Nation’s top three most expensive places for renters: all in Bay Area

https://www.mercurynews.com/2018/06/14/nations-top-three-most-expensive-places-for-renters-all-in-bay-area/

by Impossible • 8 years ago

129 292 8 years ago

dsfyu404ed• 8 years ago

There is no state, metropolitan area or county in the U.S. where workers earning minimum wage can afford a two-bedroom rental home by working 40 hours a week, according to the study.

This seems like an unreasonably high standard for a single minimum wage income unless they're using the excess here as a proxy for other necessities.

Edit: This seems unreasonably high because it greatly exceeds the standard of living we expect for a single minimum wage income household. Sure it would be nice if a single minimum wage household could rend a 2br but that's not what we currently expect them to be able to do. Saying "people who make X can't afford Y" when we didn't expect them to afford Y in the first place isn't very meaningful when you're discussing the ability of people making X to have a standard of living that meets our expectations for people making X.

chrisseaton• 8 years ago

To need two bedrooms on a single income I guess you have a child or someone else you are supporting like an elderly relative, and possibly a partner as well.

So that means attempting to support a family of two or three on one minimum-wage job.

monocasa14• 8 years ago

Which was the status of minimum wage jobs up until the mid 1970s.

The average minimum age worker is 35, so it's not really fair to say "just don't have kids".

https://mobile.nytimes.com/2014/06/10/upshot/minimum-wage.ht...

ggg99902• 8 years ago

Yeah... why would you be able to rent a 2BR house on minimum wage. More like a shared room in a house.

antisthenes2• 8 years ago

Exactly, and I'm not sure where people's entitlement here comes from.

American 2-BR apartments in upscale complexes are HUGE (I've seen figures as high as 1300 sq. ft), and in Europe they would easily have a 3-4 person family living in them, with more than 1 person working.

frgtpsswrdlame• 8 years ago

Why does that seem unreasonable to you? Seems to me that there should be tons of places in this country where anyone would be able to afford to rent a small house. That literally none exist is pretty damning.

TheLoneAdmin3• 8 years ago

I cannot remember a time when one minimum wage job was enough to rent a two-bedroom. I rented my first apartment, with roommates, in the 80's.

cimmanom• 8 years ago

There was a time when one could. The minimum wage was originally put in place to make sure a single wage earner could support a family.

PopsiclePete2• 8 years ago

A time when unions were strong, when the 1% were taxed at ~90% and when "social security" and "pensions" were not evil words.

I feel zero sympathy for Americans and for the utter clusterfuck of misery that awaits them over the next 20 years. This is just the beginning.

dsr_• 8 years ago

"To better understand how rents and affordability have changed over time, Apartment List analyzed Census data from 1960 - 2014. We find that inflation-adjusted rents have risen by 64%, but real household incomes only increased by 18%." -- https://www.apartmentlist.com/rentonomics/rent-growth-since-...

The graph lower down on the page is informative, too: only in Las Vegas and Austin did the median rent increase equally to the change in median renter income. In every other urban area, the rent went up faster.

pofilat6• 8 years ago

Source for that claim?

Minimum wage has been $4-10/hr (inflation adjusted) throughout its history in USA; only about as high for the single-person poverty level ($6/hr for single, $10/hr equivalent for a family of 3)

https://bebusinessed.com/history/history-of-minimum-wage/

gascan3• 8 years ago

There still are places you could. Skimming Zillow, you can get a 2br in Ohio for ~$450/mo.

TheLoneAdmin3• 8 years ago

The price of the rental is derived:

==========

Fair Market Rent (FMR) is typically the 40th percentile of gross rents for standard rental units.

==========

A. If you are at minimum wage, look for apartments in the 5th percentile, not a mid-range priced apartment.

B. Most minimum wage, one-income households only need one-bedroom apartment.

C. Or, get a roommate, rent drops in half.

kingbirdy• 8 years ago

The minimum was wage enacted such that a single breadwinner earning minimum wage would be able to support a family. A family needs 2 bedrooms and a livable apartment, not the bottom of the barrel, squeezed in to one bedroom.

ahoy• 8 years ago

This seems like an unreasonably high standard for a single minimum wage income

Why should it be though?

pofilat6• 8 years ago

Because not all jobs are that valuable. This is essentially replacing welfare by minimum wage, and why should welfare be administered non-progressively through employers instead of the government tax and redistribution?

