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Why California Cities Are Becoming Unlivable – Article by Andrew Berryhill

Why California Cities Are Becoming Unlivable – Article by Andrew Berryhill

Andrew Berryhill

California has the highest poverty rate in the U.S. and is rated dead last in quality of life.

In July, the mayor of San Francisco frankly stated that poverty in the city is so bad, that “there is more feces on the sidewalks than I’ve ever seen.” And it’s not just her – the local NBC investigative unit found a “dangerous mix of drug needles, garbage, and feces throughout downtown San Francisco.”

While such conditions are thankfully not widespread, California still has the highest rate of poverty of any state when factoring in living costs and is rated dead last for quality of life. It’s no wonder that from 2007 to 2016, California lost a million residents on net to domestic migration.

This plight may appear counterintuitive since California’s economy is booming. If the state were an independent country, its economy would rank as the 5th largest in the world. However, a high GDP does not necessarily entail socioeconomic wellbeing.

So, what’s the main problem ailing California and creating such a high cost of living?

Housing Costs

How bad are housing costs? The median price of a home in California is over $600,000 (compared with $300,000 nationally) and a recent study found that:

“Across California, more than 4 in 10 households had unaffordable housing costs, exceeding 30 percent of household income, in 2015. More than 1 in 5 households statewide faced severe housing cost burdens, spending more than half of their income toward housing expenses.”

Housing costs are so high that in San Francisco and San Mateo counties the government considers a household of four making $105,350 as “low income”.

And it’s not just low and middle-income families that are suffering – even many “elite” technology workers can barely make ends meet. Lucrative six-figure salaries don’t go far when you live in the most expensive housing markets in America while also paying some of the highest taxes.

You can save money by living in the suburbs, but multi-hour commutes in soul-crushing traffic may await. Is such an arrangement worth it? Many have said “no” and moved to other states. While their new jobs elsewhere might pay less, other benefits more than make up for it.

But why is the housing situation in California so terrible?

It’s easy to simply say “supply and demand” – so many people have moved to cities that housing construction can’t keep up, causing real estate prices and rents to skyrocket.

However, this invites an important question: why can’t residential developers build fast enough?


Regulations play an especially large role in the San Francisco Bay Area, which shockingly includes 15 of the 30 cities with the highest rents in the country. One article explains these struggles well:

For new housing developments in San Francisco, there’s a preliminary review, which takes six months.

Then there are also chances for your neighbors to appeal your permit on either an entitlement or environmental basis. The city also requires extensive public notice of proposed projects even if they already meet neighborhood plans, which have taken several years of deliberation to produce. Neighbors can appeal your project for something as insignificant as the shade of paint. . .

If those fail, neighborhood groups can also file a CEQA or environmental lawsuit under California state law, challenging the environment impact of the project. . .

Then if that fails, opponents can put a development directly on a citywide ballot with enough signatures. . . That’s what happened with the controversial 8 Washington luxury condo project last November even though it had already gone through eight years of deliberation.

These barriers add unpredictable costs and years of delays for every developer, which are ultimately passed onto buyers and renters. It also means that developers have problems attracting capital financing in weaker economic years because of the political uncertainty around getting a project passed.”

Why aren’t politicians working to fix this? Self-preservation. Here’s the unfortunate reality:

“The reason the San Francisco city government won’t fix things that seem obvious . . . is because it fears a backlash from the hundreds of neighborhood associations that blanket the city and can reliably turn people out to the polls.”

Community Sentiment

This cultural opposition to development is not a modern phenomenon:

“San Francisco’s orientation towards growth control has 50 years of history behind it and more than 80 percent of the city’s housing stock is either owner-occupied or rent controlled. The city’s height limits, its rent control and its formidable permitting process are all products of tenant, environmental and preservationist movements that have arisen and fallen over decades.”

Development proposals have been shot down for reasons ranging from burrowing owl protection to complaints that the size of new residential buildings will block sunshine and thereby “devalue human life”.

The power of this “Not In My Back Yard” (NIMBY) movement has been considerable, but counter-movements are growing. When one homeowner recently complained in a Berkeley city council meeting that a proposed residential building would block sunshine for her zucchini garden, one young woman angrily responded: “You’re talking about zucchinis? Really? Because I’m struggling to pay rent.” Young workers facing unaffordable rents are increasingly fed up with petty opposition to more affordable housing.

However, Californian cities still seem more preoccupied with banning strawscocktail swordsscootersdelivery robots, and workplace cafeterias.Even when politicians try to help, they frequently ignore the root causes of the issue. For example, California Representative Kamala Harris recently proposed a bill called the “Rent Relief Act” that would provide a tax credit for people spending over 30 percent of their income on rent.

Harris’ proposal only addresses symptoms of an underlying disease and would almost certainly be counterproductive. It doesn’t encourage more housing construction, which is the only real solution.

Until sweeping housing reform to enable residential development is passed at the state and local levels, Californians will keep fleeing to Texas, Nevada, and Arizona. I don’t blame them.

