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California's skyrocketing housing costs, taxes prompt exodus of residents (mercurynews.com)
136 points by jhonovich on June 23, 2016 | hide | past | favorite | 307 comments



There's some sort of Stockholm syndrome prevalent among too many Bay Area residents that compels them to accept the lower quality of life. I lived there for several years until recently, and it was a surreal experience to hear others discuss the sacrifices they were making just to have a roof over their family's head, to provide a half-decent education for their children. And these were well-payed folks at the brand-name companies! Those that took a tech job straight out of college and had never lived anywhere else seemed the worst affected. Not enough realized that they deserved more then they were getting back from the Bay Area.


Having lived in Long Island, NY and Boca Raton, FL I gotta say... I don't think I could leave the Bay Area.

The weather, the geological features, the schools, the meetups, the job opportunities... all factors.

But the biggest is that the people are truly interested in intellectual matters in a way that was not extant in the other places I've lived. My son is a programmer and nobody had a clue what he was talking about--which is fine--but they also couldn't care less to even try to understand.

And also, there is a lot of prejudice that I am glad my kids will not grow up in the milieu of.


>But the biggest is that the people are truly interested in intellectual matters in a way that was not extant in the other places I've lived.

This is the way I feel in Boston. The cost of living (mainly housing prices) gets more ridiculous every year, but the intellectual and cultural environment make me want to stay. Most of my friends back home (deep South) are easily able to afford to buy decent homes, while I'm stuck renting a tiny apt. Still, this feels like a worthwhile material sacrifice given the culture of this city. Then again, if I had kids, I might feel differently ...


Boston is an amazing city in terms of intellectual capital, no doubt due to its rich history and many universities in the area. The brutal winter and steep cost of living are what make it difficult for me to see myself living there long term; unlike NYC or SF where tech salaries tend to be at least somewhat adjusted for the cost of living, I noticed Boston tech salaries were only marginally higher than Atlanta's, while Boston has the third highest CoL after SF and NYC.


I have a child on the way, live in Frankfurt Germany and feel exactly this lack of cultural environment, as most topics in intellectual circles here can be either categorized into "how to make more money/keep up with the joneses?" or "how to be really politically and environmentally friendly while having a good quality of life?"

I'm really unsure if this environment is so great for children as i'd rather be able to get them in an environment where big ideas are discussed. I've been doing my best for the past few years by organizing meetups/events or supporting others who do likewise, but at this point I question if that is enough compared to just moving to a place where these things are just the norm.


Agreed - I like where I am, but I'm paying for it.

Then again, in another year or so I should be able to buy a place near a T stop.


Long Island and Boca Raton aren't exactly stiff competition in the "life of the mind" department. Also I disagree, IT is huge out there but other disciplines get short shrift.


LOL for sure.

And I agree about other industries but I happen to be in tech.


IT != software development


> But the biggest is that the people are truly interested in intellectual matters in a way that was not extant in the other places I've lived.

That seems like it used to be true more than it is now. I live in Austin, and you can't go to a downtown coffee shop without hearing a spirited discussion about programming languages, frameworks or even conversion rates (I heard that last one standing in line at a taco place the other day.)

It's partially, I think, because programming and computers are more ingrained in the culture at large, and mostly because SF got too expensive and so places like Austin, Seattle, and Portland have a significant number of tech startups now.


The conversations are on a different level though. In a secondary tech market you'll hear CoffeeScript vs. JavaScript, Laravel vs Rails or whatever. In the Bay Area, and also in Cambridge, the discussion might be about compiler architecture or reverse engineering.


That's some serious next level snobbery. Let me guess where you live.


In neither of those places. It's something I've observed living and working in both, however, and it's one of the main things I miss.


I would place those three or four conversations on the same level, to be frank. Also, living somewhere that isn't a tech capital, I'm actually annoyed to hear programming language discussion on the bus in the city, but maybe that's because I'm trying to get home from my job, not stay at my desk.


You're absolutely right. A better example of the former would be somebody building a basic CRUD app but describing it in brutal detail, throwing around as many words that buzz to the speaker as possible (REST, API, Bootstrap, etc.). Of course there's nothing wrong with that but it's boring as hell to overhear. A better description would be that in primary tech markets, the conversations tend to go much deeper and into areas that others would consider esoteric.


Jobs and day trips yes. Schools, no. Public schools are among the worst funded and least achieving. Good schools, go to Mass (with also good day trips, but harsh winters).


South FL has some truly awful schools; that was my comparison.


This is mid-Fla, but when we moved from a good school system in a Dallas suburb to Brevard County, my daughter went from top 20% of her class to top 5%. This was unplanned but it set the table for her to have a full ride undergrad scholarship leading to a graduate program with also an assistantship.

After leaving school ( she stopped at a Master's ) she left anything related to academia behind but she's still roughly able to exploit the degree as a credential .

But South Fl is a completely different thing. I once declined a job offer there simply because more than half of the rental property on offer appeared to be phone-drop scams.


But South FL also has some truly great schools. I graduated High School from one of them. Many of my classmates ended up in ivy league schools. Everywhere, in my experience, has some good and bad schools.


You can do magnet programs there though. I went to school in Tampa. In general the public schools were awesome, but the magnet programs were absolutely incredible.


I just moved back here. I can confirm. Now looking for an exit strategy.


Looking to get out as well, Broward/Miami area is overcrowded and pricey, not to mention poorly educated. Lucky enough to work for a company that will allow me to go remote - can anyone recommend a place on the east coast? (preferably warm climate)


Lots of my friends are moving to the Raleigh/Durham/Chapel Hill in North Carolina. They seem to like it a lot. I visit the area about 3-4 times a year and love it.


Isn't the CoL already rocketing up in that area of NC?


I'm sure it's gone up, but I think it's still pretty decent. Drinks/food are pretty reasonable. You don't need to live downtown since it's pretty car centric out there. Chapel Hill has that upbeat college feel I love.


Northern VA, DC area. Some of the best schools in the country.


Blacksburg Virginia?


I loved Blacksburg. But due to my rebellious, student nature I told the Montgomery county sheriff I'd never come back to that place. I'd hate to have to break a promise.


Go just a bit north. The line you must cross is between Pompano Beach and Deerfield Beach. Stay south of Cocoa Beach.

Ideally you'd be near Melbourne, preferably closer to the beach. Suitable towns: Melbourne Beach, Indialantic, Satellite Beach


What geological features of the Bay Area do you regard as a plus point?

NB Not being snarky - I live in Edinburgh which is overflowing with geological features [hence arguably being the birthplace of geology as a science] and I love that factor but the main geological feature of the Bay Area would appear to be a major disadvantage rather than a feature?


> What geological features of the Bay Area do you regard as a plus point?

I believe they may be talking about the Sierra Nevada range, with mountaineering matched only by places in the Andes, Himalayas or Alps. Yosemite is the climbing capital of the world and the birthplace of modern rock climbing. Sure, it's not right in the Bay area, but you can easily drive to a trail head within a half day or less.

Little known secret: the East side of the Sierras is where all the best action is at and the real estate is cheaper (although still overpriced). The downside is the tech jobs are few and far between and if you like urban environments, there aren't really any.


Half a days drive is a lot. In Edinburgh there are decent outdoor sports half an hour away.


Which is exactly why I said "or less". Depending where you live in California, Bouldering or sport climbing could be 20 minutes away,plus it's available year round. You can't beat that.


I assume you're thinking about the earthquake risk. We haven't had a major quake here in a generation, and people have short memories. The San Andreas fault exists day-to-day as a pretty chain of lakes.

I'd also count being in a place where the mountains meet the ocean as a plus, as well as the golden gate (the waterway, not the bridge, though the bridge ain't half bad, either). And a few hours away you've got Big Sur and Yosemite.


You should move to Portland. We have all of that and more. No wait, the Californians are already ruining Portland. Please, do not move here.


You can keep Portland: no fourteeners and too much bloody rain. I'll take my SoCal where I can climb 365 days of the year.


I guess parent meant geographical. Ocean, bay, mountains, forests, near-deserts, all in close proximity.


Seattle has much the same, with the plus of waterskiing in the middle of the city on Lake Washington. Of course, the boom in prices is affecting Seattle, too.


Yeah, I lived over half my life up there. West coast geography is just what I consider "normal". I don't think I could live in other regions of the country as happily.

I didn't find housing costs to be that far out of whack with the increased salary when I moved to the Bay Area, though.

