San Francisco Bay Area Housing: A Crisis of Internal Borders


Indigo Melo

Indigo Melo is a Bay Area native and undergraduate student at Humboldt State University who will be receiving their Bachelors of Arts in Sociology this Spring. Their main interests lie in the multitude of intersections within and across food systems, restorative justice, and Foucault’s power and knowledge theories.



            At the forefront of the 2016 presidential race was the seemingly infinite cycle of rhetoric concerning the safety of our national borders and the importance of maintaining and reifying control along international lines. At the center of Donald Trump’s political platform was the creation of additional security and hardening of America’s southern border, providing supporters with a unifying call to “Build the Wall.” While this viewpoint certainly deserves a place at the table, the polarizing and at times sensationalized discussion surrounding this issue has drawn people’s attention away from the issues rising along the borders in their own neighborhoods. The ideology and practices that create crises and conflicts at intersections of physical and social borders along federal and municipal lines are parallel. All borders are ultimately created in response to one question: Who belongs? As a result, there is always a concurrently manifested “us” and them.” At both the national and local levels, these divisions are founded upon ideology that looks to appropriate space along borders that empower the elite and further disenfranchise vulnerable populations. This essay will analyze municipal internal borders within the San Francisco Bay Area, as well as the detrimental consequences of deepening social and economic divides created through reactionary public policy.

San Francisco Bay Area: A Case Study

Discussions surrounding the San Francisco Bay Area—whether in academia, at the dinner table, or amongst friends and coworkers—all seem to lead invariably to the current housing crisis. A quick Google search displays local news headlines providing more or less panicked variations on a single thread declaring ever-rising rent prices and a continuing crisis no one seems to have a viable solution for. Media outlets provide a plethora of new terminology, some drawing parallels to war-torn, non-Western nations by using the newly coined “slumburbs” (Schafran 2012). One northern California paper writes, “To fix Sacramento’s housing crisis- blame the Bay Area refugees!” (Smith 2017). Being from the Bay Area myself, I come into contact with this conversation nearly every day and have experienced its reality firsthand. My family was able to reside in San Jose despite rocketing housing prices until my siblings and I finished high school. Immediately after all of us graduated, my grandparents moved to a small town still being built just outside of Sacramento, gaining 600 sq. ft. on our Bay Area home at nearly a third of the cost.

Both in academia and among the general public, the current San Francisco Bay Area housing crisis’s inception is attributed to the immediate circumstances leading up to the 2008 housing bubble and financial collapse. While financial institutions contributed to these disastrous declines through predatory loans and other unsustainable practices, the Bay Area’s current crisis has been building for decades and much of the area’s more vulnerable populations have been feelings its effects for just as long. The present condition of the San Francisco Bay Area housing market is built upon a politically fractured landscape that has shifted dramatically since the 1970s, based on policies that have purposefully created economic and social borders, encouraging the flow of capital and people over them respectively. As state and federal legislation and ideology shifted from the postwar era into the new millennium, it was never a matter of if, but when the San Francisco Bay Area would face its current housing crisis. This paper will examine the policies, shifting demographics, and capital investments that shaped the area’s political climate, as well as job and housing markets over the last fifty years. It will also highlight the present conditions created at these intersecting borders within which many struggle to survive, including the near disappearance of affordable housing and steady increases in homeless populations due to rampant foreclosure.

The Beginning of the Bay

The San Francisco Bay Area has a complex history in various sectors, from agriculture and industrial production to becoming a nursery for the dot-com boom. The exact geographical limits of the area are still debated, so for the purpose of this examination the San Francisco Bay Area will be defined as a thirteen-county region, triangulated between San Francisco, Sacramento, and Merced, which accounts for nearly 10 million people, almost a quarter of California’s total population (Schafran 2012) (See fig. 1). The flexible geographical definition of the area is due to economic linkages existing between the core and the surrounding peripheral counties. San Francisco itself began as a tiny settlement along the coast, but quickly became “an imperial metropolis” (Brechin 2006), centering its power on the financial and industrial capital it made from internal production. In order for this internal economy to grow, San Francisco utilized trucking as well as train-line services from neighboring towns in the Central Valley to move product to and from the growing cannery division. This caused substantial growth and suburbanization in the surrounding areas deemed streetcar suburbs (Cervero 1996), such as Pittsburg and Antioch, where an uptick in population created a need for cities to support service and other blue-collar workers.

The influx of a working-class population to support San Francisco’s growing industry brought with it a diverse group of residents, leading to the first ever racially exclusionary zoning regulation with the attempted banning of laundromats, the majority of which were owned by Chinese immigrants during the 1880s. Though the regulations were deemed unconstitutional and in violation of the 14th amendment in San Francisco, they were passed in Modesto after the city split itself into two separate zones (Warner 1972). This creation of internal borders through residential legislation was designed to prevent Chinese immigrants from participating in the local economy. It set a precedent for later zoning tactics—subdivision law, zoning commissions, and the profession of city planning itself—that were used to create racialized spaces and justify unequal housing practices (Schafran 2012).

