
San Francisco: Where a six-figure salary is 'low income' - osrec
https://www.bbc.co.uk/news/world-us-canada-44725026
======
librish
The data all these articles are based on simply defining 'low income' as the
bottom 20% of income earners. It has no ties to cost of living.

Unless you're the sole earner for a big family with bad benefits, it is not
hard at all to live anywhere in the Bay Area at $117K a year. Yes, it might be
prudent to make some basic sanity checks on your spending, especially when it
comes to housing (IE don't rent a 1BR in the _most_ desirable part of one of
the most competitive cities in the world unless you're making bank).

I would argue that the data in this article should actually be used to realize
what a good financial decision the Bay Area is for many people. 80% of people
are making more than $117K. As someone in tech you should not have a problem
climbing well above that.

~~~
sithadmin
>Unless you're the sole earner for a big family with bad benefits, it is not
hard at all to live anywhere in the Bay Area at $117K a year.

It isn't _hard_ per se, but it isn't _good_ either, compared to what the same
salary would buy in terms of quality of life nearly anywhere else in the
country. And let's get real: "Bay Area" is overbroad. You can't compare life
in SF proper to living somewhere like Redwood City or Milpitas. They are
completely different experiences with shamefully small variations in cost.

~~~
librish
It's not hard to live well on $117K in SF either. That's over $6K a month
after tax. There are so many people living perfectly good lives on so much
less. If you can't make $6k a month last easily without dependents you have
really poor money management skills.

~~~
closeparen
Two assumptions about "live well": we want to be on track for homeownership,
and we'll go for median rent rather than scraping the bottom of the market.

$6000 income

($731) 401k contribution of 15% discounted by 50% total marginal tax rate

($2083) savings towards a goal of $150,000 in six years for a down-payment

($3200) rent on a median 1-bedroom apartment

\------

-$14

How'd I do?

~~~
librish
You're expecting to have a 47% savings rate, and at the same time refuse to
make any concession in how you're living (get a studio, pick a lower cost
area, get roommates). I think that's a very high bar for defining "live well".

~~~
closeparen
The goal was to achieve baseline middle-class financial health norms
(homeownership, retirement). The savings rate that requires turned out to be
astronomical. That's my point.

Try another scenario: Madison, WI, where entry-level pay is $80k and the
median home is $250k.

4702 income

(717) 15% 401k contribution discounted by marginal tax rate

(700) savings goal of $50k in six years for a down payment

(1017) 1-bedroom rent

\-------

2268 left to spend

SF is a very significant lifestyle sacrifice. In a more reasonable market, you
could afford baseline middle-class financial health, median-quality living
arrangements, and some luxury spending all at the same time. In SF it's "pick
at most two." Obviously that's still enough for a lot of people (myself
included) or we wouldn't be doing it. But in normal places, those are not
tradeoffs that people making even _half_ our incomes need to face.

And sure, SF has urban amenities that Madison doesn't, but if you live in a
premium location with lots of shops in walking distance, you can't afford to
shop at them. At least not on $6,000/mo.

~~~
librish
This is only true because you've defined homeownership in your current job
market as a necessity. If you either forgo it, or choose to save for a
mortgage in another area suddenly SF comes out way on top.

~~~
closeparen
You could have even more to spend by foregoing retirement savings, but would
you? If you did, how would it feel?

Living _large_ on an irresponsible budget is not the same as living _well_.

Or are you saying renting as a long-term plan actually is healthy/responsible?
Maybe I have just internalized too much American Dream propaganda. But with
SF's rate of rent and price growth, the calculators say "buy even if renting
is free."

------
sithadmin
To an outsider that has spent nearly 80% of his time in SF on business travel
for the last couple years: the cost of living in SF is unjustifiable. I was
offered a position with one of my clients in SF for roughly double my current
income in Houston, TX. After running the numbers with an attempt to maintain
similar standards of living and leisure, it was simply impossible to make the
math work out in my favor without significant sacrifices on either count. In
Houston, I live quite comfortably in one of the wealthiest neighborhoods with
money to blow on a luxury car, 2+ extravagant international vacations a year,
and decent amount of savings and investments. But in SF, I'd be uncomfortably
close (relative to my Texan standards, anyway) to the 'low income' line. So I
might as well keep on racking up the frequent flier miles, eh?

Something's gotta give. NIMBYism when it comes to affordable housing, the
income disparity between 'techies' and everyone else in SF, and lack of
sufficient investment in effective mass transit are all clearly driving the
city into the ground. My teams in SF are constantly bleeding our best talent
to places like Denver, Austin, Seattle, etc. because the youngest and
brightest employees are realizing that SF is an unsustainable drain on their
finances. It's not going to stop me from doing business there, but it's
certainly going to mean that my firm just continues to feed the vicious cycle
of wage inflation by attracting talent with higher and higher base salaries.

