Working. Poor.

20 thoughts on “Working. Poor.”

  1. Gosh, I hate that term “sharing economy” (I know you didn’t make it up, etc). It would really be better applied to work barter, item swaps or things like that.

    I live in a rapidly gentrifying area and have 15 yrs left on a mortgage. Being lower wage working class, my partner and I have come to the conclusion you summarize at the end of your post. So we are going to sell the house while the selling is good, take the money and build a tiny house on a scrap of land so we can be free of skyrocketing rents and crippling mortgages. In a way, it reminds me of people cobbling together abodes in shantytowns in places like Brazil, although here in the States we do have access to better materials and things like more reliable plumbing, electricity, solar power, so on. But I think the model of the favelas of Brazil are going to become more of a reality here. Homeless tent towns, the explosion of people living in their vehicles (I have seen a huge uptick in this over the last couple of years in my area), it all seems to point that way.

    1. I’ve always thought the favelas were a more realistic approach to housing working class rural migrants than ultra expensive, burdened with regulations and well meaning poverty industry requirements and corruption “public housing”.

  2. This has been going on for a long time. That heard that guy who shot Harvey Milk essentially thought that people like him were being forced out of town — when was that? Late 70s?

    1. Dan White (the guy who shot Harvey Milk as well as Mayor Moscone back in 1978) lived in Visitation Valley (still a middle-of-the-road non-gentrified neighborhood on the edge of town) at a time when San Francisco was at its lowest economic point. Gentrification wasn’t a problem back then. However, middle class exodus to the suburbs was a real problem. Dan White represented the wholesome All American family man who fought the increasing social and political (not economic) transformation of San Francisco characterized by non-whites and various counter cultures. Dan White struggled particularly against the increasingly vocal and powerful gay population personified by Harvey Milk. The fact that he shot people while they sat at their desks in City Hall says a lot about his desperation.

  3. I think understanding how housing expanded in the 1980s in Los Angeles can help give an understanding of a way toward more affordable housing in the Bay Area.

    Back then, zoning allowed for more density than the housing stock carried (this is true of some of the bay area, and could become true of more of it).
    Depreciation tax credits made it attractive for professionals (think accountants, lawyers, dentists, doctors) to build mid-rise apartments, e.g. dingbats, in said areas, even without very high rents.
    Many homeowners elected to build these on property adjacent to their SFRs while continuing to occupy them. This reduced neighborhood opposition and kept tenants adequately in line.

    Basically, you didn’t have to be a developer to create new housing. Because the locations weren’t particularly desirable (neither central nor exclusive), the housing wasn’t luxury. Thin walls, minimal parking, cheap finishes. Breaking even was profitable from the view of those building- due to the tax advantages.

    Perhaps there’s a way to get this working in some of the Bay.

    As far as the effects of HSR on housing- I do believe HSR will happen- certainly the caltrain upgrades (already in progress), the central valley (already under construction), and likely the Pacheco Pass Basically, I strongly believe we’ll see IOS-North. The sticker price for the Base tunnels in Tejon or Tehachapi might scuttle anything further.

    Considering that SurfAir can provide all-you-can fly for under $2000 a month, and Amtrak 30-day passes in the NEC range from under $500 for Baltimore-DC, $1300 for Wilmington-DC, $1400 Philly-DC, I’d think that you’d probably see CAHSR monthly passes cap out somewhere around $2000 a month, with lower costs for shorter distances.

    Unless NIMBY fever threatens home construction in the central valley, I think that will provide a cash-out incentive to some of those currently sitting on SFRs closer into the bay area. HSR won’t budge Atherton. Lots of areas will be unaffected. But on the margin, if enough residents are replaced by investors, zoning will change to benefit their interests. Will it be possible to live on a working class salary in the bay area? Well, some people might get the chance to switch from an old RV to a thin-walled apartment. It’s progress.

    1. I lived in several of those beige dingbat LA apartment buildings when I was a kid. I’m not opposed to them per se. They were affordable back in the ’70’s and early ’80’s, particularly for my working class relatives who were never going to be able to buy a single family home. But the current set of building codes, zoning regulations, and financing mechanisms make small multi-unit buildings nearly impossible to construct. That’s why almost all of the new buildings you see are the 200+ unit complexes. In order for the doctors and dentists to own them they need to pool a lot more money with a lot more accountants and lawyers. Realistically, they just invest in REITs instead and let one of the big corporate production builders do the heavy lifting. So the days of the small builder/investor are mostly over, except when it comes to managing older pre-existing building stock.

      Personally I’d love to be able to take a bullet train from San Francisco to LA since flying involves schlepping to and from the airport on either end of the journey. Depending on your exact destination it’s more convenient to just drive down Interstate 5 since you need a car in LA no matter what anyway. Which gets to the heart of the problem with transit in 99% of California. It’s all sprawl all the time. You step off the train and… what? Walk around Fresno, Bakersfield, and Palmdale? Nooooo. Rent a car at the park-and-ride? Why not just drive in the first place? Rail works when it connects one walkable, compact, vibrant place with another.

