Cost of Living, Livability

There have been some news stories recently about people leaving California, primarily as a result of high unemployment and a high cost of living in the state. Of course, Californians going elsewhere is an old trend -- the Pacific Northwest and Intermountain West have been complaining about incoming Californians for decades now.

But still, it's easy to understand why people leave, especially when the economy is bad and the cost of living in California is as high as it is. And this is especially relevant to Silicon Valley because the cost of living is especially high here.

Which brings up a question: why does it cost so much to live in Silicon Valley? The Econ 101 answer is simple: demand is high and supply is low. But that answer brings up the Econ 102 (or maybe Poli Sci 101) question: if demand is so high, why is supply still low? There are a lot of factors, but one major component is a misguided sense of what it takes for a community to be livable.

Silicon Valley policies seem to be designed to maximize cost of living: lots of single-family housing (= higher land costs on a per-person basis, both because each person needs more land and because more land is taken out of the supply for housing), jobs distributed across the region (= car-oriented development, which necessitates more car ownership and more land for roads), high parking requirements (= more land needed for businesses, and thus higher land costs for business) and lots of land protected from development (= less land supply, and thus higher land costs for developable land).

Of course, if we tried to change any of these policies, people would object in the name of livability: Upzoning single-family neighborhoods would bring complaints that quiet, safe neighborhoods would be "ruined" by apartments. Attempts to centralize jobs by prohibiting new commercial development outside of core areas would be seen as increasing commute times for those in the suburbs (and un-American, too). Decreasing parking requirements in neighborhoods would be charged with killing cute neighborhood retail by "forcing" customers to bland regional shopping malls (with parking). And opening the foothills or baylands to development would decrease open space, which seems to be necessary for sanity in urban America.

But if we don't make some changes, all this livability will continue to cause people not to live here.

Coming up: What we need to do to get costs under control without losing anything that actually makes the region a pleasure to live in.