SAN FRANCISCO — The fires that ravaged Northern California in October claimed lives, weakened communities and scarred one of the West’s most distinctive landscapes. The destruction of an estimated 14,000 homes in the wine country north of San Francisco will worsen a severe housing shortage in a region where rents and housing values are already sky-high.



The shortage harms rural communities on the fringes of the Bay Area, but it is rooted in urban communities in the region’s core — San Francisco, Oakland, Palo Alto and Berkeley. It is exacerbated by well-meaning but misguided housing policies championed by urban liberals. The area has some of the most progressive voters and policymakers in the nation, yet it has also adopted some of the most regressive housing policies, with large costs for low-income renters and the environment.

The regional economy of the Bay Area is like an integrated ecosystem, where everything is connected. The exceptional economic dynamism of the region’s urban core affects the labor and housing market as well as the physical environment in the periphery.

The San Francisco and Silicon Valley labor markets are the most robust since the mid-1960s, when researchers started collecting jobs data — and employment and wages are higher today than at the peak of the dot-com boom of 2000. Young, well-educated workers can have some of the best careers in the world here. Labor productivity and wages are among the highest anywhere, creativity and innovation flourish, and incomes are growing inside and outside the tech sector.