There's Not One Home for Sale in San Francisco That an Average Teacher Can Afford
This week, the real estate listings website Redfin published a startling statistic. In the entire city of San Francisco, not one home or apartment is available on the market for under $220,000, which the site says is affordable for a typical teacher in the city. Statewide, just 17 percent of homes for sale are affordable for teachers. With the tech industry booming and the Google Bus quickly becoming a cultural icon, it's not a surprise that San Francisco faces an affordability crisis. But how can it have become so dramatic? The answers boil down to two factors: San Francisco's hot real estate market and dwindling income for city teachers.
First, the real estate market. This is pretty straightforward. San Francisco is the single least-affordable housing market in the country, according to the real estate website Trulia (TRLA). As Trulia's chart shows, the median sales price has more than doubled since 2000 and is up 11.5 percent just in the past year.
Now, on to the teachers. If you look at Redfin's data, you'll see that San Francisco has the second-lowest median salary of teachers for any county in California. That's despite having a higher cost of living than other areas in the state and a thriving private sector, thanks to the knowledge economy.
Redfin used data from 2012, and I've pulled stats for the city that included the 2012-2013 school year, when the average teacher's pay rose about $4,000. (Like many cities in the state, San Francisco boosted some education spending last year, in part because districts had more revenue from a new statewide tax voters approved in 2012.) When you take inflation into account, even with that boost San Francisco's teachers earned 12 percent less in 2013 than they did in 2002.
Why are teachers paid so much less than elsewhere in the state? One clue could be that San Francisco's high costs and mediocre school districts cause families to flee the city. Indeed less than 11 percent of city residents are between 5 and 20 years old, compared with 20 percent of the population nationally. The big drop-off in San Francisco's younger residents generally happened in the 1970s and has fallen more slowly since, but the share is down about 10 percent over the past decade.
Having fewer residents with kids may make taxpayers place less value on funding education, which could lead to relative pay reductions (as opposed to just hiring fewer teachers). This is a cyclical problem: Families leave the city, in part, because of poor schools, which tends to reduce investment and the allocation of resources to improve the district.
Whether the affordability squeeze in San Francisco ever eases will partly depend on whether the housing market cools off-and whether the wealth pouring into the city ever translates to higher pay for middle class workers, including the city's teachers.
Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.