~~~
charmides
You are far from the only person who's saying this, but I don't understand how
you can reach the conclusion that you would enjoy a lower standard of living
in SF than Houston on a salary that is twice as high. The three things you say
that you like to blow money on -- luxury cars, international vacations, and
making investments -- are similarly expensive in both places. Care to share
some of your math?

To elaborate, I looked through this guide: [https://www.numbeo.com/cost-of-
living/compare_cities.jsp?cou...](https://www.numbeo.com/cost-of-
living/compare_cities.jsp?country1=United+States&city1=Houston%2C+TX&country2=United+States&city2=San+Francisco%2C+CA)
and while a one-bedroom apartment in the centre of SF would cost around
$41,000 a year in SF compared to $17,000 in Houston, that means that if your
salary is Houston is around $100,000, you would still have around $70,000 more
dollars a year in SF after rent has been taken care of, not accounting for
taxes. How does the higher cost of living in SF manage to eat up all that
money in just a year?

~~~
skookumchuck
My math says $100,000 - $41,000 = $59,000. Not $70,000.

> not accounting for taxes

That would be a large mistake. California has huge income taxes, Texas none.
It's not just state taxes, a doubling of your income puts _all_ that
additional income in a much higher federal tax bracket.

I would expect renting a parking spot in SF to cost a pretty penny, too.

~~~
akhilcacharya
Whereas, Seattle has zero income taxes, cheaper housing, and equivalent salary

~~~
User23
Yeah, but you have to live someplace that's so depressing that 90% of the
population is overweight and self-medicates with some combination of coffee,
alcohol, marijuana, and adderall.

~~~
toasterlovin
I know it's hard to believe, but some people actually find the weather great
in the Pacific Northwest.

~~~
akhilcacharya
I agree. I lived there during the “worst” season - Sept to Dec - and I loved
it!

------
dawhizkid
I just came back from Las Vegas this weekend and chatted with my Uber driver
on the way to dinner. She was a cook at the Bellagio buffet, union member
(most service workers on the strip are unionized), and could very easily
afford a nice home with a pool.

I actually had no idea Vegas workers were mostly unionized but apparently you
can make $25-$30/hr + tips and live a pretty good life as a service worker.

~~~
tjr225
And yet there she was making piece-meal as an uber driver for some reason.

~~~
dawhizkid
Googlers have side hustles too.

Anecdotally the per mile rates were much higher in Vegas than SF. Likely Uber
algos know people are less price sensitive if they're in Vegas.

------
Xcelerate
> For example, a fair market rent for a two-bedroom apartment in the San
> Francisco area is considered to be $3,121

I think they're off by a couple thousand dollars...

~~~
scurvy
Kind of off topic, but does anyone know why the real estate around Twin Peaks
is so much cheaper than surrounding areas? I know there's a bit of break-in
crime at Twin Peaks, but the surrounding areas should be better, yeah?

