San Francisco’s housing crisis perpetuates the poverty trap faced by low income minorities in the city.
It is no news that the rent in San Francisco is among the highest in the world. High paying jobs lure talent to a city that is fast outgrowing available space. Not only is this high rent a source of stress for the new migrants, but it also has serious implications for low income minorities.
A new paper shows that a rise in rents in the Bay Area has pushed minority families to the outer edges of the region. This is important because the areas that these minorities move to have fewer high quality schools, grocery stores and other resources.
Minorities in America face a lower quality of life compared to the result of the population so the displacement caused by the housing crisis in San Francisco is contributing further to the inequality. This paper extends the findings in the study to 2017 and postulates that the displacement and resulting inequality has only deepened over time.
Data
This study uses American Community Survey (ACS) data by the US Census Bureau for San Francisco County in the years 2015 and 2017. The variables used are median rent, household income, percent of population under poverty line ages 18 years to 65 years that are African American Alone, Asian Alone and total population.
San Francisco County
In 2018, San Francisco County had a population of 883,305 (0.12% decline from 2017), median household income of $112,376 (1.41% increase from 2017) and median property value of $1.2M (8.3% growth).
Furthermore, as shown in Figure 1, the proportion of people living under the poverty line in San Francisco has decreased since 2015. This does not necessarily mean that people have become wealthier but it does hint at the displacement of people living under the poverty line.
Results
The statistics in the previous section imply that the property value is increasing at a faster rate than income – San Francisco County residents are increasingly paying a higher proportion of their income on rent. This conclusion is supported by Figure 2 and Figure 3.
Figure 2 shows the total percent of adult population under 65 has been decreasing across the County while proportion of income spent on rent has been increasing between 2015 and 2017. This supports the general claim that rent prices are rising faster than people’s propensity to spend.
To understand how this affects minority populations in poverty, Figure 3 focuses on the area in and around Chinatown with historically the highest Asian population in the city. However, the Asian population in poverty in this area has been displaced. This is evident in Figure 3 which shows that rent in the area has increased and the proportion of people living in poverty has also markedly decreased.
Moreover, the blocks where rent has increased also see increased poverty levels which could be a harbinger of future displacement. There are also some blocks where the percentage of people living under poverty has decreased even when the rent to income ratio group has stayed the same. This could possibly mean that displacements continue even if house rents have not drastically increased.
Policy, policy, policy?
San Francisco County housing policy is the biggest challenge to overcome when looking at solutions to the housing crisis. The current policy limits the amount of new housing that can be built which is a huge roadblock to increasing housing supply. Proposition 13 also incentivizes home owners to remain in their homes as long as possible to oppose new housing construction. Instead, policy should be created to allow and expedite new developments.
