The Bay Area Real Estate Market is High Enough to Leave Everyone Stoned

Um, so does Oakland want a flood of tech bros?

Is Oakland prepared for what might be coming? Does it even want this? 

The city has twice the land mass, half the population and roughly one-fourth of the city budget of San Francisco. 

It’s in the middle of a mayoral race at the moment where issues like community policing, jobs and education seem to be more at the forefront than housing, which is San Francisco’s red-hot button at the moment. (Today, by the way is the last day to register to vote before the elections.) 

Current mayor Jean Quan has adopted a plan to build 10,000 housing units, which seems to be inspired by former mayor and current California governor Jerry Brown’s playbook. (She did not return a request for comment.) 

Rebecca Kaplan, who polls say is the current front-runner, sees a lot of room for in-fill development. 

She thinks Oakland could add another 100,000 people. 

Wait, what? 

“That might sound like a lot,” said Kaplan, an MIT alum who started programming in BASIC and Pascal when she was 11. “But given that we have so much unbuilt space and so many abandoned buildings that need to be brought back into re-use, I don’t actually think 100,000 people would make Oakland feel overcrowded. We would still be so much less dense than San Francisco.” 

Across the Bay in San Francisco, there is practically a pissing match every time over building even a 100 units here or there. 

Over the summer in one of the lowest turnout elections in city history, San Francisco voters decided that they wanted to vote on every project on the waterfront that was higher than existing height limits, which are sometimes zero. That proposition was funded primarily by a single wealthy couple that lives on the waterfront. 

The ostensible intent was to prevent a wall of high-end luxury condos from sprouting along the city’s waterfront. But there’s a perverse consequence of injecting so much political uncertainty into every development: project and borrowing costs have to rise to compensate for the heightened risk of something not passing through city’s highly politicized process. Those additional financing costs get reflected in the ultimate prices of housing units. 

Oakland’s development process, however, is slightly more relaxed. The non-profit Housing Action Coalition has a rundown on the differences here. And if you want an explanation of why rents are so high in entire San Francisco Bay Area region, here is a 13,000 word explanation of that.

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