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Land Rent and Housing Policy: A Case Study of the San Francisco Bay Area Rental Housing Market

Authors


  • Dr. Barton is the Deputy Director of the Berkeley Rent Stabilization Board. He has published on non-profit housing, rent control, homeowners' and tenants' associations, conflict resolution, and labor-management relations. He would like to thank Prof. Mason Gaffney for his very helpful comments on earlier drafts. This article draws on work conducted for the Berkeley Rent Stabilization Program, but the views expressed here are those of the author and do not necessarily reflect those of the Berkeley Rent Stabilization Program or its Board.

Abstract

In the San Francisco Bay Area, where residential rent is among the highest in the United States, an analysis of data from several sources demonstrates that high rent cannot be accounted for by higher quality, higher operating costs, or higher construction costs. At least one-third of the total rent paid is land rent. Despite increases in real incomes, very-low-income tenants in the Bay Area today have less income remaining after payment of rent than tenants did in 1960. High land rent is a long-term feature of the Bay Area rental market that results mostly from its geography, the density of its urban centers, and a strong economy, rather than from regulatory barriers to new multifamily construction. Deregulation is not a sufficient response to the effects of land rent on low-income tenants. Government should subsidize non-profit housing organizations, particularly land trusts that remove residential land from the market. Taxes on land rent would be a particularly appropriate funding source.

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