Creation of the “Exurbs”

Additional clusters of peripheral towns were established postwar into the 1970s, where an “industrial garden grew from Richmond to Fremont” (Schafran 2012) due to an increased federal demand for defense-related industries. During this time suburbanization was not restricted, and many in the general population as well as those higher up in the federal political landscape had lost faith in the area’s planning abilities. Consequently, previous city planning techniques and new solutions were not evaluated. Instead, policy which relied on racist and anti-urban sentiment (Dowall and Landis 1982; Schafran 2012) was carried into the new era when Keynesian economics would amalgamate with the ideology of neoliberalism, a political and economic framework that highly favors privatization, free-market capitalism, and economic deregulation. An examination of racial demographics within geographical locations during the mid-1970s shows the vast majority of African American people resided within heavily segregated areas due to a strengthening border surrounding San Francisco. Lack of reform in residential policy confined African Americans living in the Bay Area outside of the core to East Palo Alto, Pittsburg, Oakland, and Vallejo. As previously mentioned, each of these cities was created to support San Francisco with agriculture and transportation labor, solidifying the status of these cities as homes of the working class, particularly people of color, a century before the Bay Area’s current housing crisis.

Prior to the first half of the twentieth century, the ideal of the “American Dream”—wherein a single parent’s wages could buy a home and finance a comfortable middle-class lifestyle away from the humdrum of the grimy city—was not solidified as a critical facet of American culture. The average person performed industrial work and lived in the center of town, close to their place of occupation. However, the advent of suburbia after World War II ushered in this ubiquitous American Dream, an ideal which would later on become a cornerstone in neoliberal ideology from the late twentieth century until the present day. This “dream” motivated many who once lived in the core of the Bay Area’s industry to move outwards (Cervero 1996). This process exposed the border created within suburban structuring that pushed people of color and those with low-incomes away from the city where wealth and work are located, reifying their status as outsiders. Many working-class people found the first ring of suburban homes unattainable due to high housing prices and restrictive regulations on land use. As a result, many bought homes in burgeoning towns orbiting within a second, outer housing ring located in the Central Valley, where predatory lending was the norm. These towns and neighborhoods are termed the “exurbs” or “extra urban,” language created by Auguste Comte Spectorsky in his book “The Exurbanites,” written in 1955, to describe the ring of communities beyond the inner suburban border which serve as commuter towns for an urban area.

Genesis and Consequences of the Knowledge-Industry

In addition to striving for the idealized dream of home ownership, many were also pushed out of the area by the burgeoning high-technology industry developing in the core, which rapidly, with the help of global capital and urban restructuring, created the knowledge-industry the Bay Area (particularly the centralized Silicon Valley) is known for. Urban restructuring is defined by Soureli and Youn as (2009):

...the multifaceted processes driving the major transformations of city-regions (with particular emphasis on the past thirty years), constantly at work, with highly variable dynamics, affecting spaces unevenly and people unequally, with varying but quite open possibilities for changing its predominant directions and conditioned struggles every day around the world.

This restructuring occurs in a number of ways through both economic and political processes.

During the rise of the knowledge-industry, a veritable torrent of venture and stock-market capital flooded the core Bay Area. At the height of the dot-com boom, the San Francisco Bay Area received 5.5% of the nation’s venture capital, twice that of the next-largest metropolitan area and ten times more than the average American metropolitan area (Schafran 2012). The knowledge-industry had become so successful and seemingly limitless that rising commercial property prices could not deter investors. Most crucially, what amounted to 1.65 billion in venture and stock-market capital (Schafran 2012) was not allocated evenly around the Bay Area to the outer limits of the Central Valley. Instead, it was kept tightly within the knowledge-industry borders of San Francisco, the Silicon Valley, and some northern Alameda counties. This hoarding of venture and stock-market capital to the industry’s core was exacerbated by a complete divestment of federal funds. Economic divestment can be described as “the sustained and systematic withdrawal of capital investment from the built environment” (Sugata 2017), meaning public services such as schools, buildings, and transportation were no longer provided funding, devaluing property and paving the way for gentrification. The effects of this funding vacuum are still apparent today and will be discussed later in this paper.

