- call your State Assemblymember about SB 35, which would streamline (read: Force cities to approve) the production of housing near transit. Up for a vote very soon
- call your State Assemblymember and ask them to vote Yes on AB 71, which would end the state tax deduction on second/third homes and use the money to build affordable housing.
- contact the Brisbane City Council and ask them to build housing on the Baylands, near Bayshore Caltrain. The developer wants to build 4,400 units and the city wants to build 0. Baylands@ci.brisbane.ca.us
- Ask for more housing in the Central SOMA plan. BART and Caltrain are packed every commute hour and they want to add 50,000 new jobs and only 7,500 new housing units. Best is to show up for the hearings, failing that, email the plan director, email@example.com. http://sf-planning.org/central-soma-plan#contacts
From following the YIMBY movement (http://www.slate.com/articles/business/metropolis/2017/06/yi...) it's hard to not take the YIMBY position. More needs to be built, but we can have ~10% BMR requirements as ways of increasing diversity in a neighborhood and preserving some local control/culture. If enough is built, there won't be a need for BMR.
Look how rent control turned out.
To offset crazy high demand and prices, the only option is to increase supply (build taller, denser apartments/condos) or limit demand (disallow foreign buyers who speculate or invest, increase property taxes for owners that rent out their houses)
See e.g. Berlin vs LA:
In Berlin all rents are controlled by default. And despite similar purchase prices, rental prices are half of LA's.
 only newly built units or those renovated for more than 1/3 the value of the unit are allowed to be rented without price restrictions. This keeps the vast majority under rent control.
There's more than enough housing for higher-income people, so rent control there is moot.
I have friends in London whose rent (in the same apartment) went up 10% every year for years until they had to leave the apartment. This is not happening in Berlin.
Rents in Berlin are a joke compared to London. You can actually get cheap and plentyful housing just outside the city, but then you'll need a car as well.
Either way 15% in 3 years is still rent control.
> Either way 15% in 3 years is still rent control.
...which affects very few people.
There are some places that suddenly became "hip", where rent increases drove out lots of low-income people, which caused political backlash. These people really just had to move to less popular places.
This has been the case for the last couple years at least. What do you attribute the discrepancy in rent increases vs purchase price increases if not for rent controls?
Do you know nobody living cheaply with an old contract that they would never get today, and that their landlord can't increase to market rate? Cause I know loads such people and this would not happen in a place without rent controls.
Rents don't go up proportionally, simply because the demand isn't there. During the US housing bubble, rents didn't go up either, while property prices went through the roof.
> Do you know nobody living cheaply with an old contract that they would never get today, and that their landlord can't increase to market rate? Cause I know loads such people and this would not happen in a place without rent controls.
That's because most contracts specify that increasing the rent follows the standard procedure: Over three years, rent can rise by up to 20% (15% in Berlin), if the comparable rents in the area have risen as well (which is influenced by market rate). Ultimately, this limits the pace at which rents rise, but not the extent. In Berlin, only very few areas could sustain such growth, whereas in places like Munich where people earn way more, rents have risen much higher.
This is also not the rent control specific to Berlin (which is what you originally referred to), these are federal regulations.
All of Germany is under rent control in that context, and IMO it works compared to exploding rents in the US and other countries (UK, Israel, most places really aside from some of continental Europe).
That's because most contracts specify that
increasing the rent follows the standard
procedure: Over three years, rent can rise
by up to 20% (15% in Berlin), if the comparable
rents in the area have risen as well (which is
influenced by market rate). Ultimately, this
limits the pace at which rents rise, but not
It all depends on your contract. Some contracts may put limits on rent increases in. Yes, in Germany there effectively is rent control that prevents a doubling of the rent within a year, but generally rents don't double within a year.
If those rent controls were good enough to satisfy the affected people, why are there protests and demands for additional laws for even more rent control in places like Berlin? Why is living in Munich so hard to afford? At what point does rent control start to "work"?
For starters, Berlin is known to be one of the cheaper German cities until recently ("poor but sexy"). In addition, the climate, geographies, and economies between LA and Berlin are significantly different.
Because income is one half of LA.
You'd end up paying 25$ for a coffee just so that the barista can afford their overpriced housing.
If you're just raising the cost of living, but not the standard, you're not gaining anything for anyone.
I'll offer a lay-person first-person view in contradiction to this theory: rents set a solid bottom salary level acceptable to people. A typical Bay Area rent can consume 100% of your salary once you have a family involved.
As countless HN threads discuss, i'll pre-answer the typical nay-sayers. Yes, i realize I can raise my entire family of four in a studio apartment. I choose not to. Most people I know choose not to. Yes, i realize I can raise my entire family on ramen noodles, i choose not to. Yes, perhaps i'm picky. Yes, I realize I can drive 5hrs a day and live in a nice house -- I choose not to (mostly because my workday is already 10+hrs.). Yes, I can have roommates live with my family (seriously, someone suggested this on another HN thread. This is down-right creepy. I dont want a roommate living in the same house as my 1yo daughter.)
