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For anyone interested… We just moved back to Atlanta in September after five years in the Bay Area, to be closer to family, and to be able to afford a house, ever.

I was well paid at Google, and loved working at YouTube. I also severely miss our many friends, as well as beautiful San Francisco: I used to walk up Bernal Hill one or two days a week with my toddler. Pictures of oceans and hills and everything else make me sad…

That said, we could never afford a house in San Francisco. And to get affordable, we'd have had to have gone way out, and the commute would have been terrible.

I was lucky enough to find out that Square has an Atlanta office, full of very smart people, so I was able to keep doing Silicon-Valley-style programming, which is a big win.

My pop bought his place in the east bay right after Viet Nam for ~70k. They pay ~100 a month in taxes and whatnot as the mortgage was paid years (decades?) ago. The exact same footprint ranch house next door just sold to a couple with a little boy. She is a 'local' teacher, he is a recruiter in tech somewhere in SF city. Take a guess how much they paid for a 3 bed, 1 bath on 1.7 acres about 1 hour (on a good day) commute for him.

Yeah, 850k, and that was a steal. The mortgage alone is, what ~3k/ mo? Taxes and everything else push this up to ~4.5k to 5k/ mo, right? And this is going to go for how long? Oh yeah, 20 years.

My folks have no illusions that this sweet couple and little Benny next door are going to be there anymore than 5 years. Even all the way out in the East Bay, it is just not possible.

Get out now before this bubble pops again. Beat the rush.

This isn't as outrageous as it sounds. In the time that your dad's house went up 12X, the S&P went up 20-30X. (In the 1970s it was in the 65-100 range, and now it's over 1900)

While the calculation isn't quite this simple (dividends on stock versus not paying rent, and interest deductions) it highlights that real estate appreciation isn't quite as crazy as it's made to sound.

This is an interesting "investment" example. In addition to the listed trade-offs, the mortgage would've likely allowed 25% cash down in 1976, approximately $18,000. Furthermore, savings in rent would've largely gone toward mortgage interest, repairs and capital expenditures. Given these assumptions, the result over a 40 year period would be an annual return of 10.12%[0].

Even so, the approximate return from the S&P 500 (reinvesting dividends) over the same period would be 11.468%[1].

[0] http://www.moneychimp.com/features/portfolio_performance_cal...

[1] http://dqydj.net/sp-500-return-calculator/

One thing to add... It's only in rare parts of the US that real estate appreciated so much, but you would have gotten those equity returns anywhere in the country.

It shows the effect of inflation, though. Someone who put $1900 under a mattress 40 years ago would find it's worth about $65 today.

According to the BLS’s CPI inflation calculator, $1900 in 1976 is the same buying power as $456 in 2016. Where are you getting $65 from? (Edit: that’s a rhetorical question.)

There’s a huge difference between 300% inflation the BLS claims vs. 2800% inflation you are suggesting.

Inverting the S&P 500 numbers the grandparent posted.

On a practical level, inflation is always relative to what you're actually buying. If you're buying S&P 500 index funds, the inflation rate is the price appreciation of the S&P 500. If you're buying real-estate, the inflation rate is the rate of increase in housing prices.

(Perhaps this is a bad example because you typically wouldn't be buying stock index funds after 40 years of earning, but the point is to illustrate opportunity cost. If someone's goal is to pass wealth on to their children, for example, then the price of income-producing assets is a lot more relevant than the price of milk.)

That doesn’t make sense. If your goal is to leave your children an inheritance, presumably they are supposed to either directly buy goods with it, or hire people to do useful work for them.

The price of goods, services, salaries, etc. have all gone up by roughly 3–4x in the US (with some notable exceptions like housing in certain areas and college tuition). Someone who invested in the S&P 500 and has 29x as many nominal dollars as they did in 1976 can buy about 8 times as much of other people’s labor as they could before.

Some fixed percentage of the total size of the S&P 500 is a practically useless measuring stick. If we use that as a standard, 90%+ of the population in the USA is 8x poorer than they were in 1976.

I don't understand what you're saying. If you put money under a mattress, doesn't it stay the same in worth? If I put a $20 bill under the mattress 40 years ago, it's still a $20 bill, worth exactly $20 today. What did you mean?

Instead of "worth", perhaps "purchasing power" would be more accurate. The purchasing power of cash is generally reduced over time due to inflation.

How are there taxes so low?

I know in Chicago if you were old past a certain age you got some tax breaks (MAYBE at some point a tax freeze). Does SF have some kind of tax rate freeze?

But ya, live is too short to spend a million bucks on a 2 bedroom house.

CA property tax increases are limited to 2% a year and only get re-assessed after a change of ownership or new construction.


Bingo. Prop 13 is the elephant in the room that is not mentioned. All discussions of CA property markets have this giant red flag in them. It very much distorts the free markets.

Not to argue in favor of all aspects of Prop 13, but the alternative of just letting valuations for property taxes float with the market means that a lot of people who own houses and have lived in them for a long time get forced out of their communities by increasing taxes. Which I don't see as generally a good thing.

The alternative is to do what Florida did: cap only primary residences. Why California extended the freeze to all property is beyond me.

The largest non-primary residence sector is the residential property for rent. Considering that any tax increase very quickly finds its way into a rent increase, what's the rationale for punishing renters?

