Is Tech to Blame for Rent Hikes in San Fran?

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Feb. 6 (Bloomberg) –- Trulia’s Chief Economist Jed Kolko discusses the San Francisco real estate market. He speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

So is technology beat reason that rent and housing prices are rising so fast in san francisco?

We're definitely seeing rents rising faster in semper cisco and another tech help them we see in the rest of the country, and it is much less affordable to live in san francisco them pretty much anywhere else, but these differences have been here for a long time.

The affordability gap that separates san francisco from the rest of the country has been here long before you and i were all using e-mails.

Ok, so you are saying it is not necessarily technology that is causing this to happen.

Certainly not the whole story.

What we are seeing across these tech hubs is that the cubs were drawn to people, tech industries were drawn to places that were expensive to begin with, places that have good weather, universities, other industries that were already there, so most of the gap in home rises that we see today between tech hubs and other metros was actually in place 25 years ago.

Would you go so far as to say the technology industry had nothing to do with rising rents and housing prices in san francisco?

Technology is a big part of economic growth in the bay area.

It is a big part of demand.

In housing prices as a result are strong demand.

Certainly the technology industry because it is the heart of the local economy is helping push up prices and rents, but the other pieces apply.

San francisco is an incredibly difficult place to build new housing.

Other tech hubs across the country like austin and raleigh have a lot lower home prices and a lot more construction.

So supply matters, too.

It is not just the tech fueling demand for housing.

So our rents and housing prices rising here because i'm francisco is a san francisco?

Because we are only so big, it cost so much to build big home stand the area surrounding is so great?

What makes san francisco so extreme is the supply-side.

We have ocean on one side, bay on the other, and hills know her by, and also because of regulation, it is difficult for developers to build new housing here, and as a result, we see 1/10 of the construction and south carolina -- in semper cisco that rally, south carolina has -- in san francisco band raleigh, south carolina has.

Did you find anything you did not expect?

One of these surprises for me is how much the gap in a fellow -- and affordability existed way five years ago.

It is often hard to get that historical perspective because we are focused on what is happening now, but most of the gap in housing costs between tech hubs and other metros was in place in 1990. that wasn't surprising.

How much bigger has that gap become in the last 15 years?

It has gotten bigger.

Home prices have risen more in tech cubs than in other markets.

That has been growing and without a lot more construction, it will probably continue to grow because the tech cups have -- hubs have strong demand and that is a recipe for growing prices.

What you think is a responsibility of tech companies and tech employees in this issue of tension between the haves and have-nots?

I think it is a bigger issue than just the tech industry, though certainly in san francisco, the tech industry is an import a part of the economy.

I think a lot of the story has to do with building more housing.

Some of that housing needs to be affordable, but building more housing overall will help slow down the rent increases.

So you think it is up to the government?

I think it is a much bigger issue than just the tech industry.

Ok, jed kolko of

This text has been automatically generated. It may not be 100% accurate.


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