Call me prissy, but I just figured that Ivy League educations, CS degrees from top-5 institutions, 15yrs of experience and two decades of hard work would afford me more than a studio apartment.
Where does this all put me? It means I have a hard-hard bottom on what salary is acceptable in the Bay Area. Practically speaking, it has meant that I stay in NYC where live is more affordable (yes, i've done the math 10x and can demonstrate it.). I have a great live in NYC on a good tech salary. I'd give up half my quality of live to live in SF, which means that I need a much, much higher salary in SF to make it worth moving there.
BMR isn't just about culture and diversity. It's about teachers and service industry workers and everyone a functioning city needs. The gap is so large between market rate and affordability, and there are so many richer people still wanting to move into SF, that it is likely wishful thinking that market rate development will be "enough" to solve the problem.
And that is the reason why the Yimby position is not an obvious choice. Cities need to negotiate with developers to have sufficient BMR housing to be functional.
Targeting BMR is going to be insufficient in SF anyway when 96% of the city rents units that reset to market rate when someone moves out, only thing that's going to help is a lot more new units of all shapes and sizes, hence the legislation listed above.
Think of it like overfishing: you could just as easily say overfishing is a public problem that private fishermen shouldn't be "forced" to solve through quotas. Some fishermen used to believe that, too, right up until the day there weren't any more fish for them to catch because they'd destroyed the population they relied on for their livelihoods.
If housing costs in and around SF don't get under control soon, we're going to have a lot of very rich people who can't do much because there won't be any Uber drivers, baristas, waiters, garbage collectors or really any lower-paid service-sector people to keep the area functioning. And that will pop the housing bubble in a way that's devastating to developers, but they currently don't believe they have any incentive to head it off -- let somebody else build the cheap housing, I'm going to build as expensive as I can!
I would agree about the in-elasticity of the labor market, we're finding out right now. I see plenty of hiring signs around.
So luxury condos and basic apartments either don't exist, or are identical to each other?
Unlikely. I strongly suspect you don't actually understand anything about physical construction given your seeming belief that all housing units are fungible. So I'll simply state it for you clear and plain: they are not in fact all fungible.
And it's not their fault if only enough housing is being allowed that they can get away with making luxury only housing.
Ah, it's the evil gubmint's fault. Well, that explains a lot.
Did you read what I said enough to make a counterpoint with new information or thinking? Care to be wrong about other things?
Wouldn't you rather be using the loan/tax subsidy to house 10 people in rentals instead of 2 in a BMR condo? Asking for 25% BMR is holding back development and the marginal number of units built in each development. 10% is good compromise for service jobs (though service jobs do pay competitively in the bay area for the most part, teachers make 100k+, cops make 150k+). I'm not saying end BMR completely, just a compromise for which valid reasons exist, with the aim of hopefully someday eliminating it.
How long has SF had a BMR program? and rent control? I think they've both hurt more than help. Possibly even by design.
You're way off. The median annual Teacher Elementary School salary in San Francisco, CA is $69,389, as of June 28, 2017.
Cities also need a large number of service industry workers that make even less than this.
I agree, we need to build more housing. It seems it's not quite that simple, though.
By that logic, these arsons will help reduce rents in Oakland... it makes no sense.
No. That is a fallacy on your part, denying the antecedent.
Especially given the shocking number of uneducated people who insist on keeping their backpacks on their shoulders despite the train being packed. Totally pisses me off!
Don't even get me started on the weird station lines that people form at Embarcadero/Montgomery/Powell...
This way, the space between your legs (which is about the same width as your shoulders) serves as a convenient location to store said bag, while also allowing you to stand over it and thereby protect it from trips/kicks and reduce your overall surface footprint.
And the best way to fix Bart overcrowding is to build apartments near where people work so they don't HAVE to commute.
Wikipedia says that current headways fall short of the original plan, which seems like it could be part of the problem:
> In the 1970s, BART had envisioned frequent local service, with headways as short as two minutes between trains and six minutes intra-line on the (quadruple-interlined) section in San Francisco. However, headways have fallen short of the original plans, presently three minutes between trains, and 15 minutes intra-line in San Francisco.
What is the reason for this? Do they not have enough trains? Is it a safety issue? Do they not have enough conductors/drivers/personal? Is it an engineering problem, a money problem, something else? Seems like increasing train frequency would alleviate a lot of the stress on the system and be relatively inexpensive.
Reading between the lines it sounds like there is a money problem constraining it, and then we get to the controversial issue of how they manage costs.
What ended up happening, though, is that as factories shuttered, the neighborhoods that were built around them started to collapse. The net result was pockets of localized decay, that eventually led to the entire urban area rotting as more people left. It's actually kind of stunning to see in person. (I live about 50 min South of Detroit). And oh, the riots of 1967 didn't help, either.
