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San Francisco: Where a six-figure salary is 'low income' (bbc.co.uk)
101 points by osrec on July 10, 2018 | hide | past | web | favorite | 163 comments

The data all these articles are based on simply defining 'low income' as the bottom 20% of income earners. It has no ties to cost of living.

Unless you're the sole earner for a big family with bad benefits, it is not hard at all to live anywhere in the Bay Area at $117K a year. Yes, it might be prudent to make some basic sanity checks on your spending, especially when it comes to housing (IE don't rent a 1BR in the most desirable part of one of the most competitive cities in the world unless you're making bank).

I would argue that the data in this article should actually be used to realize what a good financial decision the Bay Area is for many people. 80% of people are making more than $117K. As someone in tech you should not have a problem climbing well above that.

Agreed. These articles and their following comments all stink to me as boisterous reactionism...the bay area definitely has problems and housing costs are probably the number one problem of all of them, but this is statistical mangling, and if you think that for a second workers across the country - except in some of the least desirable places - aren't being squeezed on housing and other costs, you're mistaken.

For instance, my hometown of Grand Rapids, Michigan is also experiencing a housing crisis. This is a place that 10 years ago I could've bought a decent house in a decent neighborhood for well under 100k provided that I weren't a recent high school grad and had money to do so with...this is also ignoring the bubbly job markets and quality of life improvements that come from living in a vibrant coastal city.

>Unless you're the sole earner for a big family with bad benefits, it is not hard at all to live anywhere in the Bay Area at $117K a year.

It isn't hard per se, but it isn't good either, compared to what the same salary would buy in terms of quality of life nearly anywhere else in the country. And let's get real: "Bay Area" is overbroad. You can't compare life in SF proper to living somewhere like Redwood City or Milpitas. They are completely different experiences with shamefully small variations in cost.

> compared to what the same salary would buy in terms of quality of life nearly anywhere else in the country

That same person probably wouldn't be worth $117k outside the Bay Area. Density, network and agglomeration effects are real.

Yeah, but there's wiggle room there. $117k/yr in SF is equivalent to roughly $88k/yr in Houston, and it's arguable that $88k in Houston will buy you a far nicer quality of life than you could get for $117k in SF.

For those outside the bay, $117k a year is what a new college graduate could easily make in the bay area. The first rung of career ladder at any of the top tech companies makes ~$150k [1]. At that level it is very doable to be living in the bay renting an apartment in an OK area with a family.

[1] https://www.levels.fyi/

>For those outside the bay, $117k a year is what a new college graduate could easily make in the bay area.

Bullshit. That's what a college graduate with a CS, Finance or Accounting degree from a school targeted for recruiting by the biggest megacorps can make in the Bay Area. Those that didn't attend the right schools or programs aren't nearly so lucky. I can personally attest to that: my firm (still huge, but no unicorn) pays a good deal less than $117k/yr for fresh graduates with degrees in things like Finance, Accounting, Management, Information Systems, etc.

It's not bullshit. $120k base salary (before RSUs and maybe a signing bonus) is "not even blink" territory for new undergrads from state universities. You don't need to be at a highly desirable university. You "only" need to pass the interview.

That's not only the Bay Area either. A friend of mine has a sister who graduated from a downright forgettable school and landed a job with Google in NYC right after graduation. The base salary was $120k.

Someone else I am acquainted with received an offer for $180k all-in compensation (base, bonus, RSUs) from Facebook as a new graduate from a middling school.

It has very, very little to do with the school. It's the companies themselves. It's not even outlandish to get hired at the top tech companies without any college degree these days.

My school isn't even in the top 100 and I was able to get interviews with most of the big tech companies. While I do agree it is harder, it definitely isn't impossible or unreasonable. Nowadays you can participate in hackathons and other events that recruiters attend that will allow you to show off your skills and also get in touch with recruiters. After that it's up to you to pass the interviews.

A good school gets you an interview (which is still admittedly huge for many major tech cos). Passing the interview is still required though.

I didn’t go to a target school (at least according to some of the companies I got offers from) and all of my offers eclipsed that number.

It's not hard to live well on $117K in SF either. That's over $6K a month after tax. There are so many people living perfectly good lives on so much less. If you can't make $6k a month last easily without dependents you have really poor money management skills.

Two assumptions about "live well": we want to be on track for homeownership, and we'll go for median rent rather than scraping the bottom of the market.

$6000 income

($731) 401k contribution of 15% discounted by 50% total marginal tax rate

($2083) savings towards a goal of $150,000 in six years for a down-payment

($3200) rent on a median 1-bedroom apartment



How'd I do?

It looks like there are hundreds of 1 bedroom apartments for less than $3000 a month.


Why are you using 3200 a month?

We stipulated a middling apartment rather than low-end. It's (slightly below) average [0] [1]. It's also around what the military thinks a junior enlisted man should pay [2].

In reality most people choose a well-below-average place, live with roommates, aren't actually on track for homeownership, or some combination of the above.

[0] https://www.rentjungle.com/average-rent-in-san-francisco-ren...

[1] https://www.zumper.com/blog/2018/01/zumper-national-rent-rep...

[2] https://www.federalpay.org/military/calculator?grade=E-1&yea...

You're expecting to have a 47% savings rate, and at the same time refuse to make any concession in how you're living (get a studio, pick a lower cost area, get roommates). I think that's a very high bar for defining "live well".

The goal was to achieve baseline middle-class financial health norms (homeownership, retirement). The savings rate that requires turned out to be astronomical. That's my point.

Try another scenario: Madison, WI, where entry-level pay is $80k and the median home is $250k.