It's almost a double whammy for someone who wants to buy a house, but can't afford the current prices or was outbid by a cash buyer going over asking price. Cheer up as we've incorporated the price increase into your rent.

> The largest non-primary residence sector is the residential property for rent. Considering that any tax increase very quickly finds its way into a rent increase, what's the rationale for punishing renters?

Assuming we're talking free markets, then the rent should already be set at the maximum price the market will bear. (If not the landlord is leaving money on the table.) Increasing property taxes is to depress the price of real estate. A simple property tax could also discourage new investment, while a land value tax incentivizes owners to maximize the value of their holdings.

> The largest non-primary residence sector is the residential property for rent. Considering that any tax increase very quickly finds its way into a rent increase, what's the rationale for punishing renters?

So, treat primary residences as primary residences, whether or not they are the primary residence of the property owner. For multi-unit rental properties, the total value of the property is divided among units proportionately to the rent charged for each unit to assess this.

Is your primary goal here to extract more revenue from timeshare owners and people who own a pied-à-terre? Don't those constitute negligible portion of California real estate market (as opposed to some places like Hawaii, where absentee ownership is significant and property taxes on timeshare / second home owners are very high)?

While it's probably not a bad idea, I don't see it moving the needle much.

> Is your primary goal here to extract more revenue from timeshare owners and people who own a pied-à-terre?

I'm discussing ways to achieve the goal upthread of insulating people from property tax uncertainty on their primary residence.

I would expect that the larger purpose of that is to allow full-value taxation on all other real property; of which non-primary-residence residential property is a subset (and a fairly small subset, at that.)

Remember that Prop 13 applies to all real property, not just residential property.

Biggest issue is it applies to commercial property too

This happens to renters when the market rate rises. If you can't afford to live somewhere, you go live somewhere else. This applies to everything else governed by a market, why shouldn't it apply to property taxes?

Prop 13 is a blatant wealth transfer between people who are new to the area (mostly the young) to the people who were originally here (mostly the old).

> This applies to everything else governed by a market, why shouldn't it apply to property taxes?

Taxes aren't governed by a market; the same rules don't apply. Arguments against government protectionism in markets don't also apply to protection against the actions of the government itself.

That said, proposition 13 doesn't seem like a good implementation of this. There's no good reason for a sudden increase upon sale; that breaks the ability to buy a home. There should be a hard cap on property taxes that doesn't change on sale.

Why should taxes get to increase without bound or control on existing property? Once you've paid off your home, you should not have an ever-growing expense to keep it.

(You shouldn't have an expense to keep it at all, but that's a separate argument.)

Property taxes are based on property values, which are governed by a market.

My view is that property taxes fund the very things that make a particular neighborhood desirable, like good schools, roads, parks, and other local services. Your property's value is what it is because of these things, and you shouldn't be able to reap these benefits without paying taxes proportional to the value you've captured.

> My view is that property taxes fund the very things that make a particular neighborhood desirable, like good schools, roads, parks, and other local services.

In California, that's less true than it might otherwise be, given the prop 13 limits on both assessments and tax rates. Lots of those things are funded by sales tax revenue, income tax revenue (primarily state income tax funding local programs), development fees, and other revenue sources other than property tax.

They typically mostly fund schools, which long-time home owners generally aren't even using. One of the whole reasons to buy property is to have some long-term residential stability, which doesn't happen if property taxes can increase rapidly. If I'm holding onto my home, I've only captured value in a theoretical sense. I don't have any cash to pay for the increased property taxes until I sell.

> My view is that property taxes fund the very things that make a particular neighborhood desirable, like good schools, roads, parks, and other local services.

I think you're arguing that richer neighborhoods should have nicer schools, roads and parks. Granted, SF is an exception here, but that's precisely how things work elsewhere in California.

And if richer neighborhoods don't get that, California made annexations pretty easy, which is why you see those tiny municipalities in the vicinity of Los Angeles, San Diego, Anaheim, etc.

I'm arguing that richer neighborhoods DO have nicer schools, roads, and parks. Prop 13 says you may live in such valuable neighborhood while not paying taxes in proportion to that value, merely because you happened to buy a long time ago.

I an questioning how big of a problem that is empirically.

One can't really arbitrage that effectively.

Municipalities can't run consistent deficits, so the new schools, roads and parks will be built after a wave of newcomers buys properties, locking in higher prices and higher tax base.

In case there are no such newcomers (i.e. everybody is maximizing their Prop 13 benefit by not selling), the municipality just sticks to the last year's budget with a 2% increase permitted by Prop 13. But in that case new schools, parks and roads that make the neighborhood better don't appear either.

> I'm arguing that richer neighborhoods DO have nicer schools, roads, and parks.

That's a really good reason to stop funding those things through property taxes.

> This applies to everything else governed by a market, why shouldn't it apply to property taxes?

Does it apply to anything else you own? If 2004 Honda Civics suddenly got really popular and I already owned one, I wouldn't suddenly be priced out. Or if I own gold or stocks, and the price goes up, that doesn't affect me at all unless I sell.

> If 2004 Honda Civics suddenly got really popular and I already owned one, I wouldn't suddenly be priced out.

In California, since the state has ad valorem taxation on vehicles (the vehicle license fee, which is 1.15% of the market value of the vehicle) which does not have prop. 13 style limits, you, in fact, could be priced out of your 2004 Honda Civic if the market price suddenly and radically increased.

