If you earn a six-figure salary in San Francisco and have a family of four, you could qualify for Section 8 housing. The U.S. Department of Housing and Urban Development has released its 2017 low-income guidelines for each county in the U.S., and in San Francisco a yearly income of $105,350 now is considered low-income, which is defined as 80 percent of the median.
Sounds outrageous, doesn’t it? You may be surprised to hear the Salt Lake area is on the same trend line, which will continue unless leaders make it easier to build.
You might expect a high cost of living in the bay area, where the median home price is about $1.2 million, but my guess is most Americans would find all of this outrageous, and a little cruel to people of moderate means.
Two years ago, Fortune did a story on what $350,000 will buy in San Francisco. The answer is a 110-year-old shack, 765 square feet of (at that time) unlivable space originally built after the famous 1906 earthquake.
As any good realtor will tell you, the key is location, location, location. The shack would get you into a desirable city where demand far outstrips the housing supply. Oh, and don’t forget to bring a hammer and a credit card.
By comparison, Salt Lake County’s low-income limit of $60,300 for a family of four seems reasonable. But if there were no San Francisco, it might seem high, as well. For example, in Custer County, Oklahoma, where I once lived and labored as a sports editor (in the early ‘80s), low income is defined as $44,500.
In Utah County, low income is $55,350 or less. In Weber County it’s $61,300. In Utah’s San Juan County, the level is $54,150.
In Los Angeles County, it’s $72,100, not an unreasonable distance from Salt Lake levels.
A lot of folks of a certain age, myself included, choke on figures like these because we remember how it used to be. So let’s do some historical comparisons. According to HUD, the current median family income nationwide is $68,000. Using an inflation calculator, I find that this would be $23,048.32 in 1980 dollars. Actually, the median income that year was $21,023, which means people are doing a bit better today than they were then.
Using that figure for comparison, San Francisco’s current low-income level would be the equivalent to $35,707.95 in 1980. However, the Census that year calculated that San Francisco’s median income (in 1979) was $15,866. That gives you an idea of how things have risen there over time.
Why is San Francisco so expensive? Quite simply, there is a shortage of housing. In a blog he published last year, Eric Fischer, a developer and data artist at Mapbox, examined historical data and determined San Francisco has a long and consistent upward trend in rents, dating to at least the 1950s. He calculate that returning rents to 1995 levels would require a 30 percent increase in housing construction. Just keeping rents steady would require a 1.5 percent increase, which is three times the growth rate since 1975.
But that would require changing some rules and overcoming the objections of people who misguidedly argue that letting developers catch up with demand would make things harder on low-income people, as if that were possible.
Don’t think Salt Lake City’s problems aren’t similar — albeit on a smaller scale. In March, the Deseret News reported on how “a group of home builders, real estate professionals and municipal leaders” is warning of a demand crisis along the Wasatch Front that is nearing a tipping point. The answer, the group said, is to allow more high-density development and to give the private market more flexibility to meet market demands.
“What we’re seeing now is couples and families doubling-up with friends or their families while house hunting,” said Jaren Davis, executive officer of the Salt Lake Home Builders Association.
Coincidentally, I received a call from a pollster the other day asking whether I favored more high-density housing in South Jordan, where I live, and where houses get snatched up before a “For sale” sign can be erected. It’s a hot issue right now.
An even hotter issue, however, should be whether we want to be more like San Francisco some day, or like a city where folks actually can afford to live.