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San Francisco, I Love You But You’re Bringing Me Down (tomdale.net)
351 points by jcdavis 1479 days ago | hide | past | web | 440 comments | favorite



The reason for San Francisco's high rent/home price is very simple, despite how others like to complicate it more:

1: Its desirable for most people to live here. Possibly the most desirable place in the USA, depending on your tastes. As a result, people are willing to pay more to live here. There are jobs, culture, food, art and much more all in this great city.

2: Rent Control. I wont get too much into it, but my take as a real estate investor is that it greatly entices residents to stay put once they have rented. As a result, there is significantly higher rent (due to less supply) for new residents. Many apartments are not rented at all because of the owners fear of rent control. SF needs to get over its "you have a right to live at your same address forever" attitude.

3: No new housing/construction. SF is a 7x7 plot of land which through both NIMBY-like behavior and heavy legislation/bureaucracy, has pushed a extremely anti-developer agenda. Every year, thousands and thousands of people move to SF. Unfortunately, there is less than 1 new housing unit built for every 25 new residents. The common thread that is thrown around is "We dont want SF to turn into a mini tokyo with skyscrapers and tiny apartments" so instead we have 3 floor victorians being used to house 10 roommates at $1500/pop.


It seems to me that it is even more simple. Economics 101: scarcity of a highly demanded product drives up costs. There's just no room for significant expansion, the bay area is surrounded on 3 sides by water. Furthermore, a good majority of the San Francisco peninsula is undevelopable since it's state park.



My understanding is that this is a special 'trial phase' for Kennedy. The planning department is not approving other similar projects until it studies/weighs the outcome of these.


Interesting title, considering that 20m^2 is considered pretty roomy in Tokyo


This is a decent explanation but it's actually simpler than that.

People who are upwardly mobile follow the jobs. In general, they choose jobs, then cities. Except for the very rich who don't have to work, desirability (excluding commute) is a minor factor in prices. I can back that up, but I think most people buy this already.

However, real estate demand is extremely inelastic. If 5 percent of the houses in Manhattan were destroyed, the price increase wouldn't be 5%. It would probably be 2-5x, possibly 10x. That's why, even though rent control only affects a small percentage of the market, its price influence is huge.

New development is supposed to correct for that, but often the result of it is creation of more expensive housing, which solves quality problems but doesn't have the desired price effect until many years later. (Real estate rarely goes down in dollar-denominated amounts, for psychological reasons; what does happen in a soft market is that prices stay flat and lose to inflation. In effect, it's a loss-limit on price declines that is very tight when inflation is low.)


New development is usually more expensive because: a) supply is legally mandated to be low, so only the most profitable per-unit housing is built, and b) what new units are permitted to built are required to be large because housing (especially in CA but pretty much everywhere) pays less in taxes than it consumes in municipal services, especially public schools.

As a consequence of b), the types of housing that are widely allowable are small (0-2BR apts/condos) that families with > 1 child won't live in and large houses. If prices are high enough, sometimes townhouses are allowed. One interesting observation is that the only high density housing being built in most suburbs are senior housing, which are aimed at people ages 55+ and have covenants in place preventing anyone under 18 from living there. Ergo, guaranteed no school children and therefore the cost to serve is more inline with taxes paid.

I would love to buy a 4 or even 5 BR condo because I want to live somewhere dense and I don't care about a yard, but in order to do that I'd have to buy 2+ condos and combine them. Yikes.


The main reason why people don't want new residential development is because it will feed into gentrification and push people out because they can no longer afford to live in SF. NYC has been and is going through this problem right now and it is not pretty.

EDIT: There are a lot of comments about increasing supply as a way to make housing/apartments cheaper in SF. This is not at all well demonstrated, as in NYC new real estate development as continually raised prices and priced out those who had previously resided in those neighborhoods (if they need to move they can no longer afford the cost of living in said neighborhood, esp. if they lived in a rent stabilized or controlled place).

New real estate development can make things cheaper, but we are seeing cities have population influxes and those cities traditionally are land limited for new construction. Those two factors work together to ensure that properties are renovated or rebuilt at higher cost to a wealth class that can afford it. It should be obvious that this is not sustainable, cities that do not provide a sustainable way to live for all classes will collapse.


How does not building new residential units help prevent gentrification?

Last I checked a 1BR in the Mission is approaching $3K. It would seem like gentrification is happening whether SF likes it or not. In fact it seems like gentrification is accelerated, not slowed or prevented, by this housing policy.

Having lived in SF, and now live in NYC, IMO NYC is dealing with the problem of gentrification far better than SF. The transport infrastructure here means that people can be displaced farther but still maintain economic viability. You may be 3 stops further further on the train line, but you're still getting to work.

Compare with SF where, because of just how insanely horrific the transportation infrastructure is, getting pushed out of SF-proper has a litany of consequences for the middle and lower classes.


> How does not building new residential units help prevent gentrification?

The new construction makes no guarantee and a reduction in real estate prices. So long as the demand is very high, prices will continue to rise even with new construction. This is essentially what NYC is going through now, there isn't enough construction that could possibly keep pace with demand and its unlikely that there could be without a collapse in demand.

> Having lived in SF, and now live in NYC, IMO NYC is dealing with the problem of gentrification far better than SF. The transport infrastructure here means that people can be displaced farther but still maintain economic viability. You may be 3 stops further further on the train line, but you're still getting to work.

This is changing as we speak. The outermost parts of Brooklyn are gentrifying, esp. in places that are predominantly black and/or hispanic. Those places are already on the extreme edge of subway mass transit, so once people living there are displaced they will have very little recourse. Queens is also beginning to go through this phase although its still just getting started.

All of this happens while wages remain the same, esp. for low wage or minimum wage workers. These people won't be able to stay as the prices inflate and I'm not eager to see more tenement style apt. crowding due to the cost.


If rents are going up, you have gentrification. End of story. If rents are going up at ridiculously high rates, you have hyper-gentrification.

San Francisco can pick one or the other, but it can't opt out of the basic laws of supply and demand. ANY, and I mean ANY attempt at enforcing affordable rent for a particular income group will have unintended consequences that will either result in less properties being rented, or more rental properties instead being sold to the super-affluent as single family residences.

Or, you can just accept reality and build new, denser developments which will, yes, probably price out the poorest.

As a former construction worker who lived in Asheville, North Carolina (a Portland type city which has attracted tons of hipsters and trust-fund assholes who have driven up rents) I know what its like to have to move because my rent got jacked up. Instead of demanding the government allow me to afford a place to live, I accepted reality and moved the fuck on. I've since moved, worked my way up to making a decent salary, and one day (soon) I will move back and buy the house I got booted out of.

The notion that one person has a "right" to rent a place at a given price is in direct conflict with the "right" of another person to rent that same room for a higher price.

Rent control and "fair housing" policies benefit people like the majority of my family members. My family members, for the most part, are excellent at doing what they did the day before, the week before, the year before. If something begins to disrupt their routine, they complain about the disruption rather than changing their routine. They are poor, and this attitude is a big reason why. Rent control/fair housing policies primarily benefit people like my family.


NYC is more affordable than SF overall.

The reason NYC's still got real-estate-price-itis is that demand still outstrips supply even though they do allow new construction. But the mismatch is not as great as the bay area, where from what I hear nothing can be built and everyone wants to live there.

If you want to see matched supply and demand, look at most of the big cities in Texas. Part of that is geographic -- they're in "flatland" as it's called -- and part of it's that Texas tends to be more pro-development. Supply can rise with demand. Lots of people are moving to Texas too, but prices remain relatively sane excluding a few hotspots.


If you add supply, prices do not, all else being equal, go up.

And add to that any actual residential development in SF will have affordable housing mandates regulated into it.

I don't think that there's anything that will really stop gentrification and price rises in San Francisco real estate short of the current tech boom going away. But if you're interested in mitigating it, you want new development. What feeds the short supply of housing is a large number of single-family-detached houses, especially ones that are uninhabitable in their present form, and so reward extremely wealthy all-cash buyers who can afford to pay a premium for a house, tear it down, and build anew (without the aforementioned affordable housing mandates).


Makes sense, because SF is currently a low-rent, high-quality place for poor people to live.


it will feed into gentrification and push people out because they can no longer afford to live in SF

Ah, I see, because it is so affordable to live in SF now?


Increasing supply will raise prices? Huh?


If developers are holding out for permission to raise prices before they increase supply, then yes.

If new construction wasn't going to raise prices, rent control would be a non-issue.


The main reason why people don't want new residential development is because it will feed into gentrification and push people out because they can no longer afford to live in SF

Sheer lunacy.


[deleted]


> 1. Build more 2. Watch prices go up

I have my doubts about this. I would be interested to see evidence that you can actually drive prices down by increasing housing supply.

Because when I've been in a position to watch some dramatic housing supply buildouts in a few areas, my observation has been that generally been that the owners price (at least) somewhat above market rates for existing housing -- after all, it's new. Often it's marketed as luxury housing and leased/sold at multiples of the median price.

There's a few places I've observed a decrease in price. It's not where supply is increased, though, it's where demand drops, usually because the economic activity of the region drops off, but sometimes because of conflict/crime or health hazards.

If I'm right, then there are still two options -- build more or don't build more. Each case may have its own merits, but there's not a case that excludes prices going up for SF and the Bay Area.

Short of the current state of economic activity in the area turning out to be an unsustainable bubble or a major disaster, anyway.


AFAIK you can reduce housing price through new building, but most places that can do this expand horizontally outward into undeveloped spaces. This creates the sprawl effect, though, which has its own issues. As for cities, I'm not aware of a city successfully creating affordable housing through new construction and renovation.


Almost every semi-desirable city has this problem. Even downtown Detroit is gentrifying.

Google "suburban poverty". Its so broad I can't even link to a good citation, worth reading through a bunch to understand the scope of the problem.


> increasing supply as a way to make housing/apartments cheaper in SF

Decreasing overall rent isn't a good goal, for much the same reasons as deflation isn't good. Rather the goal of building new housing is to control inflation, as rents going up 50% year over year is even worse.

And building new luxury / high-end housing does help with that. New luxury housing reduces the number of wealthier tenants considering older housing, which reduces competition over said housing, reducing the rate of rent increase over existing housing.


Right, so rather than have cool little areas like Cow Hollow that are worth living in and visiting, keep things like the Tenderloin that are perpetually unlivable and undesirable.


This is also happening in Austin right now. My friends in Durham are speculating that the same is beginning to happen there, although, comparitively, its still super affordable.



Even I, who makes a decent salary, have seen the great American dream of home ownership recede into the distance.

That's a policy choice. I lived in Tucson for for years, and nice houses there could be bought for $200,000. Sometimes less. SF has made a choice about not allowing people to live there: http://www.slate.com/articles/business/moneybox/2012/05/face... , and in this respect it's like many other major cities: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o... . The cost-of-living issue is really a political, regulatory, and legal problem.

There are some people in some places that are trying to solve this problem (Smart Growth Seattle is one that I know: http://www.smartgrowthseattle.org/), but so far those efforts are pretty small.


That's pretty reductionist. San Francisco's housing policies are definitely responsible for some of the price difference between here and Tucson, but you can't ignore the geography. SF is a 7x7 mile square surrounded by water on three sides. Tucson is a sprawling mess that go on for dozens of miles.

Dense, desirable, naturally bound cities are always going to be more expensive than endless exurbs. Look at housing prices in Hong Kong if you think that looser zoning is a cure-all for high prices.


San Francisco isn't all that dense. It's boundaries are just drawn so as to exclude the outer semi-urban areas most cities have. E.g. the sparsely-populated neighborhoods around Midway and O'Hare are part of Chicago proper, but SFO is well outside city limits.

See: https://docs.google.com/spreadsheet/ccc?key=0Ak1exuXV7898dDR....

San Francisco is about 47 square miles of land area. The densest 47 square miles of Chicago has a population of 1.1 million people and a density of 23,500 people per square mile (versus 825,000 people for San Francisco and density of 17,600 people per square mile). If you look at the subset of Chicago neighborhoods that have the same combined average population density as San Francisco, they have a combined population of about 2.3 million people.

Housing prices are much lower in Chicago than in San Francisco, despite comparable density over comparable areas of the cities. A big part of that is lower demand. Chicago has fewer job opportunities and is stable/shrinking in population while San Francisco is growing. At the same time, supply is also a huge issue. As of last year, there were seven residential skyscrapers under construction in the downtown Chicago neighborhoods: http://www.domu.com/blog/apartment-projects-under-constructi.... These projects are adding thousands of new units to a market that is by all measures growing much more slowly than downtown San Francisco.


Is this a continuous 47 square miles, though? San Francisco is always a little difficult to compare to other cities that are much larger metro regions. If you were to replace the lower density parts of SF with the dense urban areas in Oakland and Berkeley, you might end up with something much higher than what you sectioned off from Chicago - and as a region, that comparison might be more accurate.


Hong Kong is one of the wealthiest, most space-constrained places on the planet, and remains far cheaper than areas of similar population density and economic role. Compare Hong Kong to Manhattan, Tokyo, London.


Would this remain true if salaries inflated to SV levels?


Phoenix is the mess you're thinking of. Tucson is fairly reasonable as far as size goes.


Tucson is approximately the same size as Chicago, when talking about the actual city. http://en.wikipedia.org/wiki/List_of_United_States_cities_by... -- Tucson is both giant and sparse.


https://maps.google.com/maps?q=tucson,+az&hl=en&ll=32.176194...

Looks like they include a lot of land for whatever reason that's not really "city" - and don't include some that is.

I don't know what the job climate is like there, or life in general, but it seems like a fairly nice place: college town, desert climate, but they also have a ski resort (!) just out of town, because to the north east they have a 3000 meter mountain that juts up out of the plain.


It used to be much worse -- a lot of the land grab was due to Arizona law years ago. But Tucson, as it has grown, has seen a lot of infill. Even so, places that look empty often have 1 per 3 acre housing.


Interesting, thanks for all the info! I've only been there once, and it the hills outside town were on fire at the time, but it still seemed like a cool neighborhood and cool town over all if you can handle the desert thing...


I can see the point from a supply-and-demand perspective. But on the other hand, isn't more densely populated areas more efficient, leading to less costs and less prices in the long run? Is there simply not enough initiative for more dense developments, leading to the relatively few dense areas going up in price. Are the property costs the critical factor? I'm talking in general here, not about any specific city.

Vancouver seems to have had a successful high-density residential zoning, but I've also heard that it's become very expensive... maybe because the greater Vancouver metro area is big (I don't know how it compares to the norm though).


Yes, but the job market sucks there, especially if you don't want to work in Defense. :) If you want to live where life is remotely walkable (a la San Francisco), the prices jump considerably. A decent house in a decent neighborhood comfortably around downtown will run 300k. Making half what you do in SF and paying 300k isn't so grand.

I love Tucson. I grew up there. It's just a bad place to be a software developer.


SF is great for two categories of people:

- The wealthy

- The homeless (yes, social services and tolerance is much better here than in any other big city in the US)

People caught in the middle who own a house will survive 10 years before quitting. If they don't own a house they have already left.

I'm doing more than $100K and I had to leave the day I started a family (try to find a rent below $6K for something suitable for a couple + 2 children). I think it's sad that the city will progressively become a strange place where the very rich and the bums stare at each other. If you want to have a preview, spend one hour on Market and 7th.


I feel exactly the same way except that I'm in another city, Vancouver BC. There is an odd assortment of people in Vancouver consisting of the obscenely rich, wannabe rich, obscenely poor, and singles/couples with no children. Once you have children, you are pushed out of the Vancouver area and into the suburbs due to cost of adequate living conditions [1]. But people say, "oh, it's just the suburbs, it's not that far to drive" and not realize that we have the 2nd worst traffic in North America [2].

I really shudder to think what 10-20 years will do to a city where the middle class (whatever that word means nowadays) has been completely hollowed out.

[1] http://www.vancouversun.com/news/East+Families+leave+Vancouv...

[2] http://www.cbc.ca/news/canada/british-columbia/story/2013/01...


How can middle class not mean anything? Doesn't it refer to the fat section of the income curve, where there are supposed to be the most number of people?


Sure, except that the perception of the middle class is significantly screwed (at least in the US, but probably similar up north).

In the US, the median household income is $51,404[1]. So, the middle class should probably be centered around that number. Say, $35000 to $75000 or so. I bet your looking at that number and saying "No way! I'm middle class and my household income is $150k!" Well, turns out that basically everyone thinks the same way regardless of what their incomes are.[2]

So it becomes pretty hard to nail down exactly what defines the various classes in the USA. Especially with the cost of living differences across the country.

Take a look at Rich Blocks, Poor Blocks[3] and spend a little time clicking around the map. The zip code I live in has a median household income of $38,646 and the site suggests the middle class income range for the state is $53,264 to $68,300.

Anyway, middle class is a loaded term.

1 - http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/29/c...

2 - http://economix.blogs.nytimes.com/2011/04/27/everyone-is-mid...

3 - http://www.richblockspoorblocks.com/


I think the middle class is defined to be those people who have enough income that mere survival is not a daily concern, but do not have so much money they don't have to work.

That is, indeed, most people, which is why further divisions are useful, and so we talk of "lower-middle" and "upper-middle".


Marxists, for example, do not find 'the middle class' to be a concept of any significance.


No. It's more complex than that, and depends on who you're talking to.


I know absurdly rich people with children who moved out of the city, even when they could afford an $8mm house suitable for a family, because of the schools, too. (and weather, but mainly schools); the mortgage differential between SF and a place like Hillsborough or Palo Alto, combined with $30-50k/yr per child for 14 years or so of schools (to go to private schools in SF, vs. good public schools), is a lot of money.

You'll end up with the homeless, the super wealthy, and maybe the $70-200k/yr earning singles or (young) couples without kids. Tech seems to mostly hire from that third group.


Cannot agree more -- I actually moved to Palo Alto :)


try to find a rent below $6K for something suitable for a couple + 2 children

I guess you mean SF proper.

You can find very nice (but small compared to mid-west) houses in nice areas for less than $3k in the east bay.


At the risk of unsolicited dating advice: is the reason one is embarassed to mention one's occupation to a woman at the bar caused by tech salaries being too high, or by years of social conditioning telling you that geeks are low status? (Or by learning that the way one signals high status is by constructing a low status outgroup and then explaining how you're unlike them?)

An alternative: just pretend society really likes rich people who make things, and start talking about something more interesting than your work.


Can't speak for OP, but for me it's much more of the former than the latter.

When I lived in Seattle, and later SF, I loathed to tell someone my job. Firstly because in that city it automatically paints a "has a truckload of cash" target on one's head, regardless of whether or not it's true.

Secondly because the tech folks in the city are blamed for basically all of the city's woes (this is true in both Seattle and SF). It has little to do with how "low status" software work is (because in those places, it's not really).

Now that I'm in NYC I feel much more free about telling people my job. For one thing, the response is generally "oh that's cool, tell me more" instead of "[eyeroll] yet another one", and secondly I'm not the biggest species in the pond anymore. The response to "I'm a software engineer" isn't automatically "you must make a lot of money".


Being blamed for things they self-evidently do not control? Eye rolls? These are classic markers of low status.


It's tricky I think. There are really two orthogonal statuses at play. There's the status conferred by being far wealthier than typical for the area. There's also the status conferred by having a respected/liked job.

In Seattle/SF your wealth status is high, but your interestingness status is low. Dirt low even.

In NYC your wealth status is middling, but your interestingness status is relatively high. I prefer this setup far, far more.

