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San Francisco median one bedroom apartment rent hits a new peak of $3,690 (cnet.com)
155 points by vector_spaces 20 days ago | hide | past | web | favorite | 175 comments



Note that Zumper is not a reliable source for median rent data. CityObservatory wrote an article about their data problems a few years ago [1]. Zumper's data is, of course, based on apartments that are for rent and doesn't include currently occupied units. That alone skews high, especially when there is a lot of higher-rent new construction hitting the market. Also, it looks like Zumper's data skews towards higher-end neighborhoods.

For a broader look at the rental market, including occupied units and rent-controlled units, you could just consult ACS data. That says that median rent for all occupied 1-bedrooms in San Fransisco was $1912 in 2017 [2].

[1] http://cityobservatory.org/journalists-should-be-wary-of-med...

[2] https://censusreporter.org/data/table/?table=B25031&geo_ids=...


I guess it depends on what question you're asking. You seem to be pointing out that you think the real question is: "what is the median rent for anyone living in San Francisco?" whereas Zumper seems to be more answering the question: "if someone moved to San Francisco today, and has zero connections, what rent would they pay?" Both are valid questions, but I think it's good to set the context for if you're having a conversation about "general median rent" vs "newcomer median rent."


Even then, it's not as clear. First off, median caries the implication that these are all "valid" places, whereas in reality, most apartments that are still up for grabs probably aren't rented for a reason, therefore including them in a median is misleading.

Next up, the data itself needs to be "fresh" for this to work. It could be that cheaper apartments appear on the market frequently, but are rented right away. So as someone new in the city, you could find these cheap places if you looked for a bit, but a single survey will probably not catch these.

A better approach would be to look at the median of all new rented apartments throughout the year. That will give you an idea of what someone who comes to the city will realistically pay.


My first thought, on reading the source of the data, is that the article was probably prompted by a press release from Zumper. I don't know this, but if reporting a record high gets them press for their app, they'll certainly be biased towards finding a record high. What a poorly sourced article.


From that CityObservatory article:

  Zumper has also made a name for itself through its “National Rent Reports”
  —more or less monthly press releases that claim to track median rental prices around the country. 
  These reports have received copious media coverage, from the Bay Area to Seattle to Nashville to Chicago to Boston to LA to Miami to Denver, and so on.


Paul Graham wrote a great essay on this:

http://www.paulgraham.com/submarine.html

From what I've seen, it's definitely true, most "news" is at least influenced by PR firms. Part of why (now old school) blogs are so refreshing to read in contrast. I remember working at a startup, and our marketing person once asked the engineers to do some quick data analysis to get a soundbite just like this.


On one hand, it’s a very high price. On the other hand, no one is entitled to a one bedroom unit in the heart of one of the human epicenters in the world. Many people here have roommates or alternate living arrangements.

There are several reasons why the prices have gotten so high (lack of supply, politics, etc).

But don’t expect to move your Texas ranch or Midwestern single-family-house lifestyle to SF with no compromises.

But in return for your compromises, you will get quite a bit in return.

Is it worth it? That’s a very personal decision. For many, it’s not. For many, it is.


Roommates and alternative living situations are necessary because our housing policy is to preserve the Texan/Midwestern single-family-house lifestyles of existing homeowners. And not just to preserve them, but to keep sightlines clear of evidence that someone else might be living a different lifestyle nearby.

People are not entitled to 1BRs, but they are even less entitled to streets curated for 1-2 story detached houses at trivial distances from that human epicenter.


> On one hand, it’s a very high price. On the other hand, no one is entitled to a one bedroom in the heart of one of the human epicenters in the world. Many people here have roommates or alternate living arrangements.

New York is the “human epicenter” in the US. San Francisco is in the same tier as Houston or DC: https://www.lboro.ac.uk/gawc/world2018t.html.

Paying New York/London prices to live in a city that is not New York or London is just sad.


> Paying New York/London prices to live in a city that is not New York or London is just sad.

I’m coming to this point. If I’m going to pay a New York level rent I might was well enjoy a 24/7 subway, a plethora of good restaurants and a beach that’s actually warm in the summer.


[flagged]


To the downvoters: I moved to SF/BA 3 years ago after living 8 years in Paris (France) and before that 20 years in St. Petersburg (Russia). There is noticeably more culture and diversity in both Paris and SPb than in SF/BA.


What is "culture" in this context? (I mean this sincerely)


Not parent, but I would define it as "Monuments" to visit (e.g. Eiffel tower), history of the area, culture entertainment like museums or theaters (i.e. not just movies, but opera, plays, musicals or concerts) and maybe regional activities (e.g. surfing in CA, but Octoberfest in Munich).

I haven't been to SF yet, but based on that Sankt Petersburg, Paris or NY seem more significant than SF.


SF maximizes technological intelligence, Wall Street maximizes financial intelligence. Plenty of overlap, but the top talent stays where the rest of the top talent is.


Having technological intelligence doesn’t make San Francisco a “human epicenter” (whatever that is). I wouldn’t even call San Francisco a technological epicenter. Even within computer technology, much of the most important technological intelligence in the US is outside San Francisco: in Portland (Intel), Seattle (Microsoft), San Diego (Qualcomm), and maybe San Jose (Cisco). Put differently, what cities would be most devastating (in terms of impact on US technological capabilities) to lose early in WWIII? I’d put Boston or Seattle ahead of San Francisco.


Agreed, SF has a lot of tech companies, but a lot of them don't do things that ate very valuable for society, many are social networking/advertising.


I think consumer tech is valuable in the sense that our peace-time economy is based on consumption, and San Francisco is great at helping us consume. But when I hear the word epicenter I’m thinking “what’d put us back in the Stone Age if we didn’t have it?”


I don't think a significant proportion of the people who want to live in New York would cite Wall Street in their explanation.


+1


It's not about whether any specific person deserves to live in a specific place.