Oregon solved this problem differently: there's a hard annual cap on property tax increases period, which doesn't change when the property changes hands.

That prevents people from being taxed out of their home, without creating a situation that makes it hard for people to buy new homes.

The Oregon system started out with good intentions but ended up being devilishly complicated to understand and unfair to many people. It's probably a great case study in the long-term unintended consequences of laws intended to control real estate taxes.

The Deschutes (Oregon) County Tax Assessor's office made a really good video explaining how three almost identical houses in the same location can have completely different tax bills:


In addition to what the video says, I wanted to point out that the 3% hard annual cap you mention is only on the property's Maximum Assessed Value, which is only one of the many inputs into the computation for a property's tax bill. For example, one thing that can cause taxes to go up more than 3% are general bonds approved by voter measure.

Portland Commissioner Steve Novick also wrote a really good article about all of the problems with Oregon's tax system and made some recommendations:


Our property taxes are still actually pretty low -- around 1%. My sister just bought a house in Ohio for 20% what our Bay Area house host, but their taxes are more than half as much as ours. In fact, their taxes are half their mortgage while ours are practically negligible.

I mean schools need funded somehow.. many states fund them almost all through property taxes.

A lot of places I have lived capped property tax at 2% of market value. In Ohio are their taxes significantly higher than 2% of property value? I wonder if they have tax missing somewhere else, like no local income tax or something... Ohio doesn't strike me as a high tax zone.

Taxation distorts the free market. Prop 13 is not an elephant in the room, everyone knows about it and it's a hot topic of public discussion even long after it was passed.

For those unfamiliar, you can think of Prop. 13 as an effective cartel to discourage people from selling their property.

Basically, it subsidizes keeping property and never selling it. This is because every year the owner's property taxes essentially go down, presuming any normal level of inflation. And because of follow-on propositions, you can transfer that advantage from parents to children. Yes, this does let existing residents stay somewhere indefinitely. Equivalently, we can say it strongly discourages mobility.

The crazy real estate prices you see are simply a result of the proposition-established cartel. This drives up prices for new arrivals, which California depends on to keep this going, which makes the people holding on to their property think two things: "I'm rich because my home is worth so much" and "I could never get by without Prop. 13 because my home is worth so much." This has made Prop. 13 untouchable — it would basically have to be overturned at the state Supreme Court level at the behest of broad popular opinion.

However, this is just another bubble. California as a state has done relatively quite well in the last thirty years, so it continues to inflate. However, California and local governments have also spent a huge amount of future revenue on state workers, so it has become harder to sustain. But for the huge amount of income tax receipts from the investment class of California, things would already be in rough shape.

Someday, the bubble will burst. If Prop. 13 was ruled unconstitutional tomorrow, it would cause a real estate crisis, followed by an economic crisis, that is hard to imagine. But that might be preferable to having Prop. 13 crumble in the middle of a statewide economic crisis, which is the most likely ending of this story. In the meantime, yes, it does keep grandma in her tidily-appreciating house instead of some filthy tech hipsters chasing the next gold rush.

Ah that is pretty nice if you got in a hot area before a boom. Kinda like rent-control in a NYC apartment where you pay 1/4 what your neighbor pays.

If you don't mind me asking, how does your absolute salary fare when moving to a lower cost of living region? Do employers tend to keep you at the salary you had, or does it take a hit (even though it is supposedly "equivalent" in some sense)?

My base salary went up slightly, and my total compensation went down. We'll see how the options turn out.

How did total comp went down if base went up? What was it that went down specifically?

Outside of a few hot areas, total compensation for even the best people is usually 85% base salary.

How is that possible? example please

Total compensation is base salary plus stock/options. If your stock grant goes down by enough, total compensation may fall even if base salary went up.

I'm actually a stock trader, so it's even more skewed for me and would be a good example. Let's say I get paid $50 per year. At the end of the year, depending on my/our performance, I will get paid between $0 and $200 as a bonus, which I wouldn't count as part of my base comp.

Other forms of non-base include stocks/options/etc.

Performance bonuses?

I think many ask you to take a hit. If you relocated to SF, you would expect your compensation to go up, wouldn't you?

Fun calculator for relocations:


Like most of these things, this calculator makes some broad assumptions.

For instance, it assumes transportation costs in Manhattan are higher than most other places. This is unbelievably inaccurate in my experience. Maybe it assumes people here take taxis all over the place? I've found transportation to be cheaper in NYC than anywhere else in the USA. No car or gasoline or insurance or maintenance, etc. A car costs on average about 9k/year to own according to AAA. In a place like NYC if you take the Subway every day your cost is about 1,300/year. Throw in a few hundred for cabs and you're looking at 1,800/year. It doesn't cover the rent gap compared to most places but it helps.

In effect this calculator says a salary in Chicago goes nearly twice as far (so if you make 200k in NYC that would be 106k in Chicago. In my experience that is simply untrue. 200k in NYC would be closer to 170k in Chicago.

I think this calculator is making the assumption someone would require the same resources, like a car in all places. Or that someone who had 1600 square feet of living space would expect the same in NYC, which would be ridiculous. No reasonable person would assume they would move to NYC and get a car and garage it. That simply isn't the typical lifestyle here. Most my friends born and raised in the city don't even have licenses.

