
Nation’s top three most expensive places for renters: all in Bay Area - Impossible
https://www.mercurynews.com/2018/06/14/nations-top-three-most-expensive-places-for-renters-all-in-bay-area/
======
aphextron
I've lived here since 2014, and have been successively priced out of every
single apartment I've had at the end of a lease. I had a ~10 minute commute
from West Oakland at first, then when the landlord doubled my rent it became a
~30 minute commute from El Cerrito. When the rent went up 30% there, I was
forced all the way out to Pleasant Hill after spending months looking in
Berkeley/Albany for something affordable.

I now pay the same rent for a 1 bedroom in Pleasant Hill that my 3 bedroom in
West Oakland rented for in 2014. And after 6 months of a hellish 1 hour+
commute I'm realizing it is completely untenable from a mental health
perspective. This is for a single person who makes six figures. I can't even
imagine what has happened to working class families in that time period.

~~~
kcorbitt
That's surprising to me -- Craigslist shows a number of 1BR places around
Oakland in the $1500-$2000 range. Which is still crazy expensive in an
absolute sense, granted, but should be reasonably affordable for a single
person with a 6-figure income.

~~~
closeparen
Deep East Oakland is one of the most dangerous places in the country. It’s on
a whole other level from an iffy gentrifying area like SOMA. It’s something
you just don’t mess with. $1500-$2000 in one of Oakland’s more acceptable
areas is likely fraudulent, or is actually advertising a room and not an
apartment.

~~~
elipsey
Where is deep east Oakland? can you give me a landmark?

~~~
aphextron
>Where is deep east Oakland? can you give me a landmark?

Fruitvale

~~~
e40
No, that's not it. Further south from Fruitvale. Anywhere near the Oakland
Coliseum BART station. And south from that BART station is ground zero. There
are areas over there that the police won't go to without SWAT and a large
presence.

------
justinzollars
After living here since 2009 I think I've figured out the Bay Area and San
Francisco. SF is a city that doesn't want to be a city. It just doesn't want
to grow up. Silicon Valley has since spilled over into San Francisco and we
have a combination of massive job growth, prosperity and extremely limited new
construction. Every year more people arrive than we construct housing for.

Compounding the problem are many local politicians. Serious local political
players are divorced from reality denying the relationship between supply and
demand with the cost of rent; while focusing on price fixing techniques such
as rent control as a solution.

The only way out of this is to build. We have to make this decision.

~~~
kec
Well, we could also repeal / sunset Prop13 and allow existing properties to
reach their actual market values. This would suck in the short term, but it
would lead to _way_ more liquidity in the market, even if 0 new units were
built.

~~~
toasterlovin
It doesn't need to suck in the short term, either. Phase things in over 10
years. That's plenty of time for people to adjust.

~~~
stmfreak
Heard of fixed income?

~~~
toasterlovin
Somehow the rest of the country manages to regularly increase property taxes
as property values go up...

------
SoylentOrange
I have two nitpicks with the study:

1\. It uses a two-bedroom home as a baseline instead of a one-bedroom. While I
understand that may be interesting for historical reasons, it's not a
practical metric for modern considerations. If we want to talk about housing
affordability, it's more honest to discuss one-bedroom apartments for single
earners. We could also talk about two-bedroom apartments for dual-income
earners.

2\. The 30% pre-tax rent metric doesn't make sense to me at all. Why would
that be invariant across income levels, and across states, given both
graduated taxation and the vast differences in both income tax and sales tax
across different states? In California, 30% pre-tax works might work out to
more than 40-45% post-tax, depending on your income, and the remainder doesn't
translate well to purchasing power given varying state sales taxes.

I'm not saying that affordable housing is not a problem, because it clearly
is. Just that, to address the problem honestly, we need to use better metrics
to figure out what a fair solution is.

