Bay Area Housing Inequality

By Makenna Adams

High tech, mediocre football teams (leave it to the Central Valley), and delicious boba joints—what else emblematizes the Bay Area? Oh yeah. The highest income inequality in California. Consequently, because the Bay Area has such high income inequality, housing inequality also characterizes California’s tech center. 

The problem starts with the vast difference in the income of Bay Area residents. In the 90th percentile, earners make on average $384,000 a year; in the bottom of the 10th percentile, $32,000. In recent years, the gap has grown exponentially. To better understand the expanding inconsistency in earnings, Jon Havman of Joint Venture Silicon Valley’s Institute for Regional Studies authored a study in which he examined trends in income inequality. “Although income inequality in the Bay Area is comparable to measured inequality in the rest of the state and nation,” notes Havman, “it has been increasing much faster in the Bay Area over the last 20 years.” Experts credit the rise of the tech industry as the reason for the divide in income. As entrepreneurs cultivated the tech industry in the 1990s, high-paying jobs and the middle and upper class emerged, squandering older, already-established industries in their wake. No industry had any chance of competing with the domineering tech field, and those employed elsewhere became members of the lower economic class. 

As a result, housing became available and affordable to tech moguls first. As tech corporations continued to act as the largest Bay Area employers, they have driven housing prices to astronomical heights. Eager for tech jobs, people have flocked to the Bay Area at rates that the housing market cannot keep up with. Pre-pandemic houses in the most expensive city to live in, Atherton, cost on average $6 million, and in the cheapest city to live in, Vallejo, cost $427,000. San Jose averaged $1.1 million per home, with the Almaden Valley neighborhood (more than $1.52 million) exhibiting the most expensive houses, and Alum Rock, the cheapest ($770,000). Yet 25 years ago, a house in Santa Clara County cost on average $245,670. 

The prices for goods and services have risen concurrently with the prices for housing. Thus, employees without tech-level salaries most often get pushed and priced out of areas once previously affordable. As costs of housing and basic goods continue to rise, the upper class increasingly remains the only group to live comfortably. 

Within the Bay Area, there exists the uber-wealthy elite on the highest end of the spectrum, and the devastatingly large population on the opposite: individuals experiencing homeless. Across the Bay Area, the U.S. Department of Housing and Urban Development (HUD) conducts biennial surveys to “measure the prevalence of homelessness in each community.” These surveys are known as Point in Time Surveys (PITS), because they occur at the same time, on the same day every two years. In 2017, the HUD reported 6,085 homeless citizens lived in San Francisco. In 2019, the count had risen to 8,035—an increase of more than 14%. Of those 8,035, 2,855 individuals were sheltered, while 5,180 were unsheltered. Here in San Jose, the most populated city in the bay, for every 100 thousand people, 430.96 people were homeless, and of the population 74.28% were unsheltered. While PITS are helpful, they are not entirely accurate. For example, a PITS conducted in winter as opposed to summer may report fewer levels of homelessness, as individuals may have moved to a warmer city. In short, homelessness has risen since the tech industry began to push individuals out of the area as it developed, and researchers have difficulty deducing just how high. 

Recent developments have occurred since the pandemic began. Census data reports that net migration to the Bay Area peaked in 2014 and has declined every year since. Records broke further when Coronavirus forced people to either work from home or out of jobs. With the option to work remotely, many employees have ditched the Bay Area and its high prices and moved elsewhere, while others have moved because they have been forced out of work entirely. 

With the rising housing crisis and the cost of living in the Bay Area in recent years, the region has become one controlled overwhelmingly by the elite. Dwindling is the Bay Area’s once unique, multi-faceted culture, and emerging is one full of economic inequality.