There is a cost to society in effectively pricing out half of the population from an entire city. Is the benefit of mitigating that worth the cost?

For what it's worth, I think that it probably is.


What is that cost? There's an enclave in my city where I can't afford to live, and I live in a neighborhood where others can't afford to live.

Now in my case, the people who are shut out of my neighborhood arguably have less access to things like good schools, so in principle I'm uncomfortable with exclusionary zoning and economic segregation. But I don't know if that's the case in SF. Are the elementary schools in SF that much better than in surrounding towns?


You have to drive several hours in extreme traffic to reach a substantially different housing market, which obviously involves air pollution, climate change, energy cost, road infrastructure, parking space, collisions, and a substantial portion of your life and productive capacity. The same situation in San Francisco plays out in its suburbs, only worse, since a meaningful growth in housing capacity would be an even bigger change for them.

There's a great deal of city-by-city, neighborhood-by-neighborhood, unit-by-unit variation, but the crisis is that even the floor is so high.


> What is that cost?

By some estimates it's double digit percentage points off US GDP

https://www.nytimes.com/2017/09/06/opinion/housing-regulatio...


Searching that opinion piece for "study", "studies" and related keywords returns no results.



No, the schools aren’t that good. And it’s not an enclave, the entire peninsula is extremely expensive except for a few patches (San Bruno, parts of Redwood City, Santa Clara) - and there’s not much availability in those places. The only place close to what most people outside of California would consider affordable is deep east Oakland or Richmond, after that you need to go to Tracy or Vallejo or past San José.


What is that cost?

Part of the cost is that tech companies have to find more and more money to pay staff in order to maintain the growth their investors demand, which leads them to do less and less ethical things like spying on people.

While such a large portion of tech company revenue is going to landlords (via staff wages) tech companies will continue to get worse at things like privacy.


> It's not about whether any specific person deserves to live in a specific place.

I never said anything about if someone deserves to live somewhere.

A 1-bedroom apartment is a very specific type of unit and that's part of what I wanted to point out. You can also rent studios, converted rooms, or get roommates in a bigger place with more rooms. There's a lot of other options I'm leaving out too, but I reject the premise that everyone in SF absolutely requires a 1-bedroom apt as an essential. It's nice to have certainly, and having roommates isn't for everyone...but there are tradeoffs to every place you live. You can absolutely make SF work if that was your desire and you knew the tradeoffs.


The price for a studio isn't going to be far behind a 1 bedroom, and rooms in houses aren't really an option for for people who aren't single in most cases. Even if you wanted to cram multiple people into one 12x12 room, most cheap rooms for rent are explicit about 1 person only.

Look at median household income, San Francisco is effectively off limits to most people.


Point taken. We definitely have a problem but I really don’t see any solution anytime soon. Even if we committed to building a ton of new supply tomorrow, it’d still take years to get approved and actually physically built.

I’ll push back a little on your point back alternatives not being too far behind the price of a 1 bedroom though. I know several people with units <$1800. Some converted rooms go for <$1500.


> Even if we committed to building a ton of new supply tomorrow, it’d still take years to get approved and actually physically built.

Would you argue we shouldn't do anything about climate change because that will take years of approval and political decisions before anything gets done?

I mean, yeah, it would be better to start ten years ago than today, but starting today must be better than never right?


That’s not my viewpoint at all. I think we SHOULD build as much supply as possible.

However I’m not holding my breath nor am I optimistic about the short-medium term reality.


A median price of $3,700 doesn't imply that single bedrooms cheaper than that don't exist.

>don’t see any solution anytime soon

There's not. But a solution 5 years from now is better than never.


This is more expensive than Manhattan, Tokyo, every European capital, etc. It's more expensive because unlike most other cities San Francisco has very few residential apartment buildings. Make SF into Manhattan and watch prices fall.


>Make SF into Manhattan and watch prices fall.

I don't see how that follows. Manhattan is Manhattan, and yet prices still rise, families and communities are still displaced, and there are still people that are un or under-housed.

In America, housing is an asset that appreciates in value for the purpose of resale. For the middle class, housing has been the primary means of accruing wealth and for many is the entirety of their retirement savings.

A society that guaranteed housing to every citizen would be fundamentally, structurally different than the one we live in today. It's not a simple urban planning problem.


You don't understand how Manhattan optimized for density before prices rose this high?

The parent is saying if SF had the housing density of Manhattan it would take decades of more growth before prices reach NYC levels.


People are entitled to build whatever they want on their property. As Silicon Valley is ruled by rent seekers who make building illegal, people have every right to complain.


"Rent seekers who make building illegal"? I don't think it's the people seeking rent who would make building illegal.


"Rent seeking" is a specific term in economics referring to people who seek to extract wealth from the economy without adding to it in any way, e.g. "make building illegal" in order to force up the value of their own property.

https://en.wikipedia.org/wiki/Rent_seeking


Thanks for sharing, did not know of that term, but I must say it's a rather confusing choice of words!


The term is somewhat dated, but the usage makes sense in context. Historically there has been a noble class awarded privileges via mechanisms external to the market that leveraged those privileges to extract revenue from the market. Generally this consisted of renting out some right like the right to farm certain land or draw water from certain wells or dock ships in certain harbors. From this we get the modern economic usage of the term "rents" to mean the additional cost someone can charge for something due to their exclusive or semi-exclusive ability to provide it. Think patents, copyrights, monopolies, trade secrets, and ownership of scarce finite resources (like land in SF). From this comes the term "rent seeking" to describe the behavior of obtaining market privileges through means external to the market. This (mostly) consists of trying to influence laws to be in your own favor, like patent owners trying to get patents extended or homeowners opposing upzoning.


You're welcome! I went down a wikipedia black hole on economics a while back. The most memorable term I learned was moral hazard, which also sounds confusing.


> People are entitled to build whatever they want on their property

Not in a world where zoning and nuisance laws exist, with good reasons.