~~~
jahewson
2\. The standard in the Bay Area is for landlords to require tenants have
gross earnings of 2.5 to 3.5 times the rent and to verify this with pay stubs.
Personally I think this is ridiulous and antiquated as it should be my
personal choice to blow half my cash on rent if I want to! But that’s the way
it is.

~~~
nradov
Landlords don't care about personal choices. They want tenants who can still
afford to pay rent even if they have an unexpected major expense one month.

In practice some prospective tenants simply falsify their incomes. I'm not
condoning this but all it takes is Photoshop and a ladder printer.

------
thebradbain
I think it's very important to note that the entire purpose of minimum wage,
per FDR, who instituted it, is to ensure it's enough to _support_ an entire
family of four on only one income earner alone, above merely sustenance
levels, and allow them not only to rent but to _own_ a home. And by that
metric, we've horribly failed as a country.

“By living wages, I mean more than a bare subsistence level — I mean the wages
of a decent living.” (1933, Statement on National Industrial Recovery Act)

The tech gravy train won't last forever –everyone, us tech workers included,
will be better off from advocating for fairer wages, even if that means taking
a pay cut in the meantime. Otherwise I fear the extreme wealth gap will bring
upon a new Gilded Age worse than the one pre-1929. And we all know how that
turned out...

~~~
jahewson
It’s a nobel intention but home ownership is always going to be impossible for
many in a growing city which refuses to build new housing, no matter how much
wages are. Elevating the salaries of those at the bottom isn’t a solution to
SF’s current housing problems as those at the top will just bid higher.
Building is necessary.

~~~
thebradbain
I totally agree. There is no excuse for SF and the Bay Area to be
restrictively zoned the way it is.

------
bad_good_guy
This thread really paints a bad picture for the mindset of a lot of people in
the high-earning technology industry.

That someone would argue against every job being enough to afford a roof over
your head just due to their own need for validation of their importance is
frankly sickening.

~~~
malvosenior
There are very real reasons to object to an artificial floor to salaries
(minimum wage) that have nothing to do with validation.

How expensive do you really want your burger to be? Operational costs get
passed on to the consumer after all. Raising the minimum wage just increases
the rate of inflation leaving everyone holding the bag.

Also, jobs should pay what they are worth to the business and nothing more.
Why _should_ a high school student working for McDonald's be able to afford a
2 bedroom apartment in the Bay Area? That's not some sort of right.

Maybe we should be talking about realigning education to give people valuable
skills instead of pushing for the non-skilled to get an artificial raise that
evaporates in meaning due to inflation.

EDIT

I'm really surprised by the push back on this from a community of
entrepreneurs. Anyone who has run a business will tell you that you can't just
raise salaries without increasing costs. It's Econ 101 but apparently that's
not the general sentiment here. I hear a lot of complaints about how things
"should" be and what's "fair" but the math and reality isn't there to support
that. Some jobs just don't have much economic value and pretending that's not
the case isn't going to solve anything. It's nice to imagine a situation where
janitors and fast food employees can have a middle class lifestyle but who is
supposed to pay for that? When the costs of good raise dramatically, their
additional pay will get sucked up by inflation. Again, Econ 101.

~~~
ryandrake
> How expensive do you really want your burger to be? Operational costs get
> passed on to the consumer after all. Raising the minimum wage just increases
> the rate of inflation leaving everyone holding the bag.

This doesn't make sense to me. If it were possible to raise the price of that
burger, why wouldn't it already be raised, regardless of operational costs? A
business's costs to produce a good typically does not have much to do with the
price customers are willing to pay for it.

~~~
malvosenior
You're talking about margin and fast food is definitely a low margin business
(barring soda).

If salaries increase, the business will literally have to raise the price of
goods sold or go out of business. That's different than raising the price to
achieve a higher margin (and opening your self up to competition from people
who can operate with a lower margin).

~~~
ryandrake
If a rational business owner could raise prices and make more revenue, they
would, regardless of what their costs are. Why would they wait for their costs
(salaries) to increase?

~~~
cheald
Because your competition's costs are increasing by the same amount at the same
time, and their ability to compete on price is hindered by the increase in
costs to the same degree yours is.

------
Reedx
At what point do we collectively decide, you know what, this is ridiculous.
Why are we funneling most of our money to landlords?

You'd think VCs would push back on this too, because that's where their money
is going.