Andrew Berryhill is an Alcuin Fellow at Intellectual Takeout and a rising senior at Hillsdale College majoring in economics. Andrew has interned on Capitol Hill and was a research fellow for Hillsdale’s economics department. In his spare time, he enjoys practicing the violin and playing golf.

This post (“Why California Cities Are Becoming Unlivable“) was originally published on Intellectual Takeout by Andrew Berryhill.

Automation, Jobs, and Human Prosperity – Video by G. Stolyarov II

Automation, Jobs, and Human Prosperity – Video by G. Stolyarov II

Contrary to popular belief, automation does not lead to the loss of jobs. Automation is humankind’s best friend in terms of raising standards of living and freeing up human efforts to be devoted to truly creative and innovative tasks. Furthermore, Mr. Stolyarov argues that jobs are not in themselves a desirable goal; higher prosperity is – and higher prosperity allows humans to enjoy greater leisure while producing more than their ancestors could with more primitive tools.

Remember to LIKE, FAVORITE, and SHARE this video in order to spread rational discourse on this issue.

Review of Tyler Cowen’s “The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better” – Article by Kevin A. Carson

Review of Tyler Cowen’s “The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better” – Article by Kevin A. Carson

The New Renaissance Hat
Kevin A. Carson
July 4, 2012
Stagnation [for Carson]
Published by: Dutton Adult • Year: 2011 • Price: $12.95 • Pages: 128 •

Tyler Cowen’s thesis is that economic growth is leveling off and rates of return decreasing because we’ve already picked the “low-hanging fruit” (meaning innovations and investments that have high returns). The stagnation in GDP and median income in recent decades means “the pace of technological development has slowed down,” and the general population is benefiting less from new ideas.

I would argue, rather, that measured economic growth and income have slowed down precisely because of the increased pace of technological development.

The important trend behind the disappearance of “low-hanging fruit” is the decoupling of improved material quality of life from monetized measures of economic growth and income. Improvements in quality of life—although very real—don’t show up in conventional econometric terms.

Intensive development—increased efficiency in the use of inputs—isn’t necessarily reflected in increased money returns. Unless they’re turned into a source of rents by restrictions on competition, innovations that reduce production costs will benefit consumers in lower prices and better products.

Such rents are central to the business model of “cognitive capitalism”—the “progressive” model of capitalism pushed by Bill Gates and Warren Buffett. The most profitable industries in recent years have been those that depend on returns from “intellectual property.” But such artificial scarcities are fast becoming unenforceable, and technologies of abundance are growing so rapidly that they can’t be enclosed as a source of rents.

If anything, we can expect an implosion in metrics like GDP in the coming years, even as quality of life improves enormously.

Cowen almost gets it at one point. “[I]f our food supply chain harvests, retails and sells an apple for $1, that adds a dollar to measured national income.” Exactly: GDP measures value produced in terms of the total cost of inputs consumed—not the use-value we consume, but how much stuff was used up producing it. So anything that reduces the input costs of our standard of living seems to show up as negative growth.

Actually, Cowen contradicts his own thesis. He argues that official GDP figures exaggerate growth because so much of it is simply waste. But that undermines his treatment of reduced money incomes as a proxy for reduced growth in standard of living. If the additional portion of the GDP we spend on waste—and the hours we worked to pay for it—simply disappeared, we’d be better off by that much. He can’t argue both that economic growth is the best measure of technical progress and that the levels of growth that have occurred have too little to do with real productivity.

To be sure, Cowen does address the supposed diminishing returns of technological progress in terms of personal use-value. The blockbuster innovations with the biggest effect on our daily lives, he says, have already been adopted: antibiotics, automobiles, refrigerators, television, air conditioning. There’s been far less change in the character of daily life since 1960 than before. Aside from the Internet, recent innovations have been mostly incremental.

The Internet itself, Cowen argues, may be important in terms of personal happiness, but not of generating either revenue or employment. But to treat revenue generation and employment as ends in themselves—rather than a way to pay for stuff—is perverse. If the price of what we need falls because the amount of labor and capital needed to produce it falls, then we need less revenue—and less labor—for the same standard of living. The real significance of what Cowen mistakenly calls “stagnation” is that a growing share of our needs is being decoupled from revenue by technologies of abundance.

The reduced wage employment needed to produce our standard of living, as such, is a good thing. What’s bad is when artificial property rights enable rentier classes to appropriate the benefits of increased productivity for themselves. Our goal should not be to increase the number of “full-time jobs,” but to make sure that the productivity of the hours we do work is fully internalized.

Cowen focuses mainly on the Internet as part of the furniture of daily life—the fun of web surfing—to the neglect of a far more important benefit: the basic way society itself is organized, the relative power of the individual and networks versus large institutions, and the declining ability of hierarchies to enforce their will on us.

His focus on the objects of daily life ignores revolutionary changes in the way they’re made and on the structure of the economy. There’s not such a revolutionary change in going from picture tubes to gel panels, or from carburetors to fuel injectors. But there’s an enormous difference between John Kenneth Galbraith’s mass-production oligopoly economy and one of networked garage shops using cheap machine tools.

C4SS Senior Fellow Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: An Individualist Anarchist Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.