“Senator Kamala Harris (D., Calif.) has proposed a subsidy for renters, responding no doubt to the skyrocketing rents in the Bay Area. The sheer cost of living there has made it difficult for companies to attract talent; indeed, rents in faraway suburbs are priced like downtown rents elsewhere. This is a very real problem, and its recognition on the national stage is not unwelcome. But Harris’s subsidy won’t improve the situation, and could even make things worse by drawing attention away from actual solutions.
The Bay Area’s rent crisis is driven by a drastic shortage in housing. Strict rent control in San Francisco and “NIMBY” (not in my backyard) zoning policies have ensured that the area constructs only a fraction of the housing it needs. The San Francisco metro area added 373,000 new jobs between 2012 and 2017, but it allowed the construction of only 58,000 new units of housing. And there is considerable lag time to start a housing project: State watchdogs estimate that a building permit in San Francisco takes well over a year to approve; this is about twice as long as the approval time in inland California and triple the time it takes in the rest of the country. Should the permit run against zoning rules, it takes even longer.”