The Root of the Crisis

“Home rule” dominated the policy landscape in tandem with growing neoliberal influence, drastically weakening federal and state motivation to enact regulatory policy for the housing market or fund affordable housing. Instead, developers used Proposition 13, a property tax referendum, to dramatically change the residential and commercial development sectors in ways Californians are still experiencing today. Prior to the passage of Prop 13, traditional planning criteria focused on each location’s proximity to transit or infrastructure, community needs, and environmental impacts. In contrast, after the tax referendum passed there was a fiscalization of land usage, meaning areas to be developed were assigned value based on how much capital they would be able to contribute back to the city or county’s tax base (Schafran 2012). This has inevitably led to a hierarchy in land usage that gives preference to retail space while creating further barriers to affordable housing, which sits on the bottom rung of the development ladder (see fig. 2). As a consequence of this policy which devalued economically sustainable building, residential developers fled into areas they perceived as “low risk,” where they could easily fit their ready-made, single-family detached home model. Areas within the core were seen as high risk economically and politically; much of the land had already been industrialized, and to reuse it could present environmental challenges and was unpopular with local government, which wanted to invest in properties that would get them a higher return in development fees and taxes. Residential developers also strayed from already mature, established counties and towns because of preexisting multi-use housing which could not be combined with the already manufactured product residential developers were structured to provide.

Instead, these developers tended toward counties which still possessed large swaths of open land desirable for residential development. Local governments that fit within this niche welcomed this change due to a decline in the manufacturing industry and the passage of Prop 13, which made development fees the main avenue for financially supporting new development, replacing what was once provided through federal assistance. Developers traded economic and political risk for market risk, where the odds were tipped in their favor as low gas prices and exorbitant housing prices in the core made a two-hour commute more attractive.  Many consider this to be the root of the urban crisis currently wracking the San Francisco Bay Area, as it caused an influx of commercial development without new housing to support those going to work at newly established businesses. This pattern of favoring high-return development without accounting for the people who must serve in those occupations has created an ever-increasing housing/job imbalance and the infamous “commute-shed” travelled by millions throughout the Bay Area every day (Cervero and Rood 1999). A vicious cycle has materialized through this process because of developers’ dependence on development fees for urbanization. Due to an absence of living wage jobs in the immediate area, one must travel to earn an income, thereby decreasing the pool of taxes used to increase mobility and develop an economic sector (Schafran 2012).

A Dangerous Precedent

Failure to adjust and reorganize planning and housing market structures during the major housing shift in the late 1970s left a fragmented system in which residential developers operated in a distinctly separate arena from commercial developers, with both reacting to the incredible influx of venture capital and the exponential decrease in federal support (from 75% grants to 55% loans) (Schafran 2012). The implementation of neoliberal policy in the American political sphere only acted to solidify this trend, dragging old methods of subprime mortgages, predatory loans, and an unwillingness to provide adequate housing or transportation into the present. Residents all over the San Francisco Bay Area are feeling the effects of these federal, state, and local decisions from over the past fifty years.

The aforementioned jobs/housing imbalance has only grown wider over the past decade since the housing crash, affecting demographics traditionally seen as not only financially stable, but economically thriving. An article from the Guardian entitled, “Scraping by on Six Figures? Tech Workers Feel Poor in Silicon Valley's Wealth Bubble” (Solon 2107) describes a phenomenon that has been rapidly weaving its way through the Bay Area’s high-tech and knowledge-industry core where, even for many workers earning at least $100,000 a year (twice the national average) in an area where the median income is $78,400 (Palomino 2015), affordable housing is out of reach. Olivia Solon tells the story of a group of thirteen engineers renting a two-bedroom Airbnb apartment, where the rent was “$1,100 for a fucking bunk bed and five other people in the same room,” as one of the residents stated (2017). Another tech worker stated that between her and her husband they make a million-dollar annual salary, yet they are still moving from the area because of unsustainable housing costs (Solon 2017). Though seemingly hyperbolic, these situations are not isolated. According to the Housing Affordability Index, a buyer’s annual salary must be at least twenty percent of the purchase price to be considered affordable for them (McNelis 2017). In Palo Alto, the Bay Area’s most expensive housing market, an annual salary of at least $500,000 a year is needed to afford the median home priced at 2.5 million (McNelis 2017). In Santa Clara, housing prices jumped 17.9% in a single year (Scheinin 2107). These skyrocketing housing prices have erected new borders along socioeconomic lines that were previously unheard of in wealthy Bay Area neighborhoods. Unaffordable housing prices are driving out middle-class workers and professionals who provide necessary services, including teachers, city-workers, and many others who provide services key to a community’s health (Solon 2017).  Current efforts made by local and state agents have not been able to stop this runaway train because the root of the issue—supporting commercial development without reinvestment in public services and sustainable housing options—has been largely left unaddressed in public policy. A tech worker in Solon’s article stated, “The American Dream is not working out here” (Solon 2017). This growing trend of economic borders preventing home ownership by high-income home buyers sets a dangerous precedent for those with a lower socioeconomic status who have typically already felt the effects of internal housing borders.