4702 income

(717) 15% 401k contribution discounted by marginal tax rate

(700) savings goal of $50k in six years for a down payment

(1017) 1-bedroom rent


2268 left to spend

SF is a very significant lifestyle sacrifice. In a more reasonable market, you could afford baseline middle-class financial health, median-quality living arrangements, and some luxury spending all at the same time. In SF it's "pick at most two." Obviously that's still enough for a lot of people (myself included) or we wouldn't be doing it. But in normal places, those are not tradeoffs that people making even half our incomes need to face.

And sure, SF has urban amenities that Madison doesn't, but if you live in a premium location with lots of shops in walking distance, you can't afford to shop at them. At least not on $6,000/mo.

This is only true because you've defined homeownership in your current job market as a necessity. If you either forgo it, or choose to save for a mortgage in another area suddenly SF comes out way on top.

You could have even more to spend by foregoing retirement savings, but would you? If you did, how would it feel?

Living large on an irresponsible budget is not the same as living well.

Or are you saying renting as a long-term plan actually is healthy/responsible? Maybe I have just internalized too much American Dream propaganda. But with SF's rate of rent and price growth, the calculators say "buy even if renting is free."

It all comes down to what 'living well' entails. 'Living well' on $6k in net income someplace like Houston, Chicago, Denver, etc. is far, far nicer than what you can manage in SF or the Bay Area in general.

And why does that matter in the context of this discussion? Who is claiming otherwise?

Good point. Everyone seems to want to have the same kind of life everywhere. You probably can't own a huge McMansion in SF Bay (well not anywhere convenient), but the city (and region) provides other benefits (great culture, food, weather, density of tech jobs etc) which are hard to factor in financial calculation.

Including the value of stock options in those figures is incredible bullshitting.

For those wondering: the “first rung” is more like $110k plus stock options (which you have to pay for - they’re not RSUs - so calling them “income” is rank nonsense)

The estimates for stock options value on there are also WILDLY high compared to people I know who actually work there.

Very suspect.

Public companies don’t offer options anymore. It’s all RSU which is yours yearly/quarterly etc.

Even mature startups (like Airbnb and Uber) don’t offer options.

Yeah, but then you are working for AirBbB or Uber (or worse, Facebook). Eww.

Private companies/startups are still doing options.

And options are worthless. My employee recently loaded all employee stock options / holdings into a stock trading/tracking system and as soon as the FMV from the latest 409a was loaded in people flipped their shit. Turns out that no, joining a nearly decade old private company with limited stock options and a "mature" FMV isn't going to make you millions of dollars. Especially when you're going to be spending five figgies to exercise.

To an outsider that has spent nearly 80% of his time in SF on business travel for the last couple years: the cost of living in SF is unjustifiable. I was offered a position with one of my clients in SF for roughly double my current income in Houston, TX. After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out in my favor without significant sacrifices on either count. In Houston, I live quite comfortably in one of the wealthiest neighborhoods with money to blow on a luxury car, 2+ extravagant international vacations a year, and decent amount of savings and investments. But in SF, I'd be uncomfortably close (relative to my Texan standards, anyway) to the 'low income' line. So I might as well keep on racking up the frequent flier miles, eh?

Something's gotta give. NIMBYism when it comes to affordable housing, the income disparity between 'techies' and everyone else in SF, and lack of sufficient investment in effective mass transit are all clearly driving the city into the ground. My teams in SF are constantly bleeding our best talent to places like Denver, Austin, Seattle, etc. because the youngest and brightest employees are realizing that SF is an unsustainable drain on their finances. It's not going to stop me from doing business there, but it's certainly going to mean that my firm just continues to feed the vicious cycle of wage inflation by attracting talent with higher and higher base salaries.

As a sort of tangent to your point, it is however beneficial to move to a high-cost-of-living area if you can get a roughly equivalent quality of life outcome. That is, if you can get a salary increase in line with the cost of living increase, it is worthwhile because it essentially deflates all other non-locale-related costs.

For example, the $100 shirt off Amazon is suddenly far cheaper relatively speaking. So is the new phone or laptop. Ditto, overseas trips become much more affordable relatively speaking.

I know it's not related to your original point much except that we're discussing regional cost-of-living disparities. I've just been thinking about this a bit, as I come from a high-cost-of-living country (Australia) and am considering moving overseas to locations that offer a lower cost of living (not that it's my impetus for doing said move). It's a factor I hadn't previously considered and does actually have some significance.

Your point is definitely valid. If housing costs double and salary doubles, you will have more income for things that don't change price like shirts and laptops in the high-cost area.

However, one of the things you lose in high-cost areas is freedom. You lose the freedom to pursue passions, take time off from work, try out a job you think you might love but pays 30% less, etc. I can delay or forego the purchase of a new shirt or laptop to prioritize something else in my life. Maybe I want to work for a non-profit I find compelling or spend time with my children. The high-cost area isn't high-cost for discretionary spending. It's high cost for essential spending.

If I need $75,000/year on housing, I can't afford a pay cut; I can't afford part-time job and part-time parenting; I can't afford passion. $75,000/year might sound like a lot, but the median home in San Francisco is going for $1.35M. After a 20% down payment, mortgage payments would likely be around $65,000/year. Add on another $10k for taxes and we're at $75,000 for a median home.

Let's say I could earn $250,000/year in San Francisco and $100,000/year in Chicago. In Chicago, the median home is $300,000 so we're talking $15,000/year in mortgage payments instead of $65,000. Let's assume that I pay 30% of income in tax on $250,000 and I take home $175,000. After $65,000 in mortgage payments, I'm left with $110,000. In Chicago, If I pay 25% in tax and $15,000 in housing payments, I'm left with $60,000. That's certainly less, but I've also gained a lot of freedom. If I want to take time off, my expenses are low. If I want to switch to a career earning $50,000/year, I can still live my life. I'm not being forced into specific employment based on cost of living.

