Google is being targeted by protesters angry about the rapid increase in the cost of living in San Francisco. Their complaint focuses on Google’s employee shuttle buses using municipal bus stops, but the real problem seems to be that well-paid Silicon Valley workers have driven rents up in the city. In City AM I argue that this is much more likely to be to do with planning controls restricting the supply of housing, and that government is to blame:
It comes down to supply and demand. As the Cato Institute’s David Boaz has noted, San Francisco’s strict planning laws have made it much more costly to build new housing to meet rising demand. Zoning laws restrict the construction of higher density buildings on the city’s limited land mass. Median rents are now the highest in the US. Over the past ten years, the city’s population has risen by 75,000, yet the number of housing units has increased by just 17,000. Paradoxically, rent controls that apply to some parts of the city are probably making things worse – those who live in rent-controlled housing may be OK, but there is no incentive to build more.
The parallels with London are obvious. Read the whole thing.