It's hard to imagine that happening the the metro-Bay area, but I remind myself that people once thought GM, Chrysler and Ford could never go under.
Lafayette, Louisiana is in a similar state, all this suburban infrastructure investment that is ultimately a giant waste: https://www.strongtowns.org/journal/2017/1/9/the-real-reason...
If a factory closes down, you are stuck with a specialized building that can't really be used for anything else.
If a company in an office building closes down, you can pretty easily replace it with either a different company, OR with simply more residential housing stock.
Unless the idea is social isolation, anyway. Sometimes the gleeful description of "progress" makes it sound like there's cheering on of the cyberpunk dystopia going down.
Why not build businesses where people live? Apple can spend 5 billion on its new campus in the middle of nowhere, but the public has to shoulder the cost for transit. 90 percent of Google's and Apple's domestic workforce could probably do at least 70 percent of their work from home. Apple prides itself on renewable energy usage, but it's perfectly OK for its employees to spend 3 hours idling in traffic?
Planned development areas where you get a bunch of housing, businessplaces and transit built in the same place can work really well. But they need coordination and collaboration from the public side; there's only so much one business can do on its own.
I agree. Density should be the focuses. And zoning laws should be changed so BOTH companies and residential apartment companies are allowed to build more densely.
For every millionaire that is price waring over NEW Apartments is one less millionaire that is gentrifying and kicking out a family living in the mission.
If housing and labor markets were entirely elastic, and those are the only two factors your people need to consider, then "go away" could be a reasonable government policy. But people are more than their income and their cost of living.
Consider a recovering opioid addict making minimum wage. Medicaid for health care. They are recovering, not relapsed, because of great support from their parents, brother, and grandparents, all of whom live in (say) Oakland. If we look at the labor market and the housing market, the rational economic decision is to move away. Away from their family, the support network that keeps this person employable (and quite possibly alive). Should the whole family move? Not all jobs are everywhere. Should the brother quit Berkeley? These webs are not easily untangled.
If their support network were a Church, or a local football club, the cost would be same: leave your life behind so the Bay Area can stay suburban.
Expensive housing destroys the small, vital institutions that hold our society together by driving people apart.
Personally, I have definitely noticed many people who have convinced themselves they have to stay despite their miserable conditions. Nevermind they have no family in the area, few friends, and despite their very well paying job they can barely afford food & rent. They could surely never be happy elsewhere!
It's like some kind of bubble, where we imagine the whole rest of the country is a backwater hellhole and won't even imagine we could leave.
No city on Earth is full. (Indeed, estimates of human population growth show planetary population stabilizing at less than one tenth our global carrying capacity, so this is not surprising.) It would be extraordinary for the Bay Area to be the first, and so calls for extraordinary evidence.
Housing is a cost of living. Driving the cost of being alive as low as possible should be a high priority. We should use the tools we have to do it.
We don't need to pack everyone in like sardines. As you already noted, there's plenty of space in the world. (You just have to turn your eyes outside the peninsula).
P.S. I do not live nor aspire to live in the peninsula, or anywhere near it
No other city is full because at some point people decide not to live so tightly packed together, and demand dries up.
Current laws raise prices to enforce low density. That's wrong.
The only thing that does work is confronting the fact that a lot of people need to live here and encouraging housing supply to meet demand.
...and yet, this crisis is only about 5 years old. Between 2008 and 2012, San Francisco rents were going down, not up. San Francisco's population declined in the 1980s. Say what you will about construction rates, but this is an acute housing crisis, brought on by an asset bubble, instigated by historically low interest rates.
One way to look at the current situation is to get upset and say "how dare this community not overturn its way of life to accommodate our industry!", but another, equally valid viewpoint is to acknowledge the simple fact that it's painfully stupid to try to cram the entire tech industry in a 49-square-mile patch of land (or realistically, a 20-square mile patch; nobody in tech believes there's life west of Divisidero or east of Embarcadero).
So no, people don't "need" to live here. There's no practical reason that the tech industry couldn't be spread all over the world. It was actually always kind of dumb and impractical to found startups here. But it's trendy for 20-something tech bros to live here right now, and therefore, everyone else is expected to move aside and make room.
San Francisco rents have sometimes gone down slightly, but they never returned to sane levels, and affordable housing for the poor hasn’t been abundant in many, many years.
Ultimately, the original sin was racism.
The simple fact is that if you own a Bay Area home, you will oppose increased supplies because it makes your home less valuable. Homeowners are simply attempting to protect their equity. If housing prices dropped 20% because of increased supply, suddenly tens of thousands are now upside down on their home.
I know the actual reason, but I still can’t help but wonder why Hong Kong/Seoul/Shanghai style high rises are not more of a thing in the Bay Area. There seems like a ton of good spots along the 280 from San Bruno to Woodside.
