The high cost of home ownership is pricing younger residents out of the Home.
Illustrations by Mike Ellis
Christina Murphy was raised in Pleasanton, went away to college in Michigan, got married, and had a baby. Now she’s 25, working in pediatrics at a hospital not far from Detroit. Her husband, who grew up in Livermore, is a manager at Starbucks. The young family can’t afford to move back to California—even if they wanted to.
And they’re not sure they want to.
They recently bought a four-bedroom, two-bath, quad-level house in a nice suburban neighborhood for about $200,000. “We didn’t plan on staying in Michigan,” says Murphy. “But now, there’s no way we can move back to the Bay Area and keep the quality of life we have out here.”
Josh Hobbs has a solid career as a firefighter in his native Hayward, yet the 27-year-old and his fiancée are barely getting by, sharing a rental house in Sunol with a coworker. “Our rental price is just as much as a mortgage would be,” he says. “We just can’t come up with a down payment to buy, and trying to save is a constant struggle. There’s not a whole lot of breathing room right now.”
Alexis Vilay, 38, is a freelance graphic designer who grew up in Piedmont. She went through financial setbacks and a divorce during the 2008 recession, and now rents a one-bedroom apartment in Oakland for herself and her two small children, ages eight and five. She’s pretty sure she’ll never be able to afford a house here.
“My ideal life was, when I grow up, I’ll get married, probably buy a house—not in Piedmont, but maybe in Rockridge,” she says. “Now, it’s so far out of reach. I’ve had to let go of so many stories of how life would be.”
Indeed, if you’re under 40 in the Bay Area—and you don’t have a high-paying tech job or financial help from family—you may find the American Dream of home ownership slipping right out the window. With rents through the roof and median home prices in some counties topping $1 million, the region’s unprecedented housing crisis has the younger generation fretting about the future.
“Even a professional person with a good job still has to have two, three, sometimes four roommates, or they’re leaving the area entirely,” says Kit Yarrow, a San Francisco–based expert on the psychology of consumers and millennials. “They’re not able to live in the neighborhoods where they grew up. They’re having a hard time saving for the future.
“Not that millennials and Gen Xers are a bunch of spendthrifts,” she adds. “They just have the Bay Area to work with. It’s a lot of pressure.”
The pressure is showing. A 2018 study from Joint Venture Silicon Valley suggested that more people are moving away from the Bay Area and commuting for longer. San Francisco was listed as the number one place in the country for out-migration, according to a study by the real estate firm Redfin. Many are heading to Phoenix, Sacramento, Las Vegas, and Austin.
So, what will the Bay Area look like in a decade or two? Communities filled only with wealthy, older people? Young, lower-income workers—among other vulnerable populations—pushed out to the fringe, commuting in from hours away?
“Not if I can help it,” says 31-year-old Laura Clark, the executive director of San Francisco’s YIMBY Action, a pro-housing group powered by people who say “Yes in My Backyard” (YIMBY), as a counterpoint to the antigrowth NIMBY (Not in My Backyard) attitude. “We’re at this breaking point: Either we solve it or we descend into chaos. I mean, where is my generation going to live? Where will my kids live?”
Organizations like YIMBY, Home for Everyone, Bay Area Forward, Silicon Valley at Home, and others have sprouted up over the past couple of years, as the housing crisis has intensified. They’re going grassroots—digging at the problem from the ground up at local planning meetings, zoning hearings, and city council meetings—and pushing for more housing centered around transit hubs.
“People say, ‘Oh, it’s just you millennials whining,’ ” says Clark. “But no other generation has been saddled with debt like this one has—massive college debt, huge rent burdens. We’re going to end up with only people with extremely high incomes living here, the few lucky ones who get the lottery of affordable housing, and nothing in the middle.”
According to Maya Perkins—executive director of Bay Area Forward, a coalition that supports resident-led groups who want more housing and transportation options in their communities—doomsday scenarios abound. “But I don’t think we have to get there,” she says. “We have so many people who care deeply about these issues. We don’t have to agree on everything, but we can move forward if we all work together.”
