Most everyone agrees there is a housing crisis in Mountain View and nearby communities. Many are discouraged by having to pay enormous rents. Naomi Klein wrote “The Shock Doctrine: The Rise of Disaster Capitalism” to explain how, during times of crisis, questionable policies are often put forward to exploit the public. People in pain are distracted and willing to embrace “solutions” that are deeply flawed; their pain essentially hinders their ability to think clearly. I submit to you that under a banner of “affordable housing,” proposals are being put forward that will do little to lower rents for most people; these schemes will instead generate massive profits for developers and "Big Tech."
A theory has been put forward that the cause of unaffordable housing is a lack of supply, therefore the solution is simple: Build, baby, build! Build a lot more housing of any kind and rents will fall! It sounds so logical, like Econ 101 ... but is it? Remember back before the Great Recession of 2008 when “NINJA” loans were used to allow persons with “No Income No Jobs or Assets” to buy homes? Did these loans even pass the smell test? No. Did the public object to them? No. Eventually we learned that they were worse than “too good to be true”; these loans and others actually almost brought down the entire world economy.
Let me explain the math that shows building large amounts of market-rate (expensive) housing will not bring down most rents in Mountain View.
Data shows that developers wildly prefer building market-rate housing over housing for the poorest and/or “average” residents (see “Housing units, built and planned, for 2015 through 2023 in Mountain View.") Some argue that average residents benefit when market-rate housing is constructed, using this logic: Imagine 1,000 expensive units are created; rich folks who can afford the best move into them, making their old (now less desirable) units unoccupied. Slightly less affluent folks move up into these empty units, and the process repeats. Eventually the cheapest units become even cheaper, or so the logic goes. This is an example of increased supply while demand remains constant.
Now imagine a different scenario: 1,000 expensive units are created; 1,000 new tech workers are hired from out of state and move into them. Nobody moves out of their old housing; none of the existing housing becomes cheaper as a result. This is an example of increased supply when demand also increases. Notice: It did not lower anyone's rent.
Key point: The laws of supply and demand have not one but two parts. The reason that “build, baby, build” seems so logical is that many people unwittingly forget about the “demand” part of the equation. When demand for housing is very high, as it is in Mountain View, increasing supply does not automatically lower prices. Remember: Developers prefer to build market-rate housing. They see strong demand for it.
The true cause of unaffordable housing in the Bay Area is not a lack of supply, it is excessive demand. Most everyone who talks about a jobs/housing imbalance acknowledges this, perhaps unwittingly. Job availability increases demand for housing near jobs. Well-paying jobs drive up the cost of housing. Silicon Valley has been a source of well-paying jobs for decades, which is reflected in our housing costs. Those who hold well-paying jobs are actually part of the problem.
What is the solution?
I wish I had easy answers. I don't. The laws of supply and demand predict demand dropping as prices rise ... jobs go unfilled ... employers are forced to grow jobs elsewhere where housing is affordable. Big Tech executives are magnifying the housing crisis by increasing demand in Mountain View to historic levels. They could minimize human suffering by growing jobs elsewhere.
Instead, politicians are intervening on behalf of these corporations to create housing for thousands of new tech workers in Mountain View. With a ruse of increasing “affordable” housing, they are actually maneuvering to force higher density onto an unwilling population. The last cycle of RHNA mandates resulted in 7,082 units (88%) for the highest wage earners, 371 (5%) for the poorest, and 253 (3%) for average earners. Thousands of expensive units added ... have prices dropped? No. The latest mandate (4X higher) calls for 11,135 additional units, and does not require a different distribution. The public is being duped: Building massive amounts of unafforable housing will simply not bring down rents for most wage earners. Look at the math.
Leslie Bain is a National Merit Scholar, earned a bachelor's degree in electrical engineering and computer sciences from University of California at Berkeley, worked for decades in software R&D at Hewlett-Packard, and earned a teaching credential in mathematics for the high school level. She lives in Mountain View.