No one's proposing to build a sewage treatment plant on this land. It's just more housing, in a city where people go without a roof over their head because it's too expensive. There's no "nuisance" here, only landowners trying to assert rights over their neighbors' property.


This only applies if you’re a single person. How is someone supposed to start a family and afford to live anywhere near that area?

I think we are reaching a really depressing future if only the wealthy can afford to have a family.

Bay Area is the most extreme example but we see it everywhere with no government mandated leave policies and childcare costs are insane. Again, only the wealthy get these services because they work at companies that use them for recruiting purposes and to retain talent.


Gotta ask, because this issue comes up in many major cities:

And what if the service workers who make substantially less than the higher earners who so rely on them?

Does the cost go down that much for a 4 bedroom split between four people on minimum wage? In a lot of places it doesn’t.


The service workers move somewhere else where they can afford to live. The ones that remain can demand a higher price for their work


...When they are actually working. But if you are fired from the job, you still need to pay rent for the time it takes to find a new job.

Having high rent reduces your personal “runway”. This makes bootstrapped startups hard and it makes like as a lower-income worker very risky/stressful


If you don't like the risk/stress there are plenty of other places to live. If you choose to live in SF when you can't afford it then that just not a wise decision. Eventually the prices will even out and you will just have to pay $30 for a sandwich.


Is that happening? Are service workers in SF paid a living wage?

Or are people like fast food workers being paid minimum wage and commuting 2 hours?


That is their choice. The market will only correct if people make rational choices.


For a lot of people, it isn't a choice. That's where the problem sneaks in.

The market you believe in doesn't exist in a vacuum. The world is far more complex than that.


Chances are you know someone who is on rent control and you’ll pay $700-$800 for a room. Not too many service workers move to SF if they don’t know someone there already..

Hell I know someone paying $850 for a one bedroom in Duboce.


>no one is entitled to a one bedroom

I’m curious how do you mean this? There are a plenty of reasons as to why I wouldn’t want to have a roommate and a 2bd is not affordable.


You cut off the important bit "in the heart of one of the human epicenters in the world."

It's about location, not living space.


Basically if you can't afford it then you're not a victim...


Entitled is not the same as just getting what you want. If you can afford it, great. If you can’t afford it, nothing else entitles you to have it.


There's nothing inherent in that. Any more than it's inherent that in a system that awards apartments based on time on a waiting list, that time on a waiting list entitles you to an apartment in that system.

The argument is whether we should somehow alter what entitles you to an apartment in our system.


> Many people here have roommates or alternate living arrangements.

Is “alternate living arrangements” a euphemism for homelessness?


Except for rent controlled tenants that is


I just visited New York on an extended trip.

Most of NYC is better connected, more vibrant, more concerts, more sports, more universities, more housing, more international people, more business activity.

Yet, NYC is affordable with a "functioning" commute system. People on all spectrum of income can live there.

SF bay area has none of all that and yet is super expensive wasteland of suburbia. SF city is better but not even comparable to major cities of the world.

The only thing SF has going on for it is weather, outdoors (for which you need a car and a parking spot) and tech companies.

For any young padawans considering SF, it has its attractions but you won't know what a bubble it is until you get out. It's not worth spending one single life in the bubble.


SF is not the Bay Area, the data often gets confused.

And SF is oddly very, very different from San Jose or Palo Alto - they're literally different climates, like 10 degrees differential on most days!

SF proper is a very small city, less than 1m people!.


That is true. That's why I wrote:

>> SF bay area has none of all that and yet is super expensive wasteland of suburbia. SF city is better but not even comparable to major cities of the world.

Most SV jobs are in the bay area. Even concerts, sports, shows in SF are in bay area not in SF proper.

SF proper is smaller than Jersey City or Brooklyn, with lesser walking stores/restaurants, lesser community activities and anyone not in a rent controlled apartment cannot live a life without stress in SF proper.


NYC has something like 1M rent stabilized units.


I think high rent prices are bad for a number of reasons:

Less flexibility in starting a company: You can't choose to bootstrap unless you do it as a side hustle at a megacorp, and it's hard to not compete with a megacorp because it does everything. You have to take VC funding and follow VC rules to some degree, and it may not be a direction you wish to follow. This is a feedback loop.

Oligopsony employment conditions: If you wish to build savings and not spend all your money on rent, you can really only work for the largest and best funded companies, and even then you need to negotiate at a disadvantage, since they have far more information on the employment markets (because they're big) and they each know the other big players (because they're few) and can bound salaries through price leadership. This is also a feedback loop.

I'm concerned we will see fewer "real" companies like Intel/Apple, and more Snapchat clones and e-scooter startups. Less meaningful bets, less drive, and more complacency -- borne out of the desire to cannibalize social trust (e.g. if you work hard, you earn shelter) and the societal fabric (e.g. all people deserve shelter as a basic human right) for privatized financial gain.


Most European countries already recognize that, to some extent. "Sidewalk evictions" are illegal, you (or municipality/local government) have to first provide some replacement apartment before renter can be evicted. Most town/cities have some pool of apartments for that very purpose. Of course those aparments are shitholes most of the time, but still. Of course in practice this protection does not work for everyone, and there are still homeless people in Europe.


>all people deserve shelter as a basic human right

I hear this a lot and it still makes absolutely no sense. Where will they get the shelter from? What if the builder doesn't want to build a house for that person? Is the plan to force the labor out of them? Every positive right that I have ever seen comes along with an implicit demand that somebody else become a slave.


“Shelter as a basic human right” means that we have a moral imperative to organise and structure our societies so that that right is fulfilled. If your society is structured so that not enough housing is being created, or so that housing is left empty while there are people without shelter, then that society is running on incorrect axioms and the people who make it up have a moral imperative to change how they do things.

There’s no force involved, it’s a potential principle of self-organisation.


>There’s no force involved, it’s a potential principle of self-organisation.

