Predictably, cities like Oakland will likely fail to take advantage of this trend because of their bizarre attachment to slums.
As far as I know, I'm the only East Bay blogger who actively opposes so-called "affordable housing" no matter how it's packaged. I categorically oppose it because it runs counter to any sort of optimistic vision of a growing, thriving city.
Affordable housing is designed to entrench those who are unable or unwilling to compete in the economy. It:
- Takes valuable land from those who would be willing to pay more for it and allocates it to others, disrupting the natural economic balance and distorting pricing signals in the marketplace.
- Creates "haves" and "have nots" among the poor by randomly selecting some of them to help. Economic reality makes it impossible to give every poor person a piece of coveted property without adopting full-on socialism. (Incidentally, labor unions do the same thing, but that's for another time.)
- Invites corruption by allowing government officials to distribute benefits to their cronies and their cronies' cronies.
- Discourages mobility. Much like rent control and prop 13, it makes the optimal strategy to never ever move apartments or houses, for fear that costs might rise. Thus, people turn down new job opportunities for fear of losing their government perquisites.
- Fosters mistrust among the potential higher-income residents by signaling that government is "out to get them." This is also the reason why no Oakland high school can attract the best students. Parents won't even give the schools a chance for fear that government officials will find yet another way to stick it to them.
- Carries with it the presumption that certain types of residents are more desirable than others.
- If anyone's more desirable, wouldn't it usually be the wealthier resident?
- Why not let the market decide who is more desirable?
V Smoothe writes, "Of course" there's an affordability "problem" in Oakland. What's that even mean? If people couldn't afford the prices charged for housing (whether to rent or to own), they would look elsewhere, and prices would decline. Obviously, outside of the housing bubble fallout, that's not happening. And that's great for Oakland! That means people want to live here. Why would we want to disrupt that?
The answer is simple: Petty selfishness. Governments enact policies like affordable housing because there are a set of people who want to get whatever they want, by whatever means necessary. In this case, they've failed to get what they want through the economy by competing, so now they want the government to change the rules of the game and just declare them the winners.
Now, I can hear people saying that I'm just piling on the "victims" in this situation. Such an argument is pure sophistry. No one is suggesting laws which tilt the scales of government against the poor. The scales should be flat for everyone, rich and poor, black and white. This is the proper function of government.
People like to argue that we need affordable housing so the people who work as low-wage service employees in a given city can also live in that city. The problem with this argument is that, in a supply-constrained environment, it's a zero-sum game. For each service employee who gets a spot, you have to kick out one lawyer, banker or engineer. Instead of the low-wage employee living in a suburb, the higher-income person moves there. So, the suburbs prosper while the cities suffer.
And, of course, the policies don't even have their intended effects. I know a couple who purchased a home using a special "affordable" mortgage by simply having the lower-earning spouse apply for the loan without the other. Everyone is familiar with the stories of well-off retirees living in absurdly cheap rent controlled apartments. The bottom line: Housing responds very well to economic signals, and by harnessing capitalism instead of railing against it, cities like Oakland can attract more affluent residents.
It's always so saddening to me to ride BART along the Highway 24 corridor. Cities like Orinda and Lafayette are the direct beneficiaries of the ridiculous policies on this side of the Caldecott Tunnel. In past generations, cities competed to attract the sorts of coveted residents and businesses which now flock to our eastern neighbors (and, humorously, Emeryville). These days, our cities compete to entrench ghettos and provide excellent housing for parolled felons.
To what end? To make our cities "funky?" I submit that we would do just as well on that score if we abandoned these policies. The Bay Area is full of interesting people with good jobs who would like to live in the sort of urban environment we can provide.
And besides, murder, rape, graffiti and wandering ne'er-do-wells are not "funky." They're symptoms of cultural suicide. We should be fighting against these forces, not inviting them in.
It's time to set aside these "affordable" housing policies, and pursue a rational, competitive drive to attract the best possible residents -- those who have competed in the economy and done well. In other words, we should let the market decide who lives here.