      And by the way, if you can afford an extra $500 or $1,300 or $2,000 a month for a rail pass you can afford to pay more for housing in a better location. The numbers don’t add up for a Fresno or Bakersfield address. (It makes much more sense to just move to Phoenix or Vegas or Salt Lake.) To suggest HSR it will lower the cost of housing in California is just wrong. It might help spread higher values to some of the lesser towns in the Central Valley (not a bad thing really) but paying extra so you can live near the park-and-ride lot might merely encourage marginally middle class people to overly leverage themselves (financial and geographically) into places with minimal prospects for the future.

  4. Another candid report. Thanks. The photos capture the bland mask laid over our oddly fierce arrangements.

    Is your report consciousness expansion for those with the whip hand, that’s to say some ownership over income generating assets ? You finger them at the start: “all point and click, instant, anonymous, and profitable”. Their position is fragile. Those web platforms extracting a revenue from myriad teeny deals may eat you: see Joseph Losey’s movie “The Servant”.

    1. I’m not fingering anyone in particular about anything specifically. I’m just observing reality and holding up a few snapshots for whoever might be interested.

  5. I wonder what the end-game in the Bay Area (and to a lesser degree other expensive-across-the-board metros) will be. As housing gets ever more expensive, when measured as price/wage ratios, a larger % of the population is completely priced out, and the ones that can afford mortgages taking half their post-tax earnings just have all incentives to do everything possible to keep prices of their residences high and over-water.

    Several metros are long past the point where only, say, the bottom decile had severe difficulties affording housing costs. And spill-over effects of housing prices are reaching far beyond any reasonable “drive-till-qualify” areas.

    I think building high speed rail should help, maybe subsidizing its tickets to create feasible (time and cost) Modesto-San Francisco commute patterns. Other than that, I think only some sort of state heavy-handed intervention in the region, overriding local zoning codes, would make it work.

    I erratically follow some of the local press online, and sometimes I get amused by how projects that wouldn’t in any way attract socially disruptive households are fiercely fought against. Palo Alto shot down a couple senior-oriented mixed projects, and fights the university against projects that would only draw students with minimal traffic impact. Livermore and Dublin passed “vista” ordinances to protect views of barren windswept mountains. TOD around BART, ACE or any other rail, including future CAHSR, trigger some hysteria among otherwise educated and very solid upper-middle-class (nationally) people. Proposals to build housing close to major corporate campuses like Facebook wanted to do were shot down because it would create “college-like” vibe in an area on the wrong side of US-101 already!

    Moreover, I get the feel (as someone not living there as of now, so please correct me if I’m wrong) that an undertone of “unfair access to affordable housing” is brewing and growing. Households that earn well into top 20% nationally still have to take a very sizable size of their paycheck to afford relatively modest (size, construction, location) residential property start resenting the idea of any major action that would give others the chance to live in some of the best school districts and employers in the country paying much less.

    Anyway, I’m not optimistic about the solution to these problems. Maybe when there are more “railway-side favelas” or when some fire kills people living in hazardous basements in packed houses, people that are not “the other”, then things might change. Or not. And that is sad because with not much drastic change Bay Area could accommodate three size its population and help to prevent the emergence of other tech hubs that can compete on costs (2/3 of Bay Area wages, 1/3 of living costs, double after-tax-after-housing disposable income for techies), keeping its place in the economic engine.

    1. “I wonder what the end-game in the Bay Area (and to a lesser degree other expensive-across-the-board metros) will be.”

      Everything runs in cycles. The ridiculous expense of the Bay Area will ultimately fix itself. The tech industry is constantly seeking lower cost venues for its operations (Salt Lake, Phoenix, Nashville…) while simultaneously automating many of the processes that once relied on expensive humans. And of course, many of the companies that exist today will simply not exist in ten or fifteen years as markets evolve and mature. People who are currently buying $1.2M one bedroom condos at the top of the market in San Francisco or $900K bungalows in nearby suburbs will not be in a good position when the cycle rolls from boom to bust. This will unfold slowly over many years. Think of Detroit in 1955 compared to 1975 or 2005. None of this will help the working class in the short term. But thirty years from now I guaranty today’s luxury accommodations will have devolved into the cheap rentals for a new generation who talk about the tech days the way young people now talk about the Summer of Love.

      “I think building high speed rail should help.”

      No. Not even close. Assuming a bullet train actually is built (I’m not holding my breath) the cost of real estate near the new stations out in the distant Central Valley exurbs will simply rise to a price that is still beyond the reach of the working class. The cost of riding the train will also be high enough that minimum wage earners won’t be using the train much. The “trickle down” theory that wealth will somehow spread around tends to work for people who are already reasonably well positioned with an education and property. The folks below that level are just the cleaning ladies living in rented trailers and motels.