That means it's not a human right. If your government is engaging in real human rights violations you don't say things like, "potentially maybe we might want to reconsider how we organize our society."

One example of a human rights violation would be, the government makes up for a shortfall in their black budget by engaging in human trafficking. Whatever the solution to that - keep the dictator, change the dictator, give the president a second term; that's all situational, what's not is that you have to quit doing it.

>“Shelter as a basic human right” means that we have a moral imperative to organise and structure our societies so that that right is fulfilled.

Essentially, the problem is, that's not what it means. A human right is a value that you are willing to see your civilization stop existing if that's what it takes to preserve it. If you made housing that high of a priority things would quit working pretty quickly. On the other hand, if you gave public trials to criminals who were willing to surrender, things would go pretty well.


Outside of the prison system, legal coercive labor isn't really a thing in the US.

The people building houses are working because they are paid and they prefer that to the existing social safety net.


Right, but housing as a basic human right is not something that exists in the US, at most it is a high priority. If it was really treated like a basic right our society would be unrecognizably distorted around that one thing. A human right is not something you can let slip on a bad day, and that fact has big implications.

If you are allowed to say, "our budget isn't adding up today so some people will have to stay on the wait list a bit longer," you aren't acting like it's a human right. Human rights are maximum priorities, not just high priorities.

An example of a reasonable human right would be that your own government can't kill you without a fair public trial. If a country ended up in a situation where they had to assassinate a businessman to keep their budget balanced, it would be reasonable to say "forget about the budget, you can't just take one of your own citizens out." However, if you had to loosen up the housing program because your tax revenue came in low that year, doing so would be potentially a reasonable option. "Potentially a reasonable option" is not even remotely on the table for human rights violations, which is why housing can't be a human right.


Many rights in the US are only guaranteed in the sense that they "shall not be infringed" or "Congress shall make no law". The Constitution guarantees freedom of religion and the right to bear arms, but the government won't build you a church or buy you a rifle.

Housing could be a right in that sense: the government shall make no law preventing the construction of housing. Of course, like all other rights, it would be balanced against reasonable government interests like ensuring that the housing is safe.


>the government shall make no law preventing the construction of housing

The most pragmatic objection to this would be that everything you do prevents the construction of housing - if you build a city hall, you are preventing an apartment block from being built on the same land. Taxes prevent the construction of housing because the reduce the funds available to home builders and buyers. Property rights prevent the construction of housing because they would prevent me from setting up a tent in your front lawn. Making housing a right is a wellspring of endless absurdities, unless you are willing to treat it as a "maybe" goal. Maybe-goals and human rights are disjoint sets.

>Of course, like all other rights, it would be balanced against reasonable government interests...

So, let's look at a real human rights example, being assassinated by your government because you are protesting something. The dictator might claim that they were balancing your life against reasonable government interests - the reasonable response would be, "no interest is so reasonable that what you did would be justified." That's the thesis of human rights, if anything is justifiable then you don't believe in human rights. It's not that complicated.

So, if you think that housing as a basic human right can be suspended for reasonable reasons, you either don't really think it's a human right, don't believe in human rights at all, or are proposing a distorted crazyland.


While I see your argument, I think your bar for "basic right" is perhaps a little too high:

Life: people die every day in the US. In some cases, the government even kills them!

Liberty: We put people in jail

Speech: Incitement to riot; slander

Press: Libel; national security

Religion: If your religion includes e.g. human sacrifice you certainly won't be free to practice it.

And so forth.


There's no shortage of builders. You can just compensate those workers with taxes. If you think taxes are also a form of slavery, that's a different discussion.


You can't fulfill a basic human right contingent on enough taxes coming in. If it's really a basic human right, insufficient revenues or unexpectedly high prices are not an excuse. If your country ran out of money, if the builders all started working for foreign companies, and if housing was really being treated like a human right, you'd have to make builders work without pay, or at least involuntarily.

Providing housing most of the time is just a program. Providing housing all of the time with no exceptions, like you would expect from a human right, involves some serious distortions of other values. That's the problem, people are using the word human right when they mean high priority. It's a high priority that I do my laundry, but if society were organized so that I did my laundry at all costs, if we were all convinced that a society where I did not do my laundry did not deserve to exist, then things would get pretty crazy.


A high-priority housing program is how you implement a human right for shelter.

This isn't some paperclip maximalization requirement you adhere to the social contract, and under the wrong conditions will force people into house-building labor camps. Human rights are how you reason about resource allocation. You have a right to a trial by a jury of your peers, but that obviously doesn't mean a judge must preside over your case that same day by threat of force. We can recognize physical realities, while still understanding that if we wanted to, we could provide a social safety net that includes a place to sleep.

> If your country ran out of money, if the builders all started working for foreign companies

If your country runs out of money, many human rights are probably in danger.


I disagree that people paid by government contracts are slave workers. Or maybe you mean tax payers?

Either way, I always avoid phrasing things as positive rights. But they can usually be rephrased as “I believe it would be in the interest of our society and the well being of our people to provide housing for all people.”


What will you do when it happens to you? That you have no place to live?

Because it will.


I have no place to live in San Francisco. So do about 7 billion other people. Somehow they get along, by having a place to live on the rest of the planet. So if I won't be able to afford place in San Francisco - which is, unfortunately, my current situation, unfortunately not because I want to live there but because I want to have income so high I could throw out almost $4K for just one bedroom - I would live in a cheaper place. Which is, fortunately, called "the rest of the planet Earth" and is quite large.


What makes you think that will happen to them? Most people don't end up homeless at some point in their life.


More people than you think and it gets more common over time.


This is totally irrelevant for San Francisco. Even if you're a libertarian (or maybe especially if you're a libertarian) you should support building housing in the bay area.

Nobody's asking for government funds to build housing in SF. Developers are lining up to build housing funded entirely out of their own pockets. People who are pro-housing generally just want to government to stop preventing people from building more high density housing on property they already own.