VC -> Startup -> Employee -> Landlord.

~~~
jimrandomh
We've already collectively decided that. The problem is that a significant
fraction of people have been misled about which policies will fix it. The
problem is that local governments are controlled by the landlords, and they
use zoning restrictions to limit supply and keep prices up. The fix is to
transfer that power to the state government, which will allow enough housing
to be built.

~~~
pofilat
Municipalities aren't like states of the Union. Municipalities have no power
except that which is granted to them by the state. There is nothing legally
stopping any state government from passing a law tomorrow to change how
municipalities are run.

~~~
monocasa
Except landlords have tons of political capital to expend, most effectively at
the state government level.

------
nicodjimenez
That's what happens when you don't allow population density to grow to its
equilibrium state. An overpriced, congested city, with absolutely no culture,
as the only people who can justify living in SF are basically engineers,
designers, and marketing people at tech companies. People living on a dime
trying to do something interesting (art, tech, music, ...) is what gives
cities their characters. When you take that away, you get a homogeneous group
of people making between 100k and 200k a year who think about nothing other
than money.

~~~
jpao79
I've always thought it would be cool to create a site which matched people
living on a dime trying to do something interesting (art, tech, music, ...)
with cities/suburbs (i.e. urban development organizations) looking to
diversify and grow a culture scene. Like Sacramento/Gilroy/Detroit/Yakima.

Sort of like an Airbnb but matching cities/towns and culture makers wanting
permanent, low cost housing.

------
kcorbitt
> The National Low Income Housing Coalition used that number to calculate the
> hourly wage a household must earn to afford a home while spending 30 percent
> or less of their income on rent.

This is a nit, but I don't think that's a reasonable way to calculate the
relationship between housing cost and affordability. Some expenses do scale
with housing cost (mainly things that depend on local labor), but many
important ones don't (car payments, grocery bills). So in an area with very
high housing prices and a relatively-high minimum wage, you'd expect low-
income workers to be able to spend more than the "standard" 30% on housing,
and still be able to afford other daily necessities.

I certainly don't mean this as a refutation of the article however -- the Bay
Area is a very hard place to live on a low income.

------
jcadam
This is why I just ignore Bay Area (in fact, all of California) recruiters
these days. I know y'all work on some cool poop over there, but unless you're
willing to triple my salary, I'll stay put here in Florida.

~~~
anonymous5133
Imo smart move. No income tax in fl, cheap housing, beaches, decent weather,
toruism etc.

Making 50k in fl will net you more cash in your pocket compared to living in
sf making 100k after your bills are paid.

------
duckfruit
"To remedy the situation, the coalition urges Congress to invest in housing
assistance."

Of course their answer is federal subsidies. Never mind that regulations can
be passed at the local level to ameliorate the situation -- without costing
the government a cent -- by allowing for more housing construction. With
interest groups like these we'll never get anywhere.

------
realPubkey
Well if you would define 'area' by something else, we would have 3 different
places.

~~~
meritt
That's true but they aren't arbitrary decisions designed to make one area look
bad for the purposes of an article. They are well-defined areas [1] [2].

> Q10. What does the term "HMFA" mean?

> HUD Metro FMR Area. This term indicates that only a portion of the OMB-
> defined metropolitan statistical area (MSA) is in the area to which the
> income limits (or FMRs) apply. HUD is required by OMB to alter the name of
> metropolitan geographic entities it derives from the MSAs when the geography
> is not the same as that established by OMB.

Specifically the top 3 are:

    
    
        San Francisco, CA HMFA
        San Jose-Sunnyvale-Santa Clara, CA HMFA
        Oakland-Fremont, CA HMFA
    
    

[1]
[https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf](https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf)