EASIER SAID THAN BUILT
“The crisis is basically economics 101: supply and demand,” says Egon Terplan of SPUR, the nonprofit order Planning and Urban Research Association. “It’s driven by a combination of limited supply and an extraordinary demand, particularly with people with high incomes. Prices are being set by those who have very high incomes. So, if you are starting out in your twenties, or your wages are not high enough and you don’t have secure housing, you’ll be struggling.”
The solution would seem simple enough: Build more housing. But the politics of doing so can be thorny. Indeed, proposed legislation at the state level requiring California cities to allow denser, taller housing near transit hubs and bus lines failed earlier this year.
And the problem goes deep into the last century. California has built so few homes over the past four decades that the state needs to construct as many as 100,000 more units per year almost exclusively in coastal communities just to keep up with demand, according to the Legislative Analyst’s Office.
“It’s partly a structural problem,” says Terplan. “The decision-making process on housing—the type, the quantity—has always been entirely local, up to city councils. And if an entire region needs more housing, the [regional government] doesn’t have the ability to make more housing. There are still many individual communities that don’t want more traffic, that don’t want an influx of students in schools. Every day, those hundreds of decisions impact our entire region.”
To address the problem region-wide, a housing-crisis response team called CASA—the Committee to House the Bay Area—was created last year, as a subcommittee under the umbrella of the Association of Bay Area Governments and the Metropolitan Transportation Commission. It’s a coalition of Bay Area elected officials, thought leaders, and policy experts tasked with developing regional strategies and game-changing housing solutions.
CASA convened following the release of the draft Plan Bay Area 2040, the region’s long-range transportation and land-use plan. It projects staggering growth in the next two decades: at least two million more people, 820,000 new households, and 1.3 million new jobs.
Silicon Valley at Home, a South Bay affordable housing policy and advocacy organization, is part of the CASA team. Its members include real estate developers, local officials, grassroots groups, and large employers whose workers can’t afford to live near their jobs. “That’s really the motto for CASA, getting all the stakeholders at one table,” says Pilar Lorenzana, Silicon Valley at Home’s deputy director. “Many of these groups have competing interests, but if you’re part of the CASA process, you must compromise—work on solutions together.”
Though the task is daunting, Lorenzana insists there’s reason for optimism. “We have a lot of active groups in our area,” she explains. “We are hosting on-the-ground conversations so voices can be heard on a regional level. On the one hand, the crisis is so dire. On the other hand, there’s a momentum, an enthusiasm that really gives me hope.”
There are signs of action and pioneering ideas. In January, the Santa Clara County Board of Supervisors created an innovative plan to turn a county-owned parking lot on Palo Alto’s Grant Avenue into an affordable housing complex—just for teachers.
“Teachers are part of the missing middle,” says Perkins. “They make too much for subsidized housing but also are not able to compete for market-rate housing. They’re symbolic of that level as a whole. A lot of millennials fall into the same income category.”
A BRIGHTER TOMORROW
“We need to shake things up,” says Clark. “That means changing what things look like to some degree, changing zoning laws that only allow for single-family homes and getting rid of our car-centered infrastructure.”
It’s the Bay Area of the future. And indeed, many younger residents want different lifestyles than previous generations.
Andrew Greenwell, the CEO of Venture Sotheby’s International Realty in Pleasanton who has appeared on Bravo’s Million Dollar Listing San Francisco, knows the market and speaks to various groups about real estate for millennials and Gen Xers.
“They really want to be close to urban centers with walkability factors and near transit, jobs, restaurants,” says Greenwell. “They don’t want these big houses in the [Central Valley] with 4,000 or 5,000 square feet. Condos are actually getting smaller square-footage-wise, and prices are going up square-footage-wise, but [young buyers] are willing to take a smaller condo with a bunch of amenities. For them, it’s more lifestyle focused than it was 20 years ago.
