The San Francisco Bay Area’s booming tech industry is transforming lives and changing habits around the world. But it is also deepening one of the nation’s worst income gaps, and setting up the region’s housing market for a potentially nasty correction.
Consider the latest numbers. Silicon Valley home sale prices rose for the third year in a row in 2015, to $830,000, more than double the median price of $411,000 in California. One-bedroom rentals are averaging $3,500/month in San Francisco, the highest rent in the nation.
Looming behind the buzz over whether a bubble is primed to burst is the dysfunction: new construction in the Bay Area is not keeping up with job growth. Neither are salaries, as high as they seem for the tech crowd. Even as the clamor for more affordable housing gets louder, new development remains politically risky, and it’s tough to see where, when, or how relief will arrive.