And I found the soul crushingly bad traffic at the time to be worse in Seattle than in the Bay. My #1 reason was the weather, though. I just couldn't take the lack of sunshine. My mood changed so much when I moved down here. I'm sure it doesn't bother some people, and more power to them. I really miss the northwest when I visit. It reminds me of what I've missed out on, things have changed so much. Then again, I would have missed out on things that happened down here. And I've missed out on everything that happened in Omaha and Denver and...


I like the rain in Seattle. It makes things peaceful, and the wet air smells good. (I grew up in Arizona, where 367 days of clear blue sky gets a bit boring <g>.)


After about 10 years here in CA, I started liking the rain too. Now I love it when it rains. I just hated the way unpredictable weather (==rain) meant you could never plan an outdoor activity in the PNW without the decent possibility of it getting rained on. It limited my enjoyment of the "great outdoors". But in a larger sense, my (mood-related) gripe was with the grey, not the rain itself.


I do miss the Arizona sunsets, though. And the electric storms in Kansas - what a show!


bingo


Perhaps it's a character defect, but I consider "the life of the mind" to be more about books than something involving other people directly, face to face.

The philosopher kings of SiVa are as much the Medici as they are intellectuals.

"All mankind's problems stem from man's inability to sit quietly in a room." - Blaise Pascal.


There's value in face-to-face interactions and conversations like meetups and hacker spaces or math circles for kids.


Absolutely, but it all really comes down to homework.

Guidance can help, tools can help, but it's not like those will replace just doing the work.


It's not just SF. It's big cities around the world. They are drawing in more people than ever. Most have housing/transport issues that present as high cost of living. People still keep pouring in and successful cities stand out in terms of household income.

Even as the internet makes geography less relevant, the competition for living in cities keeps growing.


I've seen the "alpha cities" phenomenon explode since 2000. Where you live has become a proxy for your competence, importance, etc.

I'm not convinced it's not the Internet. Google "FOMO" for a possible mechanism. The Internet makes it easy for large cities, by sheer social mass, to send out a louder cultural signal and convince everyone else they are missing something by not being there. Talk to a young midwesterner and you will hear many whose ambition is to "get to NY," with this vague sense that magic will happen when they do. This draws more young ambitious people, which amplifies the effect. Eventually if you are not in SF or NYC you are nobody.

This isn't new, but I do wonder if the net is amplifying it.

I also wonder if wealth stratification is playing a role. Opportunity clusters in cities where there is capital available, and those tend to be the big cities where the most rich people live.


"Opportunity clusters in cities where there is capital available, and those tend to be the big cities where the most rich people live."

Which, in 2016, is kinda crazy. One would think with the internet being geographically close to capital wouldn't matter as much. Now it matters more than ever before it seems.

It's sad that the young midwesterner (hey that was me once!) has to try to "get to NYC" for the best opportunities instead of modern communications making those opportunities available in places like Chicago, or Indy, or that person's small hometown. That person shouldn't have to choose between sharing a one bedroom apartment in Bushwick with 4 other people or remain jobless/stuck at one job in whatever middle of the country place that person resides in.


I work out of Chicago about a week a month. Most of my college friends live in Chicago and have very good jobs in the technology and financial industry. Couple that with being able to live in awesome parts of town without even thinking about the cost, drinks/food that are much cheaper than NYC at the high end, etc. I think it's a great place with awesome people.


I currently work remote (kind of), and have worked remote in the past.

My perception is that it's much harder to get trusted and valued as a remote worker, unless you have the luck to be in a very meritocratic company (and I don't think it's possible to be 100% meritocratic).

Social interactions are key for all but the most technical of positions (and even then, there's social dynamics at work, only through papers or mailing lists or whatever).


Ironically, a recent contact told me of people who work there remotely, but from California.

We're doing it wrong :)


> Talk to a young midwesterner and you will hear many whose ambition is to "get to NY," with this vague sense that magic will happen when they do. Eventually if you are not in SF or NYC you are nobody.

Speaking as a late-20's midwesterner, I don't think it's about success or "FOMO" as much as it is about lifestyle.

The Midwest doesn't have real cities (except for Chicago). You really can't have an urban lifestyle in the Midwest. The cities here simply aren't developed enough to support it, and likely never will be.

Someone from Indianapolis / Cincinnati / Milwaukee / etc might respond to try to argue that you can, or that they do. But realistically, they're kidding and everyone knows it -- it's doesn't even remotely compare to somewhere like Boston or NYC or DC or Philadelphia or San Francisco or Seattle.

That doesn't make those places bad, it's not a slight against people who want suburban or rural lifestyles. But if your the kind of person who wants an urban lifestyle, you probably won't be satisfied by anything Midwestern (sans Chicago) because that type of lifestyle simply doesn't exist here.

This is where the "get to NYC" ambition comes from, far more than any idea of success or "FOMO", in my opinion.


it's doesn't even remotely compare to somewhere like Boston or NYC or DC or Philadelphia or San Francisco or Seattle.

The benefits fall off pretty quickly after NYC, Chicago, LA, and San Francisco. As a Midwesterner who has long considered a move for exactly the reasons you mentioned, my reaction to a move to Philadelphia or Seattle or Austin (or whatever) is basically, "why bother?" I can live an "urban enough by comparison" lifestyle right here.

But, that's not true of the Big Four.


For city life, Boston clearly beats San Francisco. In the USA, probably only New York can beat Boston.

Prime example: two decades ago, Boston's MBTA T (subway/tram/light rail stuff) had technology that San Francisco's MUNI still can't manage.

LA is a sprawl. Chicago is a war zone. Well, LA is that too. This may be city life, but it doesn't count if we're considering positive attributes!


"This isn't new, but I do wonder if the net is amplifying it."

I don't know about amplifying it, but it's certainly revealing that there are much better opportunities out there. Working in the midwest and reading about the coasts is depressing as hell.


As an Old Guy the coasts are depressing as hell.


I had a feller from HP trying to get me to relocate to SiVa in the 1980s. I dunno. I calculated that land price made Texas better, and it was for quite a while.

"If you aren't in SF or NYC you are nobody..." Whew. Okay then.

"Wealth stratification" is, IMO, largely an artifact of 1) increasingly abstract wealth and 2) low interest rates. This is oh so very much because of the tax code and because of Fed policy.


I think you're right about FOMO and the internet. Stuff like Meetup, Tinder or flash mob facebook groups only really work in cities, the bigger the better. OTOH, you are not totally isolated from stuff with the internet playing such a big part of culture. It's hard to argue with the economics, I guess. Cities have been drawing people in for a while now they haven't lost their pull.


I suspect you have to examine the premise that the internet makes geography less relevant. That's okay; I live in the middle of the country (something about which I am quite stubborn ) and a significant fraction of my recent job opportunities were based on somebody moving to Cali. Follow that yellow brick road.


As a California resident, I have the impression I live in the technology center of the world, that I am part of the 6th largest economy in the world, and that California is a beautiful place to live - and more importantly, that once you move out of California you will not be able to move back.

Also we have Feinstein so that's... that's a joy.

PS: I love it how there's a desperate need for cheap housing, and developments are approved - but always priced for big-earners.


That's because nowhere near enough is approved. The US population growth rate is around 1%. If San Francisco were growing no faster than the country at large it would need to build housing for about 8500 people per year. San Francisco is currently building around 3500 homes per year.

And that's not even accounting for the massive economic boom going on here, or the surrounding municipalities which are largely doing worse on construction (cough cough Palo Alto).


It's extremely unlikely that you are the keeper of the emotional state of millions of people who aren't you. There is tremendous arrogance in asserting that people who don't outwardly share your opinion are pathological, when your source is at best a few 10s of acquaintances.


>some sort of ... among too many

I don't see him asserting that millions of people are that way.. Simply that he witnessed several instances of this or that it may have been common for him to see this.


Sounds like they aren't paying enough. If people demanded what they needed to live a decent life, they would either have to get it or the companies would wake up and relocate more quality jobs to lower COL locations.


Problem is, soon as everyone starts demanding more, then the cost of everything else goes up. There is limited space, and those people making the most, will pay the most regardless. Just a never ending cycle.


Yep, supply and demand can't be overcome. I suspect raising minimum wage must have the same effect over time as well.


My point was that more good jobs would be relocated and distributed across the country to cheaper cities


A lot of folks are also immigrants, who need to wait close to a decade to become citizens to be able to demand anything.


It's interesting to hear these experiences from people that live there. Because there is certainly a romanticized version of it we see on the East Coast. Living in upstate New York, we have tons of wilderness areas, and relatively cheap living conditions. The grind out in California, just to say you live there, sounds scary.


