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Introduction
The change in the economic status among residents of a city alters the consumption patterns of people. This situation may also change immigration patterns across different cities within the state. For a nation that has people from diverse backgrounds, homogenous distribution of such people within the nation in terms of their differences in cultural backgrounds is important in the effort to foster diversity.
However, the city government of San Francisco, California, is encountering challenges following disruption of diversity distribution across the city. This challenge emanates from colonization of San Francisco by the new wave of residents who have a high earning power compared to the traditional dwellers of the city.
Disruption of the City of San Francisco
A new wave of San Francisco city residents has colonized it to the extent of disrupting its traditional economic balance. In his article that appeared in ebscohost.com, Steinmetz reveals that wealthy high-tech residents have transformed the city of Francisco as witnessed in terms of changes in unemployment level, tensions, and the rising eviction of the dominant traditional residents (par.1). The political class can celebrate reduced unemployment levels. However, eviction and tension are crucial causes of alarm in the city government.
Class tensions have risen in San Francisco due to economic imbalances. Well-educated people who have high earning powers are creating pressures on demand and supply balances in the housing sector. The result of this move is the evident overshooting of the cost of housing. Steinmetz supports this assertion by claiming, “teachers, cooks, and musicians are packing their bags as two-bedroom apartments attract a rent of $6,000 per month” (par.2).
The housing problem is significant within San Francisco, where household incomes fall in the median of US$73, 000. From an economic perspective, when demand is higher than supply, prices (for this case, the costs of housing) rise. To access commodities, this situation calls for people who can pay for goods and services at a certain new equilibrium.
Thus, those who can only pay for goods and services at a price that is lower than the new equilibrium are blocked from accessing housing in San Francisco. To ensure equal access to basic needs, the city government has a responsibility to regulate housing costs.
The replacement of low-income earners by high-income earners in the city of San Francisco implies creating imbalances of diversity, and hence a big challenge, especially by noting that the American national unity is built around the principle of embracing diversity. For San Francisco, residents with high school level of education have no alternative other than fleeing from the city as the cost of living becomes unbearable due to the flooding of college graduates who possess a higher earning capability (Steinmetz par.3).
For low-income earners who may choose to remain in San Francisco, the rising of housing costs has a direct impact on their ability to afford other essential needs such as education for their children. Schwartz contends with this assertion by adding that household incomes directly influence affordability and accessibility of various education services, especially if fees are charged or costs such as transportation are far from their access (698).
Therefore, the high cost of housing leads to a reduction of disposable income that is available for paying for other essential needs such as education.
The problem of overshooting house rent needs the attention of the city government. In fact, from 2013, California increased taxes, which reduced the income that is taken home by its residents. California has about 1.8 million people who still need jobs. This number does not incorporate many residents who work for less than what can enable them to afford a mortgage and other daily expenses.
Amid these challenges, people have to stick to low paying jobs since there are no other better jobs. Where people who have poorly paying jobs live in the city of San Francisco, flooding of high-income earners even presents more challenges to them. Should California consider constructing or creating incentives for construction of housing facilities that are attractive to low-income earners in San Francisco?
An attempt to subsidize rental houses or even build low-income houses has some challenges. Upon studying the effects of Low Income Housing Tax Credit (LIHTC) program on the neighborhoods, Baum-Snow and Marion found out that low-income houses are inhabited by people who lie in the lower 30th percentile of the distribution of income within the state (1).
Consequently, they claimed that new developments through the LIHTC program only translates into a reduction of local amenities due to the high influx of people who earn less than the average income (Baum-Snow and Marion 1).
The above findings call for San Francisco city government to look beyond LIHTC program in terms of deriving strategies for resolving the current problem of movement of low-income earners to other cities within California due to the rising rental costs in San Francisco. Indeed, LIHTC developers are controlled by future anticipated rent changes while selecting appropriate locations for low-cost rental houses.
This claim suggests that after some time, putting up low-cost housing may cease from being a viable solution to the current problem that is experienced by the city of San Francisco as the arrival of more high-income earners in the future may create another imbalance of demand and supply in the housing sector. Low-cost rental-owners can increase rents in response to the availability of people who are willing to pay more for houses, as witnessed in the current situation.
Apart from re-fragmentation of San Francisco population on socio-economic status, flooding of high-income earners within the city is also causing the problem of racial re-distribution. This situation influences the diverse characteristics of people who live in San Francisco. In support of this claim, Steinmetz informs, “African-Americans now make up 6% of the population, half of the percentage in 1980” (par.4).
Considering that the main propelling force for the movement of low-income earners out of San Francisco is economic status, a reduction of African-Americans suggests that this group of people also belongs to low socio-economic class. Any possibility for validating such an impression may give rise to discrimination of people in the city along diversity lines, which may lead to racial stereotyping. Such occurrence undermines the American spirit of nationalism, which upholds respect and people’s diversity.
Conclusion
Dwellers of San Francisco city continue to contemplate whether the city is rapidly becoming the home for homogenously rich people. Can they continue living in a place that only allows people into the city depending on their income distribution?
What can be done to deal proactively with the inequality problem that has led to acute tensions, especially in areas where household income stands at an average of about US$73, 000, which is higher than the mean of the US national household income? Only the city government can respond to these interrogatives that continue to be a concern to San Francisco’s residents who live in the reality of a crisis that has accrued from issues such as affordability, wealth discrepancies, and limited city space.
Works Cited
Baum-Snow, Nathaniel, and Justin Marion. The Effects of Low Income Housing Tax Credit Developments on Neighborhoods. Santa Cruz: Brown University, 2008. Print.
Schwartz, Allan. “The external effects of subsidized housing investment.” Regional Science and Urban Economic 36.2(2006): 697-707. Print.
Steinmetz, Katy. Disrupted, 2014. Web.
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