But I'm also not a sociologist - maybe we're defining status differently.


well at least she didn't say "thats nice what sort of cars do you work on" when she found out that he was an engineer


There's been a lot of tech worker backlash in SF lately. Not to speak for Tom, but I've certainly been made uncomfortable after mentioning it to someone who then proceeded to bash "all these Google types" who are forcing out the "true San Franciscans" and "ruining the culture of the city".


"...start talking about something more interesting than your work"

Aaannd herein lies the second-order problem for many: that they aren't involved in anything interesting outside of work. This is, by the way, also a problem for us that have already acqui-hired Ms. Right.


The second, and there's basically no solution for it. Other than lie about your job, I guess. I tend to tell girls I'm a "mathematician", which is sort of true, is about equally nerdy but doesn't instantly cue low-status associations, and doesn't lead to further questions. It works about as well as anything I could say would, but I'm still clearly low-status and it sucks.

What's your proposed solution to dating as a low-status male? If it's the above "pretend society likes makers", well, uh, nice plan if you can convince everyone else to pretend it too, but until then, women will still want to know and shun you once you tell them.


The last time a young lady asked me what I did for a living I did the Old Spice guy impersonation and mentioned I was getting flown abroad to do it for an audience. She married me, so I now have the luxury of not caring anymore what people think of my answers, but they're generally some flavor of "I run a company which does X", where X is one thing I think they'll find interesting. Possible Xes include "helped teach Y00,000 kids to read last year", "gets patients in to see their doctors", or "makes shedloads of money for software companies like Y" if they look like they swing that way.

You'll note the pointed absence of "I am a poor peon working in the Ruby on Rails salt mines." (And heck, even when I was a Japanese salaryman, I got better results with "I am in charge of administration of X university's admissions exam" rather than "I write unit tests and XML files, please tune out of this conversation.")


My go to solution to this problem, back when I needed one, was as soon as the girl in question asked "what do you do?" I'd reply directly with "I'm a computer programmer - what do you do?" and should they say they are a musician or whatever I'd jovially reply instantly with "Oh well, I guess we have nothing in common then", and pretend that the conversation was over. They were always very interested to talk then, and the conversation was firmly on a flirtatious footing.

Writing this now, I realise that there is an corner case I hadn't covered in this plan. Solving it is left as an exercise to the reader, but I'd suggest something along the lines of "Emacs or vi?"


Sadly, I don't run a company, and I'm not in charge of anything high status or visible. I do performance optimization and design threading infrastructure to dramatically improve the experience of writing high performance system software. I think this is pretty valuable, but there's no way to put it that seems high status to non-computer people.

Should I just quit and start a company selling shit because that'll look better to everyone else?


Can you describe that in terms of an important system, somewhere, which would not exist but for your contributions? If so, more on that story, less on the technical detail. If on the other hand none of your work ever gets used in anything important, then that's a non-BSy reason to change what you're working on. (Believe me -- been there, done that.)


Nothing "wouldn't exist." They'd just cost X% more or run Y% slower, which at our scale runs to $large-number, and I personally think that's valuable.

I do get your point though, and I do wish sometimes I worked on something that wouldn't exist without me.


Maybe you should try talking to technically-inclined women? We do exist and I would probably pepper you with tons of questions about what you do if we met at a party. (Of course, I'm married ...)

Why not say something like "I make computers go harder, better, faster, stronger?" Funny, doesn't make you sound like you're apologizing for what you do, and if someone's really interested ("how does that work?") you can follow up with an explanation. I'd try for some metaphors, too, like "Servers/computers are always juggling tasks, and what I do gives them more arms to juggle with."

I know your last question was rhetorical but if you start doing something that makes you unhappy just to find a partner then you will have a partner who loves you when you're unhappy. Not a great idea.


I don't do this because technically-inclined women are rare and I'm not attractive enough to cut off 95% of the possible partners out there. Or put more bluntly, you wouldn't pepper me with tons of questions at a party, you'd pepper my colleague M, who has a more outsider-visible job and is dashingly handsome. I have to make do with his leftovers, and I can't be picky about them having technical expertise.

Also, women who aren't fascinated by computer simply do not care enough to bother trying to explain things via metaphor. I have a friend who was asked at a party "What do you do?" He replied "I'm an engineer working on--" and before he finished his sentence, she stood up and walked away. FYI, he's the suavest person I know and is _extremely_ successful with women, usually: he's learned to stop trying to explain or even mention his job at all.

I recommend you don't try giving people advice on approaching women and what to say until you've _tried it_ for a few years, which as a presumably-straight women I doubt you've done.


Sorry, I only know what would work on me (and my friends). Didn't think I was that much of an outlier ...


I don't understand why the author would move to Portland when we've got our own affordable, culturally rich, tech-friendly cities in the East Bay. Come to Oakland. It's beautiful here.

The weather is better than San Francisco, you can ride your bicycle anywhere, public transit is good, and it's easy to get to SF as well as Silicon Valley (which I do regularly).

There's no need to leave the entire Bay Area just because San Francisco is an overpriced and overcrowded city. I recently came back to the Bay Area after a decade+ in NYC, and my wife and I decided we'd be returning for the East Bay, not SF. For us, it's the best of all possible worlds.


I don't mean this to play into stereotypes etc, but just as a matter of experience, every single person I know who's lived in Oakland for any significant amount of time (say 1 year or more), over the past 5 years, has been robbed at gunpoint at least once, usually while walking within a few blocks of their home. It's not a huge sample, I probably know half a dozen people/couples who live/have lived there. But the fact that all of them (or in the case of couples, at least 1 of the 2) have had it happen makes me say "no way" to the East Bay.


One of my close friends has been living and working in tech from home for about 10 years in various parts of Oakland. I visited him there (from MA) many times and aside from some intimidation from his neighbors (including an 18-year-old who got in my face, lunged his body toward me and provoked me saying "Fuck you," and numerous additional smaller incidents), I found it lovely and enviable.

Things were going well until the last year in which his van was robbed outside his house and a few months later, his band was robbed out on the street while filming a video. It's the kind of situation that makes you want to say, "This is why we can't have nice things."

IOW, if you plan to fit in and live low-key, Oakland may be just fine for a long time. However, if you acquire various types of assets or participate in lifestyles above a certain threshold, you are more likely to experience "equalizing events."

edit: This friend moved to Alameda last month.


I will agree with what you're saying to an extent, but I think the threshold of lifestyle you're talking is quite low by your average SF tech worker's definition. All of the people I know who encountered crime in Oakland were certainly not flashy or even driving remotely fancy cars. They were all a) white b) mildy yuppie c) to varying degrees "not intimidating" looking


Oakland is currently the 3rd most dangerous city in the United States[1].

What's worse is I worry Oakland will experience the same type of growth the Mission did, where half will become overpriced and homogenized while the other half will continue to be neglected.

[1] http://www.huffingtonpost.com/2013/06/21/most-dangerous-citi...


That may have been part of what he was referring to by "culturally rich" ;)


where did they live? probably some sketchy part of west oakland where out-of-towners like to move because it's so grungy. you won't get robbed in piedmont, rockridge, montclair, temescal, grand lake usually, or JLS ever. but please keep upvoting this to the top! our rents are already going up because of SF spillover, feel free to avoid it and those of us in the know will keep enjoying our lives in the east bay with no complaints.


People get robbed in all of those places, especially walking home from BART. All the time. Also, have you not seen home prices in Rockridge and Piedmont? No deals to be had.


Live in "NOBE" now (or Longfellow, or Gaskill, or Golden Gate, whatever it's really called), but I regularly see car windows smashed in when I head over to Temescal's 50th/Telegraph area for dinners out. Loving my own apartment, but wishing more and more I had searched harder for a place near the walkable parts of Grand Ave or Piedmont Ave.


Rockridge and Piedmont have crime, too. I live in Rockridge and follow the crime watch mailing lists. People get mugged in broad daylight at the BART station and just a couple years ago was a rash of restaurant "take-over" robberies. Crime follows the money.


Mugged in broad daylight at Rockridge BART? I'm sorry I just don't believe this.


Here's a list of recent Rockridge crimes, including a 5:15 PM robbery in front of Cactus Taqueria:

http://spotcrime.com/ca/oakland/rockridge


Twice burglarized in South Berkeley. Not worth it.


East Bay is huge and the BART is fast. You could live in Walnut Creek, Fremont, etc and have a less than 25 min train ride to Oakland. You really can't write off the whole east bay because some of Oakland has a high crime rate.


Sorry I should have been specific about meaning places to live and commute to SF. You could do that from the Nut or Freemont I suppose, but that's a far commute, and a whole separate discussion about why I wouldn't suggest that to anyone from out of the area


> Come to Oakland. It's beautiful here.

Unless you are talking about west or east Oakland, in which case its full of blight, gangs and crime.

Don't get me wrong, Oakland is gentrifying despite itself but I would never want to live in Oakland till they fix their failed city government and their high crime rate.


2nd this and push it up. I live in the area of Oakland, known as lake merritt. It's bordered by Piedmont, still has that "true diversity" as in ALL the colors of the rainbow feel, 20 min commute into San Francisco, AND I have a Damn patio! I love this little neighborhood for all of its nuances.


Yeah I just bought a house in El Cerrito last week and while we paid above asking, it was 1/3 the price of what my friends on the peninsula are paying for a great place. The fact that people seem completely unwilling to commute 30 minutes for a life changing job is pretty bizarre to me.


No matter how life-changing a job is, the fact of the matter is that long commutes are almost always soul-sucking time-sinks that have a significant negative impact on the psychological well-being of those who do them.

Besides, the longer the commute, the less free time you have, which takes away from your personal projects and massively decreases your chances of innovating or inventing something new.


I can and do work on the train. Car commuting is soul sucking. Public transportation commuting isn't great compared to working from home or something but it's not as awful as all that.


As someone who commuted from Santa Cruz to Mountain View and San Francisco to Palo Alto, I certainly understand this. However, walking to Bart, being one of the first on, sitting down and reading/working is vastly different than driving. Depends just as much on HOW you commute.


Bring a book? I get a lot of reading done on my 1-hour commute.


Love El Cerrito, and even Richmond. Contra Costa County is way overlooked by the tech community. But sorta hope it stays that way for a while, in case I want to buy a house in a few years...



houses are impossibly expensive in Oakland also.


And Oakland can get stabby. So it's stabby and overpriced. No thanks. If I wanted stabby I'd go to Detroit and get a Victorian for $25k.


I had to look up "stabby"..

Is this what you were talking about?

www.urbandictionary.com/define.php?term=stabby‎

or

http://en.wiktionary.org/wiki/stabby ?


He's referring to high crime rates. Parts of Oakland does have extremely high crime rates, much higher than even SF's notably elevated violent crime rates.

Many Oaklanders would point out that not all of the city suffers from extreme violent crime, but it would also seem that the areas convenient to a SF commute generally tend to be worse, and the good areas aren't that cheap.


It's not just the violent crime rate, either -- it's that the police, as a matter of policy, don't give a crap about anything that doesn't involve blood in the street. If you call the police after your home or car are burglarized, they will basically tell you to stop wasting their time.

If you're not a thug, all evidence (or at least many anecdotes) suggests that Oakland doesn't want you.


I would assume it's the violent crime rate that causes the police to shrug off lesser crimes. I doubt the police do it because they only want gang members in the city — which seems like an extremely silly thing to think.


Thanks for all the replies. It was an honest question - I'm not a native English speaker and I get occasionally confused by slang.


Stabby as in "You might get stabbed".


They mean to get stabbed by a knife, a common misconception about the east bay. Yes there's violence, but theres also beauty, you just need to know where to go and where not to go (san francisco is the same).


#3 crime rate in the US isn't a misconception. Anecdotally, of 6 people I know who have moved to (relatively nice) areas of Oakland, 6 have had their cars broken into or robbed at gunpoint. 4 are currently looking to move elsewhere.


Mr. Stabby may provide an unsubtle hint:

http://www.weebls-stuff.com/toons/Mr+Stabby/


He means "stabby" as in "there are a lot of stabbings there and the possibility I will be stabbed is slightly higher than in other areas"


He's referring to the high murder rate of Oakland.


I imagine what he means by "stabby" is "unsafe and at higher risk of violent crime".


My wife's close friend was only able to purchase a house when she had (1) enough to offer a cash purchase, and (2) the emotional ability to put in an offer sight-unseen.

Ugh.


As an actual native to San Francisco, I think I can put a few things into perspective.

Its always been expensive to live here, it doesn't have much to do with tech, it has more to do with SF being a center for finance AND technology. That said, having a mortgage lower than your rent is true for many people who bought at "the right time" rather than at the peak of demand. Demand is outstripping supply due to the insane people who get elected to the city government, which is largely driven by fresh but naive stream of tech workers and the radicalized longterm residents. The only way to fix this is to oust people who do not support fiscal security and personal freedoms (Leeland Yee is at the top of my list) and replace them with people who eschew cronyism and support a balanced approach (Sean Elsbernd comes to mind).

The so called BART divide is really more about greed and institutionalized mediocracy. Station agents should make minimum wage, the people who make BART actually run are the maintenance staff and the conductors. The conductors shouldn't be people in trains, they should be people in offices as the technology for having fully automated trains has existed for decades. The safety issue is a red herring, as the issue as posed is not for more transit police, but for more lighting. Management is also not blameless as they should be putting less money towards bureaucratic salaries and returning it to the ridership in the form of lower fares and upgrades to cars.

If you feel guilt about living and working in SF, stop it. Spending money is what keeps the economy of SF moving, and what keeps people who don't work in the tech industry employed.


Well come on down, Tom Dale! Portland, on behalf of me, welcomes you.

With regard to the tech scene here, a few things. First, it's a little sleepy, sure -- but it's not groggy, more waking up. I'm sure it will appreciate whatever leadership you can contribute.

Second, as you'll soon be demonstrating, living in Portland and working for a company in SFO should be a pretty good combination. The flight down is frequent, quick, and cheap. I would think that given remote working capabilities now and being able to visit SFO for f2f right now! if needed should make things pretty smooth.

I've seen some warnings in some of the comments about the Portland job scene... I'm sure it's not the bay area, but nowhere is. My experience with finding tech jobs here has been excellent. And now that remote work is more and more viable, it's all the better. This is so personal and depends on so many factors that I don't think you can generalize except at the extremes, but I thought it was worth a word from someone who has had zero (knock on wood) trouble.

I know, some haters may hate on me for pointing out how great Portland is for fear that its preciousness will be peed on. But I'd like to think portland's welcoming arms are more generous than that. At least for the foreseeable future.

Two more things: portlandia (the show) is mostly true, and wait until you arrive to buy a bike :)

See you soon!


I have to admit that the “OVER!” scene from “Portlandia” came to mind as I read Tom’s post. http://youtu.be/YlGqN3AKOsA


The wealthy tech people aren't the ones ruining San Francisco. You have to ask yourself: in what universe would constant increases in tax revenues and wealthy consumers be bad for a city?

The answer, sadly, is a universe where said city has an utterly incompetent government.


> The wealthy tech people aren't the ones ruining San Francisco.

Start here: http://en.wikipedia.org/wiki/Gentrification


You didn't actually address any of his points, except to point out that some folks view gentrification as a problem in SF.

I actually agree with the comment you replied to. Severe governmental incompetence in SF has been worse for the city than gentrification.


Both of those things are bad in general for cities. However, OP expressed doubt that increased presence of wealthy residents couldn't be anything but good for a city when clearly it is not so obvious.


Except that when it related to san francisco, some of the things on that wikipedia page are directly contradictory to the point i think parent was trying to make:

IE "When wealthy people move into low-income working-class neighborhoods, the resulting class conflict sometimes involves vandalism and arson targeting the property of the gentrifiers. During the dot-com boom of the late 1990s, the gentrification of San Francisco's predominantly working class Mission District led some long-term neighborhood residents to create what they called the "Mission Yuppie Eradication Project.(image)" This group allegedly destroyed property and called for property destruction as part of a strategy to oppose gentrification. Their activities drew hostile responses from the San Francisco Police Department, real estate interests, and "work-within-the-system" housing activists.[37]"

This is not a problem with the wealthy people!

Now you could argue this is still "not good", but there was no real argument made at all, just an implication of "you should read this wikipedia page since it comprehensively responds to your ideas", and it really doesn't.

Basically, i'm trying to understand whether he actually wanted to participate in the discussion and had substantive points, or just thought it was obvious and covered by this wikipedia page.


The wiki article on gentrification goes over some of the basic causes and effects that can occur, to that end the movement of wealthy people into places that were affordable to those with less causes displacement. To that end, wealthy people play a part in the systemic issues that cause class disparities and change and ultimately harm the makeup of existing communities.


The gentrification complaint always seems hollow to me. There's nothing cooler than seeing some run-down urban area transformed into a place that's more successful and vibrant through renovation and revitalization.

Some people may find that the environment outpaces their income or lifestyle... okay. Record companies found that technology outpaced their business model. The changes are good regardless what the curmudgeons think.


> There's nothing cooler than seeing some run-down urban area transformed into a place that's more successful and vibrant through renovation and revitalization.

This change almost always coincides with a displacement of people, esp. existing communities of those with lower incomes or communities inhabited mostly by people of color. What exactly is cool about the destruction of a standing community that is caused by issues of systemic class and racial inequalities?


You use words like "destruction" inappropriately, I think.

Ironically, things like wage controls, rent controls, and welfare have locked these very people into a cycle of poverty out of which they have trouble escaping. Continuing communities that are perpetually in blight is not the an obvious good. Allowing the system to change naturally with healthy commerce would seem to be an improvement.

One would hope that government masterminds who were responsible for creating the blighted areas in the first place would just get out of the way and allow the system to heal itself through growth and change.


> Ironically, things like wage controls, rent controls, and welfare have locked these very people into a cycle of poverty out of which they have trouble escaping.

Uh what? Things like rent control and welfare allow people to have shelter and eat when they otherwise wouldn't be able to. Systemic poverty occurs not because there is a welfare program, but rather because of classism, racism, and capitalism. That's not hyperbole, this is well understood in logical argument and through real world evidence.

> Continuing communities that are perpetually in blight is not the an obvious good. Allowing the system to change naturally with healthy commerce would seem to be an improvement.

Except that said development skews heavily towards white people and heavily disfavors black and hispanic people. This doesn't address livability for people and communities, this kind of attitude is a direct endorsement of systemic racism and classism.


Systemic poverty occurs not because there is a welfare program

rather because of classism, racism, and capitalism

Yeah, we completely and totally disagree. Racism is obviously wrong, but you'd have to show why other minority groups (korean, japanese, chinese) don't have the same poverty rates as blacks and hispanics before attributing poverty to racism.

Capitalism has been the greatest economic system for humanity to break out of poverty in history. Feel free to point me to another economic system that has worked better at taking a diverse melting pot like the USA and allowing anyone to achieve the highest economic and political levels in society -- hand-waving theoretical economic systems are not admissible as evidence.

Classism tends to happen when layers of a society calcify because the framework reduces mobility. Free market capitalism allows people to start businesses and achieve the ultimate in economic mobility, shattering the classes.

Apart from all that, welfare and assistance is taken by force from others in society. I'm okay with caring for those who are truly unable to work, but most of the dollars going to such programs today go to fraud or other unnecessary use of that money.

this kind of attitude is a direct endorsement of systemic racism and classism

As usual, your political persuasion tries to throw out the race card. That tactic offends me mostly because the irony is that your political philosophy causes more stifling economic stagnation than any other. That stagnation is the cause of distinguishable classes and just reinforces economic distinctions between races that reinforces racial stereotypes, encouraging racism.


my god, it's like a republican freemarketer madlibs


I've got a possibly great job offer on the table from SF/SV, but may turn it down. I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. The real estate market is certifiably, utterly bat-dookie insane.

NYC is often considered more expensive, and Manhattan is certainly... well... Manhattan. But taken collectively the NYC metro area is actually much more affordable. You can find places to live that are nice, friendly to someone older than 25-30, and at least sanely priced. They might not be in the closest or most fashionable neighborhoods, but they'll be reachable by NYC's excellent transit system.

In SF you have nowhere good to go unless you want an absurd commute, and its transit is horrible compared to NYC. So you're either rich or you're in a crummy apartment or with roommates. That doesn't work for people who aren't kids in their 20s.

My suspicion is that it's part policy choice -- a lot of protectionism from existing property owners who want to keep riding the property bubble and a lot of NIMBYism -- and part irresponsibility on the part of homebuyers. I suspect that many homebuyers in SF are doing the irresponsible thing of squeezing into a home by spending upwards of 40%, even 50+% of their income on mortgage payments instead of the usually fiscally responsible number of ~30%. And this is punishing everyone and sucking the soul from the city.

In the long term, Silicon Valley and SF is eating its young. It's a city built on young entrepreneurs coming there and doing new stuff, but if nobody who hasn't already made it can afford to live there what happens then? The other problem is that these high costs soak up everyone's spare time and money, leaving them with the requirement to work like crazy for other people to afford to live instead of on their own innovative projects. It sucks away the marginal "play time" when innovation really happens.

If this isn't remedied, SF/SV will become an echo chamber of already-made-its and already-know-it-alls. Then it will stagnate and be left behind.

Edit: real estate hyperinflation in general is a social ill that deserves to be tackled directly as such. It seems as if real estate has mutated into this hungry sponge that sucks up all surplus economic vitality from any region that experiences success. Imagine what all that money in SV could be doing if it weren't all sucked up by real estate.

It's like beyond a certain point, people no longer get wealthier. Their houses do. The home -- the "American dream" -- has become a tool of indentured servitude and bank fiefdom.


>>I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event.

I've never understood this crazy, if not outright insane obsession with home ownership. Why does everyone want to tie significant amounts of their lifetime earnings into physical property that historically has had very low appreciation in value? It's like people have forgotten about the housing bubble popping just five years ago, causing large portions of the population to take big hits financially. (And what is the current real estate craziness in SF, if not another bubble that will inevitably pop?)

Even seemingly rational reasons for home ownership, such as being able to raise a family in good school districts, fail to stand up to critical scrutiny. There are many stable renter neighborhoods with great schools.


> I've never understood this crazy, if not outright insane obsession with home ownership.

And, I don't understand why so many people on HN seem to think it's insane. I'd like to be more in control of my environment. I don't want to be at the whims of a landlord, particularly in the future, when I have children.

I want a place that is mine to customize as I see fit. I don't want to have to ask if I can paint, I want to be able to pick my own appliances, I want to be able to tear down walls if I want.

Some people are homebodies, and some are not. I don't understand why people get so worked up and insist that their personal tastes are correct. To me, renting is insane. To you, owning is insane. Let's just agree to disagree.


I'm guessing that there's nearly a 100% correlation between the people accusing prospective homeowners of having an "insane obsession" and people who live in apartments in SF. SF is one of my favorite cities in the world, but there are a LOT of downsides to it. I find that a lot of the people I know who live there adopt a borderline Stockholm Syndrome attitude about those downsides.

If you live in SF, you have easy access to all sorts of great things, but the downside is that unless you are fabulously wealthy, you are most likely renting an old and not necessarily well-maintained apartment with one (or two or three or more...) roommates, in a neighborhood with a disturbing number of homeless people and/or occasional violent crime, and you have to take the bus (or ride a bike) everywhere you go because it's just too much of an expensive hassle to drive anywhere. I'm not describing the living standards for college students or blue collar people, these are living standards for people who are probably in the top 5% income bracket in the entire country.

Those same people will tell you stuff like, why would you want to own a home? Why would you want to live by yourself? What do you have against homeless people? Why would you want a car in the first place? What's wrong with you, you barbarian!

There's something to be said for those perspectives, and I appreciate the value of living in a really dense and culturally rich city with great public transportation. But so many of the SF residents that I know go way beyond looking on the bright side, to the point of fetishizing the very things that can make SF an unpleasant place to live.

Maybe if I lived there I'd be like that too. It's natural to always want to look on the bright side of whatever your living situation is, it's just annoying when people get super militant about it, to the point of accusing you of being a bad or stupid person if you don't want to live there too.


You have some good points, but some of them miss the mark. I entirely disagree with you sentiment that "you have to take the bus (or ride a bike)" is a downside. I consider this a major selling point to SF, you can get drinks with friends and not have to worry about driving under the influence. Almost every other city I have been to, you either need a DD, or you have to pony up a ton of money for a cab.

Regarding the old houses, roommates, and homelessness, by themselves none of these are really that big of a deal, and are probably pretty common in any major city. What is a little absurd (and you sort of alluded to this), is that we are paying some of the highest rent in the country, for these 'privileges'. However, I imagine most people who live here, including myself, don't exactly look at it that way. Instead, we look at it as we are paying high rent, for the privilege of living in SF and all it's perks (good jobs, active social life, etc..), and the old houses, roommates and homelessness are just a part of SF life.


I actually agree with what you're saying, I was more responding to people I know (and/or people that I see post here from time to time) that put SF on a pedestal, and seem to have convinced themselves that the downsides to SF are actually upsides.

I always ride the public transport when I go to SF, it's a great convenience and much less of a pain than driving up there and around there. I wasn't saying that public transport in SF is a bad thing (quite the opposite), but rather that it's often the only choice.

Like, even when it would be way, way more convenient for any number of reasons to just drive to wherever it is that you're going, various factors (parking, traffic, whatever) make it just too much of a pain. Even just owning a car when living in the city can be too expensive and more trouble than it's worth. I do see this as a downside to living up there (or just visiting), even though I would still ride the public transport most of the time anyway.

I know lots of people that live in SF and don't have a car (or in some cases even a valid driver's license), and they will swear up and down that having a car is totally pointless and why would anybody ever do that and what the hell is wrong with you anyway, do you enjoy filling up your tank with evil every week? :) But they spend 100% of their free time wandering around SF. It's not as feasible for them to go on day trips or weekend trips up and down the coast, or get out in the wilderness (at least, out beyond the reach of the bus system), so they just don't. They just hang around SF all the time, which is a rather wonderful place to be stuck in, but they are stuck there nonetheless. I love going on long drives and exploring all the remote corners of the Bay Area and beyond, and I couldn't imagine life any other way.


> I'm guessing that there's nearly a 100% correlation between the people accusing prospective homeowners of having an "insane obsession" and people who live in apartments in SF.

Ha! It seems that statement is based on... nothing?

I'm pretty militant anti-home ownership. This is partly to combat the omnipresent, uniquely American, societally-negative idea that you really ought to dream of owning a home some day. It's also some sour grapes because of the insane tax treatment home owners get and the difficulty in renting good houses because of it. How is it in the government's interest to encourage that behavior?

I live in a cozy little apartment in Boston and don't really expect to own a home for a long time, if ever.

From a theoretical perspective you should expect home ownership to be about as economically beneficial as renting. There's No Such Thing As A Free Lunch and it drives me crazy that people think lottery tickets pay off, multi-level marketing schemes are a good idea, and buying things "on sale" saves you money.

The only reason home ownership appears to be a better idea, is because people ALWAYS fail to look at it in the risk-adjusted sense.

There's very little special about real estate as an asset class over any other investment vehicle. And buying ANYTHING on so much debt that you're levered up 10x is insane. That implies a 10% depreciation wipes out ALL of your investment.

I have a degree in Economics from MIT and worked in finance for 2.5 years so I tend to see things in that light. But no one talks about home ownership that (correct) way, and it frustrates me that there's so much pressure on people with little financial knowledge to make this massive un-diversified bet without understanding of the implications.

If someone gave advice to an unsophisticated median american to go out and buy tons of stock options, or short sell stock on margin, they'd be rightly chastized. It's unethical. But no one seems to bat an eye when the exact same advice is given regarding real estate.

And that's why the real estate crash was such a disaster trapping so many people in crushing debt.

If America had a sane perspective, wealthy investors who can afford big bets on real estate while still being diversified would take the huge risk in buying a several hundred thousand dollar asset, and middle income earners would have a much easier time renting decent homes in good areas.

So, no, it's not about "fetishizing" homelessness or anything inane like that; it's about recognizing a terrible corrupting influence in America and doing our best to correct it.


> I'm pretty militant anti-home ownership. This is partly to combat the omnipresent, uniquely American, societally-negative idea that you really ought to dream of owning a home some day.

But, what if I really want to own a home? I'm a homebody. I want a place to call my own, and I want to make it comfortable for me. I enjoy entertaining guests, cooking for them, and making everybody comfortable -- when I move back to Boston, I'll invite you over. :)

> The only reason home ownership appears to be a better idea, is because people ALWAYS fail to look at it in the risk-adjusted sense.

It's not strictly an investment. What if I derive pleasure and comfort from living in a place that I can customize as I see fit? Every time I rent an apartment, there are things that I hate and drive me crazy: carpet, electric range, no outdoor space, awkward floor plan, etc.

> If someone gave advice to an unsophisticated median american to go out and buy tons of stock options, or short sell stock on margin, they'd be rightly chastized. It's unethical.

Agreed. I'm a fellow MIT alum who graduated in 2005. I know what I'm doing -- and what I want to do is own a home... and in the Boston area, to boot. I wouldn't advocate pushing the "dream" on other people, but I know what I'm doing; why chastise me?

You say that your "militant anti-home ownership" view is "partly to combat the omnipresent, uniquely American, societally-negative idea that you really ought to dream of owning a home some day". Do you find the fact that I want to own one repulsive?

I'll be back in Boston soon. I'll take you out for a beer (or tea, or any alternative beverage, if you don't drink), if you want to talk.


> Do you find the fact that I want to own one repulsive?

Ha, no no no... it's okay. I would certainly never say it's "repulsive" – at worst "unwise". But as long as it's a considered position, and you have the resources not just to cover your downpayment/mortgage but also to justify such a large stake in a single asset, then it can certainly make sense.

> I'm a homebody. I want a place to call my own, and I want to make it comfortable for me. I enjoy entertaining guests, cooking for them, and making everybody comfortable

Well that's certainly admirable. I would add, though, that part of the problem with finding an apartment that doesn't drive you crazy is most of the nice places are on the market for sale, rather than renting. So the more I can convince people that they'd be happy with renting, the better the rental supply is for me (and them). :-)

I can certainly understand the appeal of owning property for the additional flexibility and control it gives you, and sounds like that's what you're looking for. It's the allure of ownership qua ownership that I'm opposed to. But as you say, if you're not "pushing the "dream" on other people" live and let live.

> I'll be back in Boston soon. I'll take you out for a beer (or tea, or any alternative beverage, if you don't drink), if you want to talk.

I'd really like that! Shoot me an email to connect (my info is in my hackernews info box; I can't see any contact info for you).


It's a reaction against the "home ownership is doable and always a better idea than renting" sentiment that the previous generations knew to be true. The answer is probably a bit more nuanced in that sometimes ownership is great and sometimes it's a terrible idea, but I think it's just a case of the pendulum swinging the other way.


Neither option is actually insane, but the prevalent opinion that renting is an unacceptable waste of money that should only be utilized as a last resort is not correct.

I don't live anywhere near SF and I rent because I got a good deal on the monthly payment, I have a great landlord who fixes all issues promptly (which is awesome for me, since I am not much of a fix-it guy) (and relatedly, I'm not that interested in making renovations at this stage), and I don't want an asset that'll tie me down since I'm not sure I want to live in my current living area forever.

People constantly bug me to buy a house, but rent works out fine for us for now. I imagine at some point I will want the freedom to modify my home, but that'll be a little ways down the road, and I'm content "throwing my money away by not building equity" at present, especially since I don't necessarily consider significant real estate appreciation a forgone conclusion, as others mistakenly have (see: 2008) and many mistakenly continue to do.


I agree with everything that you're saying.

I live in a duplex in the Bay Area, and I know for a fact that both tenants pay ~65% of the monthly mortgage. The landlord is making a healthy profit every month -- that's the real reason that I have an issue with renting.

That being said, I will not buy in the Bay Area. I'll move back to Boston and buy a condo or house there. Parts of the Bay Area and the Boston area benefit from proximity to universities, and see much less fluctuation in the real estate market. Personally, I miss seasons -- so, I'm not going to spend more money for "better weather".


Probably because we came of age when Fight Club, American Beauty, and AdBusters were popular and questioning the American dream. Home ownership usually implies suburbs and crushed dreams to people born in the 1980s.


I'm not so sure that there's as strong a correlation to age as you think. I was born in 1983, so I don't think that I missed the window that you're talking about.


It is insane when you pay sky high prices for a house. Otherwise, it may be a good decision.


What, exactly, is "crazy" about it? As a renter, you don't control your own destiny. You're at the whim of your landlord. As a home-owner, or better yet, a property-owner, you have much more control over your living situation. Don't like the paint color? Change it. Don't like your stove? Get a new one. Want to plant some new flowers? Go for it.

As a renter, you're going to be dealing with rents rising year over year. Those with fixed mortgages will see the same payments for decades.

If you have kids, you want some more stability, most likely. If the building you rent in is sold, or the rent is raised too much, you have to move. You want to install anything permanent for the kids? Have to ask permission from the landlord.

Not to mention the fact that, if you're paying $1,000/mo for rent, at the end of the year, you have almost nothing to show for your $12,000. In a house/home, you have equity in said house.

And since when did the housing bubble have anything to do with "obsession with home ownership"? I was under the impression it was a combination of unsound investments ("home prices always go up, so it's OK to spend more than you can afford!") and shady mortgage companies dishing out loans with no regard as to whether a person could pay for them.


>>What, exactly, is "crazy" about it? As a renter, you don't control your own destiny. You're at the whim of your landlord. As a home-owner, or better yet, a property-owner, you have much more control over your living situation. Don't like the paint color? Change it. Don't like your stove? Get a new one. Want to plant some new flowers? Go for it.

This is hilarious.

As a home-owner, you have control over your own home, but you have no control over your neighbors or your neighborhood in general. If things go badly, your house depreciates in value and there isn't much you can do to change it. Therefore, when you buy a home you are buying control of your immediate living situation while simultaneously surrendering yourself to the whims of those around you.

If you don't like your stove, you can get a new one. But what if you don't like your neighbors? That's a much bigger problem than not liking your stove, and there isn't a single thing you can do about it. They aren't going away anytime soon, and neither are you.


That is an asinine argument. You're more likely to run into terrible neighbors in an apartment setting, with the higher turnover in living spaces. Your argument is done in by basic research into the neighborhood.

That's like saying that you shouldn't buy a home simply because it might burn down one day, whereas living in an apartment is fine, because if it does burn down, it's not your building.


>>That is an asinine argument. You're more likely to run into terrible neighbors in an apartment setting, with the higher turnover in living spaces.

Except in a rental setting you can complain to the landlord if your neighbors are noisy, or simply pack up your shit and move if things don't change.

With a house, you're literally rooted in that space for 5-10 years. If you get bad neighbors after making the purchase, you get screwed. If someone decides to build a factory half a mile away, you get screwed. If the nearby school that you purchased the house for degrades in quality, you get screwed. If the HoA decides for some reason (that they don't even need to justify) that they don't like your front yard, guess what: you get screwed. These things cannot be insured against or researched in advance. You simply have to live with them.


That is an asinine argument. You're more likely to run into terrible neighbors in an apartment setting, with the higher turnover in living spaces. Your argument is done in by basic research into the neighborhood.

Disagree. A lot of neighborhoods have homeowners' associations, which are like New York co-op boards and basically an excuse for non-working house-spouses to get in peoples' way because they have literally nothing else to do.

He's right. Homeownership can be a pain in the ass if you care strongly about the subjective aspects of living in a place. You have an investment that other people can fuck with by building shit near it, and you have people trying to prevent you from changing what you have.


HOAs do exist, and can be intrusive, but OP's final line still applies: "Your argument is done in by basic research into the neighborhood."

Anyone buying a home knows if the home their looking at has an HOA or is a condo. I know many people who would never consider buying a home covered by an HOA, and many other people who like knowing that their neighbor can't paint their house pink and do car repair in the front yard with death metal playing. Caveat emptor.

Finally, many of these risks are reduced by actually being a part of the community. Don't want a factory built 0.5 miles from your home? Go to the planning meetings, talk to your city planning staff/council members. Join the HOA board. Being a homeowner means that you have an incentive to invest in your community and make it the community you want it to be. If you just disconnect and let others make decisions for you, yes you can be screwed. However, if you participate, get to know your neighbors, and become a part of the community, you can make it everything you want it to be, and more.


>>Finally, many of these risks are reduced by actually being a part of the community. Don't want a factory built 0.5 miles from your home? Go to the planning meetings, talk to your city planning staff/council members. Join the HOA board. Being a homeowner means that you have an incentive to invest in your community and make it the community you want it to be. If you just disconnect and let others make decisions for you, yes you can be screwed. However, if you participate, get to know your neighbors, and become a part of the community, you can make it everything you want it to be, and more.

I think you're grasping at straws here and it shows. All of the things you listed are incredible time-sucks. If you have ever been to an HOA meeting, you will know exactly what I'm talking about.

And did you just suggest going to city planning meetings to prevent the building of a nearby factory? I'm sorry, but do you even understand how these things work?


> there isn't a single thing you can do about it.

There are laws against most of the things neighbors could do to annoy you. Which means you can involve police and/or the courts, until your neighbors stop annoying you.

If you're renting, especially in an apartment complex, and go to sue, that likely means involving the landlord, and thus getting kicked out as soon as the legal retaliation period is up.


I'm not sure what happens in the US, but I think both renters and home-owners are screwed when they have bad neighbours.

See the Steve O documentary "Demise and Rise" about his drug addiction. (https://www.youtube.com/watch?v=fkvVcQr6JU4) See especially this bit (http://youtu.be/vRTrOF6lGzk?t=4m47s)


What, exactly, is "crazy" about it? As a renter, you don't control your own destiny. You're at the whim of your landlord. As a home-owner, or better yet, a property-owner, you have much more control over your living situation. Don't like the paint color? Change it. Don't like your stove? Get a new one. Want to plant some new flowers? Go for it.

Want to move to San Francisco to work at a new startup? Oops, you have a house, you're fucked. Breaking a lease is a lot easier than selling/renting your home. Being mobile is a lot better, for job prospects if you aren't in one of the hot spots already.


"Being mobile is a lot better."

For one very specific subset of society. For other people with different priorities (friends, family, what-have-you), owning a home might be "a lot better" for them.


Yes, specifically people with wives and children like me. This is what's driving the property market in cities like Austin and Boulder. Talent is moving there because they can work for a startup and still have a healthy family life, work/life balance, and non-insane commute.


I've always considered rent as an expensive form of insurance.

Something major happens like the furnace going out mid winter, or a huge roof leak developing, or some other catastrophic event, or heck, even basic maintenance, It's not my problem, and my actual (dirt cheap) renter's insurance will take care of any damage.

$12,000 a year buys a lot of peace of mind. And honestly, unless I'm actually using my house as an investment rather than a place to live, equity is mostly meaningless to me.


> Not to mention the fact that, if you're paying $1,000/mo for rent, at the end of the year, you have almost nothing to show for your $12,000. In a house/home, you have equity in said house.

Suppose you buy a $300k house with a 15% downpayment. That means you spent $45k to GET the house. Now if the rent payments and the mortgage payment are both about the same, both spend $12k/year to keep their house, but the homeowner gains a very small amount of equity (most of the payment in the early years goes to interest on the mortgage) but the renter has an extra $45k of liquid net worth! If the renter invests in the stock market or a money market fund he gets some ROI from that - income the homeowner can't get. Plus being more solvent is valuable in itself in these hard times.


Not to mention closing costs automatically costs 6%.


>There are many stable renter neighborhoods with great schools.

You forgot "...in other parts of the country." The "great" schools in the Bay Area are pretty much exclusively in places with $1m+ house prices, and with few places to rent for a reasonable amount.

Also consider that the bubble primarily affected the distant 'burbs. House prices in San Francisco, and close in to the city, didn't really drop appreciably at all, and have now regained any losses. So either the "pop" was delayed (and another one is still coming, as you suggest), or there wasn't a "bubble" in SF at all. Not to say that I think it's sane to pay those prices, but I don't live the Bay Area any more for that exact reason.

There are those of us who really want to own a house just so that we can change it however we like. There's something smothering about living in a rental when you've previously been free to do what you want. I know, first world problems, but still, home ownership means that I can't be kicked out (or priced out) on the whim of a landlord.

And leaving the Bay Area is one way to achieve both. I've got better (for some measures of "better") public schools near me now than even exist in California any more, and yet I own my home (and paid only about $320k for it -- still not cheap, but much more reasonable). In my case (having bought and sold at good times in the Bay Area), I own the house outright, so living expenses are even lower than if I were renting, giving me the ability to pursue my own dream projects for more of the time.


"giving me the ability to pursue my own dream projects for more of the time."

That's what I was getting at. SF and SV were built on that, and it's not possible there anymore unless you've got big investors.


Exactly. The heyday of SV (think microprocessor and early PC heyday) had insanely low real estate prices. A guy could get buy doing manual labor and tinker on computers as a side project in the garage back then. Today that's unthinkable. It sucks that tech companies willingly WANT to be in SF/SV, as if it's some magical technological cloud city where the rest of the world can't compare.


It is a magical technological cloud city. For certain business models.

If the company in question is betting on very strong growth, then it needs a large pool of experienced talent to draw upon. Paying 3X or 5X as much to get top talent can easily save money in the long run.

If you want to be taken seriously by big fish VCs, you have to be able to speak intelligently about how to spend more for a disproportionately positive payoff. The problem here is not the VCs, but the aspirations of the founders.

Finding less experienced talent for cheap may be the smarter move. For other business models.


I think the problem is the belief that top talent only exists in SV - which is false. To me, I think top talent would be less willing to work insane hours, less willing to have long commutes, and less willing to spend a TON on housing. If Google and Apple HQ moved - it would be seen as the end of SV. The VCs would go too. And I think stuff like this will be happening soon.


If only there was something that let you videoconference all day with your colleagues at virtually not cost.


Schools actually aren't bad in SF, they're uneven. Take a look at greatschools.net and filter by public school. SF has an unusually large number of schools rated "10" - keep in mind, anything over 7 is good by California standards (not exactly a great standard, but that is the basis for comparison to the wealthy burbs). This is based on adjusted API (test) scores, which don't tell the whole story about a school, of course.

In SF, school assignment is by lottery rather than by residence, which drives wealthy people nuts. I get it, if you live in a nice neighborhood across the street from a good school, and the city tells you you have to drive somewhere else, that'll piss you off - and if you can convert a high mortgage payment into access to a public school that the poor don't get in the suburbs, you may very well up and leave. Of course, if you live in a crappy neighborhood across the street from a failing school, you might not mind the lottery so much.

SFUSD is moving to a more district residence model, though it won't be the overwhelming factor.


Not everyone likes living in apartments.

Not everyone thinks it's a wise choice to spend as much as a used house on a new condo where it's hard to find parking.

Not everyone likes living in a cement jungle.

Not everyone likes to have to turn down the volume of a good movie because or their neighbors.

If you want to buy an all electric car, you think you can plug it in on the street?

There are many reason why owning a home is a good idea. The best option is owning an inexpensive home in a market with reasonable prices and a decent income.


I think there are many reasons, some more rational than others.

1 - everyone is long housing, and sfbay has had major price swings. Buying a house caps what you'll pay. I lived in a neighborhood in sf where market rents for my apartment went from $2200 to at least $2700/mo in a little over a year and a half.

2 - the US, via mortgage interest deduction, privileges home ownership

3 - california in particular privileges home ownership by basically freezing property taxes

4 - rental stock in california is often complete shit. If you don't want to hear your neighbors walking or running the bathroom fan or etc... you probably need to buy a home.

5 - good luck finding a 3 bedroom rental, which is highly desirable if you have 2 kids

6 - if you have good credit, a $1mm house in the peninsula costs roughly (within $700/mo) what rent does on a similar apartment

7 - want to have a dog? Good luck with that in a rental.

8 - want to not have to ask permission for X, Y, or Z while paying $3500+/mo? Don't live in a rental.


My friend rents and has 2 pit bulls. His rent is actually quite reasonable. Even has some outdoor space...


The original origin of the "obsession with home ownership" was the idea of escaping the need to pay fealty to the rentier class by owning your own home. I completely agree that "house as investment" and house flipping bubblemania is insane, and is partly responsible for ruining the real estate market.

Actual ownership is now impossible for ordinary middle to upper middle class people in markets like the Bay Area, and in fact renting is more rational there. But there are plenty of other markets where it's not impossible.


> Why does everyone want to tie significant amounts of their lifetime earnings into physical property that historically has had very low appreciation in value?

I've tied a significant amount of my lifetime earnings into dining out and purchasing music and I can assure you that neither of those has much of a resale value, especially the former.

I've never understood this crazy, if not outright insane obsession with maximizing appreciation value. It's like people have forgotten that we make money so that we can spend it making ourselves happy.


As someone who recently (this past year) went from being a renter to a homeowner, and had previously been a home owner for several years, it's not all rational... but here are some of the reasons.

I don't have to worry about the rent going up every year / six-months. If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when you sell the house. (Assuming the market doesn't go pear-shape: a big assumption.) In contrast, money you spend on rent is a pure cost, and irrevocably lost.

There are several "rent vs buy" calculators that can visualize (based on interest rates and rent vs mortgage costs) the crossover point where it's cheaper than it is to rent for X years, and what it does for your net worth. For me, it appears that about 2-3 years of owning will be a break-even point, and less if my rent would have increased.

In my case, the mortgage on a house (3 bedroom) + yard + garage, with a nice kitchen, was about $100 more per month than a cramped, 2 bedroom apartment with a miniscule (and poorly designed) kitchen, no space for the kids to run around, and not enough space to even unpack our stuff.

I OWN IT. Until you've owned one, it's possible you might not fully comprehend this double-edged sword.

I can paint the walls, break the walls, rip up the floor, put in a new mailbox, take out the trees I don't like. There's nearly nothing that keeps me from renting out a bedroom to a friend, or letting the in-laws stay for a week. If I want to mount a swamp cooler outside my window, I can, or turn my garage into an archery range.

There are downsides, too. As an owner, you risk that the market will fall out from under you. It's harder to move, as you have this limbo of not being able to buy a house until you've sold the previous one. (I haven't figured out how to make this not suck. Same goes from transitioning from a lease to ownership.) I have to mow the lawn, make sure the garden is watered. The utilities are a bit more expensive.

Also, as a homeowner, you tend to accumulate More Crap, since you have more space to fill.

All of this is worth it, though, as I do not worry about whether it's OK to paint my kids' rooms, or tear out a ceiling fan that I hate, or stain the deck a different color, or completely redo the landscaping. When someone (me, or the kids) busts a hole in a wall by accident, I think "Dangit, I have to fix that..." rather than "well, there goes my security deposit".

I'm sure that a big part of the appeal of home ownership is that our parents valued it, but I feel like there's a real intrinsic value to it as well. Consider surveying your friends who have owned + also rented, and ask them about the things they like or dislike about it.


>>If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when you sell the house. (Assuming the market doesn't go pear-shape: a big assumption.) In contrast, money you spend on rent is a pure cost, and irrevocably lost.

This logic is fundamentally flawed. Contrary to the popular conventional wisdom (repeated by our Baby Boomer parents), renting is not "throwing away" money. You are getting something for that payment, which is a place to live.

Conventional wisdom says that with a mortgage, you are building equity instead of paying the money to someone else and that makes more sense financially. But this is not true. You should read this piece to understand why, specifically the Epilogue part: http://messymatters.com/buyrent/


Well, it's throwing away money compared to home ownership, which also gives you a place to live. I don't know about hypothetical ultra-liquid markets, but in practise rent is usually higher than interest+maintenance fees over a longer period of time. Real estate investors need to make a profit, and so do banks, but the banks tend to have slimmer margins.


Also, banks are often still making a profit with rental properties.

Which isn't to say you should buy a home blindly - you shouldn't do anything so major blindly. It seems to me the appropriate way to view it is: if your cost of owning a home sans payment of principle is less than renting, then you are "throwing away" money but the alternative is investing that piece you're throwing away plus quite probably more in the real estate market, with the corresponding potential upside and risk. In the extreme case where costs including principle are less than rent, then you should probably purchase. An additional thing to watch, though, is that people often under-estimate things like repairs.

All of which is to say, there is no obviously right answer.


> Well, it's throwing away money compared to home ownership

It's still not "throwing away money", there are just different things that people value. I value being able to move whenever I want, wherever I want. To me that is worth potentially paying more. The same way some people value being dropped at their exact location with a taxi vs a close location with a bus: just because the bus costs less does not mean you are throwing money away with a taxi.


The Harlem numbers make a good point, both renting and buying involve unrecoverable costs. But it's is a case by case question as to whether one set of costs is higher than the other.

Where I live, my rent and utilities are higher than the cost of property taxes, HMO fees, utilities AND mortgage payments for an equivalent townhome. My market's the other extreme from Harlem.

Paying less per month for the same thing seems like a good idea. Even if the market drops the value of my house to zero, buying is still the right decision.

Not sure why the market is crazy here. Maybe it's a city of transients, people just passing through, or people with no savings?

This is why rent vs. buy calculators exist, there's no obviously correct answer for every situation, it's highly contingent.


Also, if you buy, your cost of moving is WAY higher. unless you can know to a high degree of certainty you're staying put for 10+ years at least, renting keeps you mobile. Not everyone can telecommute. Many people should be more mobile to go where jobs are, and that's easier when you're renting.


If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible.

For those of us who want to stay in one place, this is a really good thing. If I want to invest in a workshop in the house, that's a good thing.

My house is mine, and some of the things I have here just aren't available to rent.


> If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible.

That's arguably a feature, not a bug. Rents generally don't skyrocket without cause, and they usually don't skyrocket in isolation. If you're living in an area where rents are increasing rapidly and your income isn't keeping pace with the cost of living (of which rent is typically a substantial component), you probably have very good reason to consider whether you're in the optimal location.

On the other hand, there are people fortunate enough to have purchased a home in an area that has done well since their purchase but who still struggle with an increased cost of living. You see this a lot with people who are on a fixed income, or who bought in an area that has experienced a boom. Yes, these individuals might be able to sell their homes at substantial profit, but they'll still have to move once they sell.

> My house is mine, and some of the things I have here just aren't available to rent.

Your house isn't yours unless and until it's paid off. This may not apply to you specifically, but a lot of people who call themselves homeowners are really homeowners-to-be in about a decade or two or three.


> Your house isn't yours unless and until it's paid off.

That depends what you mean. It's my understanding (as a non-homeowner of any stripe) that you can do more substantial remodelling projects without asking for your landlord's blessing in a home you have a mortgage on, which seems to have been the kind of thing the parent was talking about, and is a potentially substantial practical difference in whether a space is "mine" or "not mine" whatever the actual equity situation is.


I could knock my house down and replace it with a flower pot for all the bank cares so long as I keep making my mortgage payments.


> Yes, these individuals might be able to sell their homes at substantial profit, but they'll still have to move once they sell.

They have to move if they were renting, too, and would be have less money (if they didn't leave the very instant rent rose at all) instead of more. Of course, that's just saying that it's better to be long an asset when its price jumps.

Also, if your work doesn't tie you to a region and you've purchased a house, and rents are high, you can always rent out your house instead of selling it. I know several people who have done this, in one form or another, to generally positive outcome.


> Also, if your work doesn't tie you to a region and you've purchased a house, and rents are high, you can always rent out your house instead of selling it.

That's a couple of big ifs, but even so, unless you have purchased a house as an investment with the intention of renting it out, this is another one of the rationalizations that prospective home buyers use to convince themselves that they're making a smart decision.

As I noted in one of my other comments, many home buyers know very little about the local market they've bought in to. Professional investors and major institutions have purchased hundreds of thousands of homes across the country that they are planning/trying to stabilize and rent out. To my knowledge, Blackstone owns more than 26,000, American Homes 4 Rent owns around 14,000 and Silver Bay Realty Trust owns more than 5,000. These are just a few of the major players. There are countless other smaller players, some of them foreign, doing the same thing on a smaller scale.

It's quite sensible to question the impact this will have on rents in the areas where this activity is most prevalent as the homes are stabilized and rental inventory increases. And one should not ignore the impact these purchases have had on housing prices in these areas.

Net-net: assuming you're comfortable being a landlord, which can be a trying job with even a single property, market conditions and trends vary so significantly that it's simply not credible to state "you can always rent out your house instead of selling it." Heck, as a lot of people found out not too long ago, at times it can be impossible to do either.


I've done just that. My wife an I bought our house 4 years or so ago. House payments including all the interest and accompanying costs were lower if we wanted to rent a smaller crappier house in the same location at the time. Now we are moving countries and renting our place. Rent we are asking for is 50-60% higher than the costs we have and have so many people interested we may just up the rent a bit.

But I do have some experience renting places as my family has a few properties they rent and I used to manage a lot of the related work.


I would absolutely not state, free of context, "you can always rent out your house instead of selling it." The context was being priced out of the market, in addition to the the mobile employment caveat (which I agree is a big if, but if your job is tied to the region and you can't afford to live there you're boned regardless).


> you can always rent out your house instead of selling it

Even if you lose a little on the rent, somebody else is now paying for your mortgage and you can enjoy a cheaper apartment elsewhere. Or if you've earned enough, just buy a second house. Mortgages aren't so hard to come by even these days that it's outside the realm of the possible.


> This logic is fundamentally flawed.

In my experience it's rarely worth appealing to logic when discussing home ownership. It's just such an emotional subject that rational debate is often hard to come by.

1. Many home buyers make purchases with relatively little knowledge of their local real estate markets. For instance, in some areas heavily hit by the crash, you can find buyers who don't know that a considerable amount of the local sales activity has been driven by individual speculators and institutional buyers who are attempting to rent out the homes they purchase. They might be on a block where a double-digit percentage of the houses are rentals and not even know it or recognize how this could affect them.

2. Many people don't actually run the numbers for themselves so they can't intelligently weigh the cost of renting versus the total cost of home ownership and the potential gain or loss if/when the house is sold, an event that could be a decade or more away. At best, they do back of the envelope math and where assumptions are required, use a single set of assumptions that is favorable to the decision they have already made.

3. Many people who buy a house are really buying an interest rate and mortgage payment. The recent rise in interest rates has actually provided a good opportunity to observe this: some buyers who are in the market today are willing and eager to purchase a good deal "less house" than they could have purchased even a year ago because they're simply targeting a mortgage payment. Many conversations with realtors are eerily similar to conversations with auto salesmen: the best auto salesmen focus on the monthly payment, not the price of the car and what you're getting for it, because they know that the average person will apply a completely different, and less rigorous, analysis to the purchase when it's done this way.

4. Owning the dwelling you call home is an emotional thing, so home ownership proponents often resort to weak arguments like "if you're renting you're throwing money away" to justify their decision. Of course, there's no shortage of things that people "throw money away" on and some of those people, of course, are homeowners. It's not hard, for instance, to find homeowners with a $400/month auto lease or a 48 or 60 month loan on a car that costs half of what they gross in a year. And plenty of new homeowners spend more on unnecessary upgrades and "stuff" (i.e. large televisions, expensive audio systems, etc.) shortly after they move in to their new houses. Yet many of these same people don't see the irony in bragging about how financially astute they were to purchase a home and start building "equity".


>>In my experience it's rarely worth appealing to logic when discussing home ownership. It's just such an emotional subject that rational debate is often hard to come by.

This is probably the most intelligent thing I have read in this thread so far. You are absolutely right. Sometimes I forget that purchases - especially big purchases - are emotional decisions, and people jump through all sorts of crazy mental loops to justify them. I think this "bug" in the human brain is one of the most powerful drivers of the housing market.


Funny, I always considered my emotions to be a feature, not a bug. Life would be pretty boring if nothing ever gave me joy, sadness, relief, anger, gratitude, anxiety, laughter, sorrow, or peace.


Read again, nobody said emotions are bad in all situations. Thus your use of "if nothing ever" doesn't apply here.


The article consistently fails to take into account inflation. For example, they don't want to bet on 2%/year appreciation--even though the long-term inflation rate is 3%.

They also cite the "myth" that costs go down over time as the principal is paid. In fact the real reason home ownership costs go down over time is that your income is subject to inflation but a fixed-rate mortgage payment is not. Having a fixed-rate mortgage is like getting a 3% cut in your rent every year.


The epilogue is using a pretty specific comparison, which is a little out of whack in my experience. Rent / Mortgage comparisons are usually a little closer.

That being said, I completely agree with this article. The most important point is that buying is often worthwhile due to government meddling... it's difficult for other investments to compete with a house ownership appreciation that's tax free.


I agree -- I'm really glad that enraged_camel linked that article. It makes some very good points, and mentions various tax benefits and the like that I had forgotten about.

I think the best lesson from the epilogue is that your mileage may vary. Whether it's financially better to rent or buy depends on the market where you want to live. I had implied this, but not nearly as well. It's critical to take that into account when weighing the additional value you get from owning (namely that you can do what you want TO the property). Sometimes that's worth paying extra for, sometimes it's not, and it's ultimately up to you.

I also liked the commentary about mobility that people made here. It's very true: selling a house and then actually buying one is a dance I still don't understand how to do smoothly.


> You are getting something for that payment, which is a place to live.

Interestingly, for about the same amount per month, you can pay off a mortgage, get a nicer place to live and build equity at the same time...and you don't have a super telling you to turn the music down at 3 in the morning.


Conventional wisdom is just that... a convention. Each region of the country has different real estate markets with different cost dynamics. This buy-rent article merely proves that you have to do the math yourself.

I currently live near the Twin Cities, Minneapolis-St. Paul, which has one of the costlier rental markets for low end apartments. The cheapest apartments you can rent cost more per month than my mortgage. Annual property taxes where I live are under one percent of the cost of my home. The author of the buy-rent piece makes assumptions that do not apply to my region of the country.


Each region of the country has different real estate markets with different cost dynamics.

RE is once again all about location. In my area taxes are very low for owner occupied housing (they give a discount to owner occupied and gouge 4-5x the second home/rental properties to make up the difference). Rents in similar areas are very expensive comparatively. Buying makes sense if you plan to stay in the area for more than a few years.

I also fully appreciate that this situation isn't true everywhere.


I also live in the twin cities and the rent to mortgage ratio for single family homes is heavily slanted toward high rents. So we just bought a place for 1200/mo that we are renting for 1500 a month, and we live elsewhere. It's a great market if you can buy right now.


You should check this out: http://www.richdad.com/Rich-Dad-Games/CASHFLOW.aspx

The idea of home ownership is that you aren't even (really) paying rent. You are investing and the money should return at some point in your life.

It's reasonable to conclude that your house could lose money, BUT there is a reason real estate companies exist. If you purchase homes with a focus on investing (and perhaps living there for a time) you will come out ahead.


Building codes and home owners associations can cause havoc on plans you have for your own home. A lot of apartments I've rented have allowed me to repaint or install ceiling fans at least, but never anything more.


The problem with home ownership is that people don't know how to properly value risk the way financial institutions do.

One of the more eye-opening assignments I've had was working with portfolio theory for a bank. Portfolio is pretty much hoppycock used to explain for the customer why they bank lost money on your investment. Giving you nice charts for how much risk was taken and how they performed compared to some index. While portfolio theory in itself is BS it demonstrates well how risk is something that has a value, and protecting against that risk costs money (hedging)

Texas Hold'em is the same, what is the risk (odds of winning) and how much can I win determines how much I can bet (invest) in a hand (home).

With homes people have no proper sense of the risks they're taking. Cognitive dissonance together with a surprisingly short view of history and survivor bias makes investing a home seem like a no brainer.

Its often futile to even have a discussions of potential risks with a homeowner because they don't want to hear it. Sure the risk might greater or it mighty be less in the same way that you can play russian roulette with one bullet or five, but there's always some risk and often greater than you would think in these times.

Homeowners however vehemently will deny any risk and keep spouting about how homes have gone up in the last 5, 10, 20 or whatever years and some neighbour who made it rich. In any case they say if the price goes down I'll stay put until it goes up again since I have no plans of moving, like the bank won't take your home if it goes down enough that you can't cover your mortage.

I'm not saying you absolutely shouldn't by a home but at least one should be aware of the risks :)


The equity you build up also give you unbelievable borrowing power in the future. I'm a handful of years away from paying off my house. When that happens I'll be able to borrow, in one shot, more money than the last startup I worked for had to struggle to raise over several rounds and 5 years, and on better terms.

The key is to do everything possible to minimize how much interest you pay, usually by shorter mortgage terms and paying off the principle as fast as humanly possible.

I wish I had the money I spent on rent when I was young and put it into a mortgage instead. I would have lived in a nicer environment, had more space for stuff, and had rooms I could have rented out in turn (which I do off and on over the years, you can usually pay off the interest every month just by renting out a spare bedroom).


Two school friends finished school, maxed out about 5 credit cards to get a deposit and got a big old house and large mortgage. They worked 2x jobs each and had 5 flatmates. Both say it nearly killed them. However they both won out big time as the property went up heaps in value and this set them up very very nicely. It's easy to see the holes in this scenario as a plan, and both say they would never ever recommend it to anyone.


Sortof. You still have to worry about taxes/bills, which are not insignificant in places like SF... You also have to ask permission from the local hoa/local government if you want to paint your house a certain colour. You also have to pay dues to the hoa.


I and my bank also own a house (it's more theirs than mine at the moment, but they let me inhabit it for now), but I think financial benefits are not as lopsided for homeowners. You typically incur a host of new payments:

- property taxes (1.15% in Santa Clara county), adds up if you own for more than 5 years

- HOA fees if any, typically responsibility of a landlord in rent environment

- one needs to buy/install/maintain appliances

- overall maintenance cost that will vary widely depending on the age and location of the house

While I don't disagree with you, home ownership is not for everybody and definitely limits one's options as far as job location, etc.


You don't REALLY own it though do you? See what happens when you stop paying annual taxes on it...


Communities are built by people that are in for the long haul. How many renters show up at city council meetings? The age of renting is the age of "bowling alone".


I completely agree with your point, but that's not a problem of renters, per se.

If the city of San Francisco (where my wife and I live) made a committed effort to build a stable stock of rental property that allowed families of 3-5 to rent for less than $3k a month, I guarantee you'd see more families sticking around instead of fleeing to points north or east. Instead, you get mostly young, single (your "bowling alone" category, less likely to show up at those city council meetings) splitting 3 bedrooms four ways and paying $4k for the privilege of all sharing one kitchen and one bathroom.

I'm optimistic that all of the new housing being put up in SOMA will help alleviate this but there needs to be some complementary regulatory structure to help keep those community types (which are often what the young singles become in 5-10 years) around. Otherwise, SF is quickly on a path towards being a place where only the rich, the young, the single, and the poor (via subsidized housing) can afford to live. The middle gets squeezed.


"physical property that historically has had very low appreciation in value?"

Only over a longer scale. Over a short scale, say 1980-2010, interest rates have gone from 20% to practically zero. So Joe 6 Pack who is going to pay $1500 no matter what interest rate exists, has caused the previous owners selling price to explode. And once prices start exploding, the bubbly pile on begins.

Its also a fad. Post 1950 no $ should be spared on education. Post 1990-ish no $ should be spared on real estate. When the fickle public changes their mind, look out below!


>I've never understood this crazy, if not outright insane obsession with home ownership.

Where many people live you can buy a house that would cost well over a mil in SFO and have it paid off in 3-4 years. Imagine you could live in a very nice house and only pay 2-4k in property taxes a year-

Owning a home makes the post-work, part of your life much more economical too. I would argue that obsession with home ownership is only crazy if you live in many parts of CA, to apply that to the whole country is grossly wrong.


I think if you are going to work for most of your life for someone else, than it is probably safe to buy a home, and at least recuperate some of the monthly payments you've made when you leave.

If you make decent money, and most likely will for the remainder of your life (aka used car dealer), then it is probably a better option to not own because you can always pay for rent.


But again - why would you choose to rent if you can own? Rent is thousands of dollars thrown out the window each year. Mortgage (or buying with cash) is the same, with the exception that at the end 1) you own a property that you could, if need be, sell for roughly the same amount you threw out and 2) you stop paying for housing for the rest of your life (minus repairs, yes, but that's insignificatn compared to paying rent every month - or otherwise landlords wouldn't be profitable).


Maintaining a home can cost more than you might imagine. The reason it is profitable for landlords (at least for apartments) is due to the fact there many are paying rent within the same building (economy of scale).

Second, taxes are significant. Where I live (Fargo, ND) property taxes equal a rent payment alone. So it almost makes more sense (monetarily) to pay rent and invest the extra money into something more lucrative than a home.


Could you explain why you think you, as a renter, don't pay property taxes?


Oh I am sure I do. That does not change the fact that for a $250k home I would pay ~400 a month in taxes (of course more or less depending on a variety of factors). Rent is currently $550 for a nice two bedroom apartment with balcony and heat included.

Let's not forget that I have to heat that house all winter, which is a couple hundred a month in and of itself. I could go on.


Probably because it's split between everyone renting in the building, and while the tax is higher, it's not so much higher that you end up effectively paying the same amount.

At least, that's my guess.


Because the IRS doesn't think I'm responsible for it.


"Why does everyone want to tie significant amounts of their lifetime earnings into physical property that historically has had very low appreciation in value?"

Because for most, it's not an investment, it's a hedge. Your demand for housing will not be going down as you get older, but it will become increasingly harder to manage.


Good rental (i.e., well-maintained, good neighbors, long-term, non-crazy owner, etc.) may be harder to find than a comparable house to buy, and you still don't own it meaning there are many things that you can not do there.

>>>> It's like people have forgotten about the housing bubble popping just five years ago

Not everybody did. Some found it a pretty good opportunity to finally get into the market while it temporarily became a bit less insane than usual. Home ownership doesn't have to be with a goal to strike it rich on a bubble, it may be to minimize housing expenses too.


Good luck finding a house for rent in a good neighborhood for under 5k a month. Especially if you have a dog.


There are number of reasons why I would prefer a home over rented property most important reason being almost infinite scope to personalize my living space.


Both renting and owning have risks. There is no such thing as a risk-free world. You can decide which kinds of risks you can more tolerate, though.


Renting has also become unbearable, unless you are ready to shack up with roommates to bear the $3-4K monthly rent.


Some of us value permanence. I own my house, and I have zero intention of ever selling it. It's mine, mine, mine, mine.

There is an incredible feeling in owning a home that you love and plan to spend your life in. We get to plan the changes we'll make over the next decade. We can plant a tree and watch it grow. We can truly unpack our stuff AND our lives… which it's hard to ever do when you rent; most people I know move every 1 to 3 years. At that rate, a lot of things feel like they're never worth it. You don't hang curtains because you think "I won't be here that long" then you wake up and it's been 4 years and you never had curtains and you wasted all that time. (Actual curtains… and metaphorical curtains, too.)

Granted, you don't get that feeling if you just buy whatever's available. (And probably nigh impossible to manage in a place like SF.)

Our house is a special place. It's historic; we feel obliged to take good care of it, because it will outlast us. It's an indescribable source of joy. And yes, there's angst, too -- that always comes with loving anything, be they people, animals, organizations, or things. It's worth it.

The money is the absolutely last concern.


Completely agree on all points.

Also, community. My wife was sick in bed for 3 months, our neighbors came and watched our kids every morning from 8:00am-12:00pm so I could work and continue to support my family. You only get that from a neighborhood of homeowners.


The next decade. Heh. Would be nice to have that kind of job security.


Wow, thanks for this post Amy.


Well said!


> NYC is often considered more expensive, and Manhattan is certainly... well... Manhattan. But taken collectively the NYC metro area is actually much more affordable. You can find places to live that are nice, friendly to someone older than 25-30, and at least sanely priced.

It's crazy, isn't it? I was looking at housing prices recently, for places within a 30-35 minute train commute of work (I refuse to make a car part of my daily routine). In New York, for $750k or so there are 2-3 BR places in good school districts in Westchester, right on the Metro North line. Not cheap, but not entirely outside the long-term plans for a two professional family. Similar places in Palo Alto or the like seem to start well over $1 million. Over a million, to live in a place where the nice restaurant are in strip malls!

And if you can expand to secondary cities... it's incredible what kind of water views you can get in downtown Seattle for $500k.


Yeah that's the other thing. $1 million for houses in a plain vanilla suburb. I mean, Silicon Valley minus its admittedly awesome tech/science scene is not much different from the duller parts of Orange County and is at least twice as expensive. OC has better weather and nicer beaches and parks too.

It's just http://dl.dropboxusercontent.com/u/13608503/Daffy_Screwball....


If you're willing to tolerate a 30-35 minute commute, Millbrae/Burlingame is a lot cheaper than Palo Alto, and that allows for job opportunities in both SF and Silicon Valley.

But yeah, Bay Area prices are really high.


I wouldn't mind a 30-35 minute commute if I didn't have to get in a car at any point. My commute from Westchester to Manhattan was amazing: a block and a half to the train, and a block and a half to my office. Almost never late, came every 15 minutes during rush hour, etc.

The problem with Cal Train seems to be that you have a mini-commute at the beginning and end of every trip. My Westchester town had several residential high-rises just a block or two from the train station. Looking at the Millbrae station, there is nothing around it--it's designed for people to drive into. And on the San Francisco side, the SF Caltrain station isn't exactly amazingly centrally located...


There are bunch of apartment complexes near the train station. They're just not that tall.

The nice thing about Millbrae is that the station has both Caltrain and BART, so you would be able to commute to most SF tech companies without driving.

But the train ride is 30 minutes, (BART doesn't do express), so it would be more like 40-45 minutes with walking and waiting.


What nice Palo Alto restaurants are in strip malls? Most stuff is near University or California Ave. The only thing in Palo Alto I really think of as anything _like_ a strip mall is the Stanford shopping center, but that's more of a mall-mall, and the "nice" restaurants there are the big chain restaurants. Maybe the Fry's too, I guess, but there are no restaurants in that one.


Not necessarily right in downtown Palo Alto (it has a cute little downtown area), but in the surrounding areas definitely. When I was a summer intern in my employer's Menlo Park office, I had a lunch budget which means I had to figure out how to take advantage of several free lunches a week. I probably hit up a dozen (nice) places, and all were either in strip malls or in isolated buildings surrounded by a big parking lots.

E.g. this is a Michelin-star place in Cupertino: http://goo.gl/maps/VsVNL. Right next to the highway, surrounded by a parking lot. Might as well be a Taco Bell.

This is another Michelin-star place in San Mateo: http://goo.gl/maps/KjdnP.

Of course I'm being somewhat facetious. There's not a lot of places to put a restaurant in the suburbs other than in a strip mall next to a Walgreens or in a building surrounded by a big parking lot. But that's my point--you're paying Manhattan prices to live in a suburb. Not a compact, walkable one like Greenwich, either, but a sprawl-y generic one that looks more or less like the faceless generic suburbs in any other part of the country.


OK, I concede. The prices are very high for an unwalkable suburb, although I think most people think Palo Alto is at least prettier than your average. Our downtowns are better too. Still not as nice as living in a city, but not quite as bad as living in a Houston exurb either.


To be fair, downtown Palo Alto, if you can afford it, is pretty nice, if somewhat sterile. Reminds me a lot of Greenwich, actually. I can't say the same for the rest of the valley, though...


His wording was hyperbolic but his point wasn't far off the mark if you compare the restaurant scene in SF (or NYC or Chicago) to that of South Bay.


By that standard, one of the best restaurants in NYC is above a Whole Foods and adjacent to a food court.


This is a little like talking about the restaurant scene in Yountville. I mean, yeah, but what else is there in Yountville?


ElCamino and Alma/Central sort of meet the description. Though less so in PA then surrounding towns.


Pizzeria Napolitano on El Camino.

It's true, the best restaurants (combination of great food and not super pricy) in the Valley are in Strip Malls.


Pizzeria Napolitano is not even in Palo Alto. And your redefinition of "best" to "cheap" doesn't really work for me either.


By the way, you can also get a spacious 2 bedroom co-op with a large outdoor courtyard in NYC with 1 hour mass transit (express bus from door to midtown/downtown)for $300,000, in a fantastic neighborhood.


That sounds nice, but 1 hour is a major commute in my book.


It is, but my commute in DC is at least 45 minutes and normally 55 (by Metrorail), and many have far longer, so it's really not that bad in the context of living in a major metropolitan area.


When I lived in DC I commuted from Huntington to Foggy Bottom. That was roughly 40 mins, with 30 min on the train and 5 minutes on each side for getting to the train station and then from the train station to work. However, I could have rented in Foggy Bottom, 500sq/ft for $1600/mo and reduced my commute to a 5 minute walk. I guess if your willing to live in a box or a box in a basement you can reduce your commute most places.


San Francisco real-estate is absurdly corrupt.

From 2004 to 2007 only an average of 2,220 units were built. From 2008 to 2012 a mere 1,710 units were built [1]. New construction has been impossible. It looks like it's picking up slightly, but not nearly as much as it would in a fair market.

[1] http://www.sfgate.com/bayarea/article/S-F-apartment-construc...


New construction ABOUNDS

"22,000 residential units are in various stages of approval and construction."

More units are under way now than have been built from 1993-2011.


If you look at most big, established cities (Chicago, New York), the bulk of the housing stock tends to have been built in the construction booms of the 1960's-1980's. New construction is a good, but a city will suffer from its bad housing policies for decades after those policies are fixed, because the process of bringing housing supply in line with housing demand is a very slow one.

As an analogy, consider roads: in the D.C. metro area, road construction is about 10 years behind where it needs to be given the population surge, and they have been building flat-out for a decade now. Imagine if they had spent the last 20-30 years not constructing new roads even as the region grew dramatically in population. That's the state of the San Francisco housing market, and indeed the housing markets of most cities that had policies in place over the last several decades that were hostile to development.


What forrestthewoods, api, and zanny are saying is that too few units have been getting built for many years. What you are saying is 'wait, they are coming'.

The first is most certainly true. The second may be true, but we'll have to wait and see how it impacts pricing. For now, you can't live in a building permit.

BTW, here's a graph of permitting and completions in SF for the last 60 years: http://www.spur.org/files/u41/f1.png


There were plenty of foreclosures and short sales in 2010-11, indicating overbuilding (be it because of over-buying / over-lending, regardlesss) in the previous few years (2006-2008).

The article is from 2012. There are 140 projects under construction RIGHT NOW.


There weren't many foreclosures. San Francisco represented less than 1% of foreclosures in California despite being 20% of the population, and outcomes for foreclosures didn't end up in the homes being sold as much as it did in the rest of the country.

For example (not in 2010-2011 range) in 4th quarter 2011 Sacramento lost 2200 homes to foreclosure vs. 160 for SF.

Foreclosures don't indicate overbuilding, they indicate that people can't afford to pay for their homes.


These don't indicate overbuilding. It just means you are off the cliff as soon as your cash flow turns negative. Buying a house in this area is like condemning yourself to walk around with a huge sword hanging above your head.


If declining prices-- as what happened from 2007-2010-- don't indicate overbuilding, what does? Anything?


Declining prices are much more due to changes in the economy (in this case, a recession), not the housing supply. Aggregate incomes and wealth dropped a lot during that time.

If you were looking for something that indicated overbuilding, I would look for declines in the ratio of rents/sale prices to median metro income. If housing is getting cheaper compared to incomes, that means supply is catching up to or outstripping demand. This could happen regardless of boom, bust, or stagnation.

See http://www.usnews.com/news/best-cities/slideshows/the-10-mos... and http://money.cnn.com/gallery/real_estate/2012/11/29/least-af... for examples.


It's a city built on young entrepreneurs coming there and doing new stuff

Not true. There was a huge housing crash 20 years ago, and large swaths of the city were extremely affordable until about the mid/late-90s. It's only in the last 10 or so years that the city has acquired the perceptions you describe, and certainly post-9/11.

You may be talking about, what, gold miners and prostitutes? I don't think that relates to the current situation and at any rate there was open space within city limits within the lifetime of your grandparents.

You're right about sellers milking the peaks, though. Prices have been going nuts ever since the economy showed a hint of uptick, and it's certainly opportunism at work. Might as well get yours before the terrorists ruin everything, or something. I guess.


"There was a huge housing crash 20 years ago, and large swaths of the city were extremely affordable"

IIRC that was caused by the 1989 earthquake - all the transplants got scared and moved and rent got affordable as a result.


Nah. Though it's possible some people vacated for that reason, it's more a misconception. Plus, carpetbaggers are always in and out of the city, earthquake or no.

There was a recession from 90-92 and a nationwide housing bust around that time due to some tax changes under Reagan that fed overbuilding in the late 80s.


> real estate hyperinflation in general is a social ill that deserves to be tackled directly as such.

How do you stop house prices from going up? You can't put a cap on property values without turning bidding into a lottery and screwing owners out of asset appreciation. You could make it easier to afford expensive houses by increasing the money supply, but our interest rates have been pegged at effectively zero for four years. You could build more houses but that seems unlikely given the political climite in SF. Perhaps though you can geodiversify an industry, which actually this guy is doing by leaving SF. I'm not sure how you can regulate that though, except by capping the number of jobs in a given industry, kind of like with taxis.


It's not about stopping prices from going up, it's about stopping them from going up at an uncontrollable rate.

Many desirable neighborhoods are seeing market rents increases in the double-digit percentages, every year. Some parts of SF are experiencing >20% YoY growth.

That's real estate hyperinflation, far in excess of the normal appreciation you'd expect in a healthy economy with increasing population.

And the solution to real estate hyperinflation is to build more.


Too bad you can't build more in SF because of the building height limits, which is the principle reason housing rates are absurd. If the city made sense they'd build some highrise condos downtown and house the entrepreneurs in studio apartments.


The earthquake in 1906 nearly ruined the entire San Francisco. It can happen again at anytime. Limiting the building heights and number of housing is a precautionary measure. The best thing the SV tech community should do is realize the limitations and move out to other cities. LA/San Diego could be the great replacement/extension for SV.


Modern building codes prevented that from happening again in '89. If you think earthquakes are a legitimate reason to limit density, Tokyo and Osaka would like to talk to you.


I worked in Seismology related field for 8 years and visited Tokyo construction companies to see how they build and retrofit existing buildings to make them earthquake proof (to some extent). Let me tell you, they are way more prepared for the earthquakes than SF is.


So SF can't have nice things because they currently do not have nice things?


Yes, but at a less abstract level, SF can't have nice thing A (tall buildings) because they currently do not have nice thing B (the ability to build earthquake proof buildings).


They have the ability to build those buildings, even if they have to contract with Japanese companies to do it. What they apparently don't have is the infrastructure to regulate and inspect such buildings. They probably don't have that infrastructure because they don't actually want tall buildings regardless...

They don't have a chicken because they don't have an egg.. they don't have an egg because "Fuck chickens; move to Manhattan if you want chickens."


Another earthquake should worry San Francisco no more than another fire should worry Chicago.


Wishful thinking..


There have been no advances in structural engineering since 1906.


The nice parts of LA are just as expensive as SV (e.g. $1mm Santa Monica cottages) and transportation is equally bad.


I know but there is plenty of space between LA and San Diego. Irvine, Huntington Beach, Orange County should be enough to accommodate most of SF!


Los Angeles has earthquakes too.


Yes, many big cities are (state-sponsored) trying to grow vertically instead of horizontally.


You'd better tell that to builders who are putting up thousands of units in high rise buildings right now.


> build more

Clearly, higher density construction in NYC has dramatically reduce prices there.

There is no amount of construction in the subset of 49 square miles trendies want to live that is going to solve this problem. There are a million 1%'ers from around the world that will snap up a $750K condo before you 5%'ers can get it.


> "Clearly, higher density construction in NYC has dramatically reduce prices there."

They have.[1]

Or more accurately, they have prevented the exact sort of rent explosion that SF is experiencing now. Manhattan is expensive to live in - but rent prices are growing at predictable and relatively low rates. There are even desirable, wealthy neighborhoods where rents are slowly decreasing.

The fact is also that artificially restricting oneself to Manhattan makes for a easier comparison to SF, but is not representative of the housing situation overall. Commuting from Brooklyn, Queens, and the Bronx into Manhattan is trivially easy, and rent (even if we strictly limit ourselves to the low-crime, desirable sections of these boroughs) is lower than SF.

Take Brooklyn[2] for example. Plenty of good, safe neighborhoods with solid subway access where prices are flat.

[1] http://www.mns.com/manhattan_rental_market_report

[2] http://www.mns.com/brooklyn_rental_market_report


You'd have to include BART-accessible Oakland, Berkeley, etc in the East Bay to make that comparison fair. 40 min is the farthest any of the BART lines go from downtown SF.


Taxation can alleviate that. Provide tax relief to owner-occupants with children. Tax the shit out of non-occupant owners.


And why woulnd't that tax transfer to rent prices?


It would transfer.


> How do you stop house prices from going up?

Allow people to actually build things, rather than insisting that 100 year old, wood-framed 3 story split level houses and no new ones are the perfect housing solution for everyone forever.


Building more housing is the only option, and like you say you can't build anything.

Maybe Peter Thiel needs to build his floating seasteading metropolis. If he put it in the bay you could connect SV to Newark and Fremont via a gentrified version of The Raft from Snow Crash.


> you can't build anything

This canard keeps getting repeated over and over in comments. Not sure if it is a projection of bias, or ignorance, or just denial of the facts.

The reality is that tens of thousands of units (22,000 since the article, a year ago, more now) are either in construction or in the pipeline. This is a construction boom.

http://www.sfgate.com/bayarea/article/S-F-apartment-construc...


It may be a boom compared to historical levels but it is in no way enough. 22,000 is tiny! There's probably already a shortage of half a million. Think about how many people live outside the city because rent is too expensive. SF is a desirable location, just because there are only 800k people here now doesn't mean more do not want to live here.

SoMa should have massive sky scrappers being built on every block, it's the perfect location to build this high density housing/offices solution (big blocks, flat land, underutilized and close to the city center). And I mean real skyscrapers Manhattan size or larger.

The city should take care in SoMa to make sure they do not allow new skyscrapers that do not reach a minimum height. The space there is valuable (even if it's not used correctly now). You wouldn't want a situation where medium density is built instead.


> How do you stop house prices from going up?

Don't concentrate outrageous salaries in one urban area?


You said it ... the fix isn't hard except the politics make it so. Make it easy to build more housing stock. Allocate more land for building high density homes.


Have you looked into Alameda? It's hundreds cheaper than anywhere in SF proper, quieter/cleaner and my commute's only 20 min.


Alameda is a nice, quiet place with a ferry to SF (and the Lucky JuJu pinball joint aka Pacific Pinball Museum). I looked for houses there, but my friends are concerned that Alameda's low, flat land area will be flooded in ~50 years by sea level rise from global warming.. :\


Isn't that were they have the Naval Base? With the Nuclear Wesasls?

Yes, that is the limit of my knowledge of San Francisco.


Where do you commute? My possible offer's in Mountain View, and that seems like it would take a while.

I also looked at Fremont/Newark, but have never physically been there. What's that area like? School district maps say some of the schools are decent.

FYI I am 35 with a new baby, so the question is "can a family live in SF comfortably without having a cash-out event or a salary in excess of $240k?" The offer I'm pursuing could, if it pans out, be good but it probably would not quite be that good.


Good luck. If you're planning on buying, the only areas in the Bay Area affordable to a single-income family will be places you don't want to live (East side and south San Jose, Hayward, and the nastier parts of Oakland). Also, in the current real estate market, you're going to need all-cash (or a very, very high down payment) and be willing to waive all the usual contingencies. It is a brutal seller's market, and as a buyer you are competing with foreign cash investors and hedge funds buying properties 10 at a time.

This is from someone who has been trying unsuccessfully to buy a home in the Bay Area for the last year and a half. We wrote an offer on a home that got 45 written offers and ended up selling for 25% over asking.


Yeah. I'm leaning toward no. But I'll hear them out. It's a good employer and they came after me, so why not.


Nothing wrong with South SJ...


My job's in SOMA, a bit closer to Alameda than Mountain View. MV is probably one of the worst places, price-wise. You probably won't find budget housing near there, especially with a family/small child. Aging* millionaires have driven housing prices through the roof anywhere there's a good school system.

* SV "aging", in this case, having kids.


Heh.

I also hear that the SV school districts are not up to what you'd expect for a region with >$1mil house prices.


Public systems have been gutted by the private schools.


I live in Fremont. It's boring suburbia. Lots of identikit housing, no good restaurants, not much to do. On the positive side, it's relatively inexpensive and is 30 minutes from Mountain View, San Jose, or Berkeley outside of commute hours.

If you care about living somewhere hip and exciting, Fremont is not for you. If you're okay with suburbia that's outside the heart of Silicon Valley, but still reasonably close, it's worth considering.


I'm pretty sure they made that comment under the assumption that your job offer was in SF. That was the impression I got reading your original comment as well.

Have you considered living in one of the many cities on the peninsula that are all extremely close to the Caltrain and BART tracks, 101 & 280 freeways, and much better schools than those in the east bay? They're also very close to the actual city you would be working in (Mountain View). Much closer than SF.


MV housing has gotten insane since Google started their hiring binge in 2011. My rent's gone up nearly 50% since then. And Google's demographics are changing: average age is now about 31 (up from 28 or so when I started in 2009), so many of them will likely be having kids in the near future and driving up house prices even further.

Fremont is decent as long as you don't mind boring. Unfortunately, the commute over the bridge can really suck during rush hour (this applies to all the East Bay communities). Sometimes I'll take 237 around to Mountain View to avoid it, but both 880 and 101 have severe traffic issues.

A bunch of my friends actually bought houses in the Cambrian Park and Willow Glen parts of San Jose. These are still reasonably affordable, safe, and they're about a 20-minute commute down 85 from Mountain View. 85 is a parking lot between the Googleplex and about El Camino or Fremont Ave during rush hour, but opens up fast once you get past 280. If you're getting on at El Camino (eg. a downtown Mountain View office) and then commuting to San Jose it's not all that bad.

I've heard Santa Clara isn't bad either - it's 10 minutes from Mountain View without traffic (much worse in rush hour traffic, since it's on 101), but it's largely Korean/Vietnamese/Japanese immigrants and so prices have stayed relatively low so far.

All of these communities are really boring, with basically no downtown or civic events. One of the large factors that drives prices up are young professionals that want a high quality-of-life in addition to working at a fancy tech job.


Lol, sorry, did you just call willow glen affordable?


Fremont can be a good choice... Have lived there for a while and it has many convenient things:

- BART station: easy ride to the city

- Dumbarton bridge if you need to cross to go to Palo Alto (need to pay the toll but totally doable)

- taking 880 south, and then 237 you can then be in Mountain View/Sunnyvale area in 30 to 45 minutes by car depending on traffic.

- House prices in Fremont last time I checked were going up but they were still lower than the City or lower than south in SV

Overall Fremont is a good alternative choices which give you access to the City/Berkeley in 40 to 50 minutes drive/BART, and to the SV in the south. I was living in Fremont with my wife (no kids) for a salary way less than $240K, so totally doable IMHO.


Look to the south bay - Campbell, West SJ, etc are far better commutes to MV than the city (though Google does have the bus lines from SF).


If you're OK with San Jose, there are a number of houses under $500K available. Which is within reach of a decent hi-tech salary even without cash-out event. Of course, in SF it's different and given SF special appeal and the fact that SF govt is insane I can imagine both rents and ownership prices would be worse.

I think the only responsible thing a family can do is not to live there if they can't afford it. There are plenty of jobs for people not living in SF, really.

>>> Imagine what all that money in SV could be doing if it weren't all sucked up by real estate.

I'm not sure I understand how this works. When you buy a house, it's because somebody else sold it to you. The money aren't buried in the backyard - they went to somebody. Who is free to invest it in whatever they want.

I think the basic mistake here is different. Primary residence is rarely an investment (unless you plan to severely downsize sometime in predictable future) - it is an expense. Too many people wrongly regard it as an investment and make poor choices.


>>It's a city built on young entrepreneurs coming there and doing new stuff, but if nobody who hasn't already made it can afford to live there what happens then?

You mean can't afford to buy there. Which is why those of us who haven't made it rent, and put 3 people in 2 BR apartments. Or get a house in a less hip spot with 4 friends. Those who made it in SF/SV did it like this, and so will the next generation. That doesn't make it a good thing that ownership is so unrealistic, or that people who aren't young don't want to do it. But the idea that the next generation of software leaders won't keep coming to SF because of price is just wrong. As long as that's where the best companies and opportunities are, ambitious young people will move there.


"I've got a possibly great job offer on the table from SF/SV, but may turn it down."

This is what will kill the golden goose of the tech economy - if highly qualified and valuable workers choose not to move to SF/SV because they don't think they can live there, the tech sector will lose competitiveness. I moved here after 6 years of uncertainty, and I think it's worth it but the fact that I wanted to and still waited so long is a bad sign.

Workers are the key resource for new tech businesses, and if companies can't hire them, they won't grow or be formed in the first place.


Vancouver, Canada is even worse, and there is no local millionaire machine and a good chunk of the wealthiest people in the world living there.


Re: the Edit:

It's nothing more than simple supply and demand at work. Real estate suffers from being one of those markets where its very hard to create more of it (you can build taller buildings or build new cities, that's about it).

The reason real estate is so stinking expensive in huge parts of California is because so many stinking people want to live in those areas.


What I want to know is what I, an SF renter, can do to fight the NIMBYism and get more housing units added to the city each year.


The rent situation in SF is partly to blame for housing shortages. People are buying homes because the laws favor renters over owners. Just google for the horror stories as they are aplenty. As such the availability of units for rent has dropped, forcing people to either buy to be in town or buy/rent out of town where its cheaper.


> after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event.

Or they are a two-income family where both make good salaries. Then it's eminently thinkable, even advisable.


Not a refutation of your broader point, but I just want to point out there are outlying areas around the bay that aren't as expensive, too - though I don't know prices in either area well enough to do a thorough comparison.


San Francisco is like a low density lower Manhattan without the other Burroughs or New Jersey to save it and a slightly better mass transit system than L.A...which ain't saying much.


I regret that I have but one upvote to give you for this.

Here, have an Indignation: http://www.youtube.com/watch?v=EtCiP8B2xpc#t=7s

In the long term, Silicon Valley and SF is eating its young. It's a city built on young entrepreneurs coming there and doing new stuff, but if nobody who hasn't already made it can afford to live there what happens then? The other problem is that these high costs soak up everyone's spare time and money, leaving them with the requirement to work like crazy for other people to afford to live instead of on their own innovative projects. It sucks away the marginal "play time" when innovation really happens.

Someone said to be about Austin, "everyone in Austin does 3 things". There's something to that. For just one example, Austinites aren't afraid to work for the enterprise or in something less sexy than local/mobile/flavor-of-the-month because you're not expected to go all-in on one job at a time (then burn out after 14 months and replaced by another chump). This creates the cross-pollination and breadth of knowledge that generates innovation.

Bay Area people are terrified to go anywhere near an unsexy industry because they live in a culture where your job is all you do. In Austin, where 9-to-5 seems to be more tolerated, people are more willing to explore unsexy problems and hear people out in other industries-- and you learn a lot from that.

San Francisco and New York seem more fixated on a "do one thing, go all-in, and do it very well" ideology of work. That's fine after you have some good ideas but it's terrible at generating new ideas. You need the more relaxed, open approach when you're young and getting ideas (plus learning from other peoples') is more important.


I was born and raised in Austin and used to be one of those people who said they would never leave. I fought very hard to make the tech scene in Austin "happen" for years. There are multiple reasons it's taken so long to get to where it is now, which I won't go into here (not relevant to the OP's topic), but one of the main reasons I left to move to the Bay Area is the lack of hustle, or the lack of need to hustle, in Austin.

It was very hard to want to put your soul into building a company (which as a founder you generally always have to do, at least for a while) when everything is just so mellow in Austin. All of my friends were leaving their offices by 5pm to go drink $3 beers every single day, and likely go see a band play that evening. I of course did this too, because I wasn't going to be the only person working through the evening.

Then there is the cost of living. It's absurdly low compared to the bay area or NYC. I could have a great quality of life in Austin by doing 1 - 2 freelance gigs per month, easy (I know this because I did it for 3 years before starting a company). This translates to not feeling the small window of opportunity you'd have to build a company that becomes profitable (or you can raise money with) out in the bay area, because you can coast by on so little money. This also presented a talent/hiring problem when I did try to make a startup happen in Austin. It was VERY hard to convince freelancers who were making 100k a year and putting a majority of that in the bank to come make less for my crazy dream.

In the Bay Area I do not have these issues. EVERYONE works insanely hard. The cost of living is insane, so I can't just sit around and take my sweet time. Becoming profitable as soon as possible is all I think about.

I'm not saying the Bay Area version of this isn't its own extreme, because it is definitely out of control, but there has to be a balance somewhere between the two.


"All of my friends were leaving their offices by 5pm to go drink $3 beers every single day, and likely go see a band play that evening."

There is nothing wrong with this. When you get older, you'll realize soon how much quality of life is important. Wait until you want to start a family...


That's another thing. Some people want to do something with their lives other than just work on tech. That and I've found -- both personally and by observing others -- that workaholism kills creativity. It leads to fixations and mental boxes. To get out you've gotta go drink a beer and hear a band.


I am presently in Asheville, North Carolina, another "mellow" place that's probably very much like Austin (except smaller). A lot of $100k freelancers too. I moved here from Boston, and I'm not going to go into why as it's off-topic, but...

Yours is an interesting perspective. It seems like both extremes are a double-edged sword. On one hand, slower mellower and less expensive places give you the free time to think and play and create. But on the other hand, they drain you of your sense of urgency and they create a culture where people don't hustle -- as you say.

I'm trying to get something off the ground in Asheville now (https://www.zerotier.com/) and it's required a lot of self-motivation. There's not a huge tech scene either, so if it starts to get real traction I'm not sure what resources I'd have to surf the wave aggressively.

On the flip side, I lived for quite a while in the Cambridge, MA startup orbit and experienced my fair share of hustle. What I saw was a lot of me-too, a lot of crackpot stupid ideas frothing around and getting funding because the founders were connected, and a lot of workaholism that eventually drained people (including me) of genuine creativity or excitement about what they were doing. Costs were high, time was short, and inspiration got thrown under the bus for the need to perform.

So I agree that there's probably an optimum in between. My sense is that Asheville, Austin, probably Portland, etc. are probably too far on the mellow end and that today's SF/SV is probably too tweaked out and overpriced.

I get the feeling that SF and SV in the 1990s was right at that happy medium. Wasn't there, so maybe I'm wrong, but that's the sense I get.


"too tweaked out and overpriced"

That's a perfect way to describe it...


I know this probably wasn't your intention but this entire post makes Austin look incredibly attractive.


I certainly wasn't trying to make Austin look unattractive to anyone who thinks they might enjoy that lifestyle. Depending on your stage in life and needs Austin is likely one of the best places in America to live right now (assuming you don't mind 115 degree heat during the peak of the summer). I absolutely love visiting my family there and often spend weeks at a time in Airbnb's when I visit.

All I was trying to do was show another extreme, in contrast to the OP's and situation in San Francisco right now. Some people absolutely love San Francisco and probably thrive in the tech scene here, but that doesn't mean it's great for everyone or every startup.


I tabbed over to http://austin.craigslist.org/ after reading it...


The people you want aren't the people who leave at 5:00 pm and are drinking every night by 5:30. I agree with you there. I doubt that's all you'll get in Austin. A lot of New York/Bay Area people are moving to Austin, Seattle and NC to raise families and most of them have aged out of their heavy-drinking days.

Nor do you (should you, anyway) want the people who work 75-hour weeks at their startups and don't learn any new skills except the one or two things in the critical path of their assigned project (the rest of their work being grunt work they learn nothing from). Those people will suffer a lot to keep their jobs and because they overestimate the career benefit of what they're doing, but they rarely produce anything good.

So you don't want the Austin stereotype (leaves at 5:00, drinking by 5:30) or the Bay Area/New York stereotype (all-in on his employer's assigned work, burns out in 15 months, gets fired but walks away with a tiny sliver of equity that prevents you from forgetting his existence entirely). I agree with you on both. (Not to say that those stereotypes describe everyone in those regions; they don't.)

You want the people who leave at 5:00pm and then work on things that interest them for 3 hours. (Or get up early and work on side projects before coming to you.) Those are the people with the good ideas. Not the workaholic corporate stooges, and not the semi-retired slackers.

Also, there's absolutely nothing wrong with working an 8-hour day if you do it efficiently. Hell, an efficient 5-hour day is probably better than what most corporates put in, even if they're in the office for 10+ hours (that's about shared suffering and its social purposes, not efficiency).


Austin real estate isn't as bat-shit insane as SF, but what I'm seeing is that there are people who are paying $10k over the asking price. And that is severely distorting the market.

Agreed that Austin isn't as "hit-driven" as SF is. Talent here is more diverse on an individual basis than other tech towns.


This is true... it's a bit pain in the ass to buy real estate within a mile of downtown in Austin... but if you go outside that it's not that bad...


As a comparison though, people are paying 100K over asking without blinking in South Bay for already overpriced real estate in the last 2 months. I've even seen bidding up of rental prices in the last month. 10K sound pretty good in comparison.


> The recent BART strikes are just a single data point in a larger trend: we’re alienating everyone who isn’t in technology.

I'm not from SF but from an outside perspective: Taxes have increased 33% in the bay area since 2008 [1] and BART is "running at a surplus"...but BART transit workers have not had a pay raise since 2008?

Can someone explain to me why the SF tech community are the bad guys here? ...Besides a few smug tech workers who get sound bites in the news.

Also notably, rent/housing is usually around 25-30% of cost of living and SF regulators are famous for not building affordable high-rise buildings.

[1] http://ww3.hdnux.com/photos/07/00/72/1838722/9/628x471.jpg


Specifically on the subject of transportation, many wealthy tech companies have deployed private buses that benefit only their employees and not the community. I don't think it's evil by any means, merely rational (at least in the short-term), but also still a missed opportunity to strengthen the community by covering employees' public transit passes, encouraging employees to live closer to work, or moving work closer to where employees want to live (some companies have done this, but the big, well-known ones have not). The net effect is private buses for tech, and crappy public transit for the rest, breeding resentment toward tech.


I think if all the Google/FB/Yahoo/Ebay people who are on buses took Caltrain, people would be complaining that they were late to work because there was no space on the train.

Also, none of those places are right next to a Caltrain station so the company would have to have buses shuttling people back and forth at much worse fuel economy than shuttling them from SF.

Google does have a SF office but as mentioned in other comments, real estate in SF is not cheap and it would be a fool's errand to uproar the campus in MTV.


The problem with train and bus systems is generally that, when they have low ridership, they run less frequently, leading to lower ridership, etc. If there's never any space on the train, as long as the fares are reasonably high (which I thought they were when I commuted via Caltrain, although apparently they didn't cover costs) then Caltrain can buy more cars, more trains, and more sidings, and run every ten, eight, or six minutes, instead of about every 12 minutes during rush hour, as now. Every 12 minutes sounds good, but there are only five Baby Bullet runs at present, there are 40-plus minute gaps between them even during rush hour, and you have to get up by 8 AM to catch any of them. So if you miss your Baby Bullet by two minutes, you can easily spend an extra half-hour in transit.

So I think that more people taking Caltrain would make Caltrain more useful, not less.


This is on top of them covering passes and encouraging employees to live closer to work, and just reflects on low quality of Bay Area's of transportation grid.

If Muni, or SAM or VTA ran buses from SOMA/Mission to corporate campuses, those would definitely be used. But after a three-hour one-way commute that involves Muni+BART+Caltrain+city bus (an example would be a Google employee in Mountain View who lives in the Mission) even a die-hard public transport fan would switch to a company bus.


Compare with Seattle, by the way, which just has a Sound Transit stop right on the Microsoft campus, easily accessible from Belltown and Cap Hill. If there's one thing that frustrated me moving from Microsoft to Google, it's the sudden decrease in the quality of inter-city public transit.

Moreover, if public transit to/from SF weren't such a fucking joke, more young techies would choose to live outside the city, knowing they could go in whenever they wanted to.


Well there must have been an underlying reason why companies would go out of their way to invest in their own transportation system than invest in the one that already exists. Maybe they were met with resistance? What is this resistance?


This sounds a bit like asking why anyone buys a Brita pitcher instead of investing in water & sewage sanitation.

The cost and effort involved in chartering a few buses is pretty minor next to re-tooling the Muni, BART & Caltrain systems. The results are also instantaneous. They need to attract employees now, and not in 5-10 years time.

It's worth noting that a public transit commute between SF and SV can involve up to 3 distinct transportation systems. For instance, when I worked for a startup based in Menlo Park I contended with a trifecta fail-fest of Muni (bus) -> Caltrain -> local shuttle, totaling 2 hours each way.


Also, companies locate in places not remotely near public transit-like Facebook's new campus in Menlo Park, its not remotely near Caltrain. I remember taking the light rail along Java Drive every day for two years, wondering why more companies didn't decide to relocate near public transit, instead of in the outer most parts of suburbia.



Taxes went up by 33% from 2008 through 2011? Doesn't seem credible to me. Can you post the article in which the image you posted occurs?


I have one possible explanation.

Proposition 13 limits property tax increases to 2% per year in California. As a result, many homes are taxed at far below their market value.

If a lot of long term residents with dirt cheap property tax sold during that period you could see a dramatic bump in average tax per household.


It was linked from the article posted in Tom Dale's blog post.

http://www.sfgate.com/news/article/Report-Basic-cost-of-livi...


Probably referring to state taxes which are a smaller % of your total tax burden.


Doesn't seem like a great solution. If the tech guys leave SF, it would be like Detroit. SF and tech are now linked in the way Detroit and cars were. If you try pull the tech out, you'll be left with a husk fighting over crumbs.

I don't even live in SF and this is clear to me. Or maybe it's clear to me because I don't live in SF?


I think even sans the tech industry, SF would still be a desirable enough place for people to live that it wouldn't have much of a problem. Even clearer if tech just remained in Silicon Valley; plenty of people would live in SF and commute.

Even just finance is probably strong enough to support SF. Or, like Vancouver, lots of people from Asia. The tolerant/hippie/gay/etc. angle might be enough as well.


SF in '89, before tech started hitting, was not a pretty place. The Dirty Harry movies of the 70s, I think, were inspired to some extent by the decaying city. Technology breathed life into the Bay Area (San Jose was not much better back then either).


You have to understand that nearly all cities were shitholes in 1989 until the Urban Revitalization of the late 90s. This wasn't an SF specific thing. NYC, for example, had over 1200 murders in 1992 (!!!) compared to last year's 414.

SF's revitalization has more to do with that than with "tech" jobs. I know in the Hacker News echo-chamber its hard to think there's anything but Internet Tech in SF but it's got ALOT more business than that -- It's the largest banking center on the west coast, got a massive bio-tech footprint, has some major apparel companies (Levi and Gap and a bunch of smaller ones), etc, etc. It's pretty diversified.


What caused the "urban revitalization"? Was it just that people who hadn't been around during the 1968-~1980 urban hell were finally in a position to be buying their first homes?


Honestly, I don't know so I'm going to speculate based on experiences. I think it's a generational thing. The younger generations seem to want density, to be around things, to not own a car. I think growing up in large suburban homes, there's been a genuine desire by younger people to move to cities and away from that lifestyle.

You can see this happen in many ways aside from city's becoming safer: Real estate cost increases in cities, The whole bike-movement is an element of it, NYU getting 44k applications, the growth of the Brooklyn "brand".

I think, generally, there's a real desire for an urban community with culture and shared experiences. I know I don't have anything more 'concrete' to back this up, but this is the general sentiment of my friends (in their late 20s to early 30s.)


Detroit was built around the auto industry. San Francisco is merely host to the tech industry. It will thrive with or without it.


Not really the same situation in that massive amounts of people fled Detroit because all the jobs disappeared (company failures combined with widescale automation in the ones that didn't fail).

There are tons of tech jobs available in SF. Arguably, there are too many jobs available there which is causing at least some of the cost of living pressure. These jobs are unlikely to vanish en masse like they did in Detroit (at least not any time soon), so even if a bunch of tech people leave SF, many will stay and it'll just move the city towards a natural equilibrium.


Automation didn't hurt Detroit jobs. There were fewer wrench-turners, but there was an explosion of specialization. As it turns out, when everyone can stamp out a bog-standard ICE, you diversify and compete by creating ever-more-finely-tuned engines with custom parts and electronics that no-one had the time, skill or budget for previously. So what was lost in manual line jobs, was more than made up for in skilled line jobs, CAD/CAM jobs, engineering jobs, supplier jobs, etc.

It wasn't until the Big 3 were on the brink following the banking/liquidity crisis that the greater auto industry started shedding jobs. And by that point, the jobs weren't even in the city in the first place. The losses were suffered by the suburbs.

The job problem in Detroit was that cheap greenfield development deals drew all the new jobs into the suburbs. (with an assist from the highway system, race relations, city politics, etc) And with the jobs, went any economic reason to live in the city center and quite a huge chunk of the tax base.

Despite the difference in reasons, the challenge of San Francisco does share a somewhat-familiar shape with that of Detroit: the rich can justify living there, the young can romanticize it, the poor have little choice but to stay, but the lower and middle classes, and anyone with a family who can afford the choice makes for the exit.


One way to say it would be that Detroit left their workers not their workers left Detroit. If some Asian or European capital suddenly became the home of innovation and the jobs left SF then you would have people leaving for other locales. However the reasoning and blog posts would be very different to this one at that point.


I don't see San Francisco turning into Detroit. It's more likely to follow Pittsburgh's path, and Pittsburgh isn't a bad place to live these days (but it's far from a star city).


What you missed was the twenty years where Pittsburgh turned into Detroit. Losing all of your industry followed by 60% of your population does that do a city. As a Pittsburgher, it's a good city with ambitions to be great, but it took a generation to get there.


As a former Pittsburgher (now Detroiter) The cities are culturally very different, even if economically their paths were similar.

Pittsburghers really believed in their city, even through the tough economic times. If anything I miss about Pittsburgh it would be that. An older generation of suburban Detroiters would simply have no second thoughts if the City of Detroit burned to the ground. That was one of the most jaw dropping things about moving here, the lackadaisical attitude towards the state of the city among the older generation.

Although IME it actually seems like the tech industry in Detroit is humming along quite nicely. The auto industry is back again and there's a resurgence of startup and entrepreneurial spirit around these parts. My company is hiring like mad.

However I feel like the local economy is struggling to find people who will actually move here. Even if there are perfectly livable areas in the region, very few people have a good mental image when you say "I'm moving to Detroit!"


The really interesting thing about SF is that it's not 7x7 as people claim- it's actually more like 3x3. The "City" is confined to a tiny area downtown and in the Mission and SOMA. The entire southern and western parts of SF are low-density suburban sprawl. This is a result of terrible planning in the 50's and shortsighted opposition to new housing and transit ever since.


I'm guessing you're talking mainly about the outer richmond, outer sunset, and maybe the excelsior? There are a few truly suburban-ish spots in the hilly parts in the middle of the city (like Monterey Heights, for instance), but I don't think those are very extensive.

Population density of the outer sunset is: 16,489

Monterey heights: 9,639

btw, I'm getting these from

http://www.city-data.com/neighborhood/Monterey-Heights-San-F...

Now let's take a really sprawly place

http://en.wikipedia.org/wiki/Antioch,_California

about 3,500/sq mi

This might not be completely fair, since I'm taking all of antioch whereas I'm doing SF in a neighborhood-by-neighborhood way... but all in all, I just don't think you can call any part of san francisco "suburban sprawl" without stretching the term beyond what people typically mean when they say it.


> it's actually more like 3x3. The "City" is confined to a tiny area downtown and in the Mission and SOMA.

What about Nob Hill, Russian Hill, and North Beach? Pacific Heights, Marina, Haight? These aren't examples low-density suburban sprawl.


Good point, I guess I was lumping them in with downtown. But still, it's basically just the northeast.


San Francisco is dealing with the same problem that New York had with finance. New York seems to have gotten over it, mostly: everyone realizes that finance pays the bills in New York, and finance people are mostly content with paying their taxes and leaving it at that. I wonder if San Francisco will come to terms with its reality before it's too late.

As for moving to Portland, it's a great idea. Wonderful city if you can find work there. I'd love to live there if it had more of an economy.


One caveat I'd add is that in NY, finance might pay the bills, but it doesn't dominate the city. There are plenty of other industries which play significant roles in the city: fashion, publishing, filmmaking, etc. In SF, tech dominates the culture of the city. Countless times, I've gone to bars and heard pitches about startups, or discussions about some new technology. In NY, I've seldom heard people talk about i-banking, or anything finance related. It just feels way less like a monoculture.


This weekend I spent some time walking around SF and was astounded at how many new apartments are under construction. Even more interesting were the old run-down buildings which were apparently being shuttered in preparation for even more new places to live.

There will be a lot of hand-wringing about the city's loss of character, but in the end the new construction will probably ease things.

The city in essence put a moratorium on new housing after the real estate bubble burst in 2008. For several years afterwards there were virtually no new housing units added to the city at all.[1] Now that the de-facto ban has been lifted, there can actually be some new units to help give all the newcomers and old residents places to live.[2]

[1] Go here and scroll down to "Previous releases": http://www.sf-planning.org/index.aspx?page=1691 Note the difference between 2009-2011 and now.

[2] Of course there will some who claim that no amount of new housing will fix things, or that new construction will only make things worse. It remains to be seen what the longer-term outcome will be. Rents in the Bay Area actually went down after the last two bubbles burst (the original dot-com boom in 2000 and the real estate boom in the mid-2000s), so it is clearly not impossible for the housing market to change direction.


There's a certain amount of irony in someone complaining about how rich techies ruined SF, and then gloat about how you move to another city to do the very same thing. In 10 years, people will be complaining about how people like the author "ruined" Portland (and Austin). Actually, this already happens.


As a Portland resident, I agree, rents are rising rapidly.

I think people will find it a bit harder than they imagine - there's a huge level of alienation. Obviously the original writer has a job nailed down, but if you don't, trying to find work for a good company here, or remotely into SF, is quite a bit harder than being wine-and-dined by 20 people in the SF area.


You feel bad about helping to gentrify San Francisco... so you're going to move to Portland and help gentrify Portland instead.... because girls at bars won't judge you as harshly in Portland?

I don't think you are wrong to be self-analytical and self-critical about the economic role you play in your city, and possible harm you can cause.

But moving to a new city isn't a solution to anything except possibly your ego.


Move to New York City. Your uppity tech salary will again be paltry peanuts compared to the all the hedge fund guys that "turn the market upside down" here.


I imagine wall street conversations being something like "Coder: I make 200k. Trader: Oh me too. Per day"


No, just comments about wasting 1K on alcohol in a single night.


I wouldn't underestimate the effects a lack of sunlight will have on you. This coming from a part of the country that receives a little bit less sunlight that Seattle (Pittsburgh area). Seasonal depression can really make life suck. I'm also probably a little bit upset because it's been raining for something like 12 days straight.


I'm a native Oregonian - born and raised in the Willamette valley.

The weather made me want to get the hell out, though. It's not that it rains that much, it's just that it's gray and bleak so often. During the winter, it's usually around 5C or maybe up to 10C (that's about 40-50F). The cold and drizzly weather is absolutely miserable if you like the outdoors, because you can't really do much. Too warm for snow and "winter" activities, but too cold to do much without a lot of expensive gear that, at best keeps you "not cold" in a clammy, squishy, sodden sort of way.

Here's a bit of street view that feels very "Western Oregon" to me:

https://maps.google.com/maps?q=Eugene,+Oregon&hl=en&ll=43.91...

Nothing so extreme as to be exciting, just that solid, slate gray sky.


ha! that's wolf creek road in eugene. an awesome road for cycling. I live in san francisco but I visit my friends in eugene in july. luckily, in july, the weather in eugene is typically superb.

I think it'd be pretty tough for me to handle all the grey during the rest of the year.

the bay area has a lot of paradise weather - I grew up in marin - and when I went to the east coast for school I had trouble with the grey and interminable springs. it just sucked in comparison.


> ha! that's wolf creek road in eugene. an awesome road for cycling.

Yep, I've ridden and raced up that climb a number of times. It's beautiful in the summer. There are some really great rides out there in the coast range, a lot of them really remote.


That's pretty much Pittsburgh summer weather too. Sunshine is a rarity even in the summer. It's always grey and cloudy. Although it gets cold enough for snow but I don't enjoy snow like I did when I was a kid.


Living in Oregon two winters ago I went to a new docter who did some blood work and thought I had an infection so tested me for hepatitus, mono, etc. He through in a vitamin Dtest and that was it. He put me on megadose vit D and things got better. Sunlamps or vitamin D adapt to low sunlight.


Sorry to see you leave San Francisco. I've had a similar introduction to the city and don't intend to leave. One subtext that I'm reading into your article (incorrectly, perhaps), and seeing lots of elsewhere, is a subtle guilt among tech works for the salaries they make in the Bay Area. I understand that as techies we're inclined towards a sort of egalitarianism, but perhaps there's an inherent conflict somewhere between that and the exits and acqui-hires and searches for small fortunes.


The reason for the high cost of living in SF, Manhattan (where I live) and other cities is caused by politically induced market scarcity (also called economic rent by economists) through land use regulations in zoning that artificially regulates housing density to favor wealthy landlords so that rents and housing costs increase.

To make housing more affording, deregulate the zoning ordinances which artificially constrain housing supply.

This article in today's NY Times is about finding the only apartment less than $600K in the West Village ($595K for 408 sq feet) http://www.nytimes.com/2013/07/09/nyregion/amid-housing-scar...

The issue is simply politics and nothing more.


This blog post sums up why I choose to live in Austin these days... and commute to SF a couple times a month for work. I just find SF overrated, crazy, dirty and unbalanced.

This also reminds me a bit of al3x's post about San Francisco awhile ago... http://al3x.net/2009/10/04/so-youre-moving-to-san-francisco....


One of the things that I love about living in Tampa while doing technology consulting traveling around the country is the cost of living. The cost of living is so low that I can afford to do anything that I want to do while still having a lot left over for savings.


Yeah, I don't entirely understand why people are so fixated on California uber alles for tech jobs. It's so easy to do development from anywhere, especially a US timezone, that it boggles my mind that people will pay $3k for a one bedroom in SF to make low six figures at a startup and act as if that's the only choice available.

Rent is high in SF because more people want to live there than there is room for. If you want to spend that much of your salary for that privilege, then feel free. Personally, visiting is good enough for me, and I have plenty left over to visit the rest of the world as well.


I'm here for the startups and investment money. I don't want to consult anymore.


This was by far the best thing about living just outside of Orlando (and, in the long run, the only good thing). I spend more now to live in Minnesota, and the tunnel vision exhibited by Silicon Valley and San Francisco residents is an ever-nagging reminder of how vastly different perspectives are within just this profession, and how difficult it can be to see solutions when you're mired too deeply in the problem.


One of the things that makes it difficult living in this area is the lack of people with similar interests. I usually spend time with some friends from high school who are motivated in similar ways to me. Random bars, though, forget it. I get too much of my social interactions that I identify with during the week with coworkers.


I think this is exactly how to do San Francisco. Go live there as a "young" person. Learn from the best, make great business contacts in life and enjoy it all! Don't sweat the fact you're renting a small place and paying a lot. You're young and it's a trivial point in the big picture of things. After 5 - 10 years your priorities will change. As you start to think about a partner/children etc you'll reassess how great it is to be there. You'll be better able to go somewhere else and be successful due to what you've learned and who you know.

For 100+ years young people have gone to NY/Manhattan with the same dream of making a lot of money. Very few had their heart set on living in Manhattan though forever. SF is just struggling because it's morphing into that place too now. I suspect, though don't know, that there was some point in NY's history where people wrung their hands about how it was becoming impossible to be middle class and buy a home and raise a family there due to rising costs/education etc.


Or you could live in one of the more affordable tech hubs like Austin or SLC, work just as hard, and still grow a successful start-up at a fraction of the cost.


If you're going to do the heat and traffic of Austin might as well pay 20% more in life and have the extra bang of SF/Bay Area. SLC - now that is a much smaller market and has much better outdoor options than Austin.


Cry me a river.

San Francisco is expensive. It's not the tech workers fault.

Nobody owes you a home in San Francisco. The American dream is not home ownership. Where'd you hear that? A countrywide home loan commercial?


Putting aside the condescending, finger wagging tone I was struck by the incorrectness of this comment. Home ownership is actually part of the "American Dream" You could debate whether it should be but you can't define it as not being. A quick Wikipedia check on the American Dream:

The meaning of the "American Dream" has changed over the course of history, and includes both personal components (such as home ownership and upward mobility) and a global vision.


As an Ohio home owner who is thinking about moving to California and renting I agree. The dream of home ownership often overlooks the costs and insane amount of work involved in owning home and keeping it nice. I love having a 4 acre yard, but it takes me 7 hours to cut grass.


Well CA will certainly take care of that 4 acre yard problem for you :-) And the climate is sooo mild you'll be shocked by how little house work you need to do vs the rest of the country. No hard freezes or high humidity, no real bugs of infestations. A good exterior paint job will get you 10 - 15 years not 5 - 10.


I'm cool with just a few days of sunshine :). Even in the summer that's a rare occurrence here.


Why do you feel that it is okay to dismiss someone's opinion outright? He's not suggesting that home ownership is a right, but merely that it would be nice to be able to have the possibility to own a home. Those are two very different things.


The dream of home ownership is largely a manufactured one, like the desire for diamond rings, from William Levitt [0] and his Levittowns during the post-WW2 suburban boom. Before that, most Americans were quite content renting for their entire lives. Even today, countries with standards of living otherwise close to that of the US (western Europe, Australia) have much lower rates of home ownership with no reduction in quality of life (many would say it's an increase). Those countries never experienced the push for private living driven by homebuilders and carmakers in the US in the 1950s.

[0] https://en.wikipedia.org/wiki/William_Levitt


I have never understood the fascination with San Francisco for tech. I am a senior developer in Arkansas, and cannot imagine having to deal with any of that B.S. I have a mortgage of <$2000 for a 3,600sq ft house on an acre of land with an in-ground pool. My commute is 40 minutes of relaxing country-side when I go into the main office, and about 4 minutes when I work at the remote office. A tech salary of 90k in San Fran ~= 36k in Arkansas when looking at cost of living, plus you can buy a starter home (~1100sq ft) for about ~100k. Arkansas, Tennessee, Mississippi, and the list keeps going. Tech professionals should really look outside the normal huge tech city box. I personally believe that is where most will find happiness.


My wife and I made a very conscious decision to NOT move to SF when we were looking to move back to the US from Australia. Frankly, SF and the whole valley were not where we wanted to raise our three kids (6, 2.5 and newborn). Doing cost comparisons, quality of life and education we just couldn't justify SF over other places.

This is, by all accounts, a career limiting move for me (I'm in tech, but I work remote right now), but it is the right decision for our family.

Perhaps in 10-15 years when the kids are older, though right now, !SF feels like the right decision for our family.

My big hope for the next 10-15 years is that remote work becomes more and more common.


It will be nice to see your comparison of the cost of living between Bay Area and, let's say, Sydney. Can you please provide one? Starting with the assumption that AUD 80k salary in IT in Sydney for the software engineer position will be equal to around $100k in SF.


Cost of living in Sydney is just as high, if not higher than the Bay Area.

I moved my family to the Bay Area from Australia and am very happy with the decision.


Out of curiosity: I've often heard that Australia is a great place to live. Did you move back to the US because you were missing "home", or was there anything in Australia you felt unhappy about for raising a family?


Congrats on the big move! Hopefully it works out well for you.

I used to live in Seattle. And there was much griping about people from California (usually half-whispered) ruining everything. Between the influx of California-types running up the housing market, to just general growth it was a background thread up there.

Portland is a pretty small city with a moderate cost of living. With your new salary and income, aren't you distorting the market in the same way as in San Francisco? Only even more so, due to the small market size?


Say it with me: San Francisco is NOT the same as the Bay Area. No, most of us wouldn't be able to afford a decent home in SF proper. But SF is just one city in a large metro area, with plenty of places you would and could want to own a home. Those of you who are 20-something: the day is coming, sooner than you'd imagine, when you're going to want to raise kids. And unless you've knocked the ball out of the park and are worth $20 million, you're not going to want to raise your kids in SF anyway.

if nobody who hasn't already made it can afford to live there what happens then?

You can afford it. It's an expensive area for sure, but there is much more to the Bay Area than "Silicon Valley" (whatever that means nowdays) and SF. I see this attitude a lot among recent "immigrants": this myopic view, apparently based on experience in other, very different metro areas, that there is One Big City and a few "suburbs." Things aren't like that here, and the reason you feel so frustrated is that you don't (yet) understand the place you live.


Don't worry the housing prices will drop off a cliff after the up and coming massive earthquake finally hits San Francisco. It's guaranteed to happen, it's just a matter of when. You'll have a whole new set of problems but a lot of people are going to haul ass out of there and rent will drop. And the subsequent effects will fix a lot of the real estate problems. First, whatever the earthquake doesn't destroy, the fires or building demolitions will. In the ashes or rubble where the old low-rise "historic" buildings stood, new buildings will finally be built and you can bet your money that they're going to be high density. NIMBY (not in my back yard) residents will have so many other matters to attend to that they won't be so strict about keeping San Francisco looking the same as they remember it as kids so progress will be easier.

With destruction and death, comes renewal and new life. Fitting for the startup capital of the world actually.

I wish everyone the best of luck surviving and may the death toll be as minimal as possible.


Honestly, it is the tech mecca of the world, so what would one expect? If you move elsewhere, like Portland, and if you hope the tech community continues to grow there - then eventually wouldn't you be hearing about series A rounds in the coffee shops there as well? And about home ownership being the "American Dream"....the jury is still out on that one. It seems more like the "American Debt". Unless you have a family with children, and want a place for them to grow in to with good school systems and all, there's really no need to jump in to home ownership. The first several years you are mostly paying interest, so you're not building equity. Not too much mention all the money you've put down already. So unless you plan on living there for the long haul, just rent. Having a reasonably priced roof over your head should be part of the American Dream, not necessarily home ownership.


I'm moving to Portland

Except the bourgeois cannot afford to live in Portland anymore either. Rentals are ungodly expensive, water is expensive (in the PNW no less), garbage is expensive, electricity is expensive and last but not least, parking is expensive.

Please don't bring your San Francisco salary to Portland.


I'm pretty bourgeois and it's entirely affordable to me. Rent is 50% less.

My total monthly bills for utilities are $245 for a house, with AC.

Electricity is half the price it is in the bay area. Parking is a quarter of the price.


Do you have children? The problems OP complains about with San Fran, won't be made any better if he brings his SF salary here. That's the problem. It's pricing locals out of affordable housing. Rentals here in Sellwood/Westmoreland start at $2000/mo. When we got to Portland two years ago, rentals here started at $1100/mo.

Portland is THE most expensive place we've lived in in Oregon. A family of four pays between 150-200/mo for electric/natural gas and water. We've lived in Salem and Eugene for comparisons sake. Our electric bill in Eugene, with central AC (that ran from pretty much March - September) would max out at $75/mo.


Our apartment is 900/month near the 28th St. and E Burnside restaurants. Great area and we find it very affordable. No kids though. Last I looked, if you can put 10-20% down, you can get a nice house in the area for 1500-1750 a month mortgage payment.


Portland being the most expensive city in Oregon is expected... It's like comparing Seattle to Tacoma/Pullman in Washington.


I moved to SFBay area from India and despite an above american average salary find it hard to get a decent apartment to live in with say 30% of my income. This is ridiculous. I was much better off in India. I paid only 1/10th of my salary to get a twice bigger apartment.


1) Leaving sf in any part, due to your perception of the reaction of random women at bars, to your profession, blows me away. There are plenty of people in the city who also admire your profession, including many single women. And quite frankly, there are more important things in life anyway.

2) People who feel 'guilty' about getting decent salaries are missing the big picture. You are now an allocator of wealth. You can help that mom and pop shop pay its rent, if you are so inclined. Abandoning that privelege and responsibility is also a baffling reaction.


Who are you to decide what is important in the author's life?


A commenter on a blog that has been posted on the internet for public consumption?


What I'm curious about is how the low-income class is living in/around SF. I mean, there are waiters, cashiers, plumbers, assistants... where do they find affordable housing?


living in tenderloin/bayview/hunters point, furiously searching craigslist for gems, living in the east bay, being a live-in boyfriend/girlfriend


I have a similar relationship with London. Not because of the tech scene though some of my most challenging but rewarding jobs has been in London, but purely because nothing beats being at the heart of a lot of things, especially culture. After a few years I leave London to go somewhere where my quality of life increases massively, but then London draws me back again. I've moved there three times already and I won't be surprised if I end up back there again one day.


I think there might be an interesting point underneath this. If everyone who feels like the author actually stayed then SF might not have the high rents/excitement/cultural contact that you get with large amounts of young, single, employed, relatively unstable individuals. Part of the reason SF is probably so desirable in the first place is that the type of people who live there are the types that actually think the cultural experience is worth the money.


This is a sobering read as I prepare to move down to the Valley for work after years of talking about, and to a lesser extent dreaming about, it. One would hope that the experience for those of us who haven't had our stint there yet would still be worth it.

What say you, veterans? And what of San Mateo? That's where my new work is, and I wonder if I'd be better off living there than San Fran proper.


I live in Burlingame which is in San Mateo county, and about 5 minutes north of San Mateo city (I work in SF and from home). We absolutely love it. We moved down here from San Francisco about 6 years ago when we had kids.

San Mateo is very convenient to San Francisco on both US 101 and Caltrane (there are stops in both Burlingame and San Mateo) and is about 5 minutes from the airport. Burlingame and San Mateo both have central downtown districts that are both very pedestrian friendly, with a ton of great restaurants. Burlingame restaurants are a tad more upscale family oriented, and San Mateo has more affordable ethnic food (especially Japanese, as there is a large Japanese community in the area).

Burlingame public schools are considered very good (I don't know about San Mateo).

Feel free to ping me directly if you have any questions.


I loved living in San Mateo. I've lived all over the Bay Area, and that still rates as my favorite. It's a reasonable drive to both SF and the South Bay (and not painful to get to the ocean in Santa Cruz either), the downtown is walkable, and moderately interesting. There's not lots of options for things, but the options are generally decent.

There is zero reason to live in San Francisco, I don't really understand why people are so hung up on it. Live nearby, but not in. You reap all the benefits of the City, without the negatives. Nobody is shitting on your doorstep in San Mateo...


"San Francisco, I love you But I'm Bringing You Down"

FTFY


"Useless liberal arts degree"? The recipient of said degree seems to have done OK, perhaps in part due to his broad education.


I'll be doing the same thing, just doing remote work and leaving Stockholm. Not only expensive as fuck but close to impossible to actually get a place.

Rent control is a problem in Sweden as well, not to mention limited supply and queueing system. It's not the price that's the problem to be honest.


OK, so if someone had to point out where the "new SV/SF" is these days, where would you point?

Portland (maybe too obvious...not as much diversity?) Seattle? Austin? LA somewhere? (too many entrenched interests?) Boston? (too much blight in areas that are not Boston/Cambridge?)


If it's an big issue, don't move there! And stop bitching about it. You made the choice. There's thousands of jobs/careers/ventures/opportunities elsewhere. Plus you can work remotely or in a office share/incubator in hundreds of cities.



Bring on the exodus.

Based on the Dharma Initiative, let's have The Coda Initiative: Let's build a new Silicon Valley where there is plenty of space to grow and where startups will flourish.


Hey if everyone in the tech scene wants to make Portland the place to be count me in. I'm in NYC right now but I could really use some fresh air. I mean that quite literally.


If everyone in your tech-skewed job market is making comparable salaries, nominal values are far less important when competing for the same resources.


He said he was a complete noob in 2009, and in 2011 he cofounded a company with two very famous people in Ruby community. How?


One word: bubble. This mobile/cloud/social dream will end soon.


I appreciated the LCD Soundsystem reference, Tom.


was SF better during the Gold Rush? I mean the Rush of 160 years ago, not that of today.


I don't understand why tech workers in the Bay Area feel guilty about receiving 'high' salaries of $100 - $200k/year. This is not a lot of money... People on Wall street laugh at these amounts. So do specialized doctors, corporate lawyers, investment bankers, etc.

Software engineering is unfortunately a very middle class occupation at this point. I'd love to see it get up into the ranks of the upper class (at least for very experienced engineers!), but it has a long way to go...


Software engineering is not a very middle class occupation, as you can easily earn amounts more than the average middle class family as a single worker, even in areas that are not tech hubs.

> I don't understand why tech workers in the Bay Area feel guilty about receiving 'high' salaries of $100 - $200k/year. This is not a lot of money... People on Wall street laugh at these amounts.

100-200k a year is a lot of money. That amount easily puts you in the upper quartile of income earners in the US. Comparing yourself as an economic class to the people on Wall Street, who are consistently some of the highest earners in the US, is silly and doesn't make any sense since the vast majority of people do not have income like that.


> 100-200k a year is a lot of money. That amount easily puts you in the upper quartile of income earners in the US.

It's more stark than that. In 2011, $100,000 would put you in the top 20%, and $186,000 would put you in the top 5%. Of household income.

In 2010, only 6.61% of American individuals had six-figure (or greater) incomes. At 100k, you're already pulling down more than 93% of Americans.

Cites:

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

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

http://www.census.gov/hhes/www/cpstables/032011/perinc/new01...


I'd agree with you if I was referencing some mysterious elite who lucked into their positions or had ivy league connections. I'm talking about my friends from college who had average grades at a top 30 small private school on the East Coast. Several of the ones who went into finance make more than I do, and some a LOT more. I have friends who frequently clear $300k with bonuses in very average wall street jobs. They are in their late 20s... how many enginers can make that much? They are also still early in their careers. Some I imagine will go on to make 7 figure incomes at their peak, whereas we can agree that engineers will top out at 250-300k with bonuses working at the best companies in the world.

Now, I'm not saying I'm struggling to buy food or anything on my healthy engineering salary, I'm just saying that I don't feel guilty AT ALL about how much I make, nor do I feel that I am overpaid in anyway. I do tend to think my contribution to society is at least as much as my finance friends, so perhaps either I am underpaid or they are overpaid.


As someone who went to a small northeastern private school as well... I find it strange that it isn't abundantly clear to you that even our educations were a privilege that the vast majority of the country can't afford.


Feeling guilty or being critical of your own income isn't something that comes from a relative comparison to those who make more than you do. After all, even the average person in finance doesn't make as much money as people working in certain roles or at certain firms. Rather, it is about how that wealth is acquired and how certain jobs, including programmers, occupy a position of class privilege.

> Now, I'm not saying I'm struggling to buy food or anything on my healthy engineering salary, I'm just saying that I don't feel guilty AT ALL about how much I make, nor do I feel that I am overpaid in anyway.

That is totally fine, nobody really is asking that you or any other worker feel guilty. I do think that most people want there to be awareness and perspective about what it means to have the role you have and how that fits into capitalism and the society you live in. That kind of perspective isn't about guilt tripping.

> I do tend to think my contribution to society is at least as much as my finance friends, so perhaps either I am underpaid or they are overpaid.

It is likely that they are overpaid. When you think about it, people that perform low wage labor are just as valuable to society as programmers or those in finance. Those that do not work or cannot work are also just as valuable to society. Of course, work and capitalism don't recognize that inherent value and that is why people like BART workers have to strike and unionize to try and claw out what they desire to live.


I think of finance people as financial engineers. They just deal in the stuff, like I play with data structures, and my friends diodes and resistors and such. I think of how easy it is for me to manage my own software, my friend, his electro-static speakers, and to the finance engineer, his giant piles of money. It's just natural.

The sour grapes response for me is to consider that selling drugs earns more than the finance guys.


It's because our society simply doesn't value the profession, and those engineers who feel guilty have internalized it. There is a strong undercurrent of social programming in western culture which says that working in computers and other technology fields is a nerdy / oddball profession and that those who choose to do it should be ostracized. People are actually surprisingly open about it, too. See for example the essay from earlier this year by Rebecca Solnit[1] which engages in much hand-wringing about "nerds" (yes, the article actually contains that word) moving into the Bay Area and how "people are ground underfoot" as a result. Such name-calling in the mainstream press is more or less exclusive to tech.

[1] http://www.lrb.co.uk/v35/n03/rebecca-solnit/diary


If someone notices programmers that are doing well in life, or having high-paying jobs, they write articles called "Revenge of the Nerds" with images of pencil thin acne-ridden teenagers ;). Honestly, are there any articles that discuss programmers or some similar group without calling them nerds or geeks at least ones? It's getting pretty old...


Yes, it is a lot of money. Those professions make a lot of money too.

I feel a little guilty because I have friends who are doing things which are way better for society (teachers, for instance) and are damn good at what they do, but making only a fraction of what I make. I feel good about what my company does, but I don't think we (or especially other companies that are adding so little value to people who actually need it, rather than essentially just the tech elite in SF/NYC/etc) are adding so much more that it justifies the huge disparity in salary.


It's not that teaching is better for society than whatever you do (is it? how would we really know?) - it's that you get immediate "helping someone out" feedback all the time. It must be gratifying on that level (aside from the fact that it's hard to actually reach anyone who feels compelled to "do time" in your classroom). If you feel like you're missing that "good person" feeling, I'm sure you can figure out ways to get it.


If you feel guilty you could always go do those other things that benefit society more or even do some volunteer work so you feel less guilty about making a decent living.


That's my point: I feel like software salaries are so much more than decent living wages. I don't feel bad about what I do personally, but I feel bad about our industry as a whole.


That's a very unique view of "Middle Class" considering the median income is $44,389. https://en.wikipedia.org/wiki/Household_income_in_the_United...

If you earn $100,000 per year that puts you in the top 20% (for a household, if it's just you it's even higher).


The median in SF is much higher than that, and in the peninsula even higher. Also, middle class is all but the 1%. The top 1% is the capitalist class of very good jobs (high finance, specialized doctors, exectives, some lawyers, etc) or people who own a lot of assets instead of working, owning 40% of the wealth in the country and 34% of the income. So yes, programming is a middle class job, though I suppose 'upper-middle class' would suffice as well.


I think it's because more tech workers in the Bay Area enjoy their jobs than investment bankers in New York do. When you enjoy your work, you don't feel guilty, but perhaps a little sheepish when you realize how much you're being paid to do it.


Whatever large numbers of talented people get into seems to have a Clump Phase and a Chump Phase.

Clump Phase comes out of highly intelligent peoples' natural desire to be around each other (clumping) even at economic cost. This goes back to the medieval universities, but now is seen in technology companies where people would rather be a average fish in a huge pond than be the big fish elsewhere.

Now you have a lot of big fish in a school, or "clump". Then the spearfishers, usually rich, fat white men, spot it, then come along and start getting their take. Those are the MBAs who swept into Silicon Valley and are now the most powerful players, despite most of them having not written a line of code since college.

When there are more spearfishers than fish, the ecosystem gets to a point where decline is obvious and rent-seeking/musical-chairs behavior sets in. That's the Chump Phase.

That's where the Silicon Valley ecosystem, with its high rents and VC supercapitalists, is now.


And the spearfishers will maintain SV is still in 'clump' phase as long as plausible to attract more chumps, right? So as someone who's interested in finding his own clump, I've got to filter out the suits from the shirts myself. This seems non-trivial, and frustrating..


How the Internet Ruined San Francisco.

http://www.salon.com/1999/10/28/internet_2/

Check the date! Ha.


Man spends 20s in SF, moves out later. Film at 11.


I don't have a lot of sympathy for people who want to work in a faddy industry for faddy companies in a faddy town. If you want to do real work and make a real difference in the world, get out of the coffee shop.





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