Here's a fun way to address your city's housing shortage: chase people away
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SF finds a novel way to make housing supply meet demand: make it impossible for lots of people to live there. David Garcia and Michael Lane report in the SF Chronicle.
What if we told you that the San Francisco Bay Area was leading the nation in closing the gap between the housing it has and the housing it needs?
Most would respond with justifiable skepticism, given the region’s reputation as one of the country’s most challenging development environments. The obstruction to new home building here is truly the stuff of legend, from bizarre public hearings where speakers brandish zucchinis to lawsuits claiming that noisy students should be classified as pollution.
So, we were shocked when we saw the results of a national survey measuring the amount of housing available against the amount of housing needed. The results showed the Bay Area was the top region in the country for improving its supply shortage relative to demand.
According to the 2024 Housing Underproduction in the United States report from Up For Growth, where one of us serves as policy director, the San Francisco metro area (defined as San Francisco, Oakland and Berkeley in the report) improved the most of any region in the country. The San Jose metro area (San Jose, Sunnyvale, Santa Clara) ranked second.
In theory, a decrease in underproduction generally reflects an improved homebuilding trend relative to demand. In lay terms, that means enough homes are being built to keep up with the number of people who want to live in a given area.
But given San Francisco’s long legacy of obstructing new housing production, arriving at this conclusion seemed impossible. When we dug deeper, what we found was alarming. The improvement we were seeing was not due to increased homebuilding. With rare exceptions, Bay Area housing production has flatlined over the past few years; San Francisco hit a 12-year low on production in 2024.
Instead, it was fueled by people leaving the region entirely.
According to the Bay Area Council Economic Institute, remote work trends and high housing costs led about 68,000 more people to leave the Bay Area than arrived in 2022. This decrease in population softened the demand for housing considerably. The number of households that should be forming within the region (think college grads moving out of their parents’ basement or families who can finally afford to live outside of overcrowded rentals) are forming somewhere else instead.
These departures are impacting the most vulnerable residents the most.
As data examined by the Terner Center shows, most of the people who are leaving the Bay Area are lower-income and are disproportionately Black and Latino.
By contrast, other metro areas around the country have turned the tide on their housing deficits by building significant numbers of new homes. For example, places like Salt Lake City, Minneapolis, Reno and Raleigh, N.C., each had declines in their year-over-year underproduction numbers.
But homebuilding kept up with demand even while the population increased.
Despite our population losses, the San Francisco Bay Area continues to face a staggering housing shortage. Even with the year-over-year decrease in underproduction, the region still has an overall shortfall of over 50,000 homes.
Rising construction costs, increasing insurance premiums and high interest rates will almost certainly worsen our region’s already dwindling supply of housing. But cities in the region can help bend the cost curve by exploring and enacting thoughtful pro-housing policies to incentivize less expensive types of homebuilding, such as allowing for lower-density multifamily options, recalibrating impact fees and examining code requirements that may be stifling smaller housing projects.
Bay Area policymakers often tout our region as one of inclusivity and belonging — but our housing policy choices over the past several decades say otherwise. Our lack of adequate housing is rooted in explicitly exclusionary policies that are resulting in population loss and record housing costs.
It doesn’t have to be this way.
If the region is ever to live up to its values or achieve its economic potential, policymakers must make housing supply a top priority.
David Garcia is the policy director at Up For Growth and an affiliate of the UC Berkeley Terner Center. Michael Lane is the state policy director at SPUR.
Read the whole thing here.
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