It also claims that living in San Francisco is significantly cheaper than NYC which is untrue as well.

I also find it frustrating that this [and similar tools] don't break down by something more granular, such as neighborhood or zip code.

For example, it's not exactly sound to average the price of all neighborhoods in Manhattan.

COL indexes are flawed? Who knew.

I hope it would be apparent you should reference many different sources when comparing salaries in different locations.

I moved to Chicago from SF and took a substantial hit. But I was doing a lateral move and am still early in a career change. If you are moving to a higher position or you have lot of experience you may carry better across geos. Like a guy I know is long time marketer and got wined and dined by 20ish startups in Chicago. Im sure he did fine on salary.

honest question: what does "Silicon-Valley-style programming" mean? I've been living in SF for 5+ years and I'll prob stay for a few more. But I can't see myself living for too long mainly because of rent and house prices. Europe, to me, looks a lot better (I'm thinking Berlin).

But re: "Silicon-Valley-style programming", I don't see any difference here than any other similar place.

Silicon Valley style programming means working on consumer apps that have a chance of being used by thousands and millions of people.

Especially in Europe, most programming goes to custom software for banking and various industries. There are very few Microsoft, Square or Google style companies in Europe, where software is the product. A lot of software is a cost center for something else. For some, it doesn't give them the same feeling of accomplishment.

Dated, but still worth reading: http://www.joelonsoftware.com/articles/FiveWorlds.html

Software development != software development

It's the same in Silicon Valley. Software developers are a "cost center" and balance sheets and accounting reflect that - even at companies like Google.

I've spent large chunks of my career in the Midwest as a consultant. Senior devs go into very long term consulting gigs because then companies can afford to pay us much more: we count as 100% capex.

Companies that might pay an employee $110K a year will have zero problem paying rates that end up with take-homes of +$200K a year after paying your own benefits and taking vacation time off.

Could you expand on that? I've snubbed contracting gigs in the past because I enjoy the often very generous healthcare plans at tech companies.

Actually, assuming you're not just maintaining a code base (i.e. you're mostly adding features or making something new), the cost of software development is typically an asset on the balance sheet

So there are lots of programming jobs out there at places that are not like the valley. Thing Initech from Office Space - business casual dress code, gantt charts, dreary cubes, long death march schedules you have no control over, people are resources first, salaries are intentionally below market rate...

I landed at one of these a few years ago and got out ASAP. They're out there, but not so much in the Bay Area because the talent war is so hot - any place like that wouldn't be able to hire or keep anyone.

Most shops aren't like that.

I don't do "SV style programming" but we have no dress code, no death March schedules, no charts, no meetings, etc. Same thing as my last job in another city.

Though we also don't have ping pong, Foosball, stocked fridge, or many young people if that's what you are looking for. Oh, and not a lot of turnover either.

It usually means working on apps used by a lot of people, entertaining stuff and exciting new technology. That "style" is not available in every part of the world.

In some places of Europe it's most of the time just working for bank, insurance, industry or european institution with too old technology, long and fixed schedules and not so much excitement or feeling of making something useful. Add this to under-market salary, suits everyday, ... Developers are not killing it there, they just cost money, they don't have that aura of hype, respect, perks and all.

But it's starting to change I guess (and hope).

Google's HQ is in Mountain View. Why did you have to live or buy a house in SF?

We have generally found that San Francisco housing prices are lower than Silicon Valley. Cupertino, Mountain View, etc are absolutely insane.

Housing prices in Mountain View are just as bad as those in SF.

Also, YouTube's head office is closer to the SF airport.

If only there was a bus straight to campus that went to like 5 counties...

> Also, YouTube's head office is closer to the SF airport.

Which is also not in SF.

It's geographically close enough.

It isn't geographically close enough to make the claim that living in SF is necessary because you work there.

Of course, even if the office was in SF that wouldn't be justified. It's hardly unusual for people to commute into SF from places with lower living costs.

Housing on the peninsula is incredibly constrained so most people are priced out. Right now in the East Bay, San Leandro and Castro Valley are probably the best price points for square foot per $. Commutes suck from both places but they are equally positioned between valley and city giving you access to both.

If the bubble continues I would expect that both places will get priced out in the next 2-3 years. At that point you'll have to look at the Tri-Valley area (Dublin, Pleasanton, Livermore) for the affordable price points.

The Tri-Valley is actually quite a bit more expensive than the mid East Bay region (Hayward, Union City, San Leandro, Castro Valley). It's still cheaper than the Peninsula or South Bay, though.

If you're looking at the East Bay you're too late. Castro Valley and San Leandro were marginally affordable about 4 years ago. Now, you are probably going to need a salary of over $200K to support buying there. Dublin and Pleasanton have good schools so you'll need more $$$ out there. Livermore is probably still affordable to a mere mortal but I'd start looking further out towards Tracy or Stockton at this point.

San Francisco is stunningly beautiful. Prices near YouTube (which is close to San Francisco) were also incredibly high.

I live ~1 mile from Google in mountain view and a few blocks from here: http://www.orolomahomes.com/site-plan/

tl;dr: 1300 sq. ft. new 2 bedroom townhome for 1.3 million.

SF is cheaper than SV. Unless it's Palo Alto.

I think you have that backwards. Especially since you mention Palo Alto as being the exception.