But it's not just the grind to say you live there, it's the grind to work at (in many cases) the top tech companies in the world. The big question has to be: Is having the top tech company's name on your resume, or working on the kinds of projects that these companies are working on worth the grind of living in that area? In some cases, the answer will be yes; in others, I've gotta say I'd be hard pushed to agree - though for many people, the reasons to stay outrank the reasons to leave and that will be different for everyone.

Of course, I just moved to a farm in the country so I wouldn't have to deal with all that nonsense :P


Love that you're from upstate NY and your name is "overcast."

I'm making do in Ithaca just fine. More restaurants per person than New York City, a rush hour that only lasts 10 minutes on 5 roads, and a bunch of really nice people for a place this cold and gray make Ithaca the most good enough place in the world for me.

As far as big cities go, you take the great with the terrible.


Ithaca area is beautiful, I'm frequently in the Finger Lakes for hikes. Just did fifteen miles a few weekends ago at Treman and Watkins Glen. It's only a bit more than an hour from Rochester where I am, which has similar traffic, albeit the rush hour lasts a bit longer. But the food and drink scene here in the last five years here has exploded. There's been more than a few places open from ex-NYC restaurateurs.


Sounds like you did the right thing by moving somewhere that suits what you were looking for.

Similarly, I did the right thing by moving out of the Northwest to the Bay Area where my quality of life is vastly better.


eh, it just depends on what you want. Some people's priorities are different, and their tipping points are different. I live in an "overpriced" city, but I love it here. I've also lived in CA, TN, MO, so I've seen a pretty large range of high to low cost living. I'd much rather be in a large, expensive city than a small, cheap one.


Your options aren't limited to "large, expensive" and "small, cheap". There are two other options.

Large, cheap: Detroit, Houston, Atlanta

Small, expensive: Key West, Honolulu

Depending on how you count "small", add in any of: Palo Alto, Malibu, Summerville


I spent most of my childhood in California. Real estate is and always has been the number one industry in the state. The majority of my childhood friends' wealth seems to derive from houses their families bought in the early 80s or earlier. Prices have benefited from a stable of one trick ponies - fixed low property taxes (prop 13), massive population growth (net domestic migration is now negative), job growth from the tech sector, the cultural shift to assortive mating of dual income white collar professionals, and the drop to near zero interest rates. I thought for sure that prices had hit the mathematically inevitable plateau - and then came tens of billions in foreign capital fleeing China. Is there another unpredictable one trick pony waiting in the wings? At some point it seems like prices would have to hit a ceiling reflecting the fact that all future appreciation and demand has been pulled forward, at which time the great financial machine grinds down to a much slower pace, if not a halt. It will be interesting to watch and see what happens.


Negative interests rates... The Fed wants to stay relevant as a means of correction economic recessions and the rate is still pretty much ~0% atm.


The price will hit a ceiling at the exact time demand = supply, and not a moment before.

A worldwide markets for these homes now exists, which means the number of people who both want and can afford them is huge, and therefore the price will rise until that condition is no longer true.

Also, I believe we are again seeing signs of loan company shenanigans which, if so, will allow easy-to-game capital to continue to chase prices upwards as well.


Given that people don't want to leave the Bay Area and don't want to be homeless, prices seem to be largely determined by how much firepower the demand side of the equation has. In the absurd scenario of 0% mortgage rates and a 100% LTV interest-only mortgage you could theoretically occupy any house you wanted indefinitely for the price of the property taxes and maintenance (and turn a profit by subleasing to roommates or tourists). 0% is an extreme but how close could we get? Japan is already close to 1%. At which point it costs $10k/year or just a bit more than $800/month for every million in housing cost. It doesn't seem fiscally healthy (but who knows), and if any significant number of people started to consume housing in this way I can't see how we avoid another 2008 style housing collapse in those areas if rates ever rise.


The "demand=supply" argument doesn't exactly explain why a foreign billionaire would want to own an appartment exactly in San Francisco. Personally, I would buy a flat in Ibiza, Barcelona or Hawaii way before even considering SF.


I suspect it is less about the “foreign billionaire” and more about the single-digit millionaires worldwide looking for an ostensibly safe place to park some money and be assured of a healthy return (or at least not a loss).

It's a self-perpetuating cycle¹: people invest in real estate; prices go up; it becomes a more attractive investment.

¹Sometimes known as a “bubble”


don't forget barriers to new construction such as NIMBY, zoning, environmental


Real estate as a driver of the CA economy goes at least as far back as the Homestead Acts and the Reclamation Act.


Heh, funny to read this on the day my moving van arrives to get my things outta here! It's a little sad, but we simply got fed up with the standard of living here. And, the Bay Area just feels mismanaged.

Getting around is a royal pain. After living in Vienna, I was amazed at people who thought Bart was great. Really? I found it dirty, slow, and crazy expensive.

Of course everything is just crazy expensive. A beer garden opened up nearby, with a few nice tables and some decent beers. 2 beers will cost you about $16. It's like the entire economy is about paying rent. I remember going to heuriger in Vienna and grabbing a bottle of totally decent wine for about 8 EUR.

I'm not sure 64k people out of 38 million counts as an exodus, though. There's a whole lot of immigration going on.


I don't know when the wave actually broke but I was very disillusioned by the vibes of the bay area when I stayed for GDC in 2009. It seemed like they drove out most of the hippies a long time ago, more often than not people were just acting, very superficially and with a creepy adherence to a lost cultural heritage that felt more like selling out (get your shrink-wrapped Jerry Garcia T-shirt and GTFO).

To make things even more depressing one could feel the omnipresence of a rampantly ignorant / myopic tech monoculture.

I remember that I felt very relieved when I got back to Vienna.. :/


There was _way_ too much couture tie-dye at the Haight-Ashbury street fair a few weeks ago.

But then I stopped by the California Historical Radio Society booth (Radio Day is July 23 in Alameda!), and spoke with them abuot their "KSAN Live Jive CD Project", and all the good memories came flooding back.

If you're curious about the Bay Area, read David Talbot's wonderful history, "Season of the Witch".


The hippies either aged out or bought property decades ago. They were a real thing for a couple of years at most. The rest is myopic and ignorant nostalgia.


Boulder seems like this, too.


Median income in Vienna is around half of the Bay Area, so prices will always be higher, even if the very valid issues you mentioned were solved.


>>It's like the entire economy is about paying rent.

To be more precise, paying for real estate. You can't buy a decent home anywhere for less $1 million and property taxes are crazy.


We've lost most of our friends now, and the roots we were putting down over the last 7 years are eroding a bit. For the record our household income fluctuates between 300 and 400k and we live in a microhouse (500sqft) in Berkeley. Expanding is a difficult proposition.

Its an interesting set of factors that lets me buy a Ferrari far easier than a house. First lifestyle money, then tech money, now foreign investment.

And there are a lot of subtle changes neighboorhood to neighboorhood. Mission was once the most expensive in SF, now Berkeley is surpassing even them. Hayes Valley becomes hip, and Precedio Heights becomes more affordable because of the lack of public transit.

For the most part i've surmised that the city is full of smaller town transplants who graduate and think their 120k offer is the greatest opportunity of their lives. They shortly find out it barely gets them a toilet with two roommates and end up leaving for Seattle, Portland, etc while staying with their company. This cycle repeats over and over

Meanwhile, this engine extends the SFBay problem to the B and C cities -- leaving fewer places to run to.


What am I missing -- rent for large houses in nice East Bay suburbs seems to be around $3500-$4000 a month which is easily less than a third of your take-home income. I'm not sure about Berkeley proper.


Yeah. I don't know. We bought a real house on the Peninsula on far less income.


So, "exodus" is used to define a mere outflow of 60K residents ? That is less than 0.05%. Also, this article makes no sense. If California was losing people for the last 22 years, how come it's population went from 29 million in 1990 to 40 million in 2016 ? I hate how none of these "exodus" articles are data centric and explain these two discrepancies. Is the population growth then due to birth rate ? or due to immigration ? Also, interestingly the same article notes that job growth in Bay Area has been at it's highest point ever


Yeah, they used outflow numbers for the entire state to "prove" that there's an exodus from the Bay Area. Here's your hint:

"California has seen negative outward migration to other states for 22 of the last 25 years."

Obviously the Bay Area does not have negative outward migration, or the traffic and housing issues would be solved.

Another interesting quote cites a man inexplicably commuting from SF to the East Bay which is not something you'd do if you were trying to optimize your housing costs.

A third cites a woman and her sister moving from The Villages in SJ to Dayton, Ohio. Not mentioned is the fact that The Villages is a retirement community on a golf course (you have to be over 55 to live there).


Ha ha ha. These anecdotes prove the level journalism have fallen due to clickbait. The commute from SF to East Bay is pretty easy during rush hour.


It's immigration. California has had negative net domestic migration for a while. Population growth in the state is driven by immigration.


Don't forget natural growth, i.e. birth.

According to census estimates, California had a natural population increase of 1,332,394 (births - deaths) from April 2010 -- August 2015. In that same period it had a net immigration of 568,884 people, consisting of +834,999 international and -266,115 domestic.

On the other hand, when you look at the San Francisco bay area metropolitan region, you'll see that there's no domestic exodus and a net immigration of 274,598 people over the last five years.

[http://factfinder.census.gov/bkmk/table/1.0/en/PEP/2015/PEPT...]

So, yeah, with a little over ~90,000 new people per year in the region, the picture looks very different than the one the article was trying to paint.


One of the local public radio stations had a show this week about how well San Francisco is doing budget-wise. Apparently, the San Francisco budget in the last decade has been growing much faster than the local economy, and it's been all going towards paying pension obligations, assistance to homeless and low-income people etc. Talk about killing the golden goose.


Being from Chicago I say it's a good thing to pay down the pension obligations. Pension obligations can cause a lot of problems in the future. Although I don't believe governments should be growing their budgets aggressively, squaring gov obligations is a good thing.


Why do government pensions even exist anymore? There is absolutely no reason for them and they need to go. The government can pay a reasonable salary if they wanted skilled workers.


I agree with you. I think pensions are a mistake in general, however, many municipalities, counties, and states are locked in to existing pensions schemes. I am for doing away with pensions in the future, but the existing obligations need to be funded appropriately.


Doing away with pensions? Huh? How would that work? What would everyone do when they got too old to work? Do you think people should just build up a savings account? Without an annuity what would they do if they live longer than they planned and run out of savings?


You mean what would all the government workers do when they get too old to work? I don't know but I don't get a pension so why should I pay for theirs?


I don't understand (and I'm being down voted so I must be saying something stupid) but why do you care if government workers get a salary and a pension bought for them, or a bit more salary and buy their own pension?

And don't most most jobs still include a pension as a standard benefit? I'd say you were in the minority if you're a full time tech worker and have no pension at all.


The problem with government pensions is that the work of today is paid for with money today and a promise of money in the future for an undeterminable number of years. Many governments have not saved prudently for their future obligations and the result is current taxes going to support past workers, which taxpayers don't appreciate when it gets extreme.

In the private sector, pensions have been going away -- I've worked for about nine employers in the last 20 years or so, only one had a pension plan, a public school district. (I wasn't eligible to participate because I held a part time position)

Many (most?) private sector employers offer participation in defined contribution retirement plans such as 401(k), some with employer contributions -- those are much simpler to manage, today's work gets paid for today. There are some government plans of this type, and taxpayers don't get upset about them, generally.


Ok, so my ignorance was that when the parents said 'pension' they didn't say that they really meant 'defined benefit pensions'.

A 401k and other defined contribution pensions are still a pension.


In colloquial American English "pension" nearly always means defined benefits.


Government jobs are dull, underpaid, largely unrewarding, and people in them have to take shit from Ayn Rand acolytes like you every day for problems that are way above their pay grade.

Assuring that the people who serve society don't spend their final years in poverty is the least we can do.


There's social security, retirement funds, and savings. Why does 'government job' mean anything special?


Government jobs are often very low pay. Many government workers who are promised a pension are locked out of social security. If you are being paid so low that you cannot save for regular expenses, let alone retirement, then what are you going to do when you turn 65? Turn over and die immediately?

Also, the reason you assure pension to government employees is because they tend to be stable and dependable workers over the long term.

I bet you would lose your shit if government employees in your town had the turnover of a McDonald's. Higher turnover costs mean higher taxes and much worse/less dependable service.


This is like the "Java is slow" myth that will never go away :-)

In 2014 federal civilian workers had an average wage of $84,153, according the U.S. Bureau of Economic Analysis [1].5 By comparison, the average wage for the nation's 111 million private-sector workers was $56,350.

In Las Vegas, the average salary and benefits package for firefighter union employees was $199,678 (in 2009, I think) [2]. The average salary alone was $128,026.

Please also note that federal government pensions are in a league of its own - 80% of your last year salary - and there are stories in newspapers every year about, for example, street cops working overtime and making $120K+ in their last year.

[1] http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&...

[2] http://lasvegassun.com/news/2009/dec/30/cost-cutting-ideas-c...


If you compare like jobs rather than workforce averages without regard to distribution of kinds, you'll find different results.

You are also wrong about federal pensions, they aren't as a rule 80% of your final year salary. The normal FERS formula is 0.01 * high-3 * years of service (full months of service less than a year count as fractional years). The "high-3" is the highest annual pay of any 3 consecutive years of service. To get 80% of the high-3 (which, with increasing salary, is still less than 80% of last service year) you'd have to have 80 years of service.


>>80% of your last year salary

This was under the old retirement system called CSRS. If you entered service after 1987 you are under FERS where 20 years of service gets you 20% pension, and you get additional 1% for every additional year. So 40 years you get 40% pension, not great.


Sounds like a thousand other jobs. Any company would benefit from stable and dependable workers. Nobody else gets this special treatment.

I'm unconvinced. I believe they get special treatment only because they are a large lobby group.


Given that interest rates are 0.25% and inflation (non-core, the one you'll be paying) is >3% ... what is your alternative ?

A pension is the only chance you have of a decent life when you get old. There is nothing else.


I'm hoping Basic Income will be up and running by the time I hit my late 60s.


But the "basic income" proposals are completely unrealistic. The real proposals, generally referred to as "helicopter money" are about just forgiving central-bank owned government debt, then using the free cash to embark on large infrastructure projects.

You won't see any of that cash unless you're involved in the building industry.


There are other accounts/instruments that can replace public pensions. The reality is that politicians over promise on pensions and create unsustainable obligations for future generations.


They could just use defined contribution then there's no future liability.


Yes. But try getting that enacted into law in California.

Public sector unions are strongly against that sort of arrangement. They prefer that the taxpayer guarantee them a defined level of pension benefit (no matter what the investment markets do).

In other words, it seems that public sector unions want the taxpayer to insulate them from the real world shocks which the other 80% of people have to endure. It's a very valuable benefit and it's understandable that they fight for it. But it is super expensive for the cities and states.

In LA there was an attempt about 5 years ago to gather signatures just to put a measure on the ballot to transition city workers from defined benefit to a 401K style defined contribution pension plan.

But certain public sector unions made it known that they planned to send their people out to sign those petitions with unverifiable, fake names and addresses. This would increase the likelihood of a failed signature verification process, meaning that the petition would probably not succeed at getting the measure on the ballot. So they dropped the whole effort.


Agreed


They would save money themselves? I thought America is all about personal responsibility and independence and such? They can use 401k just like the private sector.


But a private 401k is just another type of pension. The people I was replying to were saying that pensions, in general, so of all types, were a bad idea.


Many pensions in the US promised guaranteed payments in retirement that they cannot now meet in low interest rate environments. This is one of the core issues with pensions in the US.

Also, pensions are not controlled by the individual. The money is pooled and managed by the pension fund. This is of course subject to corruption and bloated fees as we have seen. The 401k program is not perfect, and in fact needs to be totally reformed, but they at least offer more choice and competition and do not promise guaranteed returns.


Pensions are defined benefit, 401k is defined contribution. They are both retirement vehicles, but distinctly different, particularly in terms of risk.


Pensions aren't the mistake, low interest rates are the mistake.


For me the question is why don't all workers have pensions? As I understand it most 401(k) plans have high expense ratios, rely on people actively participating and generally leave workers with an underfunded retirement. I prefer a system much like the French. Leaving it up to an individual to plan 40 years into the future does not seem like a sensible social policy.


Agree, especially with all of the choices that employees have and the risks & fees associated with those choices. Mostly, it seems to be another way to funnel middle class money into the financial industry. The history of the 401k is interesting and was never intended to replace a work's pension.

"It was intended to allow taxpayers a break on taxes on deferred income. In 1980, a benefits consultant named Ted Benna took note of the previously obscure provision and figured out that it could be used to create a simple, tax-advantaged way to save for retirement. The client for whom he was working at the time chose not to create a 401(k) plan."

https://en.wikipedia.org/wiki/401(k)


Pensions used to be common until the 1980s. I found this report from the St Louis Fed talking about the transition. https://www.stlouisfed.org/publications/central-banker/summe...


Wall Street wanted in on the action which is why we got the 401k.


> The government can pay a reasonable salary if they wanted skilled workers.

Government doesn't even pay a reasonable salary + benefits for many positions including pensions, in overall monetary value, and the public and politicians aren't generally interested in fixing that.


Also, keep in mind, because of pensions most government workers don't get social security when they retire. My mother, a public school teacher for 20 years, only lives on her pension.

Now, if we think government employees should pay into and get social security when they retired thats a debate that might be worthwhile to have. However, in the meantime the trade off has been lower salary and no social security in the public sector vs private sector but you do get a pension in the end.


Because they were promises made a long, long time ago, when interest rates were high enough to support the idea of pensions and retirement?


Excuse my ignorance. How are interest rates and pensions connected?


The higher investment returns are, the less money I need to set aside now to pay future obligations. The lower they are, the more I need to set aside.


Pensions don't make any money with interest rates as low as they are. They need to be around 8% or so for pensions to be viable. Currently pension funds are doing the same unwise speculative investments everyone else is making because nothing else pays enough. As go pensions so goes retirement in general. Pensions were perfectly viable until the reign of Greenspan.


It's much harder for a government employer to remove a pension than for a private employer, so it's going to take a lot longer for the public sector to eliminate pensions than it has taken the private sector.

Governments tend not to go out of business, or get acquired. Governments rarely have the finances to buy out a pension (if they did, they would fund their pension obligations). Governments have a much harder time implementing a dual class workforce where newer employees don't get a pension, because they will often see public pressure when terms of employment are unequal -- a private employer may get pressured too, it can ignore it.


They aren't paying them down. They are just paying them.


Right. paying obligations. Hard to get people to work for you if you have a history of shirking your obligations. I want good people in government and city administration.

Likewise... homeless assistance: More a matter of how money is spent, not how much. Either way, it's something the city needs to budget for. Most of the homeless are San Francisco natives priced out of their homes, with nowhere else to go. The city redirecting resources that might mitigate their plight will not make the problem go away.


Not just San Francisco; California in general. Jerry Brown has done a fantastic job of forcing rainy day savings on the legislature, building a budget surplus, and enforcing fiscal discipline.


The work environment is really great and I'm glad I can quickly drive out into the countryside, but the overall environment is pretty terrible: there's inadequate investment in infrastructure leading to crummy roads, crummy schools, essentially no public transport, slow internet (in Palo Alto of all places), and the like. Taxes need to go up a lot and the whole NIMBY thing has to go.

California used to be a progressive place and we are still living off that investment. But like any extractive economy we are unsustainably mining the investments of the late 1940s to the early 1970s.

I must say I really enjoy tech so the Valley is the only place for me to work. It was fun living in SF but the companies up there aren't tech focused to the same degree.


Nobody lives there anymore, it's too crowded.


Population density doesn't indicate anything about migration or wealth distribution.


It's a play on Yogi Berra, a recently deceased baseball player, quote:

'Nobody goes there anymore. It's too crowded.'


What makes it crowded if no one lives there? Empty buildings? /s


Woosh... That's the sound of the joke going over your head.


As someone who enjoys being outdoors, I love CA and the Bay Area especially. The weather is great year round, and there is so much spectacular and wildly different areas to see within a relatively short drive, it's amazing.

But the cost of living is completely insane. It doesn't help that I moved from one of the cheapest places to live (Gainesville, FL), but my salary just about tripled when I made the move, and it's still a struggle. My $650/mo mortgage for a 1200 square foot house that seemed expensive and kinda small at the time is replaced by a $3k/mo rent for 930 square feet. Then state income taxes take a huge chunk where FL had none, yet FL's sales tax is the same or lower...

CA is roundly better than FL in just about every other way so it's worth paying a premium for now to be out here but it's pretty clear that it's not sustainable long term. I'm also happy to be paying much higher taxes if the money is being used responsibily but it is incredibly frustrating to see the government continually make no progress on solving the affordability and traffic problems of the area.


I'm a Florida transplant as well and I agree with you 100%. Used to live on the beach for 1/4 of what I pay here to live 2 hours from work. I'd love to go back, but the "opportunity risk" is real. You lose your tech job suddenly in the Bay Area, and you might spend 3-6 months and you're back at work. You lose your tech job in Florida, and you're probably going to be moving out of the state.

Tons of people have already popped up in these threads saying things like "But Austin!" And "What about Raleigh-Durham?" etc. While there might be greater than 1 tech company in these areas, they still don't hold a candle to the Bay Area when it comes to where you best mitigate the risk of job loss.


Anyone else alarmed that a doctor was leaving because the rent was too high?

A doctor is one of the jobs that is expected to pay top dollar in American society.

If a doctor can't make it in the Bay Area, who's going to cut your hair, serve your beer, or mow your lawn?

If wages don't rise in line with skyrocketing living costs, then the only alternative is a permenantly impoverished underclass.

People of the Bay Area: are you ok with that?



Recently took a trip out to the Bay Area, and when I did the back-of-the-napkin calculations, I figured it would actually be cheaper to fly from the Midwest and stay in a hotel every other weekend, than it would be to live there. Really neat place to visit, but I can't understand how anyone in their right mind would live there.


Just like people from the city might say "I can't understand how anyone in their right mind would live in the midwest"


What else can people do? The choices I see (with no mention of efficacy) are: leave, demand better pay, lobby for cohesive regional zoning and transportation planning that meets growth.


> lobby for cohesive regional zoning and transportation planning that meets growth

I agree that this is the right answer in theory. The challenge is that, in practice, by the time the critically important rail line or subway or high speed bus lane (or whatever) is built and put into operation, you're halfway to retirement and your kids are out of high school.

So, practically speaking, a lot of people conclude that the only effective voting is the kind done with the feet.

Too often state and local governments are not capable of doing their jobs quickly enough to solve the problems.


>>If wages don't rise in line with skyrocketing living costs, then the only alternative is a permenantly impoverished underclass.

If wages don't rise, people will migrate further reducing the supply to a point it won't easy for normal people to live their normal lives. Then the next round of migration will happen and so on.. until there won't be enough people to rent to and then the rents will come down.

The worse, the better. Let the rents go up until it all collapses on itself.


btw, how much do doctors (specifically primary care physicians) make in the Bay Area? They don't get bonuses nor stock, just base salary right?


May be that is the reason they are moving out!


All control of Bay Area housing should be put into the hands of a single "housing czar" with absolute authority to rezone. Usually democratic methods are preferable, but in this case it's clear they've failed in an absolute sense, and a new approach is needed.


Same with transportation. The reason transport is such a mess is because of all the different municipalities involved. To continue to think of the Bay as a group of totally independent cities is ridiculous.


I get what you're saying, but what's the alternative? Go back to the first half of the 1900s where San Jose was annexing everything?


Transportation handled on a state level with total authority by the state to place tracks and stations wherever they want. Certainly consultation should take place but ultimately state decides.

And yes, forced municipality amalgamation should take place. Enough with all the small villages that want to be their own city with their own rules to keep others out. Take a look at what Sydney is doing right now with council amalgamations to override NIMBY power. Melbourne did this a long time ago and as a result has been able to effect a lot more urban planning.


I think it would make more sense if counties and/or towns were consolidated rather than being the checkerboard of beggar-thy-neighbor constituencies it is now.


I'm fine here. I have a job in tech and I'll be able to put down roots and buy a home, Etc.

However by virtue of living here I basically force all of my children to do the same or move away. it's simply too hard to live here unless you're working in tech.


To enjoy a halfway decent life in the Bay Area (to not require roommates to meet expenses, own a car, and not have to commute from the Central Valley everyday) I'd say you have to make 6 figures. Or be married to/BFF with someone who does.

Moving from the Bay Area to Portland, my salary increased by 8%, but I can afford my own apartment and s brand new car, middle class hallmarks that were way out of my league in Sunnyvale or Fremont.


Six figures is a huge exaggeration. You can reasonably find a one bedroom apartment for yourself in west San Jose for $2000/month, likely less if you shop around or are willing to live in a studio, and live off $1000-1500/month for everything else. Even if you're making payments of a few hundred a month on, you don't need to be anywhere close to six figures to have that lifestyle.

Granted, the level of income you'd need for this is still hard to achieve without a tech job. But you don't need six figures.

Unless by the Bay Area you meant living in San Francisco. Then all bets are off.