[2] [https://www.huduser.gov/portal/datasets/il/il18/area-
definit...](https://www.huduser.gov/portal/datasets/il/il18/area-definitions-
FY18.pdf)

~~~
dionidium
The overriding, _pervasive_ problem with regional comparisons is that people
give undue attention to non-standard, arbitrary distinctions -- e.g. political
borders -- where comparisons across standardized areas (e.g. those defined by
the OMB) would be more useful and generate more informative results.

This is an example of a _good_ comparison in a never-ending sea of bad ones.

------
agrippanux
When I left San Diego for the Bay Area in 2008, I repeatedly heard from
others, "I could never leave this place".

As I prep to sell my Bay Area house and move back to San Diego, I have only
heard "I don't know if I can stay here much longer". That sentiment is the
same regardless of the person's occupation, from VC partner to guy at Staples
recycling my old electronics.

------
CryoLogic
In Seattle rents are not as high as SF yet, but the growth rate is stunning.
2bd just shy of $3,000 on avg now. [https://www.rentjungle.com/average-rent-
in-seattle-rent-tren...](https://www.rentjungle.com/average-rent-in-seattle-
rent-trends/)

~~~
ahelwer
Not really comparable. You can go on Craigslist and find decent 2bd apartments
in Capitol Hill for $1500-2000 during winter when demand dies down (November-
February). I've personally lived in these.

------
iamcasen
I'm still surprised by that. I visited Manhattan in 2010 and was noticing 1br
rents that average around 6k per month. Nothing luxurious, just a decent 1br.
Manhattan is far larger than the entirety of SF, but when they talk about
rents, they compare the entire greater NYC area to SF, which is disingenuous.

Honestly, I don't think SF is equipped to handle such a high population
density. I'm not sure it ever will be. Oakland probably could though.

------
aswanson
Houston seems to have the best cost of housing to income ratio for technology
people.

~~~
pascalxus
That's because they don't try to stop builders from building more housing, at
every turn. Plus, they don't have as much of those awful regulations and
zoning as CA

~~~
rm_-rf_slash
Absolutely correct. However that can lead to scores of unique problems on
their own, from overdevelopment exacerbating the effects of natural disasters
(like the flood zone houses being destroyed last year), to utterly hellish
development decisions.

I once Googled “Houston zoning fail” with my fiancée when she didn’t believe
me that Houston had no zoning laws. We saw an arial photo of a huge skyscraper
right next to a low density residential neighborhood and maybe 30 parking
spots at best, and we laughed for 10 minutes straight.

~~~
conanbatt
Did you laugh in a 3000U$S 1br with no seismic protection, mandatory solar
panels, and crack needles and homeless in your doorstep?

~~~
rm_-rf_slash
Idk why you’re bringing up that California stuff. I was only talking about
Houston.

------
xtrapolate
So, which came first to the bay area? the engineers, or the companies? Are we
at a point where most people move in to the bay area for work? Or is it the
other way around (ie. companies wanting to establish a foothold in an area
known for its prestigious/unique population of software-engineers)?

My point is, not only are the employees losing here, but also the employers. I
no longer understand the motivation of companies to continue expanding at
problematic locations (such as the bay area and new-york).

If Google left the bay area completely tomorrow, would that somehow restore
the equilibrium?

~~~
jpao79
For better or worse, I think a good analogy is making a movie in Hollywood
versus anywhere else. Yes you could make your movie in New Hampshire, but it'd
be that much more inertia to find a screenwriter, to cast the talent, find the
crew and get funding, etc.

And for tech startups, where time is of the essence and the secret recipe for
making a blockbuster tech IPO is somewhat ephemeral, why risk it if the
opportunity really is as amazing as you are telling the VCs and LPs.

Another aspect is a lot of startups have the back-up plan to get acqui-hired
by FANG or Cisco which are located in SF/Bay Area, so it make sense to have
the key talent on the team prepared for that eventual integration/docking with
the mothership.

~~~
jdhn
The new non-Hollywood hotspot is Atlanta. Apparently their movie industry has
been growing by leaps & bounds.

------
Glyptodon
I was shocked when I compared cost of living and discovered various online
calculators show that making $60k in Tucson, Arizona is about the same as
making somewhere in the $104-140k range in the Bay Area (I'm not sure of what
the different assumptions are between calculators that lead to the range,
could see it be something like including Oakland vs San Rafael).

~~~
anonymous5133
Yup. I have a friend who works in a sf hospital. Works 2 weeks on and gets 2
weeks off. 12+ hour shifts and lives at the hospital. She owns a home in
phoenix and flys into sf every 2 weeks. Gets the high salary and gets low col
in phoenix.

