Land of the homeless average wage earners – America is running out of apartments

The town of Atherton in California is tranquil. 7500 inhabitants, a golf club, a school, a small park. Villas with pools and wide courtyard entrances stand in the shade of old oaks. But that summer, Atherton became the scene of a dispute.

On the one hand: the city council, which planned inexpensive row houses for low-income families to alleviate the housing shortage in the area. On the other hand: the citizens who preferred to keep to themselves.

Atherton is in the heart of Silicon Valley, not far from the headquarters of Google, Apple and Facebook. All of these companies promote the construction of new homes in California with millions of dollars. But privately, many managers are apparently opposed to it.

In Atherton, some feared for the old oaks, others for their land prices. There was concern about more noise and more traffic. The resistance was so great that the city council finally gave in. The terraced houses were not approved.

It's a Nimby triumph. The abbreviation stands for "Not in my backyard" and describes people who know that some unsightly things have to be built - but please not in their "garden". In Germany, for example, Nimbys fight against wind turbines, in California often against cheap housing. Against everything that is not a family home and could disturb the peace or shield the sun.

The Nimbys are believed to be one reason why rents and real estate prices are astronomically high in Silicon Valley and nearby San Francisco. 35,000 people live there on the streets. Even average earners - police officers, nurses, teachers - often cannot afford an apartment. Some live in converted vans, others commute for hours.

And it's not just Californians who have this problem. "Everywhere in the US," says Mike Kingsella, head of the organization Up for Growth, "there is a lack of housing." Kingsella's team has calculated that the country is short of almost four million houses and apartments.

According to the experts, ten years ago it was only around one and a half million. "The housing shortage," says Kingsella, "is currently America's greatest economic and social crisis."

Buying a house, actually part of the "American Dream", has become unaffordable for millions of citizens. Prices have risen 46 percent over the past three years, according to data from the National Association of Realtors.

At the same time, mortgage interest rates are now well above the five percent mark, the last time there was anything like this before the financial crisis of 2008. Rents are also rising, they are currently paying 23 percent more than in summer 2019.

All of this is a threat to the American economy. Because if you have to spend more money on housing, you have less for consumption. The situation is often particularly bad where the Democrats react - a party that repeatedly promises to fight for the socially disadvantaged. In Silicon Valley, for example, more than 70 percent of citizens voted for Joe Biden in the 2020 presidential election.

Why is it that so much living space is missing? One reason: Corona and the home office. At the beginning of the pandemic, many Americans wanted more space and exchanged their apartments in New York, Chicago or Detroit for houses in the countryside.

There was a flight to suburbia, to the suburbs. In addition, the market is suffering from the after-effects of the financial crisis. Many construction companies went bankrupt in 2008, so there is still a shortage of workers and machines.

But the biggest problem, say Kingsella and other experts, is outdated zoning plans. Many small towns, including Atherton, only allow single-family homes. And some metropolises are also opposed to a higher building density. Houses over 50 feet tall are banned in most neighborhoods in San Francisco. Local politicians want to preserve the postcard motif that is famous around the world, the Victorian facades with their bay windows and balconies.

In April 2019, the city council blocked a 63-unit condominium development because it would have cast a shadow over a nearby park on summer evenings. That endangered the quality of life of the residents, it was said at the time. And last year, a 500-apartment tower was blocked to make way for a luxury department store parking lot.

Another disturbing development is in Atlanta, where more and more families are living in cheap motels because they don't have enough money to buy their own apartments. In 2019, 45 percent of guests booked their rooms for more than 30 days, which is an indication of a permanent stay. Last year, that number jumped to 67 percent, according to data from Highland Group, which advises hotel investors. In the meantime even school buses stop at the motels to collect children.

New York wants to solve the problem in a different way. Gov. Kathy Hochul recently signed legislation encouraging the conversion of underutilized hotels into apartments. A first building on the chic Upper West Side is currently being prepared and will soon be home to low-income tenants.

In Silicon Valley, there is a more radical proposal: there, aid organizations and local politicians are calling on citizens to take in the homeless in their homes. The skepticism is great, but one hears of the first successes. Several people have already made available rooms in their apartments. Some for a small fee from the city, others even free.

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