If we adjust the numbers slightly and make SF $200,000 and leave Chicago at $100,000, the gap quickly closes. Assuming 28% tax on the lower income, we're talking $79,000 vs $60,000. A little more disposable income, but very little freedom.

SF salaries are certainly high. Are they 2.5x higher? Even if they are 2.5x higher, do you really feel good? I guess a part of me feels like life should be easier and more comfortable. I'm not looking for fancy shirts and yearly expensive laptops. I'm looking for the comfort of knowing that if something goes medically wrong, my cost of living isn't so high that I'm very quickly on the bubble. I'm looking for the ability to be able to choose different life priorities in my future if I desire. We all make our own decisions, but I think there's something intangible that lower cost of living provides.

>Even if they are 2.5x higher, do you really feel good? I guess a part of me feels like life should be easier and more comfortable. I'm not looking for fancy shirts and yearly expensive laptops. I'm looking for the comfort of knowing that if something goes medically wrong, my cost of living isn't so high that I'm very quickly on the bubble. I'm looking for the ability to be able to choose different life priorities in my future if I desire.

Yep - this is something I hear a lot from my colleagues in the Bay. "Can I afford to keep my kids here if my wife gets hit by a bus?" ; "If home values dip, will I ever be able to pay off my mortgage and move elsewhere?", etc.

> SF salaries are certainly high. Are they 2.5x higher? Even if they are 2.5x higher, do you really feel good? I guess a part of me feels like life should be easier and more comfortable. I'm not looking for fancy shirts and yearly expensive laptops. I'm looking for the comfort of knowing that if something goes medically wrong, my cost of living isn't so high that I'm very quickly on the bubble. I'm looking for the ability to be able to choose different life priorities in my future if I desire. We all make our own decisions, but I think there's something intangible that lower cost of living provides.

Yes, yes they are. Sure, the economic boom has contributed to the skyrocketing value of equity compensation leading to some pretty insane incomes. But it is what it is... for now at least.

I totally agree with you. In my case, I countered with a proposal for roughly 3x my current income, which would have maintained roughly similar quality of life, if not some minor improvement. The client balked, mostly because they're not a tech firm and aren't used to paying folks outside their primary money-making departments that sort of salary. But if they had agreed, I definitely would have moved to SF.

There are reasons real estate is more expensive in the bay area, and it's not just NIMBYs. Even if you build to the sky in SF, real estate is going to be much pricier in the bay area than Houston. Not caring about the things that make the bay area market pricier is an arbitrage of sorts for you. The heat and hurricane weather alone are enough to make Houston a non-option for many people, myself included.

>The heat and hurricane weather alone are enough to make Houston a non-option for many people

A factor in my favor: I'm a native, so it doesn't bother me. Same goes for most others that have lived in swamplands during the summer (even places like DC and Chicago have nearly identical summer weather compared to Houston).

I'm afraid you're mistaken about Chicago summers being nearly identical to those of Houston. Chicago has experienced summers without a 90˚ day and quite a few people there have no AC.

That could be a smart move in the end. If the salary is 3x what you’re getting paid in TX you could be one of the first people they’d look to lay off in the event of a cutback.

I heard that usually the lowest-paid employees are fired first.

This was a big part of my decision to move to SF after college, but it turned out not to be true. A down-payment-sized savings goal is insatiable. Even if a fancy car or vacation or whatever is cheap as a percentage of income, you can't justify it, because the money could be inching you closer to homeownership instead. You're in no danger of ever actually reaching "enough" savings, so the excuse for luxury consumption never arrives.

"Equivalent quality of life outcome" is also tricky. Growing up, my parents drove ~7 miles from our sleepy, affordable suburb to the city center in 20 minutes. 7 miles in 20 minutes! Could you imagine such a thing? When I first moved here, I chose a similarly-distant unsexy suburban location; the transit commute worked out to 80 minutes door to door. To get a 20-minute commute here, I had to move to one of the most central, premium locations.

Not to mention the relative cost of student loans, and relative worth of savings that you do manage (ie enough for a decent house elsewhere when you’re ready to gtfo).

You are far from the only person who's saying this, but I don't understand how you can reach the conclusion that you would enjoy a lower standard of living in SF than Houston on a salary that is twice as high. The three things you say that you like to blow money on -- luxury cars, international vacations, and making investments -- are similarly expensive in both places. Care to share some of your math?

To elaborate, I looked through this guide: https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou... and while a one-bedroom apartment in the centre of SF would cost around $41,000 a year in SF compared to $17,000 in Houston, that means that if your salary is Houston is around $100,000, you would still have around $70,000 more dollars a year in SF after rent has been taken care of, not accounting for taxes. How does the higher cost of living in SF manage to eat up all that money in just a year?

My math says $100,000 - $41,000 = $59,000. Not $70,000.

> not accounting for taxes

That would be a large mistake. California has huge income taxes, Texas none. It's not just state taxes, a doubling of your income puts all that additional income in a much higher federal tax bracket.

I would expect renting a parking spot in SF to cost a pretty penny, too.

That's not how tax brackets work.

> Because the U.S. tax system is a progressive one, as income rises, increasingly higher taxes are imposed. But those in the highest bracket don’t pay the highest rate on all their income. For example, for 2017 taxes, single individuals pay 39.6% only on income above $418,401 (above $470,001 for married filing jointly); the lower tax rates are levied at the income brackets below that amount, as shown in the table below.


The OP is correct. The addition income you’d earn in SF is taxed at the higher marginal rate.