Should it be illegal do do low positive value work?

glup• 8 years ago

I would like to see the comparison for the EU or Japan... I found this https://www.citylab.com/equity/2015/06/where-europeans-spend..., which suggests it is more reasonable, but doesn't reflect the minimum wage. Maybe it isn't such an unreasonably high standard?

realPubkey• 8 years ago

Well if you would define 'area' by something else, we would have 3 different places.

meritt• 8 years ago

That's true but they aren't arbitrary decisions designed to make one area look bad for the purposes of an article. They are well-defined areas [1] [2].

Q10. What does the term "HMFA" mean?
HUD Metro FMR Area. This term indicates that only a portion of the OMB-defined metropolitan statistical area (MSA) is in the area to which the income limits (or FMRs) apply. HUD is required by OMB to alter the name of metropolitan geographic entities it derives from the MSAs when the geography is not the same as that established by OMB.

Specifically the top 3 are:

    San Francisco, CA HMFA
    San Jose-Sunnyvale-Santa Clara, CA HMFA
    Oakland-Fremont, CA HMFA

[1] https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf

[2] https://www.huduser.gov/portal/datasets/il/il18/area-definit...

dionidium2• 8 years ago

The overriding, pervasive problem with regional comparisons is that people give undue attention to non-standard, arbitrary distinctions -- e.g. political borders -- where comparisons across standardized areas (e.g. those defined by the OMB) would be more useful and generate more informative results.

This is an example of a good comparison in a never-ending sea of bad ones.

dionidium2• 8 years ago

That's correct. That's why we don't use arbitrary distinctions for proper regional comparisons and why groups like the OMB spend so much time developing standardized areas for comparison.

Your comment is more revealing than even you may realize. There are an infinite number of political borders to be drawn around any "city," but changing those borders doesn't actually change anything about the reality on the ground.

That's why it's important to make like-like comparisons.

EGreg3• 8 years ago

And if you subdivide those places just the right way you can have the top 45 most expensive places also be in the Bay Area.

I mean, it is to be expected so the title of the article doesn’t pack the punch it seems to.

In NYC and other places there are city blocks or neighborhoods that are the most expensive in the country, if you grouped by blocks.

This is called Simpson’s paradox

beat5• 8 years ago

Someone needs to name the process of nitpicking details over obviously true generalizations.

EGreg3• 8 years ago

What do you mean obviously true generalizations? It seems like cherrypicking stats.

briga• 8 years ago

Missing the forest for the trees? Cherry-picking?

JBReefer• 8 years ago

I believe that's "pedantry"

oh_sigh4• 8 years ago

I'm fairly sure that high rents in Marin County are not driving homelessness up. And why the focus on minimum wage? Most people who are working minimum wage jobs live with another primary earner.

anonymous513312• 8 years ago

Probably not by choice though.

oh_sigh4• 8 years ago

Yes, it is usually by choice, because half of minimum wage earners either live with their parents or a spouse that earns more: https://fivethirtyeight.com/features/typical-minimum-wage-ea...

bronson• 8 years ago

Remember that homelessness includes people living in cars... something that is pretty apparent around Palo Alto, Menlo Park, and San Francisco.

oh_sigh4• 8 years ago

Yes, and are those people earning a living, but just falling a little short of the high prices those areas have? Or, if rents magically dropped in half over night, would they still be homeless?

Reedx2• 8 years ago

At what point do we collectively decide, you know what, this is ridiculous. Why are we funneling most of our money to landlords?

You'd think VCs would push back on this too, because that's where their money is going.

VC -> Startup -> Employee -> Landlord.

knuththetruth2• 8 years ago

You think VCs don’t have Bay Area real estate investments in their personal portfolios?

gnarcoregrizz2• 8 years ago

VC -> Startup -> Employee -> Landlord (VC)

ekianjo• 8 years ago

The circle of life.

Gargoyle• 8 years ago

That's my favorite conspiracy theory. That VCs own the property and are fine with channeling their fund's money (which isn't all or even mostly theirs) into rent.

