PULLING THE LADDER UP: The Extinction Of Palo Alto?

A member of the Palo Alto Planning and Transportation Commission has penned a powerful open letter of resignation condemning the wealthy community’s ongoing refusal to address skyrocketing housing costs (the median home price is now $2.5 million, up from $640,000 at the turn of the century), effectively pulling up the ladder for upwardly mobile families trying to move into the city. . . .

The situation in Palo Alto—middle-class neighborhood-turned gentrified tech executive stomping ground—highlights the entrenched structural obstacles to any loosening of housing regulations. Even if the majority of Bay Area or even California residents would favor measures to make housing more affordable, long-time residents of individual communities have always tended to oppose to any expansion of the housing supply that might slow the appreciation of their own properties. It may be that amount of exhortation from economists and policy wonks can change this balance of interests, and as long as land-use decisions are tightly controlled by City Councils and local planning commissions (which have no responsibility to non-residents), pro-development forces will continue to come up short.

One way to address this structural problem would be to check local power over zoning regulations. Reihan Salam has noted that the Canadian province of Ontario, which has managed housing inflation more successfully than many American states, created an “administrative body that can overrule local land use decisions if it determines that development projects under threat have merit.” Such an institution might or might not be possible in the United States, which has tended to defer more to local sources of authority. But California Governor Jerry Brown, to his great credit, is pushing legislation that would “sidestep the endless layers of local approvals that bog down badly needed housing construction,” according to the San Francisco Chronicle.

At root, the failure of wealthy coastal areas like Palo Alto to address their housing shortages may be a symptom of broader cultural illness—in particular, the tendency of elites to prioritize their own enrichment at the expense of the public interest, and the decline in appreciation for the importance of community, and the young and middle-class families that are required to sustain it. Public policy can’t directly treat this disease. But it can treat the symptoms. And a modest shift in the state-local balance of power for setting land use regulations may be the best medicine for the short term.

Despite their constant virtue-signalling (or maybe because of it) our new oligarchs aren’t any nicer people than oligarchs usually are.