By Karen Zraick
New York Times
June 30th 2018
In the latest sign of the astronomical cost of living in parts of California, the federal government now classifies a family of four earning up to $117,400 as low-income in three counties around the Bay Area.
That threshold, the highest of its kind in the nation, applies to San Francisco, San Mateo and Marin Counties. It’s used to determine eligibility for federal and local housing assistance programs. (But it’s different from the federal poverty guidelines.)
To generate the number, officials at the Department of Housing and Urban Development factor in the median income and average housing costs in an area. The second-highest threshold is in Honolulu, according to the agency — but the third is also in the Bay Area, in Santa Clara County, the heart of Silicon Valley. The New York City area, where a family of four earning up to $83,450 is classified as low-income, came in at No. 9.
Back in the Bay Area, residents and experts said they weren’t surprised.
“It sounds ridiculous, but it’s not,” said Richard A. Walker, a professor emeritus of geography at U.C. Berkeley and the author of a recent book about the tech boom and displacement in the Bay Area. As the tech industry has drawn legions of highly paid workers to the area, home prices aren’t the only thing that has gone up. Transportation, utilities and food are also costly.
“It’s arguably the most expensive city in the country, so what that translates to is really not that much money,” said Ed Cabrera, a Housing and Urban Development spokesman who is based in San Francisco. “Especially with children in an area where properties are considered affordable if they’re going for half a million dollars.”
The federal government pegs the “fair market rent” for a two-bedroom in the San Francisco area at $3,121. The median home price has climbed above $1 million, according to a recent report by the California Association of Realtors, and sales are robust.
The “low income” designation allows people to qualify for affordable housing and a variety of government programs, like ones for first-time home buyers.
But officials noted that a vast majority of San Francisco-area residents who get direct housing assistance, like the vouchers known as Section 8, are well below the maximum low-income standard: The average household that receives assistance makes just $18,000. And the average wait time to make it into subsidized housing is 64 months.
In neighboring San Mateo County, officials say the housing stock — primarily single-family homes, many on picturesque cul-de-sacs — lags far behind demand. Many residents who have been forced to move farther inland now face grueling commutes to their jobs.
“We’re the epicenter of the affordability crisis we’re seeing in the hotter markets throughout the U.S.,” said Ken Cole, the county’s director of housing.
“What it means on the ground is that teachers, first responders, people who grew up here of average income are being forced out by the high prices,” he said.
He called for building new, higher-density housing along rail lines. Others, including Mr. Walker, say the state should abolish a state law that limits rent control and consider other steps to cool the overheated market.
“The very success of the place undermines the viability of life for at least the lower half, if not the lower two-thirds,” Mr. Walker said. “And those are the people who get forgotten in the narrative of the glamour of tech changing the world.”
Kate Hartley, director of the San Francisco Mayor’s Office of Housing and Community Development, said high construction costs and low federal funding had added to the challenges of keeping low- and middle-income people in the city.
“What makes the Bay Area great is its diversity, its creative and innovative economy, and its free spirit,” she said.
“But the harder it is to house our artists, teachers, restaurant workers, health care providers,” she added, “the more we put that great spirit and strong economy at risk.”Houses near the Bay Bridge in picturesque, but prohibitively pricey, San Francisco. Housing costs have skyrocketed as the tech industry has drawn lots of high-paid workers to the area.CreditJim Wilson/The New York Times