Do you mean East Palo Alto?

He worked at Youtube, which is actually in San Bruno. Living in SF is the trendy thing to do so he probably felt the 'real' experience would be more worthwhile (which it sounds like it was). From the southern part of SF (not South San Francisco, that is different) it's not a crazy commute to San Bruno. To Mountain View it would have been hell.

I'm about the furthest from "trendy" you can imagine. But our quality of life living in Bernal Heights was amazing.

Just wanted to point out one thing, the comparison between Atlanta and SF is a bit more nuanced. Atlanta is about 3x larger (in square miles) and encompasses an incredibly economically diverse area. Within two miles, you can find a house for $20,000 and a house for $1,000,000+. This certainly brings down the 'average cost of living', but does not account for the cost of living in a safe and desirable area, which is not quite SF price levels, but is equally in demand and short of supply.

Please define Silicon Valley style programming?

I was afraid I'd end up in a corporate IT department in a big company that does something other than technology as its main thing.

In Mikey Dickerson's talks about fixing Healthcare.gov he talks about two strains of programming: that descended from a more engineering mindset, and that descended from the IT department. (I'm paraphrasing badly: I'll try to find a better link when I have more time.) I guess I was using "Silicon Valley" as shorthand for the former.

If at all possible, you want to work where you're a net benefit and somehow directly visibly producing output the company is selling, not where you're a net cost.

Note how the word "computer" doesn't appear in that sentence; it's not unique to computer programming.

Said in traditional business-speak:

Work in a profit center, not in a cost center.

I'm on the Shared Systems team at Square, and was on Abuse prevention at YouTube, so I pretty much seem to only land in cost centers :-)

But I get to build RPC services and other cool infrastructure in Go.

I work at an NGO that manages investment in farming. We have beuracracy bigger than most governments.

Still get to write cool stuff in Go, Node, Elixir or whatever else takes my fancy and tinker with IoT hardware during work hours :-)

Thats a really nice way to phrase a sentiment I, and I would guess many other HN'ers have long felt.

I've been there. You are nothing but a commoditized resource when you are in a "corporate IT" job. That being said programmer-centric jobs can be found anywhere outside SV.

How do you switch from one strain to another? How do you know what strain you work in?

I am working for a large bank this summer in San Fran on their main website. This site has an Alexa score in the top 25 for the US, and is in the top 100 overall. They have said I would be working in NodeJS, as they are rewriting large portions of the site with node. Will this project most likely contain people of the Engineering, or IT mindsets?

If you're building a website for a bank, it is definitely IT work. Nobody sees you as anything but a cost center.

>How do you switch from one strain to another?

End up around people that already have that strain, get their attention, and become friends so you can learn and they can teach. You unfortunately just can't teach yourself everything.

It sounds like another form of pedigree selection. Or maybe dividing the field up into "us vs. them". Pretty understandable sentiment if you get pushed into fixing Healthcare.gov like he describes in one of his talks and working with guys arguing about tickets not existing because they're on different ticket systems and people with zero motivation to build a decent product. Wastage is immense in IT from the sounds of it in this talk: https://www.youtube.com/watch?v=7Vc8sxhy2I4

IT mindsets.

Programming with an inflated salary.

You realize that that sweet $140,000 Silicon Valley base salary at FaceGoogBox is worth less than that very middle class $80,000 in Atlanta, once you adjust for cost of living, right? If you want to buy a house, it's more like $40,000 in downtown Atlanta. It ain't poverty, but no one's getting dirty rich off of that kind of salary, either.

Is someone making $80,000 for doing 60 hours a week of highly-skilled, highly-profit-bearing work "overpaid". In my opinion, that's underpaid.

If anything, we've seen recent evidence that SV salaries are "deflated" compared to other industries and areas of the country, due to collusion, frequent targeted hiring of very young, often naive grad, inflated time at work, etc.

I don't work in SV, for the reasons I outlined above, so this isn't some kind of self-justification.

Edit: To be clear, I don't disapprove of people working there, I know it's beautiful and a nice place to live. I'm actually defending SV engineers from accusations of "inflated" salaries. It's just not a good place to go to get rich as an engineer with a family.

I don't (and won't) live in the Bay Area, but I live on the west coast, in an area a lot more expensive than Atlanta. When I got serious about moving to a "low cost of living" area and started doing the math, I found it to not be nearly so cut and dried. While housing and taxes are cheaper, many other things cost the same or more. For example, it's often MORE expensive to go on vacation from a cheaper area because the airport is smaller and there aren't direct flights to as many places (granted, not an issue in Atlanta). And of course everything on the other end costs the same regardless of whether you're coming from SF or Des Moines. Buying a car costs roughly the same (sales tax and car registration may make a small impact). Gadgets and electronics cost the same. Food may cost slightly less, but not in proportion to the pay difference. Cable, internet, cell service, health insurance, etc. all cost about the same.

When I put everything on a spreadsheet, the lower housing costs in other parts of the country didn't sufficiently make up for the drastically lower salaries. YMMV, but I encourage everyone to very carefully do the math before making these kinds of decisions.

(I do think that SF may be a special case, since it's SO expensive, but even then it's worth doing the math.)

