San Francisco family blues

Stories about government meddling and its unintended consequences are so prevalent and stark that they almost write themselves. That's what I thought just now reading about San Francisco's dwindling child population.

SAN FRANCISCO - Anne Bakstad and Ed Cohen are starting to feel as if their family of four is an endangered species in San Francisco.

Since the couple bought a house five years ago, more than a dozen families in their social circle have left the city for cheaper housing, better schools or both.

For years San Francisco has declared war on affordable housing (in the name of affordable housing, which would be ironic prior to the development of economic science) and now people scratch their heads and approve new government actions in order to keep families from moving away.

I love the city of San Francisco. It's beautiful, energetic, and dense. It's a great place for a young man to hang out. But as the article mentions, "[a] two-bedroom, 1,000-square-foot starter home is considered a bargain at $760,000." This is not the place to raise kids. The problem is finding a politically acceptable way to deflate these ridiculous housing prices. People who've invested in homes there are not going to be happy when the house they bought at price X is brought down to its actual market value of .5X (or whatever the number might be).

Mayor Newsom is getting his machinery in motion, Hoover-style, to try to slow the flight of families from the city. But taking more money from San Francisco taxpayers is a terrible idea. The actually effective remedy might not be simple, but the complaint is and could maybe give policymakers a hint:

For families choosing to stay in San Francisco, life remains a series of trade-offs. They can enjoy world-class museums, natural beauty and an energy they say they cannot find in the suburbs.

But most families need two or more incomes to keep their homes, and their children spend most of their days being cared for by others.

"We have so many friends who are moving out and say how much easier life has been for them," Bakstad said. "If we can make it work in the city, we would love to stay. In a way, the jury is out."

Link via Sploid.

Share this

Probligo, You would be


You would be correct if I offered that deal to everyone, but I meant those enticements to only be for families. However, I think that it would really only slow down the exodus rather than entice families to move in. Its natural land scarcity and international appeal will always keep SF expensive.

Patinator, Sorry, mate.


Sorry, mate. Wrong. Do all of those things that you mention - reduce taxes, eliminate property tax and increase tax credits - and two things will happen...

SF will become an even more popular place to live, at least while the utilities and service infrastructure continue to operate. That will force property prices even higher.

The city/state will slowly, no rapidly go broke.

Or are you suggesting that the future citizens of SF should have no need for services such as toilets, water supply, roading, law and order... Last one out turn off the lights please?

Randall - there is no rent

Randall - there is no rent control and no 'affordable housing' on the peninsula, and our prices are almost as bad as the city. I really think it has more to do with geography, supply/demand, etc. The main government regulation issue is that California is the toughest state in the union for building permits - we require more different permits and inspections than any other state.

There could be zoning issues too, since that's controlled by municipalities, I don't know much about it.

Also don't underestimate the effect of low-interest rates on allowing prices to rise so high. Given that houses are bought with loans, the interest rate is as germane as the purchase price in determining the out-of-pocket cost. If one goes down and the other goes up, the net result is a much smaller change.

Sounds pretty much to me

Sounds pretty much to me like normal capitalist market operation.

We have the same kind of thing happening here in Auckland NZ. There is a current "fashion" here (for those who can afford it) to buy as much property as they can afford, often gearing the purchases in excess of 80%. (If you don't know what that means you are no capitalist). The consequences are -

Prices for a 3brm house where I live have increased from NZD260k in 2000 to around the NZD380k with present indicators (asking prices) in excess of NZD420k. My son and his partner purchased an old (1900's) cottage on a half section about four years ago for some NZD290k. In the past year they have received several unsolicited written offers in excess of NZD450k, one over NZD500k. Needless to say, they would be hard pressed to replace the property even given the capital gain if they sold.

In the same period, RENTALS have moved only marginally because the market is unable to sustain any major increases.

Like I said, it is called free market economics. It is simple. It is exactly what most people want it seems...

I left Southern Cal for the

I left Southern Cal for the same reasons. Unless you want a nanny to raise your kids, where are you going to live? Why have kids if you are going to have a nanny raise them? Seems self defeating to me, but that is exactly how most "parents" are raising their kids out there.

The best ways to encourage families to stay or move to SF are to, on the state level, eliminate the property tax, income tax and increase the children and married couple tax credits. However, this only motivates the pocketbook side of the equation and unless most of the population decides not to live there, home prices should stay relatively high. Also, crime, population density, legions of homeless, the large homosexual population, crowded/failing schools and lacks of open space probably still outwiegh the pocketbook for a lot of parents.

Since most major cities have a lot of young, well educated singles, perhaps the SF gentrification trend (which is the same in other cities) is not so bad. You graduate, get a killer job in a big city, meet your dream elite-mate co-worker, get hitched, buy a place, work a few years more, sell the place, pay off all your school debt, move to the burbs and buy a place four times the size of your city place, start your own business with the extra cash and raise a family.

