As Harvard Economist Edward Glaeser, Economics Nobelist Paul Krugmann, Financial Times columnist and an economist Tim Harford have been saying, the issues are politically induced housing scarcity through the use of zoning density restrictions and also overuse of historic landmark status. The use of politics to create artificial scarcity to create market inefficiencies is called "rent-seeking" in Microeconomics.
Another example was the NYC limit of 13,000 Taxi medallions which lead to a market value for medallions of $1.2 million. Then Uber/Lyft came along to disrupt the market and provide more transportation in NYC and the value of the medallions dropped to less than $700 K.
I believe that Congress is looking into the zoning form of "rent-seeking" with the understanding that zoning is not necessarily local but might be federal to override this inherent unfairness where older people housing expensive and scare for younger people.
For more info: Edward Glaeser: Build Big Bill (Mayor of NYC) http://www.nydailynews.com/opinion/build-big-bill-article-1....
Tim Harford: The Undercover Economist. https://www.amazon.com/Undercover-Economist-Revised-Updated-...
Creating these politically induced market inefficiencies are what create an inherent transfer of wealth from the poor to the wealthy and from the young to the old and of course is a major contributor to financial inequality.
* "The Undercover Economist" - http://amzn.to/1sCImVw
* "The Undercover Economist Strikes Back" http://amzn.to/24bIFT3 - this one's about macroeconomics.
As well as various others. One thing I like is that they're mostly fairly neutral - he's really trying to explain the thinking, rather than beating you over the head or espousing one position.
The issue is unaffordable housing and it is a problem in many cities such as NYC where I live, not just SF.
The cause of the unaffordable housing is zoning restrictions that limit housing density and overuse of historic landmark status through politically induced scarcity. Using politics to induce scarcity creates an additional "economic rent" or profits above for landowners (housing and apartment owners) above what they could get in an efficient market.
This is a basic concept of microeconomics: the use of politics to induce scarcity for receiving profits above what one would get in an efficient, competitive market.
This "rent seeking" makes landowners like Donald Trump much wealthier than they otherwise would be in an efficient market.
Harvard Economist Edward Glaeser has written extensively about this. NYTimes columnist and Economics Nobelist Paul Krugmann has written about this in his columns, and Financial Times columnist (with a masters in Economics Tim Harford) has also written about this.
Another example of gaining "economic rent" or "rent-seeking" is in NYC there had been a political limit of the number of taxi medallions to 13,000. The result was a medallion market value of $1.2 million per medallion. Taxi drivers that leased cabs had to pay for use of the medallion as well as the cab, and gasoline. The result is much higher fares approved by the NYC Taxi and Licensing Commission.
Then Uber/Lyft came along and the price of the medallions dropped from the $1.2 million to less than $700,000.
The rent-seeking is very harmful to the economy and of course adds to the income inequalities. It is in invisible "tax" that transfers wealth from the less wealthy to the wealthy. Money that one could be spending on goods and services in an efficient housing market is instead going towards paying additional housing costs with that money ending up in the pockets of the wealthy.
The race issue headline undoubtedly gets more page clicks than an article that would state that billionaires such as Donald Trump owe much of their wealth to inefficient markets resulting from the use of politics to create artificial scarcity.
The solution is a simple one which is to get rid of the destructive laws that create the artificial scarcity in land use.
It is upsetting to me that the NYTimes reporters appear not to understand basic economics.
For more information see: Edward Glaeser: Build Big Bill (Mayor of NYC) http://www.nydailynews.com/opinion/build-big-bill-article-1....
An on-line article about "rent seeking" and the damage to the economy (includes land use restrictions) http://fivethirtyeight.com/features/the-rent-seeking-is-too-...
This book is a very fun read: Tim Harford: The Undercover Economist https://www.amazon.com/dp/0199926514