People have been commuting an awful number of miles on I80 from the somewhat cheaper towns to San Francisco for well over a decade. The jobs have not moved to where the people are living. And there are some jobs that can’t move - teachers and janitors have been mentioned, but also police. My town pays six figures to police, but they still have a shortage because of housing prices.
There is another factor. Normally old people like me would move to a smaller house. But I can’t afford to, because if I sold my house I’d get killed on the taxes. Not property tax, but income tax on my profit. First world problem, I know, but 4 of 5 people on my block are in it. You have to die to be able to afford to sell.
BTW most of the people in city government understand the problem, but there are those who run against “growth” despite the fact the people keep coming.
I just did a quick search, and the cheapest I am finding is $1600 for a 1 bedroom. For someone making $20 an hour, that’s a quarter of their pre-tax income.
That’s the cheapest I could find, and $20 an hour is actually a bit high for some of the jobs you’d probably like people to do.
Now, based on the median household income of someone living in Bakersfield, sure, of course it’s affordable, because the people who live there can afford to live there. The people that can’t, don’t.
I get ~46%. Did I do the math wrong?
No, I did. I have no idea what I did, actually. 20 * 40 * 4=3200, but somehow I got 6400.
I was actually thinking that sounded more affordable than I thought it would be.
At least I wasn’t sending a probe to Mars.
You say it, and … yet …
That is clearly a problem today. Part of the concept of expanding supply is that the demand for luxury units is not unlimited. If that demand is unfulfilled due to restricted supply ALL new builds will be luxury. Why would anyone build an affordable unit if there’s an untapped demand for luxury units?
Markets eventually reach an equilibrium, but not if you artificially restrict the supply.
No, trickle-down theory would say that if you give the rich people all the houses (with hefty tax breaks for good measure) then they’d bless the underlings with the occasional basement rental or garage apartment.
My point is that developers wouldn’t build luxury housing if there was no market for it, but there is, so they’d be fools not to try to cater to that market (thanks @Cheesesteak). Now, there’s builders who just don’t have the skills or resources to provide the quality of product luxury buyers want. That said, what passes for a $3 million home in California would get you laughed out of town Chicago, Cincinnati, or Raleigh, so even the crap contractors are playing in that market, because they can.
We’re deep into the market failure caused by zoning, NIMBY-ism, as well as banks who are loathe to issue mortgages for anything but the most normative projects. That’s why the market hasn’t been able to supply the amount of housing needed to meet demand, and the further behind we get the more it looks like market-based solutions aren’t working because it’s just taking too much time.
I think a big problem is that developers of missing middle housing mostly disappeared after the recession. They were the ones building duplexes, triplexes, and 4-plexes, or even small garden apartments with maybe a dozen units. They fit just fine in neighborhoods of mostly single-family homes. Chicago and Cincinnati are full of those kinds of buildings.
Now, it’s either single-family or 100+ unit mega apartment complexes with parking garages. I think that’s more driven by the banks, but increasingly onerous NIMBY-ism (usually baked into community councils, design review boards, and even co-opted historic preservation boards). The little guys flipping homes in the city don’t make enough of a dent to sway the market, and the big guys doing the big projects spend years in planning, property acquisition, and approvals, so their bandwidth is limited as well. Get enough little guys building slightly bigger buildings and they could probably make a dent, but navigating those waters is too treacherous for not enough gain.

And fwiw, I’m seeing plenty of rentals that are affordable on Bakersfield’s median household income.
Bakersfield, city of enchantment. Has the worst air pollution of any city in the US. In terms of gang violence and overall ambiance, it makes Detroit look upscale. The point here is even when you buy in a hellhole like B’field, you’ll still be paying far more than average.
Some American cities are already trying it, too varying degrees. We’ll see how it turns out.

Great, but where are the jobs?
Literally everywhere else. Some 14 million were added outside of San Francisco in that time period.
one thing they need to do is figure out to calm down the house flippers that are inflating the rental and buying markets thanks to hgtv and the like

That still leaves two problems unaddressed.
The first being that then you don’t have enough employees in SF.
The second being, if they go somewhere else where there is high demand for employees, then the demand for housing is likely to be high as well.
The first isn’t a problem, just a market signal that I probably should neither move there nor open a business there.
The 2nd is imagined. There are only a few cities with truly ludicrous housing situations like SF, and dozens of far more affordable growing cities with jobs in this country. We can’t and won’t fit everyone into SF/NYC/LA/DC/Boston. But there are plenty of Fayetteville/Huntsville/McAllen/Lincoln/Lubbock/etc. out there. And if those become trendy, then there are others in line.