      Honestly, I expect an external shock of some kind to tip the country into a fighting mood. This anger will be managed and stage directed toward an outside enemy rather than any internal soul searching about how we’ve organized our own affairs. War will galvanize and unify the country and the national slate will be wiped clean after a period of intense unpleasantness. The dust will settle, and a new economy and social order will emerge. It might be better. It might be worse. Time will tell.

      1. The “luxury” accommodations of today will often be pretty rundown in 30 years (I’m surprised at how dowdy pricey Marin looks in many of your pics). But unless we build more stuff, that’s not going to help the working class much. The problem is that we’re now desperately short of space for people who aren’t securely middle class. Suburbia is a a trap for those who can’t afford two cars per family, and the return to walkable neighborhood is bidding up the prices of places you can get by without a car. There aren’t enough of the mega-apartment complexes going up to cover the needs, even ignoring the fact that many still require a car.

        1. No. The popularity of Trump and Sanders are a symptom of an electorate disgusted with the existing political process. The external shock will be a “Pearl Harbor” type event that will most likely trigger war. (Pick an enemy… there are plenty to choose from.) War will galvanize the country and focus everyone’s energy around a single great external struggle.

  6. Thanks for this well written post. Our situation is slightly different, we will shortly loose the leased land we built a mini house on and operate an organic garden farm. We are in our 50’s, have some capital and will receive some compensation for the small home we’re leaving behind. This time our dwelling will be a Tiny Home (fancy trailer), and we’ll look for a small piece of land to set up our home on wheels and farm. This is one of our few options, renting an apartment is not affordable, without a good paying job. It would be nice to see local governments making affordable land available to semi permanent dwellings at fair rents and changing land use rules to make the Tiny House option legal. Basically a Tiny House is a trailer camping seasonally on whatever land they can find. Which leads to insecurity of location, if a neighbor or local code enforcing official decides they don’t like you or what you are doing, you can be forced to move. Another worthwhile cause to work on!

    1. Reading this, Johnny, reminds me how much bad, agenda-driven journalism clouds this issue. Straight forward reportage, words and observations, has a timeless utility. California is ready for another Upton Sinclair. Is it you?

      1. At university I was always told that “anecdotal” evidence was for amateurs – as if actually talking to ordinary people and observing reality had no value compared to quoting a completely detached “expert”. The problem is simple. There’s too much of a gap between what working people can earn and how much it costs to live. The solution is not so simple. All the things that could be done to bring the working class back into the fold of normal life are socially and politically unacceptable. We don’t want to solve these problems. So we won’t. My understanding of the situation is that at a certain point enough of the former middle class will slip from the “have” to the “have not” category that the national mood will change. That tipping point will be interesting to observe. Funny how Trump and Sanders (two sides of the same coin) are the two front runners in this election cycle. There are a lot of pissed off people out there who are ready to reject business as usual.

        1. “All the things that could be done to bring the working class back into the fold of normal life are socially and politically unacceptable.” I am curious to know (And I’m not being snarky, I’d truly like to hear your ideas.) what are the things that could be done?

          1. The US has spent the last couple of generations consistently and intentionally exporting and/or mechanizing as many jobs as absolutely possible. We embraced cheap imported goods for the middle class at the expense of the working class which was completely thrown under the bus. Labor protections were systematically dismantled as industry first migrated south, then overseas. At the same time we had a de facto immigration policy that let in millions of undocumented people to keep service job wages from rising. Maids, slaughterhouse workers, building trades… We could have granted these folks citizenship, but they would have had rights and could have voted and organized for better wages and conditions. We didn’t want that. We could have closed the borders and prosecuted the people who EMPLOYED illegal immigrants. But instead we left the border open and selectively prosecuted the immigrants. See how that works?

            Those with higher levels of education in premier metro areas and/or older folks who bought property before the economy shifted have done well. Those without specific skills and/or folks in unfavorable locations are permanently excluded from the current economy. Many fair-to-middling people on the cusp have exhausted themselves as they got squeezed. Money and opportunity keep concentrating higher and higher up the value chain. Everyone else is falling behind. Way behind.

            What we “could” do (equitably, constitutionally, and humanely) vs. what we probably will do to remedy the situation are two very different things given the national temperament these days. I predict a crisis that involves some form of war. International trade will be greatly diminished (no more cheap imported goods), citizenship tests for employment will be enforced (immigrants will be hammered), and the economy will become much more internally focussed (workers will have more value). The country may also redistribute wealth – possibly through wartime taxation, and possibly through confiscation from “undesirable” segments of the population. I don’t advocate for any of this. But that’s what I think is most likely since that’s how things have played out repeatedly in the past.

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