Gentrification in California

I live in Sherman Oaks, just north of a crusty (but delicious) little cantina called Casa Vega, but I fly up to the Bay Area every month or two for work.

The Bay Area is in many ways an incredible place. I lived in various places in San Francisco and the Peninsula for about five years before moving down south for graduate school, and believe me when I say that I enjoyed myself.

But by the time I left in 2009, things were starting to get really weird. Even at the outset of the Great Recession, at a time when the rest of the global economy nearly creaked to a halt, enormous waves of investment cash radiated outward from Sand Hill Road, transforming everything in their path.

When I visit San Francisco today, I see a Californian version of a Gulf Emirate or Victorian London. The income distribution has twisted so far towards an extreme power law distribution, where a tiny minority controls all the buying power, that individuals and families in the lower percentiles are being forced relentlessly towards the socioeconomic margins.

Extreme power law environments, whether biological or sociological, tend to promote hyper-specialization while killing off diversity. Biologists who analyze the effects of climate change on global ecosystems call this process ‘simplification.’

When sociologists, human geographers, and urban planners conduct a similar analysis on where people live in cities, it’s called gentrification — and it’s easy to recognize when you see it… especially if you look at housing data.

I made a visualization using publicly available rent data from Zillow. It ranks every zip code in CA by its percentage increase in rent between 2011 and 2016. Each zip is also colored according to its rent percentile rank in 2011, such that low-rent areas in 2011 are colored red, while high-rent areas are colored green. The dashed reference line is the mean rent increase across all CA zips (about 21%), while the dotted line is the rate of general inflation between 2011 and 2016 (about 7%).

screenshot-2016-09-18-14-39-31

If you want to see where gentrification is now causing real pain and loss of diversity, look for zip codes at the top of the chart that are also colored red. Those zip codes are largely in Oakland, which fits my experience when I visited a few weeks ago. Look a bit further down the charts at Richmond and Hayward to see what this chart is going to look like five years from now.

San Francisco zips also rank highly, but they’re already dark green, meaning that gentrification struck there more than five years ago. It is effectively too late for San Francisco. Many of the people left renting in San Francisco proper either don’t care about rent increases or are hanging on in rent-controlled and/or subsidized housing.

Wondering about places like Cazadero, Forestville, and Guerneville? These are tiny tourist towns in Sonoma County that are probably subject to a lot of rent volatility courtesy of Silicon Valley-dwellers buying up vacation housing (or AirBnBing it).

Believe it or not, some bargains remain in CA, especially in certain fairly affluent zips out in the Palms Desert, where rents have apparently gone backwards. I wonder if this isn’t either a data error or some idiosyncrasy in the local housing markets there.

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