A home under construction. Photo via Wikimedia Commons

It’s a fact that inequality is rising in the United States, especially since the recession. The Stanford Center on Poverty and Inequality says the U.S. now ranks third among all the advanced economies in the degree of income inequality, with the top 1 percent controlling a quarter of all the country’s income.

This growing inequality has sparked political battles over raising the minimum wage in many American cities, including San Diego. But overlooked in the battle over wages is the matter of housing inequality.

America’s population is growing faster than any other large modern economy, yet we’re building nowhere near the number of homes needed, especially in San Diego. As a result, prices and rents continue to rise. Here are four data points from just the last two weeks that summarize this challenge:

Those are daunting statistics. If we don’t build more housing, no raise in the minimum wage will have much of an impact. But building more homes has its own challenges.

Many San Diegans oppose new development near existing neighborhoods, especially if that new development is higher density. The battles over One Paseo in Carmel Valley, housing development on the old Escondido Country Club, and re-zoning for mid-rise development along Morena Boulevard in Bay Park are recent examples of this.

Of course, it’s not all grim. Civita is bringing 4,780 homes to Mission Valley, and Millenia project will add nearly 3,000 homes in Otay Mesa. Many developers are finding attractive infill opportunities, like Shea Homes’ recently announced 21 units of starter single-family homes in El Cajon.

Rising home prices help those who already own a home, especially the older generation. But recent graduates, young familes and newcomers to the region are at a particular disadvantage.

That this would increase the level of inequality is the conclusion of a recent, influential research paper by Matthew Rognlie at the Massachusetts Institution of Technology. Rognlie estimates that almost all the change in income distribution since World War II can be traced to the housing sector. “Housing has a pivotal role in the modern story of income distribution,” Rognlie writes.

In other words, the battle isn’t between capital and labor anymore, but between those who own homes and those who don’t.

Hopefully San Diego will find the political will and business acumen to build the homes needed for a growing population. If not, the result will be a faltering economy and, ultimately, lower home prices.


Chris Jennewein is editor and publisher of Times of San Diego.

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.