The average one-bedroom apartment in San Francisco is $3,200 – the highest in the country. Oakland and San Francisco had the highest year-to-year increase in home prices in the country – over an 11 percent increase since last year. Rents in San Francisco increased over 14 percent in one year, and 19 percent in Oakland, the highest in the country. Neighborhoods are changing rapidly as working families move out, and wealthier households move in.
The main cause of these high rents is the dwindling supply of housing and the increasing number of renters. In San Francisco, an estimated 5000 new housing units need to be constructed every year to keep up with demand. For decades, San Francisco hasn’t reached 2000 per year. The story is the same in Oakland. So, landlords are constantly testing the limits on how high the rents can go – and they have yet to hit a ceiling.
Home sales in the Bay Area are like a feeding frenzy. Dozens of buyers show up and the house sells way above asking price with all-cash buyers. Last year, the San Francisco median home price hit $1,000,000 – the highest it has ever been, even adjusted for inflation.
Workers are having to move increasingly far away from their jobs, to Tracy, Stockton, Vacaville, Patterson, sometimes adding over four hours to their daily commute. Families are being separated, children pulled out of schools. To afford an average one-bedroom apartment in San Francisco, a person needs to make about $128,000 per year – way beyond the salary of most workers. Less than 14 percent of households can afford to pay the median price of a home in the city.
Many want to simply blame those who can afford to pay these skyrocketing rents and housing prices for moving in. But it’s not their fault. It’s often true that wealthier sections of society bring with them a level of arrogance and elitism, especially towards working class people, when they move into a neighborhood. But the problem goes way beyond those with more money who are moving in – if they can afford it, people will try to move wherever they want to live.
There is a massive real estate bubble, in home sales and rents. By keeping housing inventories constantly low, the prices continue to skyrocket, only bringing in those who can either afford to live in these properties, or wealthy investors just after a large profit. Large investors have been targeting Bay Area cities to build large housing units in order to make a killing off the increasing rental prices.
Ultimately working class families are affected the most. Wages are not keeping up with these skyrocketing prices, and cities are doing nothing to increase the availability of affordable housing. Workers have to choose between paying most of their income in housing or moving out and adding a massive commute. And for the poorest sections of the working class, it often means being forced out to make way for the plans of developers.