One thing I've noticed about cost-of-living discussions is that people fail to take into account that the cost-of-living isn't some abstract constant, but is still buying something "real". In general, which area has more crime: The 90th percentile cost of living area or the 5th percentile cost of living area? Which area has nice stores with a wide variety of organic fruits and veggies, and which area has stores where they can't afford to replace the floor tiles when they pop out? As you say, you can't just do a cost-of-living calculation blindly.

That said, adding in those factors often makes Silicon Valley come out even worse. I've visited it quite a bit and it is not nicer enough to account for cost-of-living difference, unless you simply can not stand to live somewhere with less than perfect weather. But I think that's special to the Valley.

> Which area has nice stores with a wide variety of organic fruits and veggies, and which area has stores where they can't afford to replace the floor tiles when they pop out?

It's interesting that you bring this up. In the case of food, at least, lower COL areas (which are typically more rural) have access to something far better than any store - farmer's markets and actual farms.

I suppose I'm lucky to live on the edge of a gentrified neighborhood in the midwest.

There's a "cheap basics" grocery store in a 5 minute walk, a farmer's market in a 10 minute walk, and a Whole Foods in a 15 minute drive.

I don't really care about organic produce, but that flash pasteurized OJ at Whole Foods is really worth the extra $2.

Some would describe the 'perfect weather' of the Bay Area as 'tepid' or 'freezing cold'.

It's a nice area for certain, but it makes me wonder about myself when I'm wearing a parka and everybody else is walking around with a scarf or light jacket.

Are you talking about SF or the peninsula? Because SF weather is much colder than the rest of the Bay Area.

Both, but more so SF-proper I suppose. In the city, I look like an astronaut, but further south I only look like a moderate weirdo, mumbling to myself about people wearing shorts while zipping my coat up over my chin.

> Buying a car costs roughly the same (sales tax and car registration may make a small impact).

Parking is a big difference though. You can rent an apartment in the Midwest for what it takes to park a car in some major cities. Not to mention higher gas and insurance.

That's probably true in the city of SF (at least with respect to parking), but I'm not sure it's true in the rest of the Bay Area, and definitely isn't my experience in several other west coast cities. It's been nearly 10 years since I've had to pay for a monthly parking spot, and the random meter here and there costs me WELL under $25/mo. Gas and insurance are a tiny part of my budget; moving somewhere that allowed me to even take them to zero wouldn't make a noticeable impact. And I honestly can't imagine they're more than 25-30% cheaper in most areas. That stuff isn't THAT expensive here.

> For example, it's often MORE expensive to go on vacation from a cheaper area because the airport is smaller and there aren't direct flights to as many places (granted, not an issue in Atlanta).

I live in Cincinnati with one of the most top 10 most expensive airports in the country (CVG). I also spend a lot of time traveling and searching for flights.

One strategy I've used to avoid this is booking Kayak-style "hacker fare" for a domestic ticket to a hub like LAX/ATL/etc. with an international flight out from the hub, then a return ticket from destination to home (with connections of course).

It doesn't sound like it'd be that significant, but it made a recent trip to New Zealand & Australia about 40% cheaper, though it does take some extra effort.

it also depends on what you care about. For example, in New York, you pay up for easy access to culture. But what if you don't care about culture and are happy to just watch netflix every night? then, living in NYC makes no sense for you, unless you can't leave for some reason

well if you care about your job and career, a lot of opportunity awaits you in Manhattan. That's certainly one reason.

According to Wolfram Alpha, $140,000 is equivalent to $85,000 in Atlanta, once you've adjusted for the cost of living.


Wolfram Alpha needs better marketing. This tool is amazing.

I wish I could figure out how to get it to run each statement in parenthesis as a separate statement then combine them. A lot of time when I'm trying to combine a lot of different values it'll get confused and just evaluate one of them individually. Same thing with happens with units sometimes.

Maybe I'm just not writing my queries just right but it's my major pain point with Wolfram Alpha.

> You realize that that sweet $140,000 Silicon Valley base salary at FaceGoogBox is worth less than that very middle class $80,000 in Atlanta, once you adjust for cost of living, right?

I find that very hard to believe. If you make $12,000 a month in SF and spend $3,000 a month on rent (which is pretty generous for one person), you still have more leftover money per month than your entire paycheck at an $80,000 annual salary.

$140k after taxes in California nets you about $7,100 per month. $80k after taxes in Georgia nets you about $4,500 per month. A ~700 square foot apartment in a luxury building runs $1,300 in Buckhead (the most desirable location downtown). Looks like a similar apartment runs $3,800 in a desirable part of San Francisco. So immediately, your pay difference is swallowed up by the rent differential. But everything else is substantially cheaper in Atlanta too. It's not the land of $4 toast. Prices at a nice restaurant will be ~70% of that in SF.

Yeah, at that point it really comes down to whether your personal utility from living in San Francisco outweighs the disutility of having a smaller apartment or sharing an apartment. I don't know of anyone (who's not independently wealthy) who pays for a 700 sq. foot SF apartment with just one income. Most people I know pay around $2k a month on rent.

Sure, you may weigh the benefits of living in SF higher than the cost of doing so, but that doesn't mean the cost differential when comparing like-with-like isn't significant. Moreover, once you have a family, the cost-benefit analysis changes in a surprising way. My wife and I are dedicated urbanites and currently live in downtown Baltimore. We could afford an awesome house in a dense urban neighborhood walkable to restaurants, bars, our daughter's nursery school, etc. But we're relocating to D.C. where a house in a similar neighborhood would cost 5x as much, and are facing the prospect of having to move out to the 'burbs (or the more boring suburb-y parts of the city).

