In general, richer cities have less affordable housing.
But there’s a second reason why San Francisco’s problem is emblematic of a national story. Liberal cities seem to have the worst affordability crises, according to Trulia chief economist Jed Kolko.
In a recent article, Kolko divided the largest cities into 32 “red” metros where Romney got more votes than Obama in 2012 (e.g. Houston), 40 “light-blue” markets where Obama won by fewer than 20 points (e.g. Austin), and 28 “dark-blue” metros where Obama won by more than 20 points (e.g. L.A., SF, NYC). Although all three housing groups faced similar declines in the recession and similar bounce-backs in the recovery, affordability remains a bigger problem in the bluest cities.
“Even after adjusting for differences of income, liberal markets tend to have higher income inequality and worse affordability,” Kolko said.
Kolko’s theory isn’t an outlier. There is a deep literature tying liberal residents to illiberal housing policies that create affordability crunches for the middle class. In 2010, UCLA economist Matthew Kahn published a study
of California cities, which found that liberal metros issued fewer new housing permits. The correlation held over time: As California cities became more liberal, he said, they built fewer homes.