So, if you're arguing some sort of taxes and government regulation are bad thing, you should be in favor of drastically more housing in SF.


[dead]


Sorry, but what you are saying is that society shouldn’t give a shit if people freeze to death on the streets because they have no shelter. That is pretty disturbing to be honest.


On hackernews and other boards, a greater than sign followed by an italic section is how quotes are usually formatted. If you look closer you'll see that I was quoting the parent, not making the point myself.


[dead]


man, this comment depressed the hell out of me.


I'm surprised that people like that exist!

Clarification: people who think they need "smart" neighbours as if they are going to play chess with neighbours 24 x 7


[dead]


I don't think this tragedy of the commons type of behavior you're describing only applies to the "no n smart" people, it happens in SF and rich neighborhoods as well.


Irony isn’t your strongest suit, huh?


Excuse my ignorance. SF doesn't look anywhere like Hong Kong, possibly the most crowed places on earth, and it is not close to Tokyo or Seoul. It has plenty of Spaces, for many coming from Asia, most part of SF is like country side so to speak.

What cant there be more housing development on the edge of SF, or taller building with many smaller apartments etc. Underground packing lot?

Edit: Ok, is it because it is in an Earthquake zone?


Because of Prop 13.

http://projects.scpr.org/prop-13/stories/housing-shortage/ has a good write up.

Because land isn't taxed based on it's current value landowners have little incentive to develop their land in order to get the most out of it. They simply bank land as much as possible as it's the most surefire way to turn a profit. It's why we have golf courses* in city centers and dilapidated shacks* next to Google's global HQ.

Additionally, prop 13 gives landowners every incentive to lobby for policies that restrict development in order to drive up prices instead of fighting for the right to build 4 story apartments on their property.

Slashing property taxes always floods the market with speculators and destroys housing affordability. Look at Vancouver, or Malta, their housing shortages rival SF despite low wages and comparatively small economies.

* https://www.planetizen.com/node/93284/la-country-clubs-takin...

* https://www.theguardian.com/technology/2016/dec/15/google-ca...


There is local political opposition against allowing dense development. There are empty lots which do not get developed, even though the owner wants to develop it, because of neighborhood opposition and zoning regulations.


From what I've heard it's very difficult to develop new housing in San Francisco due to various regulations. Apparently, you even need to apply for permits to change your windows. Having lived in Hong Kong and Shenzhen, San Francisco does feel like country side.


> Apparently, you even need to apply for permits to change your windows.

Needing a permit to install windows is a thing everywhere. Because if you want a really good way to ruin a house, installing windows wrong is a great way to do it.


Everywhere in the world or everywhere in California? If the former, I find it amazing that house owners ruining their house by replacing windows is a universal problem and that requiring permits solves it.


Pretty much every developed part of the world requires permits for such things. Why permits? Because building codes are as old as civilization.

https://www.lexology.com/library/detail.aspx?g=5181e80b-f307...


Tokyo is certainly an earthquake zone as well so I don't think that explains it.


Tokyo is an earthquake zone in a country with a total liveable land mass that could comfortably fit inside a single US state. In fact the totality of all land in all of Japan, including mountains, is smaller than California. A lack of options will drive people into close quarters, but no such pressure exists in San Francisco. Wanting to be close to venture capital isn’t as compelling an build a megalopolis as some people with vested interests seem to think, no matter how much they dress up the issue with altruistic claims about the homeless.

The truth is that it’s prime real estate with a beautiful climate, and risks of earthquakes aside (and you can’t avoid natural disasters of some kind wherever you live) lots of people would like to live there. That’s no more an argument to build build build than it is to knock down any existing popular city or town and build high rises. While this argument is often derided as “NIMBYism” it is also true that it is in fact already some people’s back yard in the first place. A balance needs to be struck between the people and interests who’ve invested generations in a place, and people who want to flood in and change it to suit their desires.


Sorry, why does the fact that your grandparents lived in a place have any bearing on whether you have a say on what a neighbor should be allowed to build on their land?


Locals fight against further developing the land. They don't want skyscrapers in their suburbs.


Skyscrapers? Suburbs? They don't want 5-story buildings in their dense urban area.


>What cant there be more housing development on the edge of SF...

Three of the edges of SF are water.


Hence 'edge' in the singular, I think.


Why build more housing if people will continue to happily pay these prices to live here? The goal isn't to cram as many people as possible in a single pcity.


When headhunters contact me about SF (or even Bay Area) jobs, I just scoff and shut them down. If you're fresh out of school, no family, and willing to live in a hovel for some interesting life experience, sure. But if you're an adult, it's no way to live. And putting kids through it is frankly unethical.


Well it depends.

I'll agree with you that if you work at a rando tech startup, the costs of living are going to be quite high, and make it probably not worth it.

But, the whole equation changes if you are working for a big 5 tech company, or hot unicorn company.

These companies will pay you double what the rando startups pay. Who really cares if you are paying 40k a year on rent, if your total compensation breaks 250K.

And getting 250k+ as an engineer, with a couple years experience, is only really possible in the Bay area.


> And getting 250k+ as an engineer, with a couple years experience, is only really possible in the Bay area.

Seattle and NYC can also easily reach that.

Source: I'm in Seattle making 210k 3 years out of college.


But the cost of living is so high there that the inflated salaries are pretty much required to bring anyone out there. A company wants to have competitive hiring so they offer a little bit more than competition so what was a $200k job is now $220k. Prices increase to what these inflated salaried workers can afford and the cycle continues. It will be incredible to watch when SF finally starts to allow for more high density housing. Housing prices will fall and the salary bubble will pop. A lot of companies will start cutting back on starting salaries and as a result, experienced workers will start either taking paycuts to switch jobs or be first in line for layoffs because they cost the company too much.


This gets causality backwards. Employers don't give a shit about whether employees can afford housing - if they did, we wouldn't have such a big homelessness problem, and our teachers/firefighters/policemen wouldn't live over the mountains in Pleasanton. Employers pay enough to prevent employees from going to a competitor. The reason FANG salaries now hit $300-400K is because Facebook refused to play ball with the wage-fixing cartel that Schmidt/Jobs/et al had worked out, then the DoJ cracked down, and so now that's what you need to pay to keep your software engineers from working for someone else. Then you have a lot of tech workers with extremely fat salaries and not enough housing for everyone who wants to live here, so they bid up rents & housing prices until they're unaffordable for all the middle-income folks who used to live here.

If more high-density housing was built, then rents would fall, middle-income people could live here again, and tech workers could pocket their fat salaries as savings (or live extremely lavish lifestyles). They would still be paid a lot, because there'd always be another tech company around the corner willing to bid up wages to their current level. For the salary "bubble" to pop, a lot of these companies would have to go out of business at once. This was exactly what happened in 2001 and 2009, and it had the predicted results: unemployment spiked, wages fell, rents fell, and people moved out of the Bay Area back to wherever they came from.


If that would actually be the case you would have these salaries all around the world, but you don't. Because it's mainly a few big highly profitable companies (FAANG) that can afford these salaries and a big VC and stock market funded bubble around them. And even FAANG pays much lower salaries in cheaper regions, because hightech employers have to give a shit about housing. You can't compare it to teachers.

I think it's a dangerous attitude to think the salaries in CA are the actual worth of a software developer's work. It's just what FAANG can afford to pay. For many companies devs at that price point are not economically sustainable.


It absolutely is what FAANG (and newer companies like AirBnB/Uber/Lyft/Stripe/DropBox etc) can afford to pay. And what FAANG can afford to pay is not going to change if more housing gets built in the Bay Area. And yes, for many companies devs at that price point are not economically sustainable, but that's why FAANG are sucking all the oxygen out of the startup developers market and maintaining their oligopsony.

(Also, while there's some variance for cost-of-living in FAANG salaries in different regions, it's not that much. Google developers make less in Beijing than they do in Mountain View, but their salary still looks much more like a Google salary than a Beijing salary.)


Why "just scoff"? There's a salary that would allow you to live comfortably and get more net income in the Bay Area - you'd want to see if the jobs can pay that salary


Looking at salary data from several places, even a $200k base seems pretty rare, most developers are not making that much in the bay area. People in the bay area are going to have less purchasing power than developers in most other places around the country.


$3690/month * 12 months = $44280. If you're making ($44280 - current rent in your city) more for a SF job, you net out ahead, even without considering stock options.

(It's also significantly more reasonable in the South Bay - my family pays about $2650/month for a 2BR, and most of the fat Facebook/Apple/Netflix/Google salaries are in Silicon Valley proper.)


That's if you only consider the housing cost. But if housing costs more then so does everything else, because everyone providing everything else has to pay the housing cost too, both for commercial real estate and higher costs per employee. Then you have the tax implications, i.e. all the extra money required should be calculated as after-tax at your marginal tax rate, both federal and state, and California has the highest income tax rate in the nation.


"But if housing costs more then so does everything else"

That's not really true. Restaurants are more expensive in the Bay Area. Fresh produce is not, if you know where to shop - actually, when I go basically anywhere else in the world, one of the things I miss is the ability to fill a whole shopping bag with 10-15 lbs. of vegetables for < $10. Gas is more expensive, largely because of taxes. Cars are not. Durable goods cost the same as everywhere else. Amazon charges the same (modulo taxes) regardless of where you live. Airline tickets don't have appreciable differences. Baby things (modulo housing and childcare) are cheaper, because the Bay Area is dense enough and tech savvy enough that you can get a lot of toys/cribs/strollers/mats/gates/playthings for free or cheap on NextDoor/Craigslist. A dollar of savings is the same in SF as in Alabama.

The point about tax rates is true for rentals. You can do the math yourself on whatever offer you happen to get - figure on housing in SF being ~$40K/year, meals out costing about $20/person, grocery food being about the same, public transportation being a few dollars a trip, and gas being negligible because you'd have to be pretty crazy to want to drive (and park) in SF.


A dollar of savings is not the same, because your savings needs are proportional to housing costs. Whether it is to make a down payment, pay rent while laid off, or maintain your lifestyle in retirement, you need a much larger savings balance to buy the same capability. Even if it’s a kid’s college fund, as an upper middle income worker in a flyover state you will probably qualify for financial aid; even with the same take home budget, in a high wage high cost scenario you will not.


There's nothing stopping you from moving to a lower cost-of-living area when you need to dip into savings. If you save up a million dollars in the Bay Area, you always have the option of moving to Chicago and buying 4 houses, if you're willing to put up with the cold. The reverse does not necessarily hold: if you save up $100K in Chicago and then need to come up with a down payment for a home in the Bay Area, you're screwed.

For that matter, the higher home prices also come back to you if you choose to move elsewhere (as long as Bay Area real estate doesn't crash). A number of the homes I've been looking at are on the market because the kids are grown, the owners are retired, and now they want to take their $1.3-$2.4M and move to Nevada/Florida/Arizona or some other low-COL area.


Besides the life you and your family have built.

If saving $30k in Chicago lets you sustain your lifestyle for 12 months of unemployment, and saving $30k in San Francisco gives you the option to leave everyone you know and move 2200 miles to Chicago for 12 months of unemployment, those dollars of savings are not at all the same in terms of the protection they offer.

Living in the Bay Area can be a good deal, but to figure out whether that's the case, you need to set savings targets in terms of equivalent capabilities. Different people can place higher and lower value on location stability, but in any case the value is not $0; moving trucks and realtors are not free.


I'd definitely keep in mind that those are after-tax figures, though. At the higher income levels, CA+Federal taxes hover around 50%. So, roughly double that rent difference to get the salary offset needed.


Really? At what income level in California are you paying half your income in taxes?


When comparing alternatives you want to look at marginal rate. Above $82k, your marginal tax rate is: 24% federal income + 6.3% social security + 1.45% medicare + 9.3% California + 1.5% San Francisco for a total of 43%. This is not the same thing as paying half your income in taxes, but it is paying (nearly) half the additional income in taxes.


6.2% social security drops off after $132,900.

https://www.irs.gov/taxtopics/tc751

50% is a high estimate, good for budgeting though. With property taxes, vehicle registration fees (aka taxes), school fundraising (aka taxes), tolls (also tax), health insurance (a tax if it’s mandatory), and other fees for dealing with government, you get pretty close to 50%.

The only way to beat this is to make a significant portion of your income via capital gains, that’s one big advantage of the real estate business, various loopholes exist to let you minimize taxes (like 1031 exchanges) on increases in your net worth.


What’s the 1.5% SF tax here ? Never heard of it. Isn’t SSN and Medicare only apply to 100k of income ? Also, you have deductions for mortgage, state taxes, property taxes that lower your tax liability quite a bit. I would be surprised if anyone paid more than 30% effective tax rate on their income


Sorry, I meant marginal tax rate, since we’re looking at the diff. At the $300k level, that’s around 35% Federal, and 11.3% CA. CA also has a relatively high 9% sales tax, and I believe SF proper has some special taxes as well.


From what I've seen I think it's around 38-40% state+federal when you reach about $200-300k then about 50% by $1m annual income... Might be better or worse this year with the new tax bill, not sure.


> Might be better or worse this year with the new tax bill, not sure.

Much better for those who can arguably restructure their salary as business income (e.g., real estate developers, some contractors), then they only get a 15% tax. Far worse for those who cant make that argument and live in high tax states like NY, CA, and many others.


Because I've done my research. I generally quote salary requirements in terms of living in a modest house in a pretty good school district, on a single salary (since my wife wants to stay at home and raise the kids).

Not surprisingly, this makes recruiter jaws drop. We're not even on the same page.

In most parts of the country, though, those requirements work just fine.


Do you mind saying what your requirement is or the general range?


My most serious foray was around 2012, and back then such a house seemed to go for $800K. Given the mortgage ratios, that corresponds to a PI payment of around $3800/mo. Kind of hard to match this to current offerings, but it looks like maybe $1.3M now, so theoretically $6200/mo. So maybe $100-120K/y in mortgage payments? Not sure.

Can't recall the specifics, but my offer from a FAANG back then was a bit over $200K gross. But a lot of that isn't really liquid cash that you could use to pay the mortgage. It doesn't really fly.

These days, for the scenario above, even $300K/y cash seems marginal. And AFAIK, no one in the BA would seriously consider offering me that.

Lest someone complain that I seem entitled, let me say that I in no way consider that I somehow deserve such an offer. But at the same time, no BA employer deserves someone like me when I can get equivalent comp elsewhere.

IMO, the way BA comp works is you engage in raids for five to ten years when you're in your late 20s or early 30s. Live in squalor, three or five roommates, and bank it all. Do not marry. Then take your winnings back to the real world and retire, or at least, live an easy life.

But if you want a traditional life, thar be dragons...


Fair enough. Looks well thought out!


It's an existential issue.

"Peter Thiel: The vast majority of the capital I give companies is just going to landlords" [1]

[1] https://finance.yahoo.com/news/peter-thiel-vast-majority-cap...


He could try giving capital to companies in other locations. Rent in Berlin in less than a third of what you pay in SF.


True, but having lived in Berlin (Prenzlauer Berg) and Bay Area (Palo Alto) I have to tell you the scenes, and intensity, are very very different. SV in particular (Moreno than SF) is very tech oriented while Belin is more e-commerce and food delivery.

Thiel in particular is German and has made some particularly scathing comments about the German startup scene (to the German press).


Maybe (most likely to be honest) his ROI is worse in those cases.


But that implies he might have to make trips to those places. Well, he's the one with the money, so he's going to optimize for his convenience.


"The federal Department of Housing and Urban Development said last year that a family of four earning up to $118,400 qualified as "low income" in the city. "

For comparison, in NYC, it's $83,450.


Median household income in NYC is 50k, which is an interesting contrast.


I always wonder how those who are not in the high paying jobs can afford to live there. I'm talking about police, fire, EMS, coffeehouse workers, etc.


They don’t. For example in nearby Atherton the cops have made makeshift sleeping quarters in the police station because they cannot afford to live in the city they work. Many of the homeless in tents or RVs have jobs in the city, the sole reason they’re homeless is because there are no homes affordable on a low-wage job.


Why aren't these people out in the streets protesting this? It seems so wrong


It takes a while before you relize it's wrong and unsubstainable. And then it's too late becouse you have been a waitress or what ever for 3 years and when you move out there are plenty of people willing to take your place before they realize it and so on. Big city hype.

And there are some real natives with rent control housing.

I lived in Palo Alto for half a year before I even though about how the grocery store clerks could affor living there (which they don't). You also notice the lack of children after a while.


You do hope that first responders can live permanently close to the district they serve. It doesn't do anybody any good if they had to travel two hours before doing their job. Police, fire, EMTs, etc, are the folks we need to be on their game all the time for their safety and ours.


Rent control. If you live in a unit constructed before a certain year, you have rent control and the landlord is limited to a small increase in rent each year.

If you have been living in same place for years it's possible your rent is less than half as much as someone who moved into a similar unit this year.

The other case is that people not in high paying jobs don't live there and instead live far away and have 1 hour plus commutes.


Policemen make six figures. Others commute from 2 hours in.


To be fair, police (and firefighters) make six figures because they have powerful unions who finance the campaigns of the very people who decide their salaries. Ironic that the people charged with protecting our communities are the ones destroying them.


I'm not sure how paying policemen a wage that allows them to live where they work is destroying the community.


