Homeless in Silicon Valley

Ironically, rather than limiting people from the confines of space the nexus of the digital revolution and NIMBYism has turned Silicon Valley into one of the prime instances of housing shortage in America:

While freshly graduated engineers can command six-figure salaries, others are dealing with long-term unemployment and struggling to keep up with rising rents and home prices. In May, the median value of a house in Palo Alto was more than $1.34 million, up 11.5% from $1.2 million a year earlier, Zillow says. Rents in June were up as much as 30% from the previous year and are at an all-time high, according to a monthly report compiled from landlord advertisements by Palo Alto Realtor Leon Leong.

At a community forum in Palo Alto City Hall last month, vehicle-dwellers discussed their struggles with long-term unemployment or health issues. Some are working but aren’t able to afford the area’s rents. They say the city shouldn’t punish people who are just trying to survive.

“Palo Alto is safe—that’s why we come here,” says one man, Tony, who asked that his last name not be published. He says he is a gardener who has lived in Palo Alto for 19 years—12 of them in houses or apartments—and has landscaping clients in Palo Alto that tie him to the city.

This ought to be the scene of a crazy boom. Silicon Valley should be the site of tons of working-class construction jobs and a big population boom. Qualified engineers from around the country should be moving there and pushing the frontiers of innovation, with the population growth and construction also supporting employment all up and down the skill spectrum. Doctors and nurses and teachers and retail-store clerks and chefs and busboys and carpenters and plumbers and used-car salesmen and all God’s wonderful creatures. But instead faced with NIMBYs and restrictive zoning, we’re seeing modest population growth, double-digit housing price increases, falling real earnings for the working class, and a boom in homelessness. It’s absurd, and it’s tragic.

Meanwhile, even the “haves” of the digital economy do tend to suffer from this. Computer programmers with high nominal wages have their real living standards reduced by high housing costs. Growth-oriented firms are less able to hire skilled workers than they should be. And many people with tech-relevant skills are simply not living in the industry’s hub since only so many people can fit, reducing their own earnings and the overall vibrancy of the high-tech economy.