Disclaimer- I don't really believe it's that simple.

monocasa14• 8 years ago

If I had to guess somewhere in the next ten years when the absurd number of boomers who have been putting their retirement savings into second and third homes all try to cash out at the same time, flood the market, and find out that it was all just Monopoly money.

malvosenior5• 8 years ago

The rent they are earning on those properties is definitely real money.

enervate2• 8 years ago

are you suggesting i might get to buy a house or i might not because i'll lose my job?

dv_dt2• 8 years ago

Within the next 2-3 years, there is likely to be another recession which will, if patterns follow, will be longer than the previous one. It would be bad news for a lot of boomers getting out of the market for retirement.

jimrandomh• 8 years ago

We've already collectively decided that. The problem is that a significant fraction of people have been misled about which policies will fix it. The problem is that local governments are controlled by the landlords, and they use zoning restrictions to limit supply and keep prices up. The fix is to transfer that power to the state government, which will allow enough housing to be built.

pofilat6• 8 years ago

Municipalities aren't like states of the Union. Municipalities have no power except that which is granted to them by the state. There is nothing legally stopping any state government from passing a law tomorrow to change how municipalities are run.

abalone2• 8 years ago

This is overly dismissive of the concerns of poor and working class renters. A big problem in this debate is that privileged, largely white people who want more affordable market rate housing claim to be speaking on behalf of poorer people and claim that the same set of policies and approaches will work for everyone. They dismiss them as “misled” instead of listening carefully to their expressed needs for much more subsidized housing construction and controls on gentrification of their communities. Those are things that local governments can affect, so generally disempowering them is a concern to these communities.

triviatise5• 8 years ago

this is 100% not true. Local governments are controlled by old people who are fighting change. Landlords would love to increase the density of properties to make more money from a single property.

erjjones• 8 years ago

At what point do we collectively decide, you know what, this is ridiculous.

I would say things are at that point. So move to a different city. Success != The Valley

peterwwillis• 8 years ago

I would say we need to redefine the idea of a city and how we live in them.

stevehawk• 8 years ago

It's all anecdotal but recruiters and lot of developers seem to frown on me for not being interested in moving to SV. I'd rather be unemployed in the midwest (which i am) than employed in the SV. Why give up my 1.5 acres and 4500sq ft home for the hell i see advertised on here so often.

zerostar07• 8 years ago

To what extent do VCs and landlords overlap?

beat5• 8 years ago

They don't, probably. Totally different business models. The conspiracy theory is idiotic. VCs aren't in business to make the relatively flat world of rent. They're looking for that 100x return.

dmix2• 8 years ago

Why are we funneling most of our money to landlords?

Government policy:

https://www.amazon.com/Zoned-Out-Regulation-Transportation-M...

Zoned Out forcefully argues that the debate about transportation and land-use planning in the United States has been distorted by a myth. The myth that urban sprawl is the result of a free market. According to this myth, low-density, auto-dependent development dominates U.S. metropolitan areas because that is what Americans prefer. Jonathan Levine confronts the free market myth by pointing out that land development is already one of the most regulated sectors of the U.S. economy. Noting that local governments use their regulatory powers to lower densities, segregate different types of land uses, and mandate large roadways and parking lots, he argues that the design template for urban sprawl is written into the land-use regulations of thousands of municipalities nationwide.

asveikau• 8 years ago

According to this myth, low-density, auto-dependent development dominates U.S. metropolitan areas because that is what Americans prefer.

Unfortunately I have to agree with the "myth": outside of urban bubbles like the one I live in, yes, Americans do prefer that. It is the cultural norm and everybody's expectation. To a lot of people you may as well be a Martian to defy it.

crimsonalucard• 8 years ago

It's recursive. Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> Landlord -> business -> VC -> Startup -> Employee -> ...

arthurjj• 8 years ago

Part of it's that these cities make it hard to build more housing, sometimes illegally. I give money to CARLA[1] which enforces the housing laws in California.

1. https://carlaef.org/donate/

xienze2• 8 years ago

At what point do we collectively decide, you know what, this is ridiculous.