What he is saying is that if you make $100k in Houston and $250k in SF, the extra $150k is tax entirely at the higher rate.

> What he is saying is that if you make $100k in Houston and $250k in SF, the extra $150k is tax entirely at the higher rate.

The part above $128K is actually taxed at a lower rate; crossing the Social Security maximum taxed earnings level (and thus losing 6.2% in marginal tax on income) more than makes up for the 5% higher marginal income tax rate.

From the linked table, 2018 marginal tax rates are for single:

24% $82,501 to $157,500

32% $157,501 to $200,000

35% $200,001 to $500,000

I.e. 8% to 13%, not 5%.

You're right. I missed the word additional when I read it.

Your math is worth little unless you plug the right values into the equation.

He said his salary would be twice as high in SF, so for a 100k salary in Houston, we're talking about 200k - 41k vs 100k - 17k, which is roughly a 70k difference (actually closer to 80k, but I wanted to make a conservative guess).

you're right

My may says $100,000 - $41,000 + $17,000 = $76,000 The claim was an SD apartment is 41k while an equivalent Texan apartment was 17k. Presumably you are already paying the 17k.

Those California income taxes also apply to capital gains.

Whereas, Seattle has zero income taxes, cheaper housing, and equivalent salary

> Seattle has zero income taxes

I wouldn't count on it. Seattle just passed a city income tax, despite it being against the state Constitution, trying to gerrymander it around the wording of the Constitution. At the state level, the Democrats in the last election got control of both houses of the legislature, as well as the governorship. High on their agenda is finding a way to tax income.

Yeah, but you have to live someplace that's so depressing that 90% of the population is overweight and self-medicates with some combination of coffee, alcohol, marijuana, and adderall.

I know it's hard to believe, but some people actually find the weather great in the Pacific Northwest.

I agree. I lived there during the “worst” season - Sept to Dec - and I loved it!

Yeah Vancouver island is beautiful!

Oh wait I misread that as some people find great weather in the pacific northwest.

I think a better comparison in situations like these is to look at the cost of buying a house. While renting may be the norm in places like SF and NYC, in the midwest the norm for people making a good living is buying a house. I imagine the math is more along the lines of "how much would it cost to buy a comparable house in SF?" In which case, you may be going from a $400k house in TX to a $2M+ house in SF. If all your money is going to a monthly mortgage, you don't have extra to spend on cars and vacations.

It seems to me that by living as a frugal software engineer in SF, you will be much faster to save money for a $400k house in Texas than if you choose never to leave Houston. Buying a 2 million dollar house in SF makes little sense to me unless you're really wealthy, so I don't understand why this is a better comparison.

Yeah, but some of us don't actually want to struggle through several years of frugality in SF for the sake of buying a $400k home in Texas in cash. Why not have a much better quality of life in Texas, take out a mortgage on the $400k home, and consider the relatively reasonable interest rate as a payment towards positive aspects of life such as "reasonable commute times" and "not worrying about the kids stepping on needles on the sidewalk".

The frugality is usually when you're single with no family. Once you start a family, a lot of equations change.

I made the calculation. I could get a nice mortgage for a 500k house in Austin, TX, or I could move to SF, save for 4 years and go back with enough cash in hand to buy the home outright. The decision wasn't hard to make....

It probably isn't polite to say this but if you're young and single, you can really leverage that. Most of my coworkers in TX were getting married, buying houses etc. In other words, they simply could not move to SF, since they are tied down by their situation. I could, and I did.

I suppose that's an entirely valid way to think about it, especially if you have a family.

Tax difference between Texas and California is pretty significant, he is probably looking at double his effective tax rate once you account for the bump in income.

*not accounting for taxes. Or gas prices. On a day I paid, $4.10 in South San Francisco, that same day it was $2.60 in San Antonio. Even if you took public transit, that costs money too. Sales tax in Berkeley is 9.25%.

I live in Mountain View and little things definitely cost more. At a restaurant the other day, I paid 5% “to account for increased labor costs.”

I am happy living in Mountain View now (I grew up in Houston,) but if it weren’t for a substantial salary and stock, I could see how anyone with a family would run for cheaper pastures.

Housing isn’t the only thing more expensive in the Bay Area. When you ran those housing cost numbers, that automatically took into account property taxes, now add 5-9% for California income taxes, and it starts to become a significant amount of money on just that basis alone. Add in every other California and local tax and the difference becomes even more pronounced. Texas is ranked 33 on overall tax burden while California is 10. Additionally higher Bay Area salaries also often kick people into a higher federal bracket as well. There is no cost of living adjustment for federal taxes — or state taxes for that matter.

Not OP, but I think you are overlooking a few things.

First, taxes start being a good chunk of your income at higher income brackets, especially in California. Taxes in 50k in TX will be a good chunk less than half of taxes on 100k in CA.

Second, a city like SF will have expenses on things that you don't have in Texas. For example, owning a car in SF means you will probably be paying at least a couple hundred a month for parking and insurance will probably be higher.

Finally, major cities with high COL and rent tend to be more expensive for consumers. Things like higher rents for business and higher wages for workers will, at least partially, get passed on to customers. If you eat out a lot or have kids needing to go to day care, this can be a huge chunk of your income.

I'm not saying OP is, but I know I've met some people who exaggerate for effect when they say things like "You could double my salary and it wouldn't be worth it to move to the bay area", but pretty much everything in San Francisco is more expensive than in Houston.

Thank you for the clarification. The conclusion that I'm getting out of this is that it still makes sense to move to SF if you're willing to live frugally for some years, save some money, and then move elsewhere. It probably makes less sense if you have a partner and children and you are used to a higher standard of living.

You're spot on.

And note that Texas has 0% income tax. Zero. Somewhat higher property taxes than average, but it's arguable that it still works out in our favor compared to states like CA.

At those income levels, taxes will eat up nearly 40% of your incremental income (30% federal, 10% state). Not to mention you’d also have to make up the tax on your original 100k, which Texas doesn’t charge.

On top of that, everything else is more expensive as well, especially anything based on labor, because people have to pay the rent: - food, especially eating out - car insurance - services such as car repair, dry cleaning, housekeeping

Also, ~10% sales tax on many things that you actually spend money on.

Agreed. I think many people just don't do very precise math. But the other part is the extra income tax in CA versus TX, which is about 10% of the income, so subtract 10K from that 70K.

There are SF taxes also so it’s even worse.

There's no SF city income tax. Are you thinking about sales tax? In most cases, sales tax should be negligible unless you're spending ALL of your money, and spending it ALL on local purchases. Things like flights, vacations, online services, etc. don't have local sales tax applied to them.

SF does not have an income tax.

>How does the higher cost of living in SF manage to eat up all that money in just a year?

It would be imperative to save at least 100% of the "extra" $70k to make reasonable progress towards a down payment.

Taxes were definitely a concern (especially with SALT deductions being gimped, thanks Trump). Further, an apartment (or payments on a home/condo) in SF at $41k/yr would almost certainly not come close to matching the size, quality, and general conveniences afforded by my current accommodations. Tack on changes in cost of living (gasoline, dining out and groceries are noticeably cheaper in Texas), and at best, my model showed that at best, I'd looking at a wash in terms of livability and income.

If I were trying to move to the Bay Area to fulfill a personal goal, things would be different. But when I'm working for others? Fuck that. I'm not going to compromise on comfort and quality of life.

Different strokes for different folks. The place you linked, to me, has comparatively few conveniences. Specifically, walking and bicycling are viable modes of transport in SF.

The SALT tax deduction wouldn’t matter so much if the state taxes weren’t so high in the first place. Additionally, you neglected to mention the doubling of the standard deduction. SALT deductions were essentially the federal government subsidizing state and local taxes. Rather than the feds paying California taxes, now Californians pay those taxes.

The weird, but predictable thing to me is that those complaining about effectively increased taxes due to loss on the unlimited SALT deduction, don’t complain when there is a clamor to raise federal taxes: in fact, most of those people seem to support higher taxes — except when they have to pay them. There is a lot of intellectual dishonesty with many Bay Area voters — they oppose tax cuts, but then complain when they pay higher taxes. California needs to lower taxes across the board but you don’t see Brown or Gavin suggesting tax relief to account for the now higher tax burden experienced by the upper brackets.

The California economy is booming despite the taxes, not because of it. Apple, Google and Facebook are driving much of the Bay Area economy — and they make the majority of their money somewhere else. Local companies thrive because of the large base of high income people that are present because of the massive tech companies. If you took away Big Tech, the high California taxes would quickly become unsustainable. But since everyone around here can afford a Tesla, people seem to think that high taxes are the cause of all of this “success.”

As far as California quality of life, the weather isn’t a result of tax policy and the beaches and mountains also aren’t either. That’s 80% of what makes California have a higher apparent quality of life compared to Houston. The point is, the higher taxes aren’t the cause of a better quality of life compared to Texas. Outside of some obvious places like Cupertino, California schools aren’t particularly good — and Cupertino’s school success is a function of the culture of 60%+ Asians who tend to value education more highly than other groups. It certainly isn’t because of taxes. Washington, DC spends more per student than almost anywhere and yet have some of the worst performance. So when we talk about quality of life — it’s good in California for sure — but it isn’t because of fiscal policy, the 71 degree temperature is a big part of it.

Unless you’re from the area you’re going to have a difficult time creating roots here to support a family.

It makes sense if you’re single and in your 20s or early 30s but as soon as you start factoring in kids, childcare, and owning a home it gets crazy.

I'm in my late 20s, no kids, with a wife that will shortly surpass me in terms of income. The math still didn't work for us in SF, unless we were willing to make big compromises in terms of living space and discretionary spending.

> After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out

Ditto. And I live in Manhattan. That said, it's important to think in terms of absolutes versus relative figures. You may not save 20% of your income. But the 5 or 10% you save may be more than 20% of your non-Bay Area income.

Yep, I agree. I only looked at absolute numbers. I built a relatively complex model of my expected income and expenses in Houston vs SF for 1, 2, 3, 5, and 10 year periods, factoring in things like annual COLA and potential deviations in things like the price of gasoline. A majority of the time, I would have ended up worse off. So I turned down the offer.

Why would the price of gasoline matter in SF? If you’re living and working in the city, you almost certainly aren’t driving enough for the gas price premium to matter.

I don’t mean to pry, but I’m having trouble imagining an income that is so comfortable in Texas, but so uncomfortable in SF when doubled. There must be at least one major factor that doesn’t apply to my calculations, perhaps child care or private school or something.

Taxes. A doubled income in California isn’t a doubled income. It’s much less: higher tax bracket, state income taxes. What needs to be compared is the after tax income. Because it sure isn’t doubled. Even if you add it property taxes — tax on a Houston $500k house is going to be less than taxes on an equivalent $2 million house. The median prices of condos in San Francisco is almost $1.4 million. $1.4 million could buy you a grand house in Houston. A nice condo might cost $350k. Because, even if you double the income, your post-tax pay isn’t actually doubled. Adding housing into the mix (even ignoring taxes) and the math is still rather difficult because houses cost far more than double what they do in Houston.

That’s a big difference when you talk about doubling income. Taxes and housing; that’s the problem with California.

You don't mention your income, but presuming you're in tech, you may well find that the bay area offers not quite the discretionary percentage, but far more in left over after rent etc. in total. There is a reason people move here.

I live here (https://en.wikipedia.org/wiki/West_University_Place,_Texas#D...) and fit into the described demographics. SF in no way made sense at 2x my current income.

I must be missing something. The link you provided says ”The median income for a household in the city was $202,132, and the median income for a family was $227,425"

That's more than double the median income in SF.

>That's more than double the median income in SF.

Irrelevant. I wasn't trying to optimize for % gain over median income in SF. I was trying to optimize for moderate improvement in overall quality of life compared to what I have now.

"I was offered a position with one of my clients in SF for roughly double my current income in Houston, TX. After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out in my favor without significant sacrifices on either count."

So assuming you were making ~200k, doubling that to 400k, it was still impossible to make your standard of living? I find that hard to believe.

If you are making $200k in Texas, you can afford to buy a 3,500 sq.ft. house with a pool on a half-acre+ lot with AC and a 2-car garage for, say, $400k, maybe less.

In CA, you would pay well over $2MM for that same house anywhere within an hour’s drive in rush hour from either SF or Silicon Valley. Anywhere north of Sunnyvale, that house will run you a minimum of $3 million.

I found it hard to believe too ¯\_(ツ)_/¯

But I also built a model that put a lot of guesses about intangibles into numbers. It passed sanity checks when reviewed by several peers, but I could just have a bad model. Who knows.

More than double the median income and also (presumably) less than half the cost of living. So they still made the right decision when factoring everything in.


And then they get hit with state income tax, which the state wastes on frivolous policies and nannying. No thanks.

What examples of policies do you feel are wasteful?

I grew up in CA and moved away just a few years ago, and I didn’t have an appreciation for the extraordinary corruption and wastefulness of state, county, and local policies. Only rarely did any single single policy seem particularly egregious or catastrophic.

Then I moved to Washington State. No state income tax, but comparable sales and property taxes. Much less regulation at every level of government.

The savings in income tax alone paid for my rent, until I bought a house. The house I bought is in an extremely high quality neighborhood. School ratings are almost maxed out. Professional or entrepreneurial neighbors. Responsive government services.

My home costs less than a condo in south San Jose. I pay about half the Bay Area rate for full time childcare. Gas is significantly cheaper. 5 dozen eggs at Costco cost $6-8.

Life is good. No one is dying in the streets. If anything, people are thriving and have hope to create a better future.

It is not until I experienced the totality of difference between Silicon Valley and another west coast city (in my case Tacoma and its suburbs, though I suspect Portland is similar) that I groked the suffering inflicted by CA politics.

This is painting with such broad strokes. Say I'm a member of San Francisco city council - what am I supposed to do with your accounting here? "Make city less corrupt." Okay... "Remove state income tax" welp.

The OP couldn't give specifics, can you? Because otherwise we could just point to different population sizes and city history and state size as the reason your experience differs.

Would you agree that many minor policies can combine for a large impact?

I can appreciate the desire for more detail - I would likely ask for the same thing. Yet I decided to paint in broad strokes because I'm trying to illustrate the cumulative difference of all policies combined. You have two first world states, one with great services and affordable cost of living, the other with notoriously bad services (e.g. ranked 44th in k12 education) and widely lamented cost of living. I think it is worth trying to figure out the differences. It might turn out that those difference are caused by simple demographic factors, which would be very sad and fatalistic, or it might turn out that political decisions have influenced the direction of society.

As a basic example, consider waste management in SF. The impact of SF instituting a mandatory composting program, which likely requires full-time headcount (with near term salaries and half-century long pensions) to monitor garbage bins, write citations, collect fines, inspect businesses, and carry out other enforcement and monitoring actions, might be small given the wealth and population of the city. But what is the impact when combined with a thousand other similarly small policies?

Yes, many minor policies can have an impact. I hope to figure out what those policies are, or what new policies are required, because I am not happy with many things in SF and I want to contribute to making the city better.

I don't think population differences is fatalistic, I think it just means a sharper analysis is required than "why don't we try how Portland does it?" Hence the existence of states at all, at least originally. I'm not opposed to the idea that Portland's strategy is better than SF's, I just don't want to fall into the trap of assuming differences between quality of life are blamed on arbitrary things that may not at all be relevant. Maybe demographic differences are one of those arbitrary things!

Picking the given case specifically, thus I would immediately ask "what is the environmental impact? Maybe it's worth the cost?"

I don't have the data on hand. I had asked my questions hoping perhaps you did have specific policies etc that were working better in Portland that I could start researching but again it's fine if you don't, this is all in service of me learning more so anything you can teach me I am grateful for.

Costco is all around the Bay Area. I shop there almost exclusively for bulk groceries. Food costs are reasonable here with little effort.

In general, food costs slightly more in WA. However, I use eggs as an example because it is a staple food in my family. I was in a CA Costco last week, and noted that a comparable quantity of eggs would cost 3-4x the WA price.

You might have been looking at organic eggs. I often buy the 5 dozen eggs at the SF costco and it’s definitely under $10.

A dozen eggs at trader Joe's is a dollar fifty, at California and hyde.

So no specifics then? Just hand waving generalizations with no content?

We've asked you so many times to stop being uncivil on HN that I have to conclude that you don't want to use this site as intended, and have banned this account. It doesn't matter how right you are, or how wrong someone else is; it's not ok to be a jerk here.

If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future.

Well if you’re going to plain lie about my actions on this site (viewable to all) then what would be the point?

I shared my personal experience based on living in the bay area for 30 years. YMMV.

SF ban in 2010 on Happy Meal toys, the overall pension crisis, the continuing debacle of the high-speed rail project there...

One that seems to have actually worked was the ban on plastic bags.

Literally the most successful state in the nation but... k.

Care to get specific?

Uh, successful by what metric? If we look at economic figures like income per capita, Cali doesn't even make the top 10.

California is the 5th largest economy in the world. It also has 40mn people, so of course it will have a lower per capita

I just came back from Las Vegas this weekend and chatted with my Uber driver on the way to dinner. She was a cook at the Bellagio buffet, union member (most service workers on the strip are unionized), and could very easily afford a nice home with a pool.

I actually had no idea Vegas workers were mostly unionized but apparently you can make $25-$30/hr + tips and live a pretty good life as a service worker.

And yet there she was making piece-meal as an uber driver for some reason.

Googlers have side hustles too.

Anecdotally the per mile rates were much higher in Vegas than SF. Likely Uber algos know people are less price sensitive if they're in Vegas.

I know a guy with a Tesla that drives for Uber.

Some people just like driving & side hustles

Many waitresses and bartenders I know make $800-1000 in cash tips on a busy weekend, and don't report their tips. They're basically making the equivalent of a six figure salary that is fully taxed. They can do side hustles during less busy hours (like mornings-afternoons for a bartender).

> For example, a fair market rent for a two-bedroom apartment in the San Francisco area is considered to be $3,121

I think they're off by a couple thousand dollars...

No, citywide this is a good number. Richmond district or south of Cesar Chavez things are a lot cheaper

In downtown it's rare to find something under 4500 for an older beat up 2 bed.

Short-term rentals on the border of southern Redwood City/Atherton & Menlo Park are going for $4-6k/mo for 1 bedrooms.

Edit: Removed a cynical remark.

Kind of off topic, but does anyone know why the real estate around Twin Peaks is so much cheaper than surrounding areas? I know there's a bit of break-in crime at Twin Peaks, but the surrounding areas should be better, yeah?

Is there that much of a weather penalty?

My Midtown Terrace house is over 750’ above sea level; though only a 15 min walk to Cole and a 20 min walk to Castro or Upper Haight.

Still yet, prospective renters shudder when I say the words “easiest transit is the 36 Bus from Forest Hill Station.”

Property Crime is only a problem on Christmas Tree Point and down on the East side terraced streets - Burnett/Corbett. The worst thing I’ve encountered personally in MT would be the coyotes that roam the night in the woods that appear occasionally on Marview or Farview.

One wouldn’t think ~$4K a month for a 4 Bed 3 Bath fully detached single family house, split up amongst roommates, would have any hangups for people looking to rent in SF - though it’s been tough finding people who’re “ok” with the location.

It’s for sure high up - I’ll give in to that.

I indeed use the excess garage space to charge and house my Bolt EV for most trips outside of SF; though most of SF is ~$12 for uberX.

I say, people can enjoy their overpriced $4000 (barely) one bedroom apartment in a “walkable” hood, next to a Philz and their favorite brunch place. I’ll join on foot after hiking on Mount Sutro. I’ll even pick up the tab - and indeed I work part time as a QA Engineer making a bit less than six figures annually.

(Midtown Terrace is a illogical land use nightmare... a subdivision of fully detached single family homes on Twin Peaks.)

Maybe because it's less accessible? The hills make it a pain unless you own a car.

weather is fine if you don't mind the permanent wind

"San Francisco area" from the BBC's perspective could include the larger Bay area

Wow yeah thats not even close. Numbeo says $3500

$3500 is median asking price for a 1BR now.

In SF yes, not the Bay as a whole (which is the cited area)

Risks to the Bay Area’s continuation as an engine of growth are risks to the entire country’s economy. Local parochial interests ought not to be allowed to do that.

If we can stretch the Commerce Clause to banning growing and consuming corn or pot that never leaves one person’s plot of land, much less a state, I don’t see why it can’t cover abrogating NIMBY regulations.

The Commerce Clause is traditionally a cudgel for activist judges, and the current court is activist in a way that doesn't really jive with what you're suggesting, nor any sort of collectivist-oriented jurisprudence. You're not wrong (in spirit at least), but it's just not going to happen.

If it only took 1/2-hour to travel from Stockton; Fairfield; Davis; or Santa Rosa, CA; San Francisco would not have a housing crisis for people would have more housing options.

Stockton and Santa Rosa could be doable in ~30mins given _significant_ investment in rail services, but Fairfield or Davis are really pushing the boundary of what seems reasonable. You're talking about covering 70-85 miles to Civic Center for these latter two cities, which would require high speed rail in an environment that probably couldn't sustain it profitably for a decade or more.

Sonoma County and the greater Sonoma County are also saddled with an unbearable housing shortage caused by the 2017 fires - we wouldn't be of any help even with a better rail system. Rents are up 50%, construction bids on labor alone are up 30%... it may not last forever, but it will certainly have an impact for years to come.

What about high speed bus rapid transit? The cost of new lanes/separate lanes can’t be more than the equivalent high speed rail, right?

Sure. If you can set aside lanes for busses to do ~120+ MPH from Davis to SF, then by all means, go for it.

The Bay Area and the surrounding tech hubs are very important to California as is So Cal with it's entertainment and media delivery. If California wants to grow the state and the country as well with good ideas and affordable housing, A new type of transportation infrastructure has to be thought out or invented.

I had a related but tangential problem: I think the company was willing to offer the bucks to make it economically worthwhile: I had major performance anxiety about the value proposition to deliver to meet that scale of pay.

Maybe its just me, but I had a hard time even imagining selling my work for the kinds of sums necessary to maintain an inner-city lifestyle in S.F.

The title is misleading. The “six figure salary” actually refers to FAMILIES OF FOUR where their household income is ~100k.

So what? It's still outrageous.

It is, but it's funny how quickly you get desensitized to it. A house in the most affordable cities in the US is the 150k range, in the Bay it's in the 1.5M range. Maybe 1.2M? 10x the difference for the same thing. Pretty mind-boggling.

If you're single, have no kids, and "ok" with roommates and you're part of the 70% of renters who live in a rent-controlled unit the combination of making a Bay Area tech salary + having rent control is hard to beat.

I have a friend at Google who pays $900/mo for a large room in a very central spot in Lower Haight.

After 6-10 hours at a dinky desk in an open office, you can bet I'm not okay with roommates!

And once you're married, have kids, and need more space, the math gets harder to make work.

Isn't that what suburbs are for?

Traffic and long commute times are another big problem with SF after housing prices.

Google, Amazon, and Facebook all have offices in New York, where an entire state of suburbs is a PATH train or Suburban shuttle away.

If not, they also all have offices in Seattle, where the suburbs are even closer and all have access via company buses.

Have you priced houses in the Bay Area suburbs? $2 million is practically the price of admission for a 3 bedroom.

I don't understand how business owners are able to find employees in SF for actual low-income jobs like retail and fast food. How are these employees paying rent, and how far are they commuting every day?

I also wonder this ... is McDonalds in SV a 6 figure job?

The title is misleading. The figure refers to:

- household income (i.e. the sum of income of all members of the household, not just that of a single individual, which is implied by the singular term 'salary')

- a family of four (two adults and two children)

So if you're a single, twenty-something software engineer earning six figures, and have no kids, you're probably not eligible for this.

If you're making 110k anywhere else in the US while single and without kids, you're buying houses and cars when you're not traveling.

Not renting a one bedroom and eating $14 avocado toast with your roommates.

"Not renting a one bedroom and eating $14 avocado toast with your roommates."

$110k before tax is $77k after tax. That's enough to cover:

Avocado toast for every meal: 3653$14 = $15k/year

Rent without roommates: 12*$3.5k = $42k/year

Misc other expenses: $20k/year

Socketsite pre-emptively debunks the article[0]

0: http://www.socketsite.com/archives/2018/06/a-six-figure-sala...

It’s also technically wrong because the range for a six figure salary is $100,000 - $999,999 and only the lower range is being considered low, not all six figure salaries.

Hey, us Davis students are having our own housing shortage, please don’t include us

I think SF is perfect for a techie work-n-travel. Go work at a googloapplebook, live in a trailer, save 90% salary. Move to a cheap place, buy a house with cash (in your twenties), the rest spend on a year-long journey around the world. Sell it to the masses, and the housing problem is solved :-)

San Diego has more space than the bay area however good RE is super expensive here too.. One way to avert high cost is to live on a boat. Moorage fees are fairly low (relative to rent) and a boat beats most vans, cars or even RVs.. I've heard co's like Netflix pay 250k or higher, and even at that rate you'd need a spouse/2nd income to be able to afford a home + family.

Depends what you'd classify as good real estate. Sure La Jolla and Coronado are pricey and if you want acrerage you have to move way inland (and deal with the heat), but a half hour commute and $250k a year salary will get you a beautiful home in a great neighborhood.

There is no way you would need a second income for you and your family to live very well on $250k in San Diego.

That said a boat does get you pretty great sea views! I have a friend who slept on his boat near work in Irvine to avoid having to brave the commute back to San Diego during the week. Was cheaper (and nicer) than buying a place up in Orange County.

The Bay Area roughly divides into two populations. One understands rental economics, is technologically literate, and refuses to vote. The other either doesn't understand rental economics (or understands it in a cynical, self-serving way), couldn't give two shits about technological literacy, and religiously attends community events.

The cost the latter extract from the former expresses itself in inflated rents. In the long run, it's probably self-defeating. But in the long run we're all dead.

The lack of any semblance of civic culture amongst technologists is starting to show its wounds, and I suspect this will have to get worse before it gets better.

Can you clarify what you mean by "lack of civic culture?" I don't mean to argue, I just don't follow what you mean to say here. Do you just mean that they don't vote, or something more?

> Can you clarify what you mean by "lack of civic culture?"

In New York City, there is a general expectation that once you make money or ensconce yourself in the community, you start giving a shit about it. You volunteer. You donate to local charities. You stay informed about community issues, voice up for yourself and those around you, and vote. That sense of civic culture and underlying duty is far more suppressed in the Bay Area.

This x 1000. As someone who grew up on the East Coast, I’m always amazed at the relative lack of interest in politics and culture in Silicon Valley. The San Jose metro area probably has more wealth than almost any city in history, but can’t sustain a decent symphony, ballet, or opera. Yes, I know SF has those things, but it’s 90 minutes away by car, factoring in traffic and parking.

> relative lack of interest in politics and culture...symphony, ballet, or opera

And before someone decries these art forms as inapplicable to modern life, remember that most ballet and opera contains political and social commentary. I can't count the number of times I've left the Metropolitan Opera to get embroiled in a debate about the nature of democracy or relation of Verdi's Don Carlo to the White House, at a nearby restaurant with a table of newly-found acquaintances.

SF is also a city of immigrants. Especially those that moved here from all around the world for a great job in tech.

As resident aliens, they cannot vote.

> SF is also a city of immigrants

Yet 34% of eligible voters turned out for June's primaries [1]. (A figure that is elevated relative surrounding counties.)

[1] http://abc7news.com/politics/june-primary-voter-turnout-upda...

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