Philosophy to the rescue!

The go-to thinker for when something seemingly contradictory happens in capitalism is Karl Marx, the father of modern communist thought.

In his book Das Capital, Marx discusses what he sees as the two values of commodities, their value for use and their value for exchange. He suggests that capitalism is unique in that people will use capital to transform commodities into others which can command a higher price in exchange for the sake of a higher profit.

Thus, for Marx, there is no contradiction in a place being innovative and not being able to serve the needs of the poor. He would see it as a feature of capitalism. The fact that the people there are considered innovative doesn't change this at all. In fact, it might lead them to create stupid products that are both useless and quite profitable while total ignoring a social problem that offers little profit if solved.

Since housing demand far outpaces supply in California, landlords can keep raising prices and still find people willing to pay that much for a place to stay. Since it is more profitable to do this rather than keep rents low forever, they do so. It doesn't matter how innovative your landlord is, they are still going to act this way if they can. Marx, being a commie, sees these features of capitalism as unsolvable.

His solution would be to toss the whole thing out. If you don't want a revolution tomorrow, one could also look into decommodifying housing in general and remove the profit motive entirely.

Which philosophers have passed the test of time?

If you'd like another opinion from somebody who isn't a communist, that's fine; we have liberal capitalists, too.

John Rawls, the most celebrated American political philosopher of the 20th century, was less concerned with the question of who owned the means of production and more with what happened with the money created as a result.

As a liberal thinker, Rawls accepted that some inequalities were going to exist in any society and even argued that some of them could be beneficial. However, his principals of justice demand that any inequalities that exist in a given society must be demonstrated to improve the condition of the poorest as a justification for their existence.

If that doesn't make sense to you at first sight, here is have an example.

Suppose that a small, poor, isolated community has no doctor living there and that the residents of that town must travel large distances at great expense to get basic medical care. One day they find a doctor who is willing to move there, but only if they are paid a very high salary. To pay him so much would create much income inequality in the community, but it would also improve the condition of the poorest, as they would now have ready access to health care.

In this case, creating the inequality — that is, paying the doctor a high salary — makes the poorest people in town better off; they would then have health care. In Rawls' theory of justice, all inequalities have to meet this qualification.

For Rawls, the problem in California, or the rest of the United States, for that matter, is that while it has excellent ways of producing wealth, the institutions we have to distribute that wealth — or to make sure the adverse side effects of inequality are minimalized — are ineffective. They allow for the creation of vast inequalities that have made the condition of the poor worse as newly-rich tech workers drive up housing costs.

That many people in California are high-earning tech innovators isn't entirely relevant here, despite their work streamlining people's lives (see: there's an app for everything). This said, since California possesses both high-earning individuals and, judging by the homeless community's exponential growth, a still lackluster system in place for the needy — the current crisis can be said to be, in this philosophical lens, an institutional failing. However, it's such a one that can happen anywhere. Poverty is nothing new.

Nevertheless, a Rawlsian solution to the housing crisis might be to charge a surtax on all ultra-high incomes or on the sales of luxury homes to finance the construction of low-income housing, as it would continue to allow high salaries to exist while helping to assure that any income inequalities benefit everyone.

Though, given that California has had a significant housing shortage since the '70s don't hold out for an innovative solution that abolishes the problem of excessive rent prices any time soon.

All of this philosophy is great, but what are we doing right now to fix this?

California lawmakers have just implemented a rent cap to try and control the skyrocketing costs of housing. One of several around the country in place to try and correct the housing crisis through price controls, it limits yearly rent increases to inflation plus five percent for millions of units of housing and increases tenet protections against eviction.

"Rent control," the name for this kind of legislation, works by limiting how quickly rents can rise on certain units of housing. Expert opinions on it are mixed. Economists of both the left and right agree that it can reduce the amount of housing available in the long run. One study even found that it might cause gentrification as innovative landlords turn less profitable rental properties into owner-occupied housing. Many economists suggest, instead that longer-term options that will increase the housing supply overall be considered.

Proponents of the policy argue that it is effective in preventing evictions in the short run. While that may seem short-sighted, remember that people don't eat in the "long-run" — they need solutions to current problems now. Creative ideas to help increase the affordable housing stock have been tried with some success, but more is needed.

For a place so filled with brilliant people, piles of money, and a creative energy that has earned the love and ire of the rest of the country, California has had a difficult time solving its homelessness problem. While different philosophers can offer us insights as to why this is, they can only point us in the right direction. We have to go about fixing the problem ourselves.