I can't blame them. They need living income. The only people destroying this place are NIMBYs who won't allow faster construction of more units.

Ultimately businesses have to relocate to find talent. Seattle, Austin, NYC and Boston are super well-positioned. Amazon HQ2 is important for this very reason. It is a gigantic churner of talent and can do wonders.


I am very curious as to what they are going to do for revenue when the self driving cars take over and prevent the millions of dollars in fines drives acquire each year.


I wonder how self-driving cars would change parking situation. SF profits a lot from parking tickets - about $300m/year - and the situation with parking is usually abysmal, which in turn enhances that income. But if you can just have you car drive somewhere by itself to remote parking and then have it come back when needed... that changes the whole equation.


They risk life and limb for the betterment of the community, I think they deserve 6 figures more than a techworker at facebook if you wanted to get moral about it.


The data is suspect. Anecdotally, and throw browsing the Craigslist classifieds, the rental market seems to have softened some since the peak a year or two ago.

Specifically looking at the Mission, there was a time that a sub-$3000 one bedroom was very rare. Now you can find plenty in the $2500-$3000 range and even some decent ones below $2500.

There is also more inventory.


Where I live in Atlantic Canada you can rent the same for $550 USD, or just buy a brand new modern home for $180k USD. People here work remotely for companies like Google. The government will also help fund your startup’s product development through various programs (hundreds of thousands of dollars).

Always wanted to move to San Fran but starting to feel pretty grateful about being here.


How large is the remote ecosystem there?


I have a 4-bedroom house in the country and the mortgage for it is 5 times smaller.

Absolute madness.


And in addition to that because it's San Franscisco you don't really own your own home or apartment. You just have a set of things you are allowed to do on it on the whim of the city (ie, no airbnb).


For those who live in SF - what's the cost of a one bedroom rent 1 hour from most jobs in SF? I know in NYC you can reliably get that for around 1500.


Walnut Creek is about 40m away from SF on Bart. So door-to-door that'd be about an hour commute. Safe, picturesque, good schools and vibrant downtown. The rent there would be about $1800 for a 1BDR.

EDIT: As noted by the sibling post, the reason it is cheap is because Walnut Creek does not have very many tech jobs. Also, the peculiar thing about the Bay Area is that about 15 years or so the tech industry oscillates its epicenter between San Francisco and the South Bay. From Walnut Creek you can reach San Francisco in an hour, but if you have clients/partners/HQ etc in South Bay it is one bad commute.


Thanks! So it's not that much more expensive than NYC.


> Safe, picturesque, good schools and vibrant downtown

It's completely dead and devoid of culture.


I think part of the issue is that a lot of places outside of SF are places where people want to live and work (who also make lots of money). Lots of people want to live in Palo Alto, Oakland, Mountain View, etc so the prices don't really go down that much as you move further out.


For someone with no experience with SF and just looking at a map: a huge amount of the East Bay is closer time-wise to the busiest weekday BART station, Montgomery, than the western part of SF.

Even in the Sunset and the Richmond, 1 bedroom rents are still expensive. I poked around Craigslist recently and found plenty in the $2500 range. If you go across the bay, it's a little better. And, if you can deal with BART turning into a pumpkin at midnight, you might enjoy your work commute more.

Edit: this post assumes you take a job in SF. But, big companies are building more and more office campuses on the peninsula, away from reasonable public transit options. If I recall correctly, office rents in the city are actually on the rise, considerably, and it is driving larger employers out of the city under the guise of "putting our employees together to collaborate better."


2k for a studio in Dublin, east bay area about 1 hour via Bay Area Rapid Transit, assuming you can walk to work because BART is extremely limited for a mass transit system. 3k for a two-bedroom, so probably split the difference for a 1-bed. It wouldn't be so bad if we had better mass transit, there are only a handful of stops in SF and if you have to take a bus from there your commute time probably doubles to 2 hours. Buses suck.


$4500-$5000/mo 3-4 bedroom single family house in San Mateo. Perfect, safe location right in between San Francisco and San Jose, close to good schools, close to Caltrain station, close to major highways - 92, 101 and 280.

About 40-45 minutes from SF and San Jose time wise regardless of time of the day.

That’s where the premiums comes from


The Bay Area is particularly problematic in this regard. There are quite a few cities—Boston I’m most familiar with—where you go an hour out and prices are pretty reasonable. Not Rust Belt reasonable but reasonable. Not so much in the Bay Area.


Boston at least has a pretty well regarded public transit system.

But even with that commutes are soul sucking. I pay $2.7k for a tiny apartment but not having to deal with a commute longer than 5 minutes walking is amazing for my overall well being.


$1800 is probably your floor. You'd need to get to the east bay and do something like Oakland, Berkeley, or something beyond the hills like WC.


$3,689.99


You just have to pay attention. Last year this time people said it was $3400, but I rented for $2300 that May.


It makes me mildly annoyed that people are getting cheaper rents than me in SF than I am near Boston.

Are these luxury places?


They are not. It's just a standard 1 br. SF is a bit peculiar. There are some things I should call out which are different in most rentals in comparison to luxury rentals:

* No Washer/Dryer in the unit. You'll usually share.

* No parking spot.

* No-one will be around to pick up parcels for you.

* You'll have to put the rubbish bins out for the bin man.

* The stove and fridge and heating won't be using the latest stuff. You're not expecting to have a Nest or a Viking but you won't get a nice stove either, it'll be very basic.

Honestly, it's a downgrade in standard of living for me but not to the point that it annoys me. Those things were just luxuries. Really the washer/dryer being in my unit is the one thing I really miss.


Barcelona, Amsterdam. Same/better quality of life


I do t want to install the app just to find out: hasn’t this been true in Palo Alto for some time? My ex pays more than that and her place is hardly de luxe.


Palo Alto is particularly expensive because of how luxe the area is (from what I understand).


I first moved to Palo Alto in 1984 and can assure you that luxe it is not.




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