A roof over one’s head

SAN FRANCISCO – It is a basic human right, but even here in the land of milk and honey, there is a grand failure of society to provide. A walk down this city’s streets will bring one face to face with poverty and homelessness where once upon a time, visitors saw beauty and romance enough to leave one’s heart with a longing to return.

There are tents in public places. Downtown streets smell of urine and other human waste. Homelessness is unexplainable in a state whose economy is said to be the fifth largest in the world. But there it is from Los Angeles to San Francisco and beyond.

Technology may be minting billionaires in nearby Silicon Valley, but it has also led to worsening social inequality and skyrocketing housing prices that made living here unaffordable for many. Those providing services from teachers, nurses, to policemen and all others other than techies, are victims of a booming economy.  

Mercury News reports that the Bay Area has long been a costly place to live, but an unprecedented economic boom pushed rents and property prices out of reach for all, but the most affluent. “Low and middle-income families and younger workers unable to find apartments or house they can afford have been forced further afield, a trend that has led to ultra-long commutes and perennially clogged freeways.”

CNBC reports that during last week’s stockholders meeting, Facebook’s chief policy officer Elliot Schrage noted that Facebook considers affordable housing and transportation “an existential issue.”

Schrage said they have to address the issue “if we’re going to remain a company in Silicon Valley for the long term. Our position is that Silicon Valley has been this extraordinary engine of economic opportunity, and if we can’t solve the housing and transportation issues, Silicon Valley won’t be Silicon Valley. These companies like ours will expand elsewhere. So we feel a real sense of urgency around that.”

Facebook is establishing offices in San Francisco even as its main campus will remain in Menlo Park. Both cities, CNBC notes, “are facing exorbitant housing prices and transportation failings, fueled by the growing ranks of tech companies. Real estate experts have predicted a mass exodus from Silicon Valley and into the middle of the country, if things don’t improve.”

There is another thing wrong… disparity of incomes in the Valley is widening. San Francisco Chronicle cited a study that warned: “While California’s economy overall is strong, it is only a matter of time before the discrepancies between wages and housing prices could begin to constrain economic growth.”

The Chronicle pointed out that “since a healthy economy depends on participation from workers at every wage level, this fact should alarm even the wealthiest Californians.”

Silicon Valley has become so expensive that Businessinsider.com reported a house that was ravaged by fire two years ago sold for $938,000 in April — more than $130,000 over the listing price of $799,000. The structure appears dilapidated and held together with plywood and will have to be demolished.

But the home sits on a 5,800-square-foot lot and is located less than a 10-minute drive from downtown San Jose, where Google plans to build a new campus.

Interestingly, the housing problem has brought about some creative ideas. Someone in Oakland has started a business renting shipping containers converted into a single room dwelling for $1,200 a month. It has the amenities of a small apartment.

Not too long ago, property prices here zoomed up because Chinese buyers offered cash as they gobbled up property. Locals who still have to get a mortgage were thrown out of the market.

Indeed, the situation has led to many leaving for other states. But even if domestic migration out to other states has increased, the SF Chronicle reports that international immigration is net positive for the Bay Area. Those moving into the Bay Area have better incomes are and able to absorb the higher housing costs.

Similar trends in rising property prices have been reported in Seattle and Vancouver. Seattle is also a tech haven and Vancouver property prices have become the most expensive in Canada because of Chinese buyers.

We have long experience what’s happening here at home. That’s what the squatters living in squalor in the periphery of prosperous enclaves is all about.

More recently, Bloomberg reported that an estimated 100,000 Chinese working for gaming companies have created a rush in both residential and gaming space that reversed a feared glut in the property market. The resulting migration is causing home prices to rise to record levels in neighborhoods and condominiums favored by Chinese workers.

Offshore gambling companies that cater to overseas Chinese punters have been given permits to operate by PAGCOR. The operations called for bets being placed remotely for players in China, requiring Chinese speakers in Manila to handle everything from marketing and customer queries to payment processing for overseas clients. I wonder if these Chinese workers pay local income tax.

In Silicon Valley, as it is back home, lack of affordable housing is causing longer commutes and worsening rush hour traffic jams. Lower paid workers are forced to live further away from main business centers putting a strain on transport systems.

Having a roof over one’s head is a common struggle for many people in cities. It is a potent political issue here as more demands are made for government to take steps via more rent control and subsidized housing to make living in the city affordable, if you are not a tech billionaire.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco