
Tech workers find communal living a solution for high rents - finid
http://www.reuters.com/article/us-san-francisco-tech-images-idUSKBN16H2EE
======
hpcjoe
I try to help recruiters calling me from the Bay Area understand how profound
a negative impact the housing prices are for my modest standard of living. I'm
in the midwest, and my house current estimated sale price (if offered for sale
today), would be insufficient to be the down payment for the purchase a
comparable sized house/property in a reasonable middle class (not upscale)
area. I could drop the size of my house (1600 sq ft) down to say 600 or so.
And then the pricing is, using Bay Area zillow listings, about a factor of 2
higher than what I could sell my house for here.

Honestly, the housing cost is a severe impediment to people with families,
unless companies decide to adjust for this in a real manner. But, the moment
they do, pricing/rents will go way up.

The only real way to solve this problem is to not try to bring more people to
the Bay Area. Defuse the rent seekers. Reduce the tech mediated inflation.

I don't think this will happen on its own. You'll need a crash of some sort
for the area to find its real prices. And it is alarming talking to the
recruiters, whom seem to think that housing prices will only ever go up.

This communal living is IMO, a symptom of the problem. It is not a long term
solution. I don't know what is the solution. Though I should point out that
there is a whole rest of the country which is relatively open ...

~~~
paulsutter
Candidates who make this argument ("pay me 5x my current salary so I can
afford similar housing") come across as super tone-deaf.

The cost of housing reflects the opportunity you find in the area. It's a
matter of personal preference. If you prefer a big home and less opportunity,
stay in the midwest. If you prefer to be where opportunity is greatest, and
are willing to sacrifice on square feet, consider the bay area.

But to expect both reflects a lack of common sense. Market salaries and home
prices are what they are.

~~~
hpcjoe
Respectfully, I disagree with

> The cost of housing reflects the opportunity you find in the area.

The cost of housing reflects the market for housing which is driven by many
factors, including local opportunity.

Again, with all due respect, the tone deafness isn't on my part (and I don't
ask for 5x salary).

It is on recruiters calling me up, telling me how wonderful it is there, then
offering salaries on par with, if not below what I am making or being offered
elsewhere. I have to help them understand the very real aspect of opportunity
cost, the huge negative impact, and that if they want someone like me to view
this as an attractive offer, they are going to need to think about these
issues.

Put another way, the symptom I alluded to is one where you wind up pricing
pretty much all of the talent out of the area. Which, as the invisible hand of
the market often does, fixes the problem for you.

Are some people willing to lower their quality of life, live in a dorm with N
other people, in a space they cannot call their own, for exorbitant rates?
Yes, of course. The article was about that.

Is this a stable scenario? I doubt it. I could be wrong, but I've seen too
many of these cycles to buy into "housing prices always rise." Or, "the reason
it is so expensive is due to opportunity."

The reason it is so expensive is due to rent-seeking behavior, driven in part
but not in whole by opportunity. At what point will people say "no more"? That
is the question I find interesting.

~~~
paulsutter
I can tell you that candidates from outside the bay area made all the same
arguments in 1989, the year I moved to Cupertino from a very low cost state.
And yes there were several booms and busts since that time.

So go ahead, place your bet.

------
nextos
In Oxford & Cambridge we have the same problem.

I am spending an uncomfortable part of my income in renting. Furthermore,
landlords tend to be greedy and unhelpful with any issues. Regulations give
you little protection. So the whole experience is disgusting even if you are
willing to go for premium properties.

I am considering to buy, but I am not to keen to borrow money equivalent to a
decade and a half of income. It feels like selling my soul. The problem here
is incredibly expensive land. A small plot in the countryside goes for at
least £150k. With so much empty land, permit restrictions can only be
explained as a way to keep land supply low and prices high.

I can only sympathise with the tiny house movement. They try to hack planning
regulations by building small homes which require no planning permits [1-4].
Maybe not a scalable solution, but definitely a way to voice concern about
unfair and wealth-extracting policies that force you to devote years of work
to buy a tiny chunk of land from billionaire landowners.

[1] [http://www.tinyhouseuk.co.uk/property-
ladder.html](http://www.tinyhouseuk.co.uk/property-ladder.html)

[2]
[https://tinyhousescotland.co.uk/faqs](https://tinyhousescotland.co.uk/faqs)

[3]
[https://www.echoliving.co.uk/planning](https://www.echoliving.co.uk/planning)

[4] [http://tlio.org.uk/](http://tlio.org.uk/)

------
raverbashing
$1900 for sharing a house with 40 other people? What a joke

And these are people making 6 digits per year

I'd rather get a lower pay and not worry about crap at this level, even though
rising rents seem to be an issue at every city that matters

~~~
pram
Dickensian neo-tenements are cool and disruptive.

------
alphonsegaston
I wonder how far away the tech industry is from returning to company towns,
complete with Bitcoin-like digital scrip to spend at their online stores.

It seems like the amount of time/energy spent dressing up the bleak economic
prospects of structural inequality as new fashions could be put to better use
addressing these problems. But then I guess the robber barons of the gilded
age didn't have teams of marketers under the thumb of outrageous student loan
debt.

~~~
closeparen
>bleak economic prospects of structural inequality

The housing crisis has nothing to do with economic inequality. If there are 3
units and 5 people who want them, 2 are going to be dissatisfied, even if they
all make the exact same income.

Lower inequality just changes the allocation strategy away from "who has the
most to spend" to things like government lottery, who was here first, who
belongs to the most politically favored class, and who is willing to spend the
largest share of their equal incomes on rent (making the most sacrifices in
other areas of life). Arguably, we already live in this world, due to SF's
progressive policies around housing allocation which seek to dampen the
influence of "how much do you have to spend on rent" on what (if any) housing
you'll get access to.

The housing crisis would remain exactly as severe as it is now if you erased
100% of inequality between people.

We have it because there is economic inequality between geographic areas,
leading people to migrate to areas where this no room for them, and no will to
build vertically to make room.

But that's only in a world with flat population. If we were reproducing above
replacement rate, a housing crisis would be _inevitable_ without construction,
even if every person and every area had exactly the same socioeconomic status.

~~~
curun1r
This is only when you look at it as a zero-sum game, which is only the case
because there's not enough new construction happening. If you addressed the
inequality between homeowners and non-homeowners by getting rid of the
protections afforded by proposition 13, you'd create a situation where it's in
everyone's best interests to have lower housing costs and we'd see more new
construction as a result. As it is now, homeowners are actually incentivised
to oppose new construction since it increases the value of their property.

~~~
closeparen
Policymakers have set it up as a zero-sum game _precisely_ to address
structural inequality: to prevent tech workers from ruining everyone else's
lives.

Viewing preexisting homeowners here as unfairly advantaged (rather than
unfairly disadvantaged by the influx of people with higher incomes than them)
is a fringe position that only works on HN. I think it's correct, but it's not
going to win a Board of Supervisors election.

------
lquist
Here's a less flattering article about The Negev:
[http://sfist.com/2014/11/21/tech_co-
op_the_negev_faces_furth...](http://sfist.com/2014/11/21/tech_co-
op_the_negev_faces_further.php)

~~~
dorianm
An almost 3 years old article

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julius_set
I used to live at the Negev, it is not an accurate depiction of startup
culture in San Francisco. For starters, it used to be a place that hosted
regular Hackathons, tech talks, and other tech related stuff. However it soon
turned into a druggie fest, at one point I even saw a girl doing cocaine in
the main communal area. I don't think I would ever live in the Negev again,
but I did meet a few people that were very nice.

The Negev is a small microcosm of start up culture in the Bay Area.

------
tomjen3
I have been looking into alternative living situations as a hobby for sometime
because I am not convinced that the standard single family occupant
home/apartment is best for us as humans, but at the same time 1900 a month for
a shared apartment is bat shit crazy.

------
aub3bhat
1900$ is ridiculously expensive. Even in Manhattan you can get a nice private
Bedroom in shared apartment (3 to 5 BHK) for significantly less than that. At
1900$ you can get a bedroom in shared 2 Bedroom apartment physically next to
the Google building in Chelsea.

------
inlined
I'm a bit worried that this can be penny wise and dollar foolish. Increasing
density like this temporarily lowers the minimum cost of rent, but the price
per square foot skyrockets. I can't imagine that will be good for any of us.

I also can't imagine the actual cost of the building being anywhere near that
much per person. I pay 50% more (each) with a roommate to live fantastically
in a skyscraper that has plenty of room. How much is being pocketed in this
arrangement?

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davidf18
> "Sarah Sherburn-Zimmer, executive director of the Housing Rights Committee
> of San Francisco, said housing problems have arisen because occupants leave
> buildings being converted to communal homes and cannot afford to move back
> in or the space is no longer suitable for them."

This is incorrect. The reason is because of zoning density restrictions which
causes market inefficiency in this case a politically induced scarcity which
is a form of rent-seeking.

These zoning laws that create artificial scarcity benefit the wealthy
landowners to the detriment of those who rent or want to buy into the housing
market.

Economists discuss this. See Tim Harford's book, "The Undercover Economist" or
read Harvard Economist Edward Glaeser for starters.

David Ricard was the first to see "rent-seeking" and he joined parliament to
help to overturn the "Corn Laws" in 1848.

These zoning laws are simply another way of the wealthy to unfairly get more
wealth from others instead of wealth creation through good ideas.

With all of the wealthy company owners in SV and SF, I'm surprise they don't
lobby to overturn these repressive zoning laws.

------
aanm1988
> Zander Dejah, 25, pays $1,900 a month rent to live in a downtown San
> Francisco house with at least 40 other people, many of whom sleep in bunk
> beds.

I'm just gonna say it, that's moronic. These articles about people choosing
(and yes, when you are a dev who has loads of options it is absolutely by
choice) to live like this, or in vans or whatever, just piss me off.

------
tomc1985
Some of us don't want to live communally; we want a place to ourselves in a
good area at a decent price :/

~~~
blackguardx
You could always try one of the many SROs [0] in San Francisco, primarily the
tenderloin district.

[0]
[https://en.wikipedia.org/wiki/Single_room_occupancy](https://en.wikipedia.org/wiki/Single_room_occupancy)

~~~
tomc1985
Is an affordable one-bedroom apartment too much to ask? A small one- or two-
bedroom house?

The former are close to $1500 just for rents (nowhere near SV) and the latter
do not seem to be built very much. Very depressing as a native who wants to
purchase a simple house in his hometown.

~~~
blackguardx
Where is your hometown? With the cost of land, it seems crazy to build a 1 - 2
bedroom presumably ranch style house in San Francisco. Those style of homes in
the Sunset used to be had for $500k or so ten years ago. I think they go for
around $1M these days.

I agree that 1 - 2 bedrooms houses are the perfect size, though. I currently
live in one (not in CA).

------
kyleschiller
Is this city specific? It's nowhere near this bad in south bay.

I'm in Mountain view, close to Caltrain and getting a private room in a large
house (sizable backyard, garage, hot tub, kitchen, living room) with two other
roommates for $1600/each. We looked at at least a dozen similar houses.

------
patrickg_zill
40 people times 1900 per month is 76,000 per month, 912,000 per year.

Usually for real estate back of envelope calculations, 120 months or 10 years'
worth of rent is what the value of the property is. What did the Negev
property sell for?

~~~
s0rce
It seems in the bay area that figure isn't accurate. From my experience the
term is even greater than 150 months, often more than 200. I guess this means
rent is cheap here (or conversely the price to buy is very high, probably
partly because mortgage rates are so low and the interest is tax deductible).

~~~
user5994461
In most cities (not limited to US) it now takes 20 or 30 years of rent to make
up the price of a property.

~~~
raverbashing
Hello Bubble

~~~
bbcbasic
Ahh. The good ol' days when it was only 20 yrs rent.

~~~
user5994461
And the rent wasn't 50% of your income.

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m-j-fox
Thought this was going to be about Chinese subcons a la Foxconn and friends. A
different kind of tech worker but maybe not such a difference in lifestyles.

------
f4rker
Nothing new under the sun, the rest of us suffer while the top part of society
buys their 3rd house and 2nd boat. Let them eat Ramen.

~~~
paulddraper
The number of people with 3 houses _and_ 2 boats is tiny. Much less than 0.1%.

~~~
Buge
Does a kayak count as a boat?

~~~
paulddraper
Only if dog houses do.

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cdransf
As much as I like visiting the Bay Area, the cost of living is one of many
reasons I'd never consider living there.

------
james_niro
Developers should start building communal spaces where you have your own room
and bathroom and share everything else.

~~~
paulddraper
"Dorms" being the technical term for that arrangement.

~~~
Buge
I've lived in several dorms, and I never had a bathroom just for myself.

~~~
protomyth
The new senior dorm where I went to school had private bathrooms in the dorm
rooms. Of course everyone of them went and got a small fridge.

------
creaghpatr
For 1900 a month you can rent the same condos as pro athletes in Atlanta, just
sayin.

~~~
Johnny555
Well yeah, but then you're living in Atlanta (and after 5 years there, I'm not
moving back)