~~~
jdhn
Does she sleep in a spare hospital room? I feel like the hospital wouldn't
allow that due to the fact that the room would potentially need to be
allocated to a patient.

------
11thEarlOfMar
'Root Cause' of high housing costs is in the success of the tech companies
that are rooted in Silicon Valley. Specifically tech because of their:

1\. Penchant for offering stock options as a form of compensation.

2\. Extraordinary growth in scope and profits.

3\. Leverage of virtually free computing and network power, which makes the
output of a single engineer distributable to billions of consumers. This
justifies 'whatever it takes' salary structures.

4\. Very high density of these companies in Silicon Valley.

Among the current top 100 US tech companies by Market Cap, 14 are in Silicon
Valley, representing > $4 Trillion in 'new money' market cap, combined:

Apple: $929 Billion

Google: $830 Billion

Facebook: $557 Billion

Intel: $256 Billion

Cisco: $207 Billion

Oracle: $187 Billion

Netflix: $171 Billion

Nvidia: etc.

Comcast: etc.

Adobe: etc.

Broadcom:

Paypal:

Qualcomm:

Tesla: (#100 as of this writing)

The housing costs what it costs because supply is highly constrained and the
companies that are headquartered here can afford to pay the salaries that
enable their workers to pay these astonishing prices.

------
snarfybarfy
Duh! Those places are probably also the most expensive to buy.

I don't really know about the Bay Area but I would bet that rents are probably
"cheap" compared to prices.

Where I live, it currently takes 30 annual rents to buy the same place.

The average over the last couple of decades is 26 annual rents. Which means
renting has relatively become cheaper. I bet the same holds true for the Bay
Area.

------
notadoc
Opening satellite offices all over the midwest, NE, and south is just begging
to happen. Cost of living is comparatively dirt cheap in MN, MI, WI, OH, IL,
IN, MS, TN, GA, AR, AL, NY (outside of NYC), PA, etc, and quality of life is
very high. But alas those locations aren't trendy, so the west coast obsession
continues despite the wild costs.

~~~
lotsofpulp
It's also possible that those places don't have something many people
(especially young and tech/science oriented) want, such as temperate weather,
mountains to hike, national parks, beaches, low humidity, politics, food,
marijuana, etc. It's trendy for a reason.

~~~
notadoc
Everything you list is in each of those locations, though admittedly
California has among the best weather in the world.

------
matchagaucho
Office space rent is similarly outrageous in the bay area... forcing our
company to be remote only.

#FirstWorldProblems

------
dsfyu404ed
>There is no state, metropolitan area or county in the U.S. where workers
earning minimum wage can afford a two-bedroom rental home by working 40 hours
a week, according to the study.

This seems like an unreasonably high standard for a single minimum wage income
unless they're using the excess here as a proxy for other necessities.

Edit: This seems unreasonably high because it greatly exceeds the standard of
living we expect for a single minimum wage income household. Sure it would be
nice if a single minimum wage household could rend a 2br but that's not what
we currently expect them to be able to do. Saying "people who make X can't
afford Y" when we didn't expect them to afford Y in the first place isn't very
meaningful when you're discussing the ability of people making X to have a
standard of living that meets our expectations for people making X.

~~~
cimmanom
There was a time when one could. The minimum wage was originally put in place
to make sure a single wage earner could support a family.

~~~
PopsiclePete
A time when unions were strong, when the 1% were taxed at ~90% and when
"social security" and "pensions" were not evil words.

I feel zero sympathy for Americans and for the utter clusterfuck of misery
that awaits them over the next 20 years. This is just the beginning.

~~~
qaq
Would you name a country where 1% is taxed @ 90%? and what exactly would it
acomplish so a google eng. would suddenly have 30-40K after tax income with 2
mil mortage that would really help make things right.

~~~
PopsiclePete
Google engineers are not the top whatever-percent that needs to be taxed like
that, no. It's mostly the idle _billionaire_ class. Warren Buffet agrees with
me, FWIW.

~~~
qaq
What does it have to do with 1%? there are about 600 billionaires in US so
they are like what 0.000001%?

