For nearly 5 years until I finished school at the end of 2009, I lived in a Menlo Park apartment just 2 blocks southwest of East Palo Alto, 1992 recordholder for highest homicide rate in the country. While the homicide rate has fallen a bit since then (or maybe it just got surpassed by the likes of Detroit and New Orleans), I always thought East Palo Alto was a bit incongruously located, being less than half a mile from the second most expensive zip code in America (that would be Atherton). Its other flanks adjoin Palo Alto and Mountain View, home of Stanford and Google. The 101 freeway serves as an 8-lane barrier to discourage fraternization.

So, now that I’m at the age where people are buying homes and settling down, I had a brilliant idea — Why don’t I get a bunch of my friends to do a group buy of homes in East Palo Alto?? Houses there are super affordable! Maybe we can instigate a mass influx of well-educated young urban professionals and expedite the gentrification of this slummy Peninsula corner!!

Then I had another thought. I’m not that smart, so if this idea were truly so brilliant, surely someone else would have already done this — certainly during the height of the real estate bubble in 2006*?

Well, Warren explained to me that slums need to exist near expensive neighborhoods. If the rich pushed into East Palo Alto, the poor people would just squeeze into Redwood City or something. Slums are necessary so that there can be a local supply of workers who provide services to the wealthy. What services? Cocaine, of course! Maybe Provigil if you’re lower class. Come on now, it’s not the custodial staff at Facebook who come back to East Palo Alto and shoot their neighbors. If they were the only workers wealthy people depended on, East Palo Alto would merely be a low-income neighborhood, not a friggin murder capital.

So I guess Palo Alto needs East Palo Alto the same way that the US needs Mexico. It’s an interesting synergy.

*Turns out someone did. — wsj.com.

It’s actually a bit sad. Page Mill Properties bought up 1,800 rental units with grandiose dreams of building a wide swathe of high-end McCondos. Then they defaulted on a $240M loan, abandoned the buildings, and now East Palo Alto’s crime rate is even higher than before.