Bay Area rent Increases are Rising Faster than Wage Gains for Residents
Skyrocketing costs for housing have overshadowed the wage gains that have emerged in the Bay Area. The Silicon Valley Institute for Regional Studies suggests that it is becoming increasingly difficult for residents in the Bay Area to keep up with the costs of owning or renting a home, and its report released last month highlights the housing-wage gap. The report by the Silicon Valley Institute claims that from 2011-2016, wages in the Santa Clara County, San Mateo County and San Francisco areas increased by an average of 2.8 percent a year. During that same time period, the costs of rental housing increased by an average of roughly 9 percent, which makes it is clear that the housing-wage gap is getting worse. Stephen Levy, the economist who prepared the report for the Silicon Valley Institute, stated:
The one constant trend and continuing threat is insufficient housing construction and high housing costs.
The median wage from 2011-2016 in the three counties increased by a total of 14 percent, while the median apartment rent increased by a cumulative 45.2 percent. Over the same five year period, a similar gap has emerged statewide with California’s median wage increasing by an average of 1.2 percent per year, while median apartment rents surged by an average of 7.9 percent a year. From 2007 through 2017, the three counties added 80,300 residential units, but the Silicon Valley Institute determined that 138,100 residential units were needed to actually keep pace with the population growth in the area. The sooner the housing crisis is solved, the better it will be for residents looking for affordable housing.