> but that doesn't mean the cost differential when comparing like-with-like isn't significant.

That is kind of true, but it's also not realistic to just compare identical housing arrangements in very different regions. It makes more sense to compare not just median costs of two regions, but also median housing size/type. But of course, if spacious housing is very important to someone, that's perfectly fine, and it's a perfectly good reason to live somewhere else.

Bingo. And the calculation just gets worse when you include expenses for a family.

I make 50% more here than in Utah. Before stock, I am saving less than I did in Utah. I had a $1100/mo mortgage in Utah (4 bed, 2 bath). I'm paying $3800/mo in rent here (3 bed, 1.5 ba). Utilities are about 2x. Food about 30% more. I pay roughly 10% salary more in a taxes.

It's expensive to live here. That doesn't mean I don't like it though :)

To be clear, I'm writing from the perspective of having a family with children. Believe me, I've run the numbers and there's no way I could buy or even rent a decent house there without a massive commute (which I can't stand).

Glad to be proven wrong here. I'd go back and entertain offers I've had if I knew I was wrong.

Are there other family-related costs that are significantly lower in Atlanta than in SF? I'm still having trouble making the math work out.

Childcare in the peninsula is hugely expensive even when it is available. 150 person waitlists for 50 kid facilities are the norm. A dirty daycare will run 2k per month, and a nanny around 3k. I'm not sure what the situation is elsewhere but I have to imagine it is better. Home daycares aren't available because no one can afford a home. The crazy prices lead to shortages of services because none of the people who would provide them can live there.

Childcare is substantially more expensive and the public schools are not very good. You almost have to put your child in private school, and you are looking at $20k-$30k/year/child. The city is not very kid friendly in general.

And any surrounding districts with good public schools will of course have ever higher real estate costs.

Consider daycare which ranges between $1500 to $2000 per month in SF. Nannies are $2000 to $3000 per month.

I did a quick comparison. This doesn't include all the costs, but it should give you an idea of what he/she means:

The median sales price of a Santa Clara County 3 bedroom house is $820,000. This is $3,877/mo, plus $850/mo property taxes, for a housing cost of $4,727/mo

That $140,000/yr is taxed at $48,922 in the state of California, leaving $91,078, or $7,589/ mo income.

CA Income ($7,589) - CA Housing Costs ($4,727) = $2,682 leftover.


The median sales price of a Cobb County 3 bedroom house is $173,000. This is $818/mo, plus $140/mo property taxes, for a housing cost of $958/mo

That $80,000/yr is taxed at $23,600 in the state of Georgia, leaving $56,400, or $4,700/ mo income.

GA Income ($4,700) - GA Housing Costs ($958) = $3,742 leftover.


I'm not saying my numbers are valid for every person's situation, only that this is an example of a situation where the numbers work in Atlanta's favor.

Your numbers are way off. Salary doesn't paint the entire picture. Median total comp for a fresh out of college (L3) at Google is ~165k.

L4 is ~215k. L5 (Senior) is ~265k.

Factor in free breakfast/lunch/dinner, free gym, free laundry, generous 401k matching, other perks and discounts, and the gap widens even more.

And those scenarios represent a small fraction of the total number of engineers in the Valley. There is a reason Google is so selective in its hiring.

Throwing those out as typical is disingenuous.

Google is a huge outlier when it comes to salary. There are thousands of tech companies in the bay area, and median salary is around $100K.

Do you have a source of this data? I have tons of friends in the Bay Area who work at a wide variety of tech companies, and none of them are making $100k or less. I guess maybe they really are "all above average" but I find it hard to believe that the median salary for software engineers in the bay area is really $100k.

Sure. [1] [2]

Of course, this is just "a couple minutes of google research"--I am not a subject matter expert, as someone on HN kindly pointed out last time I posted these here. Also, they are based on self-reported surveys and don't include sellable equity, so take it with a grain of salt. I don't know where better data would be published. I'm intuitively not too surprised by these figures--I think the HN demographic is probably pretty skewed towards the higher end, judging by all those threads where people toss around $150K and $200K salaries as "normal".

1: https://www.glassdoor.com/Salaries/san-francisco-software-en...

2: http://www.payscale.com/research/US/Job=Software_Engineer/Sa...

$140k is what we're discussing in this thread. You're welcome to join us.

You left out tax differences and inflated costs for other necessities such as food, transportation, entertainment, etc.

12,000$/month is pre taxes. You get taxed more on 80-140 than 0 to 80, and California has higher income tax rates to make up for messed up property tax rates.

On net you get an extra ~2,600/month after taxes.

>>If anything, we've seen recent evidence that SV salaries are "deflated" compared to other industries and areas of the country, due to collusion, frequent targeted hiring of very young, often naive grad, inflated time at work, etc.

Conversely, they're also being propped up by the massive amount of VC money at play there, which is driving an arms race for programming talent not seen elsewhere around the country. I'm not saying you're wrong about your point about collusion, but there are multiple factors at play there.

It's also the case that going back decades, moving to very high cost of living areas like Manhattan and Silicon Valley has tended to result in paying out relatively more for housing than salaries tend to increase. Yes, the situation today is particularly bad but such places have long been something of a "luxury location."

