State of Inequality, Part 1

An article from the the San Francisco Call, October 15, 1899 describes Henry Dussen and his family, “in a tattered tent located on 16th street and Portrero avenue they shivered last night, supperless, except for a meal of potatoes, half cooked for lack of fire.” In 1899 San Francisco was home to many other impoverished families like Dussen’s, but also home to multi-millionaire railroad barons, sugar plantation masters, and bankers.

What’s the most unequal county in California? Maybe it’s Yuba. Or maybe Siskiyou. Or is it Los Angeles. Depends how you measure it.

One simple means of gauging inequality is to compare household income levels at the top of the income distribution to the bottom of the income distribution.

At the bottom of the income distribution are the very poor. Members of very poor households are more likely to have high levels of debt, and to experience unemployment and under-employment. Some of these very poor households subsist on fixed incomes from pensions or social security. Very poor households likely have a hard time paying rent and bills. They likely pay much higher percentages of their income to live in substandard housing; they send their kids to under-funded public schools; they have a difficult time obtaining health insurance; they pay more for credit and other financial services, and so on.

Then there are rich households. Rich households are more likely to live in clean and safe neighborhoods and cities; they send their kids to well-funded public and private schools; and their housing and other needs don’t consume all of their income. They can save and pass on wealth to their children.

Using reported household income data from the U.S. Census (American Community Survey, 2013 3-Year Estimates), I’ve categorized households into the following five categories by income for each county in California:

Very poor – Less than $49,999

Working class – $50,000 to $99,999

Middle class – $100,000 to $149,999

Upper-middle class – $150,000 to $199,999

Rich – $200,000 or more

You can object to how I’ve categorized and labeled different income ranges, but the point isn’t sociological perfection. This is a rough attempt to simplify some data and make some big picture comparisons regarding income inequality across California’s 58 counties.

Keep in mind that “very poor” and “rich” don’t refer to wealth for the sake of this discussion. These categories only refer to reported household income.

Also keep in mind that what I’m doing here is taking a very blunt measurement of inequality to compare counties to each other. One problem with using this census data is that everyone earning above $200,000 is lumped into one category (the one that I’m calling rich). There’s a big difference (two orders of magnitude to be exact) between earning say $200,000 and $20,000,000, and this is entirely lost in this Census data, so we have no idea what the gross incomes for each county are, and what the gross incomes of the top 1% or 5% really are compared to the rest of the population.

Even so, there’s some interesting patterns in the tables.

Below is a table that breaks down each county’s households into the five categories. The counties are then sorted by a simple measurement – the quotient of very poor households to rich households. Take for example Yuba County which has a quotient of 64 —the highest score of all counties. This means that for ever 1 rich household making above $200,000 a year in income, there are 64 households that are very poor, making less than $50,000 in yearly income. At the bottom of the table is Marin County where there are 2 poor households for every 1 rich household.

What jumps out when inequality is measured this way is that California’s Central Valley and other rural areas have big numbers of very poor households and very few rich households. By comparison the major urbanized areas have more rich households. And the six major counties of the Bay Area (Marin, San Mateo, Santa Clara, San Francisco, Contra Costa, and Alameda) all have the lowest very poor to rich household quotients.

Keep in mind that this doesn’t mean that the Bay Area is without very poor households. Alameda County, for example, has about 200,000 very poor households compared to 58,000 rich households, a quotient of 3.4. Yuba County, at the other end of the table, has only 13,600 very poor households even though it’s quotient of very poor to rich households is much higher.

If we re-sort the table by a different metric, the percent of poor households to the total number of all households, then Siskiyou County jumps to the top of the table. 63 percent of households in Siskiyou County are very poor. Again at the other end of the table are the six population centers of the Bay Area, with relatively low percentages of very poor households, ranging from 28 percent in San Mateo to 37 percent in San Francisco.

A final way to look at these numbers is to simply see which counties are home to largest sheer numbers of very poor households and rich households. Here it’s no contest. Los Angeles County is home to about one in every three very poor households. LA is also home to about one in every five rich households. Not surprisingly, this table largely follows the general population rankings of California’s counties.

So what’s the most unequal county in California? Well it’s probably not best to use this type of Census data to figure that out. The above tables point more toward concentrations of low income and high income households, but because the data doesn’t measure the actual amounts of income being earned (especially top incomes) it’s impossible to say just how unequal these places really are.

I’ll try to zero in closer to an answer in a subsequent blog post.

Piedmont’s Affordable Housing Plan: More Servants’ Quarters

The city of Piedmont is one of the wealthiest and most exclusive communities in California, but per state law, Piedmont is required to demonstrate that it’s regulations do not block the construction of a “fair share” of new housing, including affordable housing. This doesn’t mean that Piedmont is required to build new housing. However, it does require the city to demonstrate that its municipal rules don’t impede new development.

Affordable housing is a big part of the state’s law that requires cities to show how they are creating opportunities for developers to build new housing units. Lots of cities are eager to attract affordable housing development, including Oakland and San Jose. Piedmont, however, was founded as a wealthy enclave, and has built itself out physically, and politically, to exclude the construction of affordable housing within its limits.

So it’s not surprising to read in Piedmont’s Housing Element (a document that spells out how the city plans to create opportunities for building a “fair share” of housing, including affordable housing) that Piedmont’s only contribution to creating more affordable housing is to add servants’ quarters to some of the mansions that dot it’s hilly landscape.

According to Piedmont’s Planning Commission, the city has a very small number of rental housing units, only 50 apartments. All of them are crammed along Linda Avenue on the Oakland border. Piedmont has only 50 vacant lots upon which to build new housing, and many of these sites are unfit for construction of any large multi-unit structures. Piedmont was zoned decades ago to be a community of homogenous single family homes with large yards and long driveways. The only variation really was in the size of the lots, starting with large houses surrounded by generously proportioned yards up to the multi-acre estates along Sea View Avenue where every residence has its own private tennis court and pool and English garden fit for long walks under rows of redwoods and oaks. Piedmont’s city charter requires a referendum of all voters to change zoning in any area of the city from its current single family status to a multi-family zone that could accommodate apartment construction, or renovation of existing mansions into multi-unit buildings. In other words, this ain’t gonna happen.

The result is that Piedmont isn’t likely to build affordable housing, even though it’s required to demonstrate that developers have the opportunity to build affordable housing that would contribute a “fair share” to the Bay Area’s needs. The solution Piedmont’s government has come up with to build new and affordable housing is to encourage the addition of servants’ quarters—small studios and apartments added to the basements or attics above the garages of mansions. In fact, many homes in Piedmont were originally built with servants’ quarters for butlers, maids, nannies, gardeners, and other helpers. But having help fell out of fashion after the 1960s, so lots of these quarters were turned into dens or guest rooms. Piedmont’s planners hope that homeowners will take these spaces in their houses and re-convert them into rental units.

“Given the lack of vacant and redevelopable land in the City, Piedmont has historically explored other ways to meet future affordable housing needs,” explains the city’s Housing Element. “Since the 1990s, the City has found that the most effective approach is to actively encourage the production of second units.”

Here’s a more detailed description excerpted from Piedmont’s Housing Element explaining what these second units are:

“The City of Piedmont has a long tradition of allowing second unit housing. Many of these units were initially created as living quarters for domestic employees. Today, second units in Piedmont provide housing for professionals, seniors, caregivers, child care employees, relatives, and young adults entering the housing market, among others. In some cases, elderly Piedmont homeowners have moved in to second units on their own properties in order to retain ownership and have a source of retirement income. Given the single family character of the city and the absence of land available for new development, second units are the most practical and prevalent form of affordable housing in the city today.”