~~~
sokoloff
>> 0.000001%?

No, 0.000184% (or 0.0000018, a factor of >180 different)

------
perfmode
I moved to Brooklyn last year and have zero regrets.

------
ynot269
Coming from someone not in the bay area the most expensive place I've ever
lived was outside of Boston (Waltham) and even then it was a summer sublet.
Why is housing so expensive, more importantly why are landlords allowed to
adjust their prices so aggressively and based on some anecdotal evidence seen
in this thread, randomly? I'm currently locked into a lease and I'm 95% sure
the price is pay is what im locked into for a full year, but are landlords
really raising prices monthly?

edit: words

~~~
pound
It's not some landlords who randomly drive prices up, they just respond to
increases in property value.

------
walshemj
I would have thought that a 2 bed over looking central park in NYC would have
been more expensive

------
throw2016
Its only a matter of time before marriage rates and families crash. No one can
have kids or get married when they can barely survive.

That will change the nature of society, the economy, demand, demographics and
the labour pool. Most societies at this point start trying to bribe people to
get married and provide incentives for kids but usually its too late. The
sense of well being has been replaced with insecurity and businesses then get
increasingly desperate about promoting immigration to keep wages down.

Libertarians and their 'wealth creators' benefactors still stuck in the
settler mindset may soon find themselves in the odd position of trying to
bribe people to get married and women to have kids. Life is too complex to be
reduced to self serving ideologies. Everything has consequences.

------
oh_sigh
I'm fairly sure that high rents in Marin County are not driving homelessness
up. And why the focus on minimum wage? Most people who are working minimum
wage jobs live with another primary earner.

~~~
bronson
Remember that homelessness includes people living in cars... something that is
pretty apparent around Palo Alto, Menlo Park, and San Francisco.

~~~
oh_sigh
Yes, and are those people earning a living, but just falling a little short of
the high prices those areas have? Or, if rents magically dropped in half over
night, would they still be homeless?

------
EGreg
And if you subdivide those places just the right way you can have the top 45
most expensive places also be in the Bay Area.

I mean, it is to be expected so the title of the article doesn’t pack the
punch it seems to.

In NYC and other places there are city blocks or neighborhoods that are the
most expensive in the country, if you grouped by blocks.

This is called Simpson’s paradox

~~~
beat
Someone needs to name the process of nitpicking details over obviously true
generalizations.

~~~
briga
Missing the forest for the trees? Cherry-picking?

~~~
beat
No, there's something else to it. It's often used as a misdirection technique,
a way to change the subject from an uncomfortable discussion of something the
commenter would like to avoid to a raucous debate about irrelevant details.
(Not saying that's what's happening here, but.) Another form of the pattern is
to just show off how smart the commenter is, disrupting the discussion in the
process by getting caught up in details.

I should go dig into the Greek Sophists. They probably had a word for it. They
_definitely_ taught it as a technique.

~~~
EGreg
WOW. How about misleading people with cherrypicked examples? That is what is
done in Multiple Testing and reporting “sensational” findings. Here are two
links:

[https://www.marketwatch.com/story/10-most-expensive-
neighbor...](https://www.marketwatch.com/story/10-most-expensive-
neighborhoods-in-the-us-2012-11-06)

[https://xkcd.com/882/](https://xkcd.com/882/)

Relevant topics:

Simpson’s paradox

Multiple testing

Confirmation bias

Tons of people on HN live in the bay area so they can’t imagine things being
even more expensive elsewhere in the country. Thus a critique of the
methodology behind the loaded headline is dismissed, even voted down.

~~~
beat
Welcome to HN. Violate the GroupThink, get downvoted into oblivion. It's
happened to me twice in two days (and for one of them, I knew when I posted
that it would happen).

But back to my point... the true generalization is that the Bay area, broadly,
is the most expensive place in the US to live. Worse than New York. If you
narrow down, you can find individual blocks of New York that are more
expensive, but across the entire metro?

Sure, the headline/argument is a little sensationalist. But reducto absurdum
in the other direction is no better.