I live in one with < 1% vacancy rate and it's also a tourist city. Apartment prices have gone up more than 50% in the past few years.
Yeah, this is a bit of "yimby" rhetoric that's pretty simple-minded. People don't oppose new construction because of abstract fears like "property value"...they oppose them because of concrete fears, like changing the character of the neighborhood, or increasing traffic.
I'm not saying I agree with those fears, but it's helpful not to make cartoon characterizations of the other side's arguments, when many of those arguments have merit. If you spent most of your life savings on a house in a cute suburban neighborhood, you'd (rightly) be pretty pissed if people suddenly wanted to surround it with high-rises.
Again, I don't agree with these arguments, but it's helpful to actually understand them.
Traffic goes down when we have mixed use zones vs. Euclidean zoning.
I see. Because people have used this complaint to do bad things, it is therefore always incorrect. Got it.
Writing off the whole notion that people fear their property value falling is illogical.
When you go to planning meetings, people are not generally complaining about property values. They're complaining about neighborhood character, traffic, parking, etc. I'm not going to say it never happens, but when it does, you should dig deeper. There are always real concerns.
What is true is that for decades people who came here at some time in the past complain about how newcomers are overturning its way of life, despite having been newcomers themselves at one point. Aging hippies complained in the 80s that yuppies were ruining the Haight, despite having been "neighborhood-ruiners" themselves when they came in the 1960s; the Mission used to be an Irish and Italian neighborhood before it was the center of Latino culture in the city, but it's the neighborhood most vociferously complaining about newcomers and insisting on building moratoriums to stop the neighborhood from changing. It's all deeply hypocritical and unprincipled, but also completely unsurprising.
tl;dr: San Francisco has always been an expensive place to live and we've never built enough housing to meet demand 
Actually, everything I wrote is a fact, and you can verify it. SF rents went down as recently as 2012, and are currently in a pronounced, acute period of hyperinflation . San Francisco's population declined rather dramatically from 1950-1980 
I'm sorry if this doesn't fit with your preferred narrative, but citing opinion articles does not provide data for your position.
Edit: even your sfist link confirms the basic facts, despite its (inaccurate and hyperbolic) headline. To wit:
"Dips in the population, urban flight, and a decaying Edwardian housing stock — much of which was built between 1907 and 1910 and was in great disrepair by 1970, when areas like Alamo Square were extremely "low-rent" and dilapidated — may have made life cheaper for the hippies, but that all began to change by the early 1980s."
So yeah...SF hasn't "always" been an expensive city. No more than any other city, anyway.
Yeah, it might be nice if the US tech industry were more geographically distributed throughout the country (though that would also potentially have negative consequences due to constant relocation necessary when switching jobs). But NIMBY policies have broadly failed at getting people to move away. They have, in fact, just made the situation worse.
I'm coming late to this just to make a narrow point, but I'm not sure you should put nurses into that sentence. Take a look at US News Best Jobs and see a roundup of BLS stats for salaries in San Francisco.
Registered Nurses earn a median salary of $133,650 in San Francisco
A software developer in SF earns a median salary of $117,770
Now, that does seem suspiciously low to me (in San Jose, the salary is over $140k). And every time I mention this, I am careful to point out that I have no objection whatsoever to nurses making lots of money, more than programmers. It's a tough and important job that deserves good pay, and while I wouldn't argue that it should pay more, I certainly wouldn't argue that it shouldn't, either (I do think programming is a tougher and more stressful job than people generally realize).
But the notion that programmers with their high pay are driving out nurses seems a stretch. I would argue that programmer compensation is higher than what is cited here, and there are other factors. But none of this is enough, to me, to overcome these numbers. While low income people are driven out of SF by the presence of higher earning workers, I don't think you can really say Nurses are driven out by programmers. Doesn't really work.
And programmers, I assure you, are most definitely hurt by the high housing costs in SF.
OK...but that's also an argument for creating public policy that discourages tech companies from locating in the city. We could start by eliminating the mid-Market tax incentives.
The "yimby" movement is at least as much about tech companies who have invaded and now want to change their environment, as it is "everyone else who isn't a programmer." I wish we could be honest about that fact.
My parents are poor, so I watched the market from the bottom end. What I experienced was that the amount we paid for what we got was sort of dumb, but at least we could afford an illegal in-law. Then, in the early 1990s, we got an OMI eviction and moved in with relatives. And now I’m paying twice as much for a fourth of the space in the same neighborhood, while my parents were ripped from their communities and moved out of the Bay Area.
For the low end of the market, any restriction will make housing more scarce, and San Francisco is not short on restrictions. That is why I support the YIMBY movement.
Even without the tech boom, California hasn’t been keeping up with housing demand:
“Every generation, civilization is invaded by barbarians - we call them ‘children.’” - Hannah Arendt
Except, it isn't. As I've documented in this thread, like most American cities, the SF population was declining for ~30 years, until the mid/late 1980s. The first tech boom really kicked things off for local real estate again, starting in the early 90s...which was the last time the city saw a building boom. Developers build in times of increasing demand, and that's exactly what happens in SF.
In any case, repeating the "supply and demand" mantra doesn't change basic facts about the timing and cause of this boom. The problem is not that developers "didn't build enough" in 1980...it's that we've disproportionately grown demand starting in ~2012, and large housing projects don't get built that quickly in tiny, landlocked cities.
Cutting the counter-productive tax incentives for tech should be on the very short list of ideas for restoring sanity to SF.
As you say, developers build in times of increasing demand, yet there hasn’t been a real building boom since the early 1990s. In a normal situation, increasing prosperity would bring both jobs and homes to an area. Here, we have the jobs but not the homes.
The developers intimately know how price is caused by supply and demand, and do not build unless they are reasonably certain that they can make a profit. They avoid causing gluts. The problem here is that California has some of the most misguided regulations, and municipalities some of the worst processes, that prevent housing from being affordable to build. Developers can’t be certain to make back their investment when housing is not in crisis, and we need to fix this.
Like sea urchins in a kelp desert, mega-developers with large projects are not the core issue. Mega-developers work best when trampling over pristine wilderness. We need to build inside cities. The core issue is that we collectively do not have the imagination to enable thousands of small-time landowners to undercut the mega-developers with naturally affordable housing. Zoning makes it illegal, and government process makes it impractical, for ordinary non-developer people to build around here.
The Republican mantra is that “Government is the problem.” But at the local level, the government is the people, or a funhouse subset of them. The policies that create the housing crisis enjoy bipartisan support. My support for the YIMBY Party is not about supply and demand. It’s about creating a political demographic for getting people into humane homes.
No. That's what YIMBY people keep repeating. Regulations account for only ~20% of the cost of new construction in SF. The "cause of the crisis" in SF is acute demand on a tiny peninsula where there is no unbuilt land. I can't speak for the rest of the bay area, but the YIMBY line is almost entirely wrong when it comes to San Francisco.
"In a normal situation, increasing prosperity would bring both jobs and homes to an area. Here, we have the jobs but not the homes."
San Francisco has been in the midst of a dramatic building boom since ~2013. There are projects all across the city. Mission bay went from vacant land to fully developed in less than four years.
In other words, aside from the fact that huge multi-family housing projects take a few years to get built (everywhere!), things are working exactly as they should. But no, you can't build giant housing projects faster than the tech bubble has inflated in SF. That part is true.
"The problem here is that California has some of the most misguided regulations, and municipalities some of the worst processes, that prevent housing from being affordable to build. Developers can’t be certain to make back their investment when housing is not in crisis, and we need to fix this."
Repeat after me: 80% of the cost of building in SF is land, labor and materials. Meditate on that fact every time you're compelled to repeat something about regulations. When developers in SF complain about regulations, they're dog-whistling to the BMR housing subsidy. That's the bulk of their "regulatory" costs.
Also, stop confusing "California" and San Francisco. They're different. Atherton's building policies have nothing to do with SOMA construction projects.
"The core issue is that we collectively do not have the imagination to enable thousands of small-time landowners to undercut the mega-developers with naturally affordable housing. Zoning makes it illegal, and government process makes it impractical, for ordinary non-developer people to build around here."
Nonsense. Small-time landowners cannot fix housing density in dense, fully-built cities like SF. To create any meaningful amount of housing, you need the capital to buy large amounts of land, labor and materials for high-rise buildings. That's why big developers are doing the construction -- not "regulation", and certainly not "zoning" (while I agree that height limits can/should be higher in many places in SF, it wouldn't suddenly enable small landlords to build skyscrapers. Your "evidence" for this claim has very little to say about zoning; it's merely a collection of snarky graphics).
I don’t know if you’ve been paying attention, but San Francisco is in California. Bad state laws are being abused in San Francisco, and the entire state is in housing crisis. Additionally, Atherton affects San Francisco because it is within commuting distance. If Atherton built 500,000 units of housing especially within a mile of their Caltrain station, that would dramatically affect housing prices in San Francisco.
You keep using words like “dense.” San Francisco is not dense. Most of the recent development has been on 20% of the land. Go west or south of the Mission District, and except for small “transit corridors” and a few pockets of housing, it’s like a time capsule from the 1950s. With a lot more cars.
The idea that an area once built is finished, is a disease that threatens the viability of this country. Small-time landowners cannot fix the crisis because around a third of the privately owned land is zoned for single-family homes (even worse down the peninsula). It is actually illegal for most landowners to increase density, so they don’t even try.
We do not need mega-developers with mega-towers at this time. Those have very high building costs. We can satisfy current demand with a whole lot of medium-sized buildings with much lower building costs.
The equal protection clause of the Constitution establishes freedom of movement for all Americans. Native and longtime San Franciscans have no more or less right to be there than the Iowans and Wisconsinites flooding in.
If you want to change that, then secede from the United States.
It’s been a problem since the 90s but it eases off for a year or 3 every recession.
Same deal here - it’s been crap for decades but the 2008 crash deflated the balooon a little for a while.
As someone from outside of the region, what reasons necessitate that a lot of people be in the Bay Area that is beyond the economic need?
Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides.
Because there is usually room to give. If people were on the brink of actually having to leave due to rising costs, incomes would lose their inelasticity pretty quickly, insofar as the need for labour is required. There is always superfluous work that is useful at a low price, but fine to give up completely if costs grow too high.
> Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides.
Squeezing is necessary to a point. After all, the economy eventually seeks equilibrium. It has been the case – at least before housing costs grew out of control – that one could make a fortune by moving to the Bay Area, where average incomes are significantly higher than most of the rest of the country. Now the costs are rising to close the gap with lower-income areas.
If someone in a low-cost area has a gross income of $30,000, and expenses of $25,000, then someone in a high-cost area with a gross income of $150,000 can take on expenses of $145,000 without being any worse off. While housing isn't the only cost one has, it is usually among the largest (with taxes being the other major expense). Having $145k to spend on expenses each year can go a long way.
I disagree: $5,000 has a lot more buying power in the low income area than the high-cost area.
Someone in a low-cost area may want to travel to the city to take in the entertainment and amenities available in the big flashy city, in which case that money is being spent in a high-cost area. Similarly, someone in a high-cost area may want to travel to a low-cost area to take in what it has to offer and thus will spend it in a low-cost area. In that case, the person with $5k in a high-cost area is actually still better off.
If you're going buy an iPhone with that money, the price isn't going to vary much in either place. If the $5k is saved in both cases, there is no real difference either.
Lenders also don't seem wild about letting you commit 80% of your take-home to a mortgage, even if your discretionary cash after the mortgage would be the same as in a cheaper place with a mortgage at 25% of your take-home.
or is that a nonsense thing to say in the States? In some places of Europe that would be a pretty normal feeling.
It's a nonsense thing to say in front of the educated American elite.
Most of America agrees with you, but as we've seen, there is a disturbing trend amongst American elites to mock anyone who is unwilling to sacrifice their families, communities, and networks in the name of career development/personal advancement.
I'm not into most aspects of the populism that is sweeping the US right now, but the elite dismissal of basic family- and community-building is IMO completely real. The brutal policies that result - of forced displacement, of people adrift without support networks - are one of the very real reasons why anti-elite sentiment will continue to increase.
It's unclear why migration should stop now. Why is this the status quo that should be locked in, rather than the status quo of 50 years ago or 50 years from now?
The disturbing trend is that migration has slowed to historical lows. Among Americans, being unwilling to move for opportunity is the new development. Of all the settlement patterns that could be locked in for eternity, today's is a poor choice.
The ever increasing urbanization rate suggests otherwise. If the majority of Americans had stuck close to their families, these cities would be small settlements at best, and maybe wouldn't even exist at all. In reality, the high cost (which may come in the form of lower income) of living elsewhere has pushed most into these cities.
More specifically, though, the majority of Americans have stuck close to their families - they may not live in the same exact town they grew up in, but most live within a certain radius of where their family/community/network is. Americans have shown that they are willing to move to follow economic fortunes, but remain tethered to the general area their families and loved ones are in.
And this - at least anecdotally - is a common preference. I've lost count of the number of conversations I've had with colleagues and friends about where they can live where they can still be in range of [parents|grandparents|cousins|organizations|institutions].
And this is where I think the rhetoric goes off the rails - some forcible relocation may be inevitable - after all, we can't ensure there are enough jobs for all people in all places at all times.
But there's a line between acknowledging that forced migration is necessary/inevitable, and regarding those who resist it with derision. God help us if we ever fault someone for wanting to stay near their family and their community.
Nice to see that all the people who actually make the city function -- so that those high-paid "value providers" can live there and get work done there -- are completely written off in your analysis.
Unless there is some reason their function isn't actually necessary, in which case, yes, the jobs may disappear. But I do not see the trouble with unnecessary jobs disappearing. Nobody is crying over the loss of loom operators either.
It is simply supply and demand. If the populace needs police officers, firefighters, garbage collectors, transit operators, cooks, cleaners, waiters, and teachers, there is no reason those jobs cannot also pay $200k per year – if that is what it takes to keep people in the region doing those jobs.
Nobody thinks there is special value in that node.js job. It is simply that $200k is what it takes to incentivize someone to both live in the Bay Area and work on that node.js project. If the VCs could find people matching that criteria to do the job for less, they would be jumping all over those people. Why do you think SV's largest tech companies have been pushing the government so hard to ensure that everyone learn how to code in school? But, for now at least, they don't exist.
And when the people for the other aforementioned jobs don't exist at a lower price, pay has no choice to go up for the jobs as well. Unless the local population decide those jobs aren't as necessary as you claim they are and choose to forego them entirely. Which is always an option too.
With all of the remote work available, why would you stay here? I manage a team with two remote-friendly job openings currently. You could work for me and go live in Telluride, CO for less than that East Bay 1br and still have money left over.
I would like to live in the Bay Area but it’s financial suicide.
Companies can learn from this as well: there's a difference between # of workers working in a field and labor supply vs labor demand.
Having remote-friendliness in my pocket, I can be choosy and can hire strong senior-level folks. I think it's inevitable that the rest of the Valley catches on and figures out how to make remote work for them. When this happens, I think we'll see who things:
- A leveling-up of remote salaries. Not such a big deal at my company and on my team, because we don't hold someone's remoteness against them and we pay fair SFBA salaries. Other companies (GitLab, etc.) adjust salaries based on cost-of-living. This is a reduced-fare lunch for them but probably not sustainable. Other companies are going to catch on and snap up top talent at average SFBA comp levels and the salary-savers will be forced to level up.
- SFBA talent will start leaving the Bay Area for more affordable and enjoyable areas. We'll see engineers moving to Central American beach towns, Colorado ski towns, back home to flyover states, etc.
The Midwest is stereotypical for "affordable living" but
I live in New England and it's fairly affordable here too in comparison. I own a three bedroom in town, with 20% down my P+I is $750 a month and PITI is $1275 a month. If I financed the whole thing the PITI would be $1462 a month. I think my housing cost is about average for the US.
5 bedrooms/4 bathrooms
As the other comments have said, remote work is extremely competitive, low paying, and unstable on the whole unfortunately.
It's either tough it out and deal with the gauntlet of traditional tech interviews and sky high rents in the Bay Area, or hustle your ass off 24/7 competing with the millions of new CS grads in India and China who are just as skilled as you (or more) and can work for $4/hr.
Compare that with for example Microsoft Research, who actually do things I find interesting.
Representative of low performers, maybe, but even then I’m not convinced. The idea that a high performer only gives up $5k total comp going to Amazon or Microsoft in Seattle is... well, feel free to believe that. You’re making a ton of money any which way relative to the general population.
But most people I know in the Bay Area don’t report that they’re leaving net income on the table staying here. Maybe all those software engineers are just bad at accounting, seems to be everyone’s analysis.
If you’re interested in earning $300-400k/year after working for a BigCo for 4-5 years, Seattle isn’t going to work out to a better net savings/year.
I think it’s perfectly fine to max out at $100-150k. You’re still extremely rich by any standard. And startups in The Bay Area will pay you vastly less regardless, so Seattle may well be a better place for startups.
But I think you’re doing people a disservice if you convince them they’ll save more money working in Seattle than the Bay Area.
I have hired many people who worked for Seattle BigCos, and I know many people who have gotten offers from Seattle BigCos trying to lure them away from the Bay Area.
And I’ve chatted with people doing competitive analysis on what offers to make to engineers.
The Bay Area generally has 20-30% higher total comp after the first 2-3 years.
Somewhat amusingly, the headline salaries are pretty similar, which makes people think total comp is similar. It’s all about the bonus and RSUs.
*except during summer when it's beautiful
But I get your intention, and it's been our strategy for a few decades now: over exaggerate seattle's rain problem to keep Californians from moving up and driving housing prices up even further. Unfortunately, it's no longer working, Seattle just keeps getting more popular and more pricey every year.
I hate seeing my old classmates and friends move from Fremont to Marysville or further, no good reason why we have to keep every single building in Seattle super short and build parking that will sit empty.
On a more serious note, after spending a few weeks in SoCal with the SO, I have no intention of ever moving to such a hostile climate. No onshore breeze + sunburns from driving for 40min = No bueno. At least it takes more than 40min to burn on a sunny day in Seattle :P
It's really just a symbolic gesture, to appease the base of those in office, that will most likely be overturned.
I really have no idea what the "enclose a bullet" part means.
That was fixed by leveling the entire area, removing a freeway offramp, and replacing the liquor stores and poor people with a Four Seasons hotel and a large office building housing a law firm and medical offices. The final solution to the underclass was thus implemented.
When Facebook moved to Menlo Park, house prices went through the roof.
If "final solution" refers to relocating people, what term will you use if they're deliberately killed?
Obviously the Bay Area as a whole has a problem with housing prices. (It has for a very long time but it's become extreme relatively recently.) But one of the big issues with housing prices in "prime" cities is that professionals weren't clamoring to live in them until quite recently.
Look at Boston/Cambridge as well. Teradyne was probably the only significant tech company with a major office in Boston until the dot-com/bomb and it later moved out. All the growth in Kendall Square and Seaport is recent. It's no wonder urban housing and transit hasn't kept up.
