I had breakfast last week with my nephew in Palo Alto. He's a young Silicon Valley entrepreneur, and he and his wife are about to start a family. Even though he does very well, he told me that there was no way they could afford a home anywhere near Palo Alto. If they wanted a single-family home like ours in Madison, they'd have to move to someplace like Livermore, a two-hour commute from his work.
So, I asked him why Oakland, just across the bridge from San Francisco and probably 45 minutes from Palo Alto, wasn't a possibility. He told me that things were just so bad there that it didn't even enter into consideration for his family or for any of his friends.
That got me to thinking about why the market isn't working in this case. Free market theory would predict that at some point low property values would combine with the lower travel costs and easy commute to make Oakland ripe for redevelopment. The same story, to a less dramatic extent, is true in Detroit and some other decayed urban centers.
At some point I think the market will kick in. Probably led by the shock troops of urban homesteading -- artists -- these neighborhoods will start to be reclaimed. Following the artists will come young singles without much money but with time to invest in sweat equity, and after that young families in the same situation.
But an interesting question to ask in this presidential election year is how the government might kick start that kind of reinvestment in our cities. We talk about this for all kinds of other things -- alternative energy industries, high-tech industries, science and math education. But where's the discussion of urban policy?