Consequences of (In)Action

As the financial squeeze continues to push people farther from their place of work into the exurbs, average, low-income, and already vulnerable populations have been forced into rapidly worsening situations. Senior citizens who often live on a fixed income are being economically expelled from their homes and away from their primary care physicians, making it increasingly difficult to afford transportation, medicine and other healthcare needs. My grandparents have driven the at-minimum two-hour commute each way in order to have simple medical tests done. Housing instability creates precarious situations for other vulnerable populations as well. In order to provide increased land and building vacancy for high-return investments, many immigrants are ousted out of sanctuary cities, such as San Francisco, forcing them to survive in higher-risk areas where they are more susceptible to deportation. On any given night in 2016, more than 10,000 homeless were unsheltered in San Jose and Santa Clara counties, excluding the “hidden homeless” which includes couch surfers (Chen 2017).

The devastating effects of the 2008 housing and financial collapse are evident when analyzing data from the 2017 San Jose Homeless Point-in-Time Census and Survey, in which 33% of respondents across all demographics stated that their primary cause of homelessness was a lost job. Second to lack of employment is eviction, which was reported as the primary cause of homelessness by 5% of individuals in 2011 and 20% in 2017, making it the largest jump in reasons for homelessness in the years following the collapse. State and federal grants were once used to provide public services to these vulnerable populations, but divestment at the structural level has caused many of these services to become inadequate if not obsolete. Currently, many local governances are choosing to use what money they do have to create attractions for tourists akin to the “Sonic Runway,” a recent installation in Downtown San Jose directly across from city hall (See fig 3). Family-owned shops that were part of my childhood have disappeared along with the families who operated them due to unsustainable rent prices. Businesses that once sustained an entire family (including income often sent back home to other countries) are replaced by specialty shops, which charge higher prices and do not provide staple supplies for the community, creating additional borders between vulnerable populations and their everyday necessities and services.

State and federal responsibility for this crisis is further exemplified by the 40% of homeless individuals in Santa Clara who report they do not have access to the transportation now necessary to maintain a steady job and income (Chen 2017), an issue with deep roots in federal and state divestment from the exurbs which left transportation projects incomplete. In addition to stagnant public transit projects, local and state decisions to prioritize commercial over residential development created an absence of housing. This has become glaringly apparent over the past five years, when larger numbers of homeless people report it is not only high prices keeping them from maintaining stable housing, but a total lack of housing availability; housing has evolved from being unsustainable to completely inaccessible. Due to mainly communities of color historically residing in these regions, state and local political figures did not push for reformative policy to address this detrimental problem (Schafran 2012). The racialized aspect to these spaces is highlighted in the San Jose Homeless Census and Survey, in which a comparison of the general population and the homeless population by race shows starkly unequal ratios (see fig 4).


Judith Butler defines precarity as the “politically induced condition in which certain populations suffer from failing social and economic networks of support and become differentially exposed to injury, violence, and death” (Butler, 2010). The political and economic apparatuses that have been purposely institutionalized by local, state, and federal authorities have created internal borders through an unviable housing and job imbalance, in which both ends of the market (production of capital through income and consumption through renting and buying) have been made inaccessible to those who need it most. The state has additionally fortified long-standing borders that force minorities and vulnerable populations into living conditions where they are subject to harassment, assault, and food and housing insecurity, leading to drastic declines in physical and mental health. The Center for Disease Control and Prevention (CDC) cites gentrification as a public health issue. Their resource article on the health effects of gentrification states (2009):

Displacement has many health implications that contribute to disparities among special populations, including the poor, women, children, the elderly, and members of racial/ethnic minority groups. These special populations are at increased risk for the negative consequences of gentrification. Studies indicate that vulnerable populations typically have shorter life expectancy; higher cancer rates; more birth defects; greater infant mortality; and higher incidence of asthma, diabetes, and cardiovascular disease. In addition, increasing evidence shows that these populations have an unequal share of residential exposure to hazardous substances... (Healthy Places)

In addition to physical consequences of displacement, there are also documented psychological ramifications. Dr. Mindy Fullilove defines root shock as “the traumatic stress reaction to the loss of some or all of one's emotional ecosystem,” highlighting the emotional difficulties and mental fracturing people grapple with when they are cut off from their home and social ties (2016). In this way, the legacy of financial abandonment, the fiscalization of development, and racialized housing practices created decades ago continue to create borders across demographics, cities and neighbors, leading to the unjust displacement of individuals, families, and whole communities.

Index of Figures and Charts

Figure 1 (Schafran 2012)

Figure 1 (Schafran 2012)

Figure 2 (Schafran 2012)

Figure 2 (Schafran 2012)

Figure 3 (Bay Area News Group 2017)

Figure 3 (Bay Area News Group 2017)

Figure 4  (2017 San José Homeless Census & Survey)

Figure 4  (2017 San José Homeless Census & Survey)


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