Is there that much of a weather penalty?

~~~
joshlittle
My Midtown Terrace house is over 750’ above sea level; though only a 15 min
walk to Cole and a 20 min walk to Castro or Upper Haight.

Still yet, prospective renters _shudder_ when I say the words “easiest transit
is the 36 Bus from Forest Hill Station.”

Property Crime is only a problem on Christmas Tree Point and down on the East
side terraced streets - Burnett/Corbett. The worst thing I’ve encountered
personally in MT would be the coyotes that roam the night in the woods that
appear occasionally on Marview or Farview.

One wouldn’t think ~$4K a month for a 4 Bed 3 Bath fully detached single
family house, split up amongst roommates, would have any hangups for people
looking to rent in SF - though it’s been tough finding people who’re “ok” with
the location.

It’s for sure high up - I’ll give in to that.

I indeed use the excess garage space to charge and house my Bolt EV for most
trips outside of SF; though most of SF is ~$12 for uberX.

I say, people can enjoy their overpriced $4000 (barely) one bedroom apartment
in a “walkable” hood, next to a Philz and their favorite brunch place. I’ll
join on foot after hiking on Mount Sutro. I’ll even pick up the tab - and
indeed I work part time as a QA Engineer making a bit less than six figures
annually.

(Midtown Terrace is a illogical land use nightmare... a subdivision of fully
detached single family homes on Twin Peaks.)

------
bradleyjg
Risks to the Bay Area’s continuation as an engine of growth are risks to the
entire country’s economy. Local parochial interests ought not to be allowed to
do that.

If we can stretch the Commerce Clause to banning growing and consuming corn or
pot that never leaves one person’s plot of land, much less a state, I don’t
see why it can’t cover abrogating NIMBY regulations.

~~~
sithadmin
The Commerce Clause is traditionally a cudgel for activist judges, and the
current court is activist in a way that doesn't really jive with what you're
suggesting, nor any sort of collectivist-oriented jurisprudence. You're not
wrong (in spirit at least), but it's just not going to happen.

------
SCAQTony
If it only took 1/2-hour to travel from Stockton; Fairfield; Davis; or Santa
Rosa, CA; San Francisco would not have a housing crisis for people would have
more housing options.

~~~
sithadmin
Stockton and Santa Rosa could be doable in ~30mins given _significant_
investment in rail services, but Fairfield or Davis are really pushing the
boundary of what seems reasonable. You're talking about covering 70-85 miles
to Civic Center for these latter two cities, which would require high speed
rail in an environment that probably couldn't sustain it profitably for a
decade or more.

~~~
akhilcacharya
What about high speed bus rapid transit? The cost of new lanes/separate lanes
can’t be more than the equivalent high speed rail, right?

~~~
sithadmin
Sure. If you can set aside lanes for busses to do ~120+ MPH from Davis to SF,
then by all means, go for it.

~~~
SCAQTony
The Bay Area and the surrounding tech hubs are very important to California as
is So Cal with it's entertainment and media delivery. If California wants to
grow the state and the country as well with good ideas and affordable housing,
A new type of transportation infrastructure has to be thought out or invented.

------
ggm
I had a related but tangential problem: I think the company was willing to
offer the bucks to make it economically worthwhile: I had major performance
anxiety about the value proposition to deliver to meet that scale of pay.

Maybe its just me, but I had a hard time even imagining selling my work for
the kinds of sums necessary to maintain an inner-city lifestyle in S.F.

------
sjroot
The title is misleading. The “six figure salary” actually refers to FAMILIES
OF FOUR where their household income is ~100k.

~~~
sithadmin
So what? It's still outrageous.

~~~
BadassFractal
It is, but it's funny how quickly you get desensitized to it. A house in the
most affordable cities in the US is the 150k range, in the Bay it's in the
1.5M range. Maybe 1.2M? 10x the difference for the same thing. Pretty mind-
boggling.

------
dawhizkid
If you're single, have no kids, and "ok" with roommates and you're part of the
70% of renters who live in a rent-controlled unit the combination of making a
Bay Area tech salary + having rent control is hard to beat.

I have a friend at Google who pays $900/mo for a large room in a very central
spot in Lower Haight.

~~~
mbreese
And once you're married, have kids, and need more space, the math gets harder
to make work.

~~~
allthenews
Isn't that what suburbs are for?

~~~
sxg
Traffic and long commute times are another big problem with SF after housing
prices.

~~~
akhilcacharya
Google, Amazon, and Facebook all have offices in New York, where an entire
state of suburbs is a PATH train or Suburban shuttle away.

If not, they also all have offices in Seattle, where the suburbs are even
closer and all have access via company buses.

