As Mayor London Breed takes office, San Francisco faces an unprecedented affordability crisis.
The median home price is $1.61 million. A family earning $117,000 now qualifies as low-income. Thousands are leaving The City by the Bay, and many more are considering the same.
Where did things go wrong? Unemployment is low, and incomes are rising. The median wage in the San Francisco-Redwood City-South San Francisco region did rise 16 percent from 2011 to 2017.
However, that’s just 6 percent growth after adjustment for inflation.
In contrast, the average cost of renting a San Francisco apartment rose 39 percent, or 27 percent after inflation, in the same period. In 2017, the average monthly rent for a San Francisco apartment was $3,734 — or 17 days’ worth of income for a median wage earner working full time.
These numbers are based on my analysis of San Francisco-Redwood City-South San Francisco wage data from the U.S. Bureau of Labor Statistics and San Francisco apartment rental price data from Rent Jungle.
Simply stated, wages can’t keep up with the rising cost of living, and the situation appears worst for low- to middle-income families. While the 75th and 90th percentile of hourly wages increased by $4.92 and $7.82, respectively, the 25th percentile saw only a 59-cent increase in real terms from 2011 to 2017.
The data show increasing income inequality in San Francisco, with the rich enjoying larger wage increases than the poor and middle class. But even wage increases for high-income earners cannot match rising housing prices, which illustrates just how bad it is for the working class.
The large increases in upper-income wages are likely attributable to well-documented growth in the technology sector. Many of these high-wage earners are recruited from across the country and around the world. We welcome them for their contribution to innovation and our economy.
At the same time, what happens to the low-income San Franciscans who find themselves priced out of their own communities? Slow wage growth and undersupply of housing have already forced many to leave.
San Francisco must grapple with what kind of city it wants to be in five, 10, or 20 years. It is the people of San Francisco who give The City its unique character and charm. Likewise, the future of San Francisco will be written by the people who call it home. Can it truly live up to its progressive, inclusive, and immigrant-friendly values if only the rich can afford to live here?
What do we want the Mission to look like, or the Haight, or Chinatown?
Some have turned to protest by blocking tech shuttles or rallying before City Hall. Others have turned to legislation to raise taxes on business or increase affordable housing. While well- intentioned, they are only short-term replies to larger problems like a hallowing middle class and poor social mobility.
With a new administration in City Hall, what San Francisco needs is transformative leadership and radical policy solutions. We want a city with thriving families and neighborhoods for immigrants and culturalminorities to call home. We want to lift entire communities of San Franciscans overlooked during the prosperity of the last decade into better jobs, higher wages and housing security.
To realize this vision, we need clean and safe streets and parks. We need public education reform that sets up today’s children for success, so that we start seeing software engineers and startup CEOs who grew up in the Bayview, Tenderloin and Mission.
But it will also require us to accept some more difficult realities. Our skyline will have to change to increase housing. Growth in tech needs to moderate to give low-income San Franciscans a chance against better-endowed newcomers. And money? We ought to put community before money.
The good news is that rental prices appear to be leveling off. The average San Francisco apartment rent has fallen slightly since 2016. Unfortunately, there’s still a long way to go for working-class wages to catch up, and this is the biggest challenge facing our new class of city leaders.
Born and raised in San Francisco’s Portola, Brandon Yan is an incoming medical student at UCSF, a recent graduate of Duke University with a bachelor’s degree in public policy, and a research analyst at the UCSF Institute for Health Policy Studies.