Why Homes in the Bay Area Are Unaffordable

I reached out to Alain Bertaud, the renowned urban economist at New York University and author of Order without Design: How Markets Shape Cities. “When I read [that] Google says it’s going to give $1 billion to housing,” he told me, “I think it’s completely misplaced. Now, of course, we have to address homelessness in a non-market way, through social welfare, to help people out of their misery and bad luck. But what disturbs me is when I read some large percent of the housing should be affordable, which means below market-rate through subsidies. That only means waitlists and lotteries. As soon as the system doesn’t allow firefighters, cops, and schoolteachers to afford a house, you know that it is a broken system and no amount of subsidy will solve the problem.”

According to Bertaud, Google’s, Facebook’s, and Apple’s billions might be better spent lobbying city and suburban governments to relax their restrictions and free up the housing market.