------
Puer
Prior discussion:

[https://news.ycombinator.com/item?id=17405375](https://news.ycombinator.com/item?id=17405375)

------
cimmanom
I don't understand how business owners are able to find employees in SF for
actual low-income jobs like retail and fast food. How are these employees
paying rent, and how far are they commuting every day?

~~~
gremlinsinc
I also wonder this ... is McDonalds in SV a 6 figure job?

------
rahimnathwani
The title is misleading. The figure refers to:

\- household income (i.e. the sum of income of all members of the household,
not just that of a single individual, which is implied by the singular term
'salary')

\- a family of four (two adults and two children)

So if you're a single, twenty-something software engineer earning six figures,
and have no kids, you're probably not eligible for this.

~~~
vorpalhex
If you're making 110k anywhere else in the US while single and without kids,
you're buying houses and cars when you're not traveling.

Not renting a one bedroom and eating $14 avocado toast with your roommates.

~~~
rahimnathwani
"Not renting a one bedroom and eating $14 avocado toast with your roommates."

$110k before tax is $77k after tax. That's enough to cover:

Avocado toast for every meal: 365 _3_ $14 = $15k/year

Rent without roommates: 12*$3.5k = $42k/year

Misc other expenses: $20k/year

------
yhavr
I think SF is perfect for a techie work-n-travel. Go work at a
googloapplebook, live in a trailer, save 90% salary. Move to a cheap place,
buy a house with cash (in your twenties), the rest spend on a year-long
journey around the world. Sell it to the masses, and the housing problem is
solved :-)

------
martin1975
San Diego has more space than the bay area however good RE is super expensive
here too.. One way to avert high cost is to live on a boat. Moorage fees are
fairly low (relative to rent) and a boat beats most vans, cars or even RVs..
I've heard co's like Netflix pay 250k or higher, and even at that rate you'd
need a spouse/2nd income to be able to afford a home + family.

~~~
midnightclubbed
Depends what you'd classify as good real estate. Sure La Jolla and Coronado
are pricey and if you want acrerage you have to move way inland (and deal with
the heat), but a half hour commute and $250k a year salary will get you a
beautiful home in a great neighborhood.

There is no way you would need a second income for you and your family to live
very well on $250k in San Diego.

That said a boat does get you pretty great sea views! I have a friend who
slept on his boat near work in Irvine to avoid having to brave the commute
back to San Diego during the week. Was cheaper (and nicer) than buying a place
up in Orange County.

------
JumpCrisscross
The Bay Area roughly divides into two populations. One understands rental
economics, is technologically literate, and refuses to vote. The other either
doesn't understand rental economics (or understands it in a cynical, self-
serving way), couldn't give two shits about technological literacy, and
religiously attends community events.

The cost the latter extract from the former expresses itself in inflated
rents. In the long run, it's probably self-defeating. But in the long run
we're all dead.

The lack of any semblance of civic culture amongst technologists is starting
to show its wounds, and I suspect this will have to get worse before it gets
better.

~~~
throwawaymath
Can you clarify what you mean by "lack of civic culture?" I don't mean to
argue, I just don't follow what you mean to say here. Do you just mean that
they don't vote, or something more?

~~~
JumpCrisscross
> _Can you clarify what you mean by "lack of civic culture?"_

In New York City, there is a general expectation that once you make money or
ensconce yourself in the community, you start giving a shit about it. You
volunteer. You donate to local charities. You stay informed about community
issues, voice up for yourself and those around you, and vote. That sense of
civic culture and underlying duty is far more suppressed in the Bay Area.

~~~
URSpider94
This x 1000. As someone who grew up on the East Coast, I’m always amazed at
the relative lack of interest in politics and culture in Silicon Valley. The
San Jose metro area probably has more wealth than almost any city in history,
but can’t sustain a decent symphony, ballet, or opera. Yes, I know SF has
those things, but it’s 90 minutes away by car, factoring in traffic and
parking.

~~~
JumpCrisscross
> _relative lack of interest in politics and culture...symphony, ballet, or
> opera_

And before someone decries these art forms as inapplicable to modern life,
remember that most ballet and opera contains political and social commentary.
I can't count the number of times I've left the Metropolitan Opera to get
embroiled in a debate about the nature of democracy or relation of Verdi's
_Don Carlo_ to the White House, at a nearby restaurant with a table of newly-
found acquaintances.