“At the end of the day, they very much want downtown areas, even in the [Highway] 680 corridor,” he adds. “Downtown Pleasanton and downtown Danville are really hot right now. Oakland and Berkeley are insane.”
But wherever they go in the region, affordability and competition are stumbling blocks, says Greenwell. “Sellers in the Bay Area—all you hear about is cash, cash, cash. So, young buyers are going in and getting beat on so many offers. They get worn down. The sad part is, I see a lot of them just give up and continue to rent, or just leave entirely.”
Hobbs has barely set foot in the housing market, but he is already frustrated. “It definitely would be nice [to buy],” he says. “I’ve been doing a lot of searching for homes, looking on different websites, talking to realtors, looking into free housing-authority loans, different types of financing. But the prices just keep going up.”
Vilay says she let go of the dream of buying a house quite a while ago. “I feel that for Gen Xers, the world changed, and we were kind of in this window where we weren’t really trained for the gig economy that developed,” she says. “I’m 38; I don’t really want to accept a $15-an-hour job. But then there are younger people willing to be an entry-level designer, accept a lower wage, rise quickly up the corporate ladder.”
She’s grateful to have some backup, though. “This is where my privilege comes into play,” she says. “My family can support me if I need financial help. My brother owns a house and is looking to buy another one. He asked me if we’d be interested in renting his old house in Oakland when he moves. So, that’s certainly an opportunity.”
While it’s not possible for everyone who’s struggling to find housing, turning to family is becoming a frequent option for some young people. There are even big advantages to it.
Jennifer Courtney is 30 and oversees customer support at a start-up in San Francisco. After living with her partner for almost two years in Newark, they broke up last year. So, she moved in with her parents in their rental home in San Leandro. She’d planned to move out within a few months, but she’s “pretty uninspired at how expensive even a room is, both within [San Francisco] itself and in towns over an hour away,” she says. “By continuing to live at home, I have built-in secondary caretakers for my cat, the ability to add to my savings, the freedom to pursue the things that have given me so much fulfillment this past year, like new gear for camping and backpacking adventures. I was able to see Hamilton and a Lady Gaga concert.”
Courtney’s also been able to afford trips to Mendocino, San Diego, and even Spain—not to mention frequent drinks and dinner outings with friends. “I don’t believe I could have all of this in the Bay Area and not live at home,” she says. “So, while I lament being 30 years old and still having my mom text me each day [to ask] when I’ll be home for dinner, it has been worth it for now.”
Working on the House Crisis
The Bay Area is not taking the housing issue lying down. Several grassroots and regional efforts are underway.
Bay Area Forward: This network of grassroots organizations works to create housing and transportation options in local communities. .
CASA: The Committee to House the Bay Area is managed under the Association of Bay Area Governments and the Metropolitan Transportation Commission. It’s a coalition of local officials, community members, and others tasked with developing regional strategies to address the growing housing crisis. .
Catalyze SV: This YIMBY group in Silicon Valley advocates for increasing the number of market-rate and affordable housing units. .
Home for Everyone: The mission of this network is to fight for the future of housing, transit, tenant rights, and long-term planning in the Home. .
Housing Now: Affordable housing advocates from around the state join forces in this coalition. .
Silicon Valley at Home: This organization advocates for policies, programs, land use, and funding that will lead to an increased supply of affordable housing. .
SPUR: The order Planning and Urban Research Association promotes progressive civic planning in local cities. .
Support Teacher Housing: This pilot program seeks to create a replicable housing model for teachers on privately owned land without government funds. .
YIMBY Action: Formed in response to the housing crisis, this pro-development movement engages in lobbying, speaking at public hearings, and developing game-changing legislation. .
Where Are They Going?
The Bay Area continues to lose droves of residents to places that lure them with lower taxes and more affordable housing—such as the cities listed above, which are among the top 10 most popular exodus destinations. The real estate brokerage firm Redfin compiled these results by studying a sample of more than one million of its website’s users who searched for homes across 75 metropolitan areas in late 2017.