In order to be able to afford 2K for a one bedroom apartment (definitely on the low end for Santa Clara County) you're going to have to save up at least that much for moving expenses. Want to try doing that on a less than 6 figure salary (I'd say 85K maybe if you want to stretch it). 60K could've landed you a cheap apartment in 2007, but not anymore.


As I said, apartments are easily found for that price: http://sfbay.craigslist.org/search/sby/apa?max_price=2000

But anyways, $3500/month (what I mentioned above) is 42k/year in take home pay. Doing some very rough back-of-the-envelope math, that would be a pre-tax salary of about 50k. Obviously that's not reality, but 60k is definitely livable around here. You'd drive a cheap used car and you wouldn't save anything, but you'd be comfortable and wouldn't have to worry too much about frugality.

Someone making 85k would be more than okay.


I have literally never heard anyone cite California taxes as having any contribution on them leaving. The only people I've heard mention 'high California taxes' are people who are explicitly trying to solicit Californians to move to wherever they are ('come to Texas! We have way lower taxes than you!').


Agreed. It seems odd to harp on that, especially for a Bay Area newspaper. Also, it's not at all specific on what kind of taxes it's talking about and it makes it sound like taxes are higher in the Bay Area than the rest of California.

Local income tax is more or less nonexistent in California (and the US in general, really). Property taxes are some of the lowest in the country. We do have a high state income tax compared to other states, but it's still negligible compared to federal income taxes.

I guess your federal income taxes will be higher in California because you'll make more money here than in most other states.


For the vast majority of people I think high real estate costs are a much bigger problem than high state taxes. CA state income tax is less than 9.3% of income for most people, a home is probably at least 30%.


As someone not in CA, it's a reason I have no desire to move there.


I don't know if reading this makes me feel better, as in, at least everyone else around me is getting fucked. Or if I'll soon feel worse for having accepted an offer to stay, even after 2 shitty years. I didn't harbor any fantasies of owning in New York but at least it was more fun and cheaper by far than Menlo Park


Come to Boise, Idaho (USA). We need high tech people. Excellent quality of life, low commutes.

https://www.tsheets.com/living-in-boise/

(I don't work at T-Sheets but they have a great page on living in Boise.)

Also in Boise: Micron, HP's laser printer division.


Craigslist shows about a half dozen jobs, just like it always does when I look. Other sources have similar results. Where might one find these companies that "need tech people"? Because I'm seriously looking to get out of the Seattle area, and Boise would be a first choice, but for the lack of available jobs.


If I hadn't stayed in Baltimore, I probably would've ended up in Boise. It's a lovely town.


These people who sold their Bay Area homes and moved somewhere else to pay cash for a house seem to gloss over the fact that they were able to do this because they struggled in the Bay Area for so many years and became real estate wealthy. They won't see this kind of real estate wealth growth in their new communities.


That's kind of the point, you can get more for less struggle elsewhere. They are giving up the wealth growth.


Right, but it glosses over the fact that they were not able to afford their lifestyle 'organically' in their new place. It only seems awesome because they're going in with huge wads of California cash.


Only if you are focusing on "wow they bought a lavish mansion with fifty acres and a stable". If they move to Ohio and buy a house- guess what, property ownership is very normal and attainable in Ohio by relatively ordinary people. Mega California bucks aren't necessary.


Huh? There is a lot more room for growth in small cities with functional tech industries, and these people can now afford to speculate on multiple properties for the price of their small Bay Area house.


> They won't see this kind of real estate wealth growth in their new communities.

The question is do they expect to?


My wife and I spent a year in the Bay Area (San Mateo), and there was a lot to love. Great weather, awesome farmers markets, plenty of work, etc.

But holly cow was it expensive! My rent was around $2000/month. I had a co-worker living in SF proper who's apartment was $4500/month. And that was 4-5 years ago, it's probably gone up by now.

After a year, we moved back to Ohio - I now have a good-sized house on nearly an acre of land, and my 15-year mortgage is just over $1000/month.

The difference is going into my retirement savings: I'm on track to have enough to retire at around age 45.


Yup, rents have gone up approx. 50% in the last few years. A 1 BR in SF is now averaging $3200/mo. I believe. AVERAGING.

The secret killer behind these prices is that only newcomers pay them. Most renters who have been in SF for more than 5 years are in a rent-controlled building, which means their rent is basically locked in, which is good on one hand but on the other, you can never move out. Black mold? Leaking roof? Rat infestation? Illegal units stealing your electricity? It creates a situation where people will deal with any and all hazards and illegal situations just to maintain their low rent because they know if they move they have nowhere else to go.


Yep, rents have doubled since I moved here.

I moved to the bay area about 8 years ago. In that time, the house in Seattle that I lived in doubled in value, the equivalent of about 50k/year. Since I have lived here, the rents have also doubled, the equivalent of about 25k/year. I'm actually paying about the same (mortgage there vs rent here). I could have parked everything in AAPL and made about 5x. There are opportunity costs everywhere.

Money is only part of the equation but I'm making more than that difference in salary and I'm a LOT happier in SF. Being closer to friends and family and having a better work/life balance, being able to ride my bike to work, makes a big difference for me in overall happiness score. YMMV of course.

The building I live in used to be a terrible slum situation, and the new owners have renovated it (of course, living here during the renovation wasn't fun). I feel lucky there. Friends of mine have also been evicted and moved to other cities or other countries as a result of not being able to afford anything.


You can get a studio out here for less than $3K in a good location, but it will take time and effort and you may lose A LOT OF PATIENCE trying to find it in places that are less than ideal. Now you may be saying, "but why not roommates," in which case I would say "hell is other people, especially when you live with them." Good on you for moving to a reasonable COL city, the best thing I can say about SF's job market is many companies out there let you work remote because apparently finding decent tech people out here is hard, so you could make the SF salary with that $1K per month rent and live like a king.


I would expect if you had chosen to grind it out in the Bay Area, you could have retired in Ohio even sooner.

But if you wanted to retire where you're working, yeah, it ain't gonna happen at 45 in the Bay Area.

Did you do the comparison at the time? Just curious. Part of what makes it work out here for me is that the cost of living means savings scale that much faster. But I have no idea where I'm going to retire.


You might be right. The move back was more for family reasons than money, but the money did work very well. (I kept my California salary and just started working remote. I've since switched jobs, gotten a 20% raise, and still stayed remote.)


This is happening almost everywhere, but at a less frightening pace than CA. And we are told continually by the chattering class and politicians that skyrocketing real estate prices - asset inflation - is a good thing. Since forever a stable residential real estate market was the goal and people understood its value. Now we're all gamblers, meaning losers. When the hedge funds and REIT's stop speculating in residential real estate and pull out, there will be a deafening crash.


Maybe the biggest reason they tell us that skyrocketing real estate prices are such a good thing is simply that, as long they keep skyrocketing, we won't see huge quantities of failed home mortgages.


Hedge funds and REITs are not involved in single family residential in the Bay Area, and even as a whole they are small players. Most REIT assets by far are in commercial / multifamily property.


They're huge players in single family rentals. Blackstone (a hedge fund) is the largest owner of single family rentals in the USA. And they really don't care about cash flow that much, they are trying to inflate the price of the asset, hence all the "cash over asking" sales. Which means they will dump it when they can't keep causing the prices to rise.


Why would they stop and pull out?


Bubbles act as de facto Ponzi schemes.

As money movies in prices inflate and returns are good. This attracts more money. However, it's the flow of money which is generating above market returns which requires exponential increases to keep returns up. Exponential growth is never sustainable so eventually new money can't keep up which lowers the returns. This further reduces the influx of money, further depressing returns. This pops the bubble.

Of note, the 401k system did similar things to the stock market which ended up reducing returns. In the end exponential returns are only viable when the outflow of money is greater than the inflow enabling a steady state. Eventually returns will end up averaging out as if that influx never happened, but it's going to take decades.

EX: A farm get's a fixed amount of sunlight, it can increase efficiency up to a point, but in the end it's going to output a fixed amount of food <= some constant * amounts of land. Investing more money can't push past that limit (diminishing returns), so eventually you just have more money chasing a lower return. On the other hand if you don't invest more money then the dividend continues indefinitely.

A huge range of things have increased in value because other parts of the economy improve. But, this is limited by overall economic growth. Also of note long term market manipulations are counter productive. You can prop up housing prices by reducing future returns.


Why did they in 2008?


The hedge fund buying spree happened after 2008.


I live in the Bay Area. I have been able to make it work for me and love it here, though I do understand some of the reasons why others may not. Cost probably tops that list. But, the complaints about traffic should not be focused on California. In my experience most of the cities I have to travel to (Seattle, Phoenix, Atlanta) have much worse traffic issues. My colleagues in those cities spend 5-10 extra hours driving during the week compared to what my coworkers and I spend.