When tech workers get over their “I simply MUST live in the Bay Area, ugh, anywhere else is simply unliveable” mindset that in turn drives companies to concentrate in said area.

trovi• 8 years ago

Isn't it the other way around though?

avn2109• 8 years ago

> "VC -> Startup -> Employee -> Landlord."

Hate to be the bearer of bad news, but the VC is the landlord. They're not stupid, and this setup is intentional.

It's a company town. History doesn't repeat itself but it rhymes.

radlad3• 8 years ago

Do you have any sources to back that up?

anonymous513312• 8 years ago

It is slowly starting to change as more tech companies arent even located in the bay area anymore. Companies flocked to the bay area for the employee skills but now more of the talent can be found in other cities as well.

jimbofisher113• 8 years ago

You are probably missing the fact that many VCs are likely heavily invested in Real Estate and this chain simply loops back to them, what incentive would they have for changing the status quo?

VC -> Startup -> Employee -> VC/Landlord

kcorbitt2• 8 years ago

The National Low Income Housing Coalition used that number to calculate the hourly wage a household must earn to afford a home while spending 30 percent or less of their income on rent.

This is a nit, but I don't think that's a reasonable way to calculate the relationship between housing cost and affordability. Some expenses do scale with housing cost (mainly things that depend on local labor), but many important ones don't (car payments, grocery bills). So in an area with very high housing prices and a relatively-high minimum wage, you'd expect low-income workers to be able to spend more than the "standard" 30% on housing, and still be able to afford other daily necessities.

I certainly don't mean this as a refutation of the article however -- the Bay Area is a very hard place to live on a low income.

aswanson• 8 years ago

Houston seems to have the best cost of housing to income ratio for technology people.

cgb223• 8 years ago

Is there a chart somewhere that has this kind of information?

Especially if it pertains to tech jobs specifically

ccmonnett• 8 years ago

Not your OP and not answering your question directly, but the aforementioned "tech-to-housing cost" ratio isn't so straightforward for finding out where to work. For the record, your parent seems to have thrown out Houston anecdotally. AFAIK it doesn't have a tech scene much different than would be expected from a metro area of ~6M people but it's super cheap to live in as cities go.

The 'cheap' big cities (sticking to the US, those in the middle of the country: Chicago et Houston in particular) have just enough tech to show up on the hypothetical chart and are cheap enough to place well. But IMO, even as a U of Illinois alum and massive fan of Chicago, the tech density isn't such that you would be able to find particularly interesting work, especially compared to the Bay. That said, surely there enough startups that need app/web developers to pay your rent in those relatively inexpensive areas if that's your thing.

The cities that interest me are those with a high density of tech at a lower cost: Austin, Portland, Raleigh, etc. The Bay housing cost is trickling down there too; there are so many people making _so much_ in the Bay that still can't afford to stay that when they start moving to these places they can really affect the smaller markets. Austin has had a crazy housing boom in the last ~15 years, but it would take a _lot_ more people moving to Chicago to move the needle there.

You still face issues with inequality squashing culture, like in Austin, which has a strong history of art and music and is so much cheaper than the Bay but so much more expensive than the areas around it. Bigger cities can generally support the diversity of people needed to maintain a viable culture if they aren't 7x7 miles and surrounded by water on three sides like San Francisco is. In other words, you could move out of the Bay to one of these places and live happily for a few years before you find these same problems following you to your new home.

This is a bit of an exploration but I think about leaving the Bay daily as my wife and I get more serious about starting a family. We talk about this often, and to each family, it's the most important thing in their lives. SV is really in for a wake-up call as it sheds talent that can't afford to stay.

pascalxus2• 8 years ago

That's because they don't try to stop builders from building more housing, at every turn. Plus, they don't have as much of those awful regulations and zoning as CA

rm_-rf_slash2• 8 years ago

Absolutely correct. However that can lead to scores of unique problems on their own, from overdevelopment exacerbating the effects of natural disasters (like the flood zone houses being destroyed last year), to utterly hellish development decisions.

I once Googled “Houston zoning fail” with my fiancée when she didn’t believe me that Houston had no zoning laws. We saw an arial photo of a huge skyscraper right next to a low density residential neighborhood