This is the problem. Embrace edge cities, people. There's no reason to expect hundreds of thousands of people to commute to a downtown area. Scatter the businesses throughout the suburbs, dammit. Start locating new startups not just in Oakland but even farther out, in places such as Walnut Creek or Santa Rosa. Hell, maybe a tech influx could get the crime down in Stockton.
Why should cities not be allowed to change and have their density spread? The heart of a city is its density and population mass. It didn't become the perfect amount of population when the current residents arrived, never to be changed again. A city that does not change is dead.
And traffic isn't a problem if the city is designed right. The idea is that each suburb is an edge city with plenty of businesses. In Dallas, for example, it's not uncommon for people in an inner-ring suburb to commute to an exurb, and when people do commute farther inwards, it's typically people commuting from an exurb to an inner-ring suburb. The long commute form exurb to downtown doesn't happen that often here. Street layout helps, too: we have arterials on a grid system, and all arterials are six-lane divided highways. Freeways are placed at regular intervals on both the north-south and east-west axes to segment the city into bite-sized chunks (just go to Google Maps: Dallas looks like a sequoia because of the way the multiple loop roads are laid out). Five-layer stack interchanges are used to cut down on the bottlenecks in freeway interchanges.
Cities are antiquated, noisy, dirty, and crime-ridden. Suburbs are much more comfortable places to both live and work.
For those of us that want to live in particular cities because of the city itself, supply is far below demand. Some of current residents are trying to keep supply low. That's what we're objecting to.
Part of the problem with DC metro is that the suburbs where it would make sense to expand the roadways are full of multi-million dollar homes owned by rich politically connected people (not just several hundred thousand dollar homes owned by mere mortals), plus you have the 4 'local' state governments (dc,md,va,fed) plus cities (e.g. chevy chase, arlington, etc) and bazillions of agencies (e.g. park service) throwing their hat in the ring too..
E.g. hypothetically, why should the northern tip of DC (and therefore the fed) pay to improve a congested road full of traffic between rockville and chevy chase? and why is my mansion being demolished and not yours etc.
Edit per comment below: uber Oakland office was going to 3000 people, but yeah, now it's been reduced to a few hundred: http://www.mercurynews.com/2017/03/20/uber-scales-back-initi...
And overturning it for commercial real estate won't do much to help housing prices, except for any re-zoning that happens. Overturning prop 13 or amending it might not happen for 5+ years, if ever. Note: https://www.bizjournals.com/sanjose/news/2017/07/19/californ...
Over the short, medium, and long-term then, building more is the only choice (SB 35, AB 71). Since you see prices not increasing as much in other parts of the state, it means building more can in fact keep prices down, as the deep-east bay construction shows.
This is what all the economic literature on the subject says.
Of course, it may not seem like you're making a dent, because housing has been so badly undersupplied there for so long.
I can guarantee you that if you built a million apartments, then prices would go down.
These people are working on it and you should talk to them: http://www.sfyimby.org/. Also SFHAC, East Bay Forward.
Take Castro Valley in the East Bay. Highly rated public schools. Your kid will get pretty good schooling there, but you need to fork over 900K for a little 4 bedroom split level. A few blocks over, you see the same house for the bargain basement price of $600K, but lo and behold, you're in Hayward, where you're going to need to send your kid to school wearing a bullet-proof vest.
Re-reading the comment I was originally replying to, the commenter might have meant that the 2nd home didn't justify a tax deduction, which I would most definitely agree with. A 2nd home is an investment, and there should be no tax incentives on that sort of investment.
Could not transportable housing be sited on short lease plots, with the aim of being a rudimentary means to live in a city but without having permanent planning or zoning decisions implemented?
Certainly if I was younger, I would be interested in prefab housing for say 5 years lease on the site, and not expecting any permanent conversion or to be a squatting occupier, if I faced the London market at present again. Location is so important, and I pass so many empty lots even in the city's central Whitechapel area as I walk into the City centre. I would probably have been thrilled to meet my needs at twenty, this way.
The problem is that the transport network is at capacity: road, bus, train, tube - everything is packed at peak time, the main roads are a continuous stream of busses, there are 3 train in 20 minutes, a dlr every 3 minutes, ... If you double the density, you need to double the transport links too.
Then there are the nurseries/schools/hospital. My GP has literally thousands of people registered despite a 3 street catchment area. It take at least a month to get a GP appointment.
What's the point of living in a cheapass flat if you need to pay 2000 GBP for nursery or similar for private school, you need to go to private GP when you get a cold and you are still miserable in the public transport and ambulance do not get to you faster than if you were in the middle of the country side. London is at capacity for people working in the City/WestEnd/CanaryWharf. You need to expand it outward (eg: Crossrail ) and start encouraging business centers off the convergence commute route.
BTW I don't think the cost of building is really a problem. The new build quality is appalling, a luxury unit cost little more than 50K to build and will be sold off plan for close to 1 million, years before the builder gets the council approval.