As economic inequality has threatened the nation’s political system, it has most likely worsened homelessness in California. In a recent paper, researchers presented evidence that income inequality may fuel homelessness in regions where housing supply fails to keep up with demand. The authors theorized that this may be because the wealthiest households in an unequal city bid up the cost of housing for everyone else, making it increasingly unaffordable to lower-income residents.
This appears to be exactly what happened here the Bay Area, where the unfathomable wealth generated by the tech boom has been mostly captured by those at the top of the income distribution. Because Bay Area cities have failed to produce enough supply to keep up with population increases, lower and middle-income residents now have to compete for housing with the super-wealthy, whose ability to outbid everyone else continually forces prices up (emphasis added).
- First, we could enact legislation to require large businesses (like Facebook, and Google, and Netflix, for example) to provide housing for all the new workers that the company will need, when the company expands and hires new workers. Currently, the companies expect local communities and others to provide housing for their new workers, and since their new workers often receive very handsome salaries, they outbid ordinary income persons, and make the homelessness problem worse. This is, in essence, what Resnikoff was saying, in what I have quoted from him, above. This is certainly something that residents of Santa Cruz County know about, firsthand.
- Second, the state government could enact a statewide program of inclusionary housing, requiring housing developers to restrict the price of, perhaps, 25% of all the new housing they construct, making that housing available at a rental or for-sale price that is affordable to persons with average or below average incomes. Such inclusionary housing should also come with a resale restriction, insuring that those who buy such housing, at the restricted price, cannot turn around and then sell that housing into the "market," but will be required to sell the house, if and when they do sell, to another person of average or below average income.
- Finally, the state could also enact a rule that would require all new housing, specifically including market rate housing, to be sold with a resale restriction that would require a person who buys a new home to sell it, when and if they do sell it, at a price that is no larger than the price for which they bought the home, plus verified inflation. That would help, a lot, in taking speculation out of housing prices.