Blogging Bayport Alameda

January 19, 2016

Trickle out economics

Filed under: Alameda — Lauren Do @ 6:09 am

There was a great opinion piece on Bloomberg view that has been shared around recently about income inequality. Despite recent attempts to counter cries of “build supply to help with housing shortages” as a reviled “trickle down economics” theory the reality is in the Bay Area we suffer from lack of supply more than anything else.  From the opinion piece:

The wealth homeowners derive from their quiet, low-density neighborhoods doesn’t just materialize out of thin air. In a way, that wealth is taken from those who are excluded from the neighborhood. Working-class Americans, shut out from neighborhoods by development restrictions, are forced to live in worse neighborhoods as a result — decreasing their own wealth. If expensive neighborhoods are also close to the city center, it means poorer residents are forced to commute for longer times — a punishing penalty that costs money, stress and time.

In the piece he references a study — yes an actual study and not someone’s gut feelings — about how zoning and development restrictions lead to increased segregation by income as we have been witnessing in the San Francisco Bay Area.  Here’s how City Lab breaks down the good stuff in the study:

Density restrictions work to increase segregation, mainly by exacerbating the concentration of affluence. This contradicts the commonly held belief that exclusionary zoning leads to the concentration of the poor. Instead, the authors find that the main effect of density restrictions is to enable the wealthy to wall themselves off from other groups.

Density restrictions in the city not only lead to higher housing prices (think San Francisco), but to greater economic segregation across a metro as a whole. As the authors write, “density restrictions are a culprit in the social fragmentation of metropolitan areas and should be relaxed where possible.”

Places that require multiple levels of approval to get housing built are more segregated, largely because such regulations hinder new housing development. Furthermore, segregation is higher in metros where local governments are more involved in residential development and feel pressured to restrict population growth. [emphasis added]

And then quoting from the report itself a problem that exists anywhere you hear the word “NIMBY” whispered:

Greater pressure from multiple local interest groups regarding residential development exacerbates the tendency to segregate by income. At the same time, income segregation is ameliorated by a higher level of involvement from state institutions. Taken together, these findings suggest that land use decisions cannot be concentrated in the hands of local actors.

It’s no real shock that some of the most vocal opponents at the marathon rent crisis meeting also aligned with (or are) people who support restricting development.  The interesting thing is that these are people who own multifamily units, but have supported for decades the restriction on building multifamily housing in Alameda.

And while these are the same people who would insist that Measure A was for the “preservation” of historic homes and talk about their love for these historic buildings they were also the first ones to immediately threaten that without the ability to conduct their rental housing business unfettered that they would be unlikely to perform any more repairs or upkeep of their beloved historic buildings.

So essentially what we do when we attempt to work around and find “alternatives” to true rental housing protections or we endeavor to preserve “character” as opposed to building housing for actual characters to live in is that we continue to push those without the most resources out of our city.



  1. Instead, the authors find that the main effect of density restrictions is to enable the wealthy to wall themselves off from other groups.


    No walls around my neighborhood…

    Comment by dave — January 19, 2016 @ 7:06 am

  2. What is missing from this discussion is the effect of public schools on segregation by wealth. Families vie to get into the best school district they can afford. When a home buyer walks into an open house or a real estate office the conversation quickly becomes what school district the house is in and whether it is any good. So an area with above average schools attracts wealthier parents, and poor districts attract poorer parents. This causes the wealthy areas and poorer areas to become ever more pronounced. Your residence now serves as a kind initiation fee to the school district. Note the ire directed towards children from outside the district. We don’t have this kind of segregation in the workplace. Yet that is where we spend most of our waking hours. We buy these million dollar homes and do little more than sleep in them. If segregation by income, or
    any other factor, was something people actually wanted, we would see it in the workplace, and we don’t. If neighborhoods could be unlinked from schools then East Oakland could be more like Piedmont.

    Comment by Ed Hirshberg — January 19, 2016 @ 8:28 am

  3. In at least one case on the western side of the island where and when there was no desire to build housing with character, we endeavored to build housing without “character” and actually filled one of them with an actual “character”. So at least now we have one character of resource (and I’d bet there are many others) living in a house without “character” even though we continue to push other resourceless characters out of our city of character. I’d bet Noah Smith wouldn’t like that though, since he’s a character with character.

    Comment by jack — January 19, 2016 @ 9:52 am

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