Brad and Nicholas, You're

Brad and Nicholas,

You're right that part of the high prices in San Francisco are due to high demand and low supply. But from what I understand there is an unbelievable amount of government meddling in the housing market that seems to account for the lion's share of the extra costs (i.e. beyond real market value). When I visited in November I saw political flyers all over the place with "rent control" and "affordable housing" written all over them--signs that housing prices were totally skewed.


You seem to take it as a given that the government should be in the business of fixing this “problem.”

Given that they created it, and that market participants are not going to fix it by ignoring laws en masse, yes, the government should remove its laws/regulations that inflate housing prices. My point was that this will not be politically popular, because many people there paid inflated prices for homes and dont' want to sell them later for their actual prices.

Are you new to Catallarchy? It seems like anyone who's read us for a while would know that we don't favor social engineering.

Randall, you say "The

Randall, you say "The problem is finding a politically acceptable way to deflate these ridiculous housing prices." I'm not sure that's the problem at all. You seem to take it as a given that the government should be in the business of fixing this "problem."

I'm certainly in agreement that the citizens of SF should not be taxed, but I take it a step further in saying that not one joule of state-funded energy should be spent on finding ways to encourage families to stay. If families want to stay and pay the higher cost in terms of convenience and money, great. If not, let them leave.

If this discussion focused on Las Vegas, on the other hand, I think most would see the stupidity in asking the government to modify things so families would like it more. The market has made Las Vegas what it is and it will do the same for SF. The government should leave the market alone even if that means the city won't fulfill the nostalgic, cherished image in the minds of *some* of its citizens.

And even if I temporarily concede the point that this isn't the goverment's business -- which I won't -- I can't imagine any way to encourage families that isn't expensive or freedom-inhibiting.

Family and the city A post

Family and the city
A post at Catallarchy by Randall McElroy made me think about the topic of families leaving the city. I think it represents a very significant and unfortunate trend that middle class families have left the city. It is now a

San Francisco Family

San Francisco Family Blues
High home prices are difficult for families:...

One wonders what the

One wonders what the relative impact is on SF housing prices of:

1. physical constraints-- not only is there not much land to build on, but much of what there is probably can't be built up very high due to earthquake hazards.

2. regulatory constraints-- difficulty getting permits to, say, build more medium-to-high-rises with spacious condos in them, or convert non-residential buildings to residential use.

The weird thing about the SF housing market is that-- at least for now-- the *rental* prices are not bad at all for a large metro area. Craigslist yields plenty of nice-looking 2BRs in good residential neighborhoods (e.g. Noe Valley) for $1800-2000 per month, which is no worse than, say, the nice parts of Brooklyn, and way cheaper than Manhattan. Much better than paying the mortgage on one of those $760,000 houses, even with deductibility of mortgage interest and all.

Why would SF care if all the

Why would SF care if all the children left? That would mean savings on education and law enforcement. Children make messes and are noisy and they take up a lot of room in public parks with soccer games and playgrounds and such. If every family with children was replaced by a set of DINKS wouldn't that be better for the city? DINKS don't go around demanding that others subsidize their parenting experience.

Maybe they're trying to

Maybe they're trying to encourage polyamorous marriage? That's one way to get those multiple incomes :twisted:. Or follow the strategy of my housemates and I - communal living. With 4 owners and 2 renters, our 3000 ft^2 house in Silicon Valley is not too bad...

I'm not sure I would raise a

I'm not sure I would raise a family of four in SF. They obviously are not poor. A lot of parents are more fixated on where the kid grows up than the kid is, anyway. Most kids couldn't care less about museums or art galleries and just want to hang out with other kids. Why force everyone else in SF to subsidize the child-rearing hobby? So they can have the joy of hearing other peoples childrens laughter?!?!?

Again, that's why I left the

Again, that's why I left the LA area to move to Atlanta. I just couldn't see any sense in using my income and my wife's income to buy a 1000-sq-ft 2bdr condo, when I could come out here and buy a 3000 sq ft house on my own income.

But I don't think government is solely to blame for SF's troubles. It's a trendy place to live. It attracts wealthy or high-earning people from all over the country, and that is by definition going to crowd out others. Government policy has some effect on it, of course, but it's not like SF has any room to grow. It's a peninsula.

Money is NOT being "taken"

Money is NOT being "taken" from taxpayers in SF. In fact you get more services than taxes actually pay for in the Bay Area! Perhaps people who siphon off the market by speculating might get screwed under Newsom's plan A or B, but really - their money is not being taken away. Possible profits on top of their initial investment might be limited, however. I don't have a problem with that.

San Francisco is expensive because rich people buy more housing and want to make more money. It's called greed. If people didn't feel that they were entitled to enormous profits off real estate sales, we wouldn't have this problem.