I moved from Seattle to the Bay Area about 15 years ago, and at the time, Seattle traffic was far worse. Of course, the metro Bay Area is physically larger, so it's possible to conjure up a worse commute involving more miles, but for the same number of miles, at the time, Seattle was worse.

Traffic in the Bay Area has gotten quite bad of late, but I know Seattle has done the same.

I live 7mi from work so it hardly phases me. Particularly when I bike in.


I just visited some friends in southern California and the possibility of me moving out there came up in conversation. So, I used a cost of living calculator to figure how much more I would need to make to be at the same level... 60% more. Definitely not going to happen.


I visited a few times in the past. Spent a large part of the day stuck in LA traffic. It wasn't even morning or evening community, it seems it is an all day kinda thing.

There was a metro / subway there but it never seemed to go where we wanted to go.


Traffic in LA is an all day (and all night) thing. But, like anywhere else, you can choose to live close to work -- or not.

The light rail is actually a huge success story in LA right now.


I only took Uber mostly but would also commute from downtown to Beverly Hills. I never once got stuck in traffic but we always left after 10am.

Also it depends on which way you are going. The 405 north of Sunset is a disaster if you (in general) are going from West LA to the Valley after work but if you travel the opposite ways, traffic is generally fine...


Not to worry. In just 25 more years, the metro system will go almost all the way to the airport.


Something that most people fail to calculate as well is the difference in hours spent for work. If you have to add 2 extra hours of daily commute to your schedule you suddenly decrease your hourly wage by ~18% (estimating original commute of 1 hour daily). Not to mention all the other costs associated with that extra driving.


Meh, it's not impossible. My salary went up 50% when I moved here.


Ok, but a 50% salary bump doesn't help as much if you also get a 4x (or more) house cost bump.

Before: 100k / 12k ($1k/month) = 88k After: 150k / 48k ($4k/month) = 102k

Sure, you say to yourself that you ended up with an extra 14k, but then you need to still factor in the rest of your increased costs. And you should probably recalculate everything as an hourly equivalent since you'll likely add 2 or more hours to your daily commute in exchange for keeping that house cost bump at a mere 4x.

The numbers shift based on where you are and how much you make. The point is that a large number of people don't properly factor in all the actual and implicit cost and quality of life changes.


When Yahoo bought Interclick, and then subsequently brought us out, they gave my team CoL bumps that had us at roughly the same level in the Bay Area as we were in South Florida. But we were away from the heat/humidity, lack of undulation, and bugs (flying cockroaches; ugh).


And the bullets.


I looked at some pay ranges on Payscale and a few other sites and I really do not see that happening. Perhaps I could swing a 30% increase, but (after taxes) the difference in rent alone would consume most of that.


Just wait until enough democratic voters are imported to overturn Proposition 13 (caps property taxes at roughly what they were when you bought the house, and requires 2/3 vote in the legislature for tax increases).

California is trying so hard to go full Venezuela, and the only buffer they have are the three or so major industries that are doing well (agriculture, entertainment, and tech). If there's a contraction in those sectors, expect a death spiral.


Anyone happen to know what is the definition of "middle class" for the Bay Area? Given the higher incomes amd cost of living, I have to assume the range is higher than most other regions.


Then they move to another state, and drive up the housing markets, and vote for all the same stuff that made California untenable, and wonder why the natives are hostile.


I doubt the newcomers will be voting for NIMBYist ordnances though; that tends to be something existing owners do.


jff is referring to the exportation of left leaning voters.


I went the opposite route as most. I was remote for 3 years from Texas and then moved to the Bay Area for work. And I have a family of four.

Key aspects that make it work for me are the following:

* Accept a long commute to a more family-friendly community with good schools.

* Live near BART and use it everyday.

* Work in the city, not the South Bay.

* Make sure you have two strong professional incomes.

* Pay for good quality child care and/or after school care.

* Pay the high housing costs and accept that you will redirect a good portion of your investments towards housing here. And it won't be as nice.

All in all its been worth it for me. I am working with extremely smart, driven people who I am learning a ton from. I don't have to hide my political views, and everyone has been open and accepting. It has been very easy for us to make great friends in a short time.


"I am working with extremely smart, driven people who I am learning a ton from."

This is something being overlooked completely. There aren't a lot of other places that have this concentration of progressive minded bright (tech and non-tech) individuals. Great things will come out of this density. It sucks that the non-techies are being pushed out, but that should accelerate the need for housing reform. This density must be maintained and made widely accessible.

Vote. Call your rep. http://www.dof.ca.gov/budgeting/trailer_bill_language/local_...


At the risk of the grossest generalisation, the Bay Area has worked because it's combined two very different types of people. On the one hand, the engineers/techies (with roots in the defence industry and conservative midwest backgrounds) and on the other, the idealists/utopians (with roots in the counter-culture movement). Strange bedfellows, but a world-changing combination back then. I don't live in the Valley now, so can't comment on the situation, but I hear it is far more of a mono-culture now.


If it is a monoculture now, it's because the engineer culture took on counterculture values while pricing the actual counterculture out of the region. The engineers still have their conservatism in that they tend to think of as many possible failure modes as possible and try to address then when they can. It's just not recognizable as such because the rational, cautious, establishmentarian 1950s conservatism has been almost completely replaced by emotional, religious, populist conservatism.


It doesn't need to be. If all the tech companies are experimenting with ways to up-end different industries and ways of doing things. The municipality should also invest in experimenting with how to maintain affordability and accessibility and therefore diversity. Currently, the municipality, is geared to just make sure real-estate investor values are maintained. Therefore, the bill mentioned above.


Maybe it was also just a unique period of history, never to again be repeated.


I'll read the article later, but this sounds like a replay of about twenty years ago. Articles in the WSJ, NYT, et. al., about how CA's high housing prices and taxation are causing an exodus to such places as Las Vegas (and we see how that turned out). I was too young to have paid attention at the time, but I wouldn't be surprised to go back to the archives to the 70s, where one might find the same articles.

I know, this time it's different $BECAUSE_REASONS. No, it's not. Some individuals and companies will leave, but CA will continue to be crowded in some areas, heavily taxed, and costly, just like it's always been.


Yes.

Also, tax rates are higher today than they were in the 1970s.

One data point: California statewide sales tax base rate was in the 3.75% to 5.0% range in the 1970s. Today it's 6.25%.

https://www.boe.ca.gov/sutax/taxrateshist.htm


NB: net _domestic_ migration. Population still increasing.


I left NYC for the Bay Area two years ago and just moved back.

A lot of it was for personal and career reasons, a lot wasn't. At a certain point I couldn't justify paying oodles for a dark 1BR in Mountain View when that same money could get a better apartment in the West Village.


No interest to move to the Bay area. You could work literally anywhere else and live like a millionaire on their salaries but by the time you've paid for a house and car there you might as well live in a VAN DOWN BY THE RIVER.


There's no river, but I found this. http://sfbay.craigslist.org/sfc/sbw/5642724453.html


Oh wow only 900 a month? finally something I can afford to live in!


It also seems like there's no push from the buy side, in CA we're all sheep. likely b/c there is no community so the rent-taking can wratchet up all day long.

I think if people en masse began to reject extortion rent we could have a situation. This never seems to happen but it would be a spectacle: thousands of 160k/yr workers decide to camp in tents until rents subside, all camped out in the streets in a section of Sf.


Atleast california state or San Francisco city don't yet claim a cut of your intellectual property. After all you use their land and infrastructure. Also, the state and city governments don't yet have their own firehouse of data collection into your communication.

I wonder if some enterprising landlord will put in a clause into the lease to own your intellectual property and communications while in your residence. Would people sign the lease for a 20% rent discount ?


When people saying housing costs are out of control in California, really they mean the bay area. Every other part of the state is no worse than anywhere else.


This is objectively not true [1] and has the same sort of arrogance that frustrates people who live in other areas of the state. Is the cost of living ridiculous? Absolutely, but the higher-than-average salaries at least help compensate.

Consider, for example, San Diego [2], which is considered the worst city for long term wealth accumulation in the entire USA.

1. http://www.trulia.com/home_prices/California/ 2. http://www.sandiegouniontribune.com/news/2015/oct/26/san-die...


Hard to believe this article when it says Detroit is a better place to earn wealth than NYC.


