I live in the Bay Area. It is extremely expensive. (Source not cited.)
Oppressively high housing costs have led to all kinds of fun social pathologies. San Francisco’s homelessness crisis is only the most well-documented. There is also the rise of the Stockton supercommuter. The swelling (and increasingly discriminated against) RV populations in the Peninsula and South Bay. The fact that teachers (a group of people that society pretends to care about! ) can’t live anywhere near the communities in which they teach.
These are but some of the problems we tolerate so that Menlo Park millionaires can enjoy subsidized mansions.
But increasingly, I worry about another problem — one that we’ll feel across generations and lead to a much less egalitarian America: What do the Bay Area’s dysfunctional housing policies mean for long-run social mobility?
First, some context:
Our national economy is now dominated by a handful of “superstar cities” (e.g., SF, DC) that are hyperproductive. While there has always been something magical about dropping smart people and good companies in the same place and pressing “Play,” our globalized, financialized economy is hitting “Fast Forward” on that trend. (Our globalized, financialized economy has also been deleting Midwestern manufacturing towns from the TiVo.)
In a well-functioning society, moving to a superstar city would be one of the surest ways to change your (and your family’s) economic fortunes. After all, you can develop elite programming skills, but if you’re living in West Virginia, it might be hard to capitalize on them.¹
Insane housing costs flip the calculus. If you’re the child of a coal miner or whatever (here you can insert your favorite Andrew Yang-ian cliche), and you’re looking at your economic prospects, you no longer see the Bay Area as a place of boundless opportunity. Instead, you’re comparing your not-so-great options at home to your not-so-tempting options in a superstar city.
“After all,” you might ask yourself, “what’s my long-term plan in a place like that? Is it worth leaving friends and family to live in a San Francisco shoebox?” (No, my Yang-ian friend, the answer is no.)
But you know who doesn’t have to worry about that calculus? People with family wealth, or whose families happen to be living in a superstar city already. For them, it’s all upside².
Since the supply of homes is constrained by fentanyl-strength NIMBY-ism³, housing has become a ferocious zero-sum competition. There are only so few spots to go around. But their families can help them “get into” the Bay Area housing market (which is to say: subsidize rent or gift them down payments). This intergenerational investment pays dividends because they can now earn the outsized returns that come from living in a superstar city. These lucky Baydestrians will be able to pass down their geographic privilege to their children. Meanwhile, our would-be movers from coal country — and their would-be geographically privileged progeny — are shut out.4
At this point, I know what you’re thinking: “Pffft, so much complaining. Life is hard. Why don’t you call the waaaambulance, bro?”
And, yes, right, good point. Life is hard, and I should call the wambulance. But the reason I care so much about this topic is that I am one of the geographically privileged. Through impossibly dumb luck, I was born to parents who decided to immigrate from Cairo to San Mateo (a town roughly halfway between San Francisco and San Jose). I grew up in Shoreview, which at the time was considered the “bad” part of San Mateo (and today boasts a median home price above $1 million). But San Mateo — at least then, before this technological boom hollowed out the Bay Area’s middle class — boasted pretty good income diversity.
This diversity, in turn, benefited me in ways that are probably impossible to articulate.
Although my parents worked at convenience stores and restaurants, I had friends whose parents worked at Sun Microsystems and Genentech. I could use them as a resource when I finally thought to ask the question: “What do I want to do with my life?” I could also learn the upper-middle-class manners (y’all are weird as fuck tbh) that let me navigate the world of finance when I stupidly decided that’s the field I wanted to work in.
More importantly, when I realized that I hated finance and wanted to work in Data Science, I was even luckier. I could enroll in a Data Science bootcamp and move in with my parents, escaping the high rents that would have made such a risk untenable — or at least really, really, really difficult — for someone like me.
Because I could afford to take the risk, I was able to materially change my fortunes, to say nothing about the fortunes of my future family.
If my parents were immigrating today, however, they might have had to live in Vallejo instead of San Mateo. I wouldn’t have had access to the same educational options. I wouldn’t have met adults who worked at Sun Microsystems. I don’t know if I could have afforded the risk I took in leaving a good job for a sketchy educational venture called a “bootcamp.”
To put it in soulless economic terms, there is a much higher chance that my human capital would have gone… undeveloped.
And, look, I don’t mean to remove all individual agency from the equation: Even in this, our dystopian future, some people will make it. There are always people who make it, no matter how flawed society’s generative models are. People are resilient, lucky, even remarkable sometimes.
But this isn’t about individual agency. It’s about how we design our society, and what that design says about us.
Do we make it easy for people to realize their potential? Are we as welcoming as the Bay Area’s progressive rhetoric implies? Do we even care that we’ve made life so hard for regular people?
The answer to all of these questions, of course, is a big fat “NO.” And the sinister thing is that the “NO” is silent! We’ve built it into the structure of society so that the consequences remain mostly invisible.
I mean, sure, economists have estimated that the insane housing policies in our superstar cities are reducing national GDP by 9% per year. But we can’t see that unrealized GDP, nor can we see the intergenerational impact. We can’t see all the potential being squandered. We can’t see the teacher who gives up teaching because he doesn’t want to live in an RV. We can’t see the unfounded company that an immigrant would have started5. We can’t see all the kids whose lives would have gone differently if only we hadn’t made it so damned hard for them.
But even though we can’t see these costs, there’s no escaping the feeling that something has gone horribly, horribly awry.
Speaking the subtext aloud, finally: I don’t think my story would have been possible if I were born today, and I can’t articulate all the ways that depress me.
- A handful of superstar cities are becoming America’s primary engines of economic growth
- These superstar cities are becoming increasingly inaccessible to the average person due to insane housing policies
- People with economic privilege can reap the outsized rewards of these superstar cities; regular people are shut out
- This pattern will aid in the creation/ossification of the two-tiered society that America has been trying desperately hard to implement since WWII made things briefly, uncomfortably equal6 for a little while
- This outcome is, to put it lightly, a disaster: Although the notion of “equality of opportunity” has always been a farce, the fact that we’ve allowed it to become this big of a farce is shameful
¹Yes, yes, there’s remote work. And I think a full-throated embrace of remote work will need to be part of the solution here. (It certainly won’t be the aforementioned Menlo Park millionaires voluntarily changing their community’s zoning laws.) That said, I don’t think remote work is a perfect solution for reasons I’m happy to get into.
²Strictly speaking, the situation isn’t “all upside,” especially for people who are from the Bay Area. My wife works in government, and from what we can gather, a lot of people working the traditionally middle-class jobs that hold society together — teachers, policemen, nurses, etc. — are people whose families lived in the Bay already, i.e., they have the “luxury” of living at home. But that’s not a particularly glamorous life (as evidenced by the fact that most millennials want to leave the Bay Area as soon as humanly possible). The real beneficiaries are, of course, those with economic — and not merely geographic — privilege.
³I know this phrasing is in poor taste, but sometimes, things are so screwed up that the only way to rail against them without going insane is to use language that’s equally screwed up. If you think about it for two minutes, you’ll see why I phrased it that way.
4Here, you can begin to see how economic privilege really compounds. At many elite colleges, there are more students from the Top 1% than the Bottom 50%. With the best job opportunities clustered in hyper-expensive locales, which of these two groups do you think will be better positioned to reap the returns of their elite educations?
5Don’t even get me started on the bananas ass immigration policies of the current White House