And there are some jobs that can’t move - teachers and janitors have been mentioned, but also police. My town pays six figures to police, but they still have a shortage because of housing prices.
And at some point cities with policies that prevent them from hiring people who provide core services won’t be able to provide them, and they’ll have to deal with the repercussions.
Tourist towns run into this too. One of the big employers near Bar Harbor, ME ended up building employee housing last year. And some of the hotels have dorms for seasonal employees.
I’ll quibble a bit. Around here, where lots that could take a 100 unit anything are hard to come by, we see a lot of these I don’t know- 7 to 15 ish unit condos

And there are some jobs that can’t move - teachers and janitors have been mentioned, but also police. My town pays six figures to police, but they still have a shortage because of housing prices.
Also, some industries. Once you get a critical mass of people in something like biotech, that still requires many of its employees to be in the office (rather, lab, clinic, manufacturing suite) you don’t easily set up shop elsewhere. We once decided to open a facility in Idaho, because it would be cheaper, and forever had trouble filling the positions.

The first isn’t a problem, just a market signal that I probably should neither move there nor open a business there.
Right, so the city dies, no one wants to live there anymore, problem solved.

The 2nd is imagined.
Okay, SF is the only place where housing prices have gone up faster than income, I am simply imagining all the reports that indicate otherwise.

There are only a few cities with truly ludicrous housing situations like SF, and dozens of far more affordable growing cities with jobs in this country.
Now, SF is the worst example, and may be one of the few with, as you say “truly ludicrous” housing situation. But the problem is nationwide, housing is becoming less and less affordable even in your Fayetteville/Huntsville/McAllen/Lincoln/Lubbock/etc. It doesn’t have to be “truly ludicrous” to price you out of a roof over your head.

One of the big employers near Bar Harbor, ME ended up building employee housing last year. And some of the hotels have dorms for seasonal employees.
Ah, corporate housing. How could that ever go wrong.

“The financialization of housing” “describes the increasing tendency for owners and investors to value housing as a financial asset, like stocks or bonds.
That’s silly. Houses have always been considered real estate, which is a sort of investment just like more classic financial instruments.
The only recent difference is that rather than some guy with a bit of extra scratch owning a few homes and renting them out, they’re being treated as appreciating assets in their own right, regardless of whether or not someone lives in them. It’s no different than someone buying a corner lot in the suburbs, and hanging onto it intending to sell when the area develops, and the price has gone up.
I would think a way to mitigate the problems might be to assign a home purchase to a category, and if it’s a person buying it and it’s not their primary residence, or if it’s a corporation, then there’s some sort of clause that requires them to rent it out within some time frame, or suffer some pretty hefty penalties- percentage of the home’s value or some such. That way, you’d discourage buying and sitting on homes, or sticking hard to some sort of perceived market value for rent.
One thing that could be done top-down: the Federal government provides a lot of funding for transit. If that funding was contingent on the elimination of density restrictions and parking requirements within, say, a half-mile of any subway or other rail stop, you’d have a handful of specific areas where the dense construction would be allowed (and property values would increase there as a result) but homeowners elsewhere wouldn’t have to worry about some random project being built next to their home that would have the opposite effect.
The city or county could take or leave the offer, but in order to take it, they’d have to permanently eliminate the ability of local citizens’ groups to veto such construction in those radii.

I would think a way to mitigate the problems might be to assign a home purchase to a category, and if it’s a person buying it and it’s not their primary residence, or if it’s a corporation, then there’s some sort of clause that requires them to rent it out within some time frame, or suffer some pretty hefty penalties- percentage of the home’s value or some such. That way, you’d discourage buying and sitting on homes, or sticking hard to some sort of perceived market value for rent.
Maybe. I like the idea of a very high property tax that is waived for your primary residence.

But the problem is nationwide, housing is becoming less and less affordable even in your Fayetteville/Huntsville/McAllen/Lincoln/Lubbock/etc. It doesn’t have to be “truly ludicrous” to price you out of a roof over your head.
A for-instance: my wife and her brother sold their late grandmother’s house in Plant City, FL last fall for $180,000, and would probably have gone for more like $250K if it didn’t have some real problems with plumbing, electrical, and the age of the structure. (It’s as old as I am, but I’m holding up a lot better!)
This was a house that would have gone for well inside five figures just a few years back. Plant City is not that far from Tampa, but within commuting distance, and my WAG is that it’s becoming a bedroom community for Tampa, which it hasn’t been until now. But when you can’t build more densely in the center city, people have to move further out.
(I know people will jump in and say, ‘$180K? That sounds pretty good!’ but 70K would have sounded a lot better, and that would have been more likely just a few years back. The point is, you don’t get this upward pressure if there aren’t more jobs for more people than there is housing for more people. And LA/SF/NYC/DC/Boston are far from the only places where this is happening.)