Huh? CA has had real estate values vastly above the average since the 1980's. I remember seeing dumpy ranch houses in Salinas, CA for nearly a half a million in 1992. Such a house would have been $40K almost anywhere else.


San Diego county coastal isn't what I would consider in control...


It's just as bad down here in LA. Six figure incomes get eaten up pretty fast by rent/mortgage and taxes.


Yes. Real estate is surprisingly expensive up and down most of the coastal band from La Jolla to Mendocino.

Even in lower density places like Encinitas, Carlsbad, Buellton, San Luis Obispo, Paso Robles, Half Moon Bay ... Sebastopol.


It's unfortunate, California is such a beautiful place. But it's turning into somewhere to visit, and not live. See you soon Sierra's!


I move around and travel a lot for work - I've lived in 4 states in the last 2 years (CO, WA, CA, TX) - and one of the universal things across all the midwest and west coast that I've found is that while most people like the weather/scenery in California EVERYONE hates people from California, except for the people in California.

I've heard the saying "California would be great if it wasn't for the people" in literally every state I've spent significant time in when they find out that I lived in the Bay.


Curious about this, what do they hate about Californians? I mean California is very diverse. The main cites (Bay and LA) are very liberal but the restof CA is pretty right leaning. So I imagine you get pretty much every kind of person from California and it would be hard to hate all of them.


When I moved from San Francisco to the Denver area about 10 years ago, the attitude I picked up on wasn't so much personal hatred as it was, "Oh great, another Californian moving here to make our freeways more crowded and drive up the cost of everything".

Sure, there are significant cultural and political deltas, but I think a lot of the disgust for Californians moving to other states is just the simple fact that people generally don't like change in the form of "outsiders" flooding "their" state and threatening the status quo.


Good old NIMBYism


Just like half the statements here, this could be changed to "People from the bay area", "People from LA", etc. California has a lot of great people and beauty but when you equate the whole state with the two big cities, of course it paints a negative picture. The entire central coast I met more awesome people than I have living in Chicago for 20 years.


Echoing what you said, I've never met nicer people or made friends more easily than when I lived in Sacramento.


Sacramento and its surrounding region is filled with a lot of latent demand for people who care about things (let alone think about things) and want to do things, which there aren't a lot of --- probably because it's a government-oriented region, which might lead to a tendency to be reactive instead of proactive.


I moved out of California to Texas a few years ago, and part of the reason (besides housing prices) was that I too was sick of Californians. The idea used to be "California leads, the nation follows" but politically, that's changed, and I frequently hear about how sick of Californians everyone else is. Tired of people from CA moving to their areas and trying to change it politically. I can see their point.


"California leads, the nation follows" and "tired of people from CA moving to their areas and trying to change it politically" don't exactly contradict each other.


Agreed. There's a very special mix of stupidity and arrogance you see in the kids that grew up here. "Swag/YOLO" culture is to blame IMO.


Is there anyone FROM California anymore? I'm guessing that sentiment comes from the type that are attracted to the entertainment industry.


Yes, many people are 'from' California; including myself. California is a pretty big state so keep that in mind. It's not just LA and SF.


Yes. Millions and millions.

Just curious: if you work in the tech industry, is your impression that the tech industry in CA is populated mostly by people who came from outside the state?


From and outsider, yes, that is the impression a lot of us get.


Born there, spent many years there too. Moved out a few years ago.


Born in Concord, California, but got out by the time I was 8.


Of course, they say this about America too....


Totally. Speaking as someone who lived in the bay area for 4 years and happily left after college, why live in CA when you can work remotely from anywhere else, live well, own a sizable property, and make decent bank? The bay area is great to visit, I was literally just there a couple months ago. But to live I would need to make 4x what I do now.


Well, the weather is nice in many places, and it has some beautiful scenery. Probably why so many people live there in the first place.

Texas on the other hand is hot and flat. Really boring here. Oh and it's too crowded. Yep, if you're from California Texas is worse. Don't want to move here. Please stop moving here, please, oh god please.


I know what you're trying to do, but its not going to work ;). Texas is about as interesting as you can get, especially if you live in Austin. The housing costs are not ridiculous (yet), you can live in decent house near downtown, COL is low, no state taxes etc. Quite a wonderful state, especially if you're young and in tech.

BTW, there is also a vibrant live music scene. And also a lot of theater and art. Did I mention the food?

The only thing I would say Texas lacks are good beaches. We do have a lot of rivers/lakes though. But for someone who grew up near the ocean...it does suck.


It's oppressively hot though. I've been there many times for work(Dallas,Houston,Austin), and there is nothing enjoyable about being in Texas anywhere near the spring/summer months. Flooding, tornadoes, and other severe storms sucks too. Food is good though for sure.


Just pray you don't end up on the wrong side of the law (to be fair, the same could be said of CA).


> the same could be said of CA

I don't think anyone would want to spend time in a typical CA prison or jail. Overcrowding, violence, gangs, insufficient medical care, etc.

LA County has had some well publicized problems with sheriff's department guards severely beating handcuffed inmates. It's probably not a place you want to visit.


Definitely. CA prisons are some of the worst in the nation, which is why the state was ordered to release prisoners to reduce crowding. But Texas has a death penalty with teeth, hard labor, corporal punishment, and equally poor prison conditions (less crowded and less of a gang problem, but way worse weather which you're mostly not sheltered from). The south in general is a terrible place to fall afoul of the law, and probably either Texas or Louisiana claims the trophy.


How do you mean?


The death penalty, and heavy incarceration with atrocious conditions.


Most Texans, let alone Californians fleeing high prices, don't have to worry about such things. Besides, the death penalty isn't exactly a negative if the alternative is life in (a Texas) prison.


Perhaps I'm alone in deriving small comfort in the knowledge that even if I were framed or otherwise unjustly convicted for the most atrocious of crimes, this would not be my fate (though the federal government showed in MA, for instance, with the Boston Marathon bomber, that they will override humane state law; you're never truly safe in the US). The knowledge that a gross miscarriage of justice could land me in "hell on earth" was troubling in CA (death row in TX and CA are quite different beasts on the other hand).


While our death row is an issue, you are something like ten to twenty thousand times more likely to die at the hands of our idiot drivers here in Texas. So keeping a sense of perspective is important.


Replace "hot and flat" with "gray and rainy" and that's the western third of Oregon, too.


Recently moved from the bay area to Austin. I hate the weather and the bugs. I plan to move back eventually.


Of course, hobbies and preferences are inherently subjective, but CA has a lot to offer.

Parts of the state have (what I consider) perfect weather year round; access to the beach and mountains to ski/snowboard, tons of other outdoor activities, etc. You can find most of these in other places, of course, but CA is pretty unique in that it's all in the same state, and easily accessible.


No one is denying the beauty, and adventures that await in California, that's why people live there. The issue here is what the original article is all about. When it becomes a grind just to live there, you can't even enjoy what makes it so awesome to be there.


This. I've lived in Los Angeles almost my whole life. I visited the beach maybe once in the last 5 years. Why? Because to do so, you have to be willing to sit in at least 1-1.5 hours of traffic. When you get there, at least 30 min to find parking. There are simply too many people in CA at this point to enjoy anything it offers. Leaving the house for me means waiting (in traffic, lines, for parking, etc).


Something that a lot of commenters (and the article) missed is that there is a _lot_ of CA that's not: LA, SF, SD, etc.

I grew up (and my parents live) near San Luis Obispo, CA. The central coast has: pockets of perfect weather, proximity to wonderful beaches, proximity to winte rsports, etc. Yet, there's under a quarter of a million people in their gigantic county, and a small apartment or house can be found for a (fairly) reasonable price in parts of the area. SLO even has a fantastic university and a bit of tech has sprung up around it (Amazon has SWE offices, etc).

Much like people who don't live on the coast harp on, there's much more to CA than the popular few cities.


>There are simply too many people in CA at this point to enjoy anything it offers.

The problem you describe does not get enough attention. The state and local governments have seriously mismanaged growth over the last half a century or so. The individual person's quality of life has truly been diminished in the way you describe.


I know, I was just in Santa Monica visiting a friend for a week, before I headed off to the mountains. I feel sorry for what she has to put up with daily.


Access to the local economy.


So, you're making 'decent bank' now yet you need to make 4x that to live in SF?


You can make a ton of money elsewhere, relative to cost of living. If you were to move to SF, to have the SAME living standards, you'd need to making multiples more than that.


I mean, if you're talking about keeping the SAME living standards moving from somewhere cheaper to SF then that would apply to any major city really. Just depends on your priorities I guess and what you like.


Well, we're discussing standard of living, so that's the priority right now.


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