed levying of 1.5 percent payroll tax on tech companies and a restriction on the number of places where private tech company buses are allowed to stop, forcing all tech buses to stop only at a few “hublocations, leave no ambiguity as to who is welcome and who is not.

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These moves, according to Bloomberg, pale in comparison to activists’ Big Kahuna—restricting available housing to techies. Progressives on the city’s Board of Supervisors recently called for certain height limit restrictions to be lifted only for developments that include 100 percent below-market-rate housing (the current policy sets the number at 30 percent). This would effectively stop new affordable construction in many areas of the city as government subsidies needed to build would dry up.

The progressive supervisors also want San Francisco to be exempt from a policy that would speed up new market rate development. It could put techies in a choke hold as they wouldn’t be able to afford the escalating rents effectively pushing them out. Then rents would be lowered again once they were gone. That’s the idea anyway. In practice, it might not be so simple.

If all cities in the Bay Area followed suit, as some have already done, then workers and their companies will be forced to factor in the higher costs forcing rents and prices upwards. This might cause the one thing activists tried to prevent from happening, actually occurring at a greater pace. Lower income workers will eventually be driven out.

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Most would agree that for any city to flourish, all economic sectors need to be able to flourish. How to achieve that is the big dilemma. In San Francisco, the tech sector fuels much of the economy. If, unlikely as it is, the industry started to dissipate and move elsewhere to save money, the Bay Area would suffer massively. Equally, liberalism and inclusivity has always been a part of the area’s DNA. Most would abhor the idea of a city only made up of rich white or Asian techies. The solution, The Nation reports, may be held in a few initiatives working their way around ballot boxes in Bay Area. It boils down to a basic idea—rent control.

The initiative, started in Richmond, CA has been vociferously opposed by The California Apartment Association, who see the solution in more affordable housing—not rent control. Gail McLaughlin, city councilwoman, former Richmond mayor, and Local Progress member agrees that more affordable housing needs to be build but contests low-income tenants cannot wait for that. The proposal she supports pegs annual rent increases on units built before 1995 to the percentage increase of the Consumer Price Index, thus linking rent hikes to inflation. Any units built after that year will not be affected. The initiative also seeks to protect tenants from unjust eviction. If it passes, landlords will no longer be able to give tenants an eviction notice without cause. A rent board will be established to oversee enforcement.

“There’s a lot of anger and outrage about rising rents all over the state at the grassroots level, and there are a growing number of local groups trying to organize around it,” says Peter Dreier an urban an environmental policy professor at Occidental College. “I would say the tenants’ movement is the sleeping giant of California politics.”

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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