Thursday, December 26, 2013

Leave your broken heart in San Francisco

Over a half-century ago, two economists--who were each to later distinguish themselves by winning Nobel prizes--published a little pamphlet, Roofs or Ceilings, which begins by telling the story of housing the population of San Francisco in the wake of the disastrous earthquake of 1906. They note that in the San Francisco Chronicle there is no mention at all of a housing shortage, even though more than half of the city's stock of housing was destroyed. In fact, in the first edition of the paper published after the earthquake there were numerous classified advertisements offering dwellings for rent.

By 1946 the situation had changed. Both the population of San Francisco and the number of housing units had increased, but the same newspaper was reporting that the California state legislature was convened to address what the Governor declared as 'the most critical problem facing California'. Evidence being that only 4 advertisements appeared in the Chronicle offering apartments for rent (compared to 64 on the day after the 1906 earthquake).

Why the difference? Easy; in 1906 apartments were rationed by price fluctuation. In 1946 that method was illegal thanks to WWII's price controls. In 1906 people adjusted their behavior; economizing on space due to higher prices, and increasing space by new construction responding to higher prices. In 1946, laws prevented those adjustments.

Let's look in on the City by the Bay today;
Frank Hanes, a 25-year-old sous chef, moved to San Francisco from his native Vermont to pursue a career in cooking. He has been working at Aziza in the Richmond District for the last year, and both he and Aziza chef-owner Mourad Lahlou say it's been a match made in heaven.
But recently, Hanes gave Lahlou his notice. He's moving back to the other side of the country.
"I'm learning so much more here than I would on the East Coast. I've seen food I never even knew existed," Hanes said. "But my girlfriend and I have been looking for our own spot, and we couldn't even find a single-bedroom apartment."
Anyone surprised to learn that, due to housing activists, the city once again has rent control?  Added to which are California's land use regulations which place approximately 75% of the area in and around San Francisco out of bounds for development (and more housing units).

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