> You realize that that sweet $140,000 Silicon Valley base salary at FaceGoogBox is worth less than that very middle class $80,000 in Atlanta, once you adjust for cost of living, right?

You're ignoring equity here, which after a couple years will be more than your base salary anyway.

With a total comp of $300k+, a lot SV workers don't mind paying $30k/year more in rent to live in the Bay Area. As many others have noted, it really is beautiful here...

A beauty that's getting harder and harder to appreciate. And that's not even exclusive to the Bay to begin with.

> And that's not even exclusive to the Bay to begin with.

What other place is like this? I mean a lively, diverse city where everyone is from everywhere, mountains nearby, and 3000 hours of sunshine a year?

You mean where everyone is from an upper middle class family, a private highschool, and one of 20-30 prestigious engineering schools at which they studied under one of the same four degree programs, after which they decided to go and work at "this really hot tech company!"

Boy that's diverse.

The area basically vacuums everyone who fits the exact same mold from anywhere in the world – that does not make the area more diverse.

That's literally the sales pitch for Denver (we're working on the diversity bit). Although we get more sun.

Oh, and the warm winters bit :)

Came here to read this.

Are there "a lot" of SF workers with 300k personal income on their taxes?

I call b.s. I pulled numbers off a few sites that estimate cost of living in Atlanta at ~$26k/year. Just ran my own numbers, and my own costs last year were ~22k. For reference, I live in Santa Cruz with that sweet job as FaceGoogBox. There are a few places I'd consider moving to for a $80k pay cut, but Atlanta isn't one of them.

I don't think anyone on my team in Austin makes less than $135K/year. I'm the youngest on our team at 33 though.

It is not unusual for someone in that position to be renting an apartment for $1,000 per month which, accounting for the increased salary by living in the bay area less opportunity cost of buying vs renting in ATL, is still a net win for that individual in their stage of their life. They key here is that this person can buy the so-called $40K house after 1-2 years of saving and living here, where as you will still have a mortgage.

$140k is only a base salary at "FaceGoogBox" if you're relatively young in your career. And it overlooks the meaningful equity/bonus.

It's not really true in my experience. If you can live in the East Bay, there are definitely still really nice and affordable places to be found. Yes, the prices have gone up significantly over the past few years in the East Bay too, but it is still cheap enough where it probably will make the high Bay Area salaries financially worthwhile.

Houses in downtown Atlanta haven't been $40,000 for decades.

That wasn't my argument at all. $40,000 was in reference to salary (ie, a $40,000 salary in Atlanta can get you the same type of house as $140,000 salary in SF).

By the way, many here assuming I'm in Atlanta. I am not (and don't wish to be, because of the crazy traffic).

"Not living in Georgia" is worth a premium.

I agree, no offense to anyone who loves Georgia.

SF is too expensive though. I like Seattle just fine.

You mean market-based salaries

How about programming with a market-based salary in an inflated market?

Does this really exist? If a company could meet the need cheaper, wouldn't they? Instead, you're either referring to using the wrong tool, and hence a high salary, or you're being relative to a given location. If that's the case, then pretty much everyone's salary is inflated, since there's certainly someone in the world who will do the job for $20k USD.

It's useless trying to talk sense into someone who clearly has a deep sense of resentment.

I suspect this refers to the languages and frameworks in vogue (Rails, Node, Angular/React/Ember), emphasis towards open source, and using Apple hardware. There's still a ton of work done in unsexy companies on Dells and HP using PHP/ColdFusion/.NET/etc.

Not at all. See my other comment.

> ...unsexy companies.../.net...

At unsexy companies, and at StackOverflow

Welcome back (my office is in the 201 building too). As you'll soon find Atlanta has a lot to offer but you just have to look a bit harder or drive a bit further.

You can't fix the lack of proximity to the ocean, but being able to get a direct flight to most airports in the Caribbean almost makes up for that.

in my personal experience, sf is better to visit than to inhabit. los angeles is the opposite.

Agree 100%. I will say though that there are many suburbs of SF that are way better to inhabit than visit, and give SoCal a run for it's money (cycling through vineyards on the way to downtown Livermore for example)...

Really? Los Angeles seems like an awful place to live. I've been spending quite of time there recently. The hours that people spend in their car is absolutely horrific.

> The hours that people spend in their car is absolutely horrific

here's a tip: don't do that. problem solved.

What does it take to be at that level (e.g. working at known, established tech giants and/or startups), knowing people or being knowledgeable + luck?

> (e.g. working at known, established tech giants and/or startups), knowing people or being knowledgeable + luck?

Passing an interview gauntlet will usually suffice. Be really good at sophomore level data structures/algorithms class materials.

working at one of the premier SV companies, google still doesn't provide sufficient income to purchase a home?

Sure it does on a sustaining basis, but you still have to save enough for the initial down payment.

> I was lucky enough to find out that Square has an Atlanta office

Was the salary the same, or was it adjusted?

The best way to afford housing in the bay area is to have already bought when the market was low. You can use that money to put in for a 3 bedroom house in or very close to SF. Unfortunately, it's too late to do this for anyone interested now.

Great advice!

Yes it was, too bad not many listened...

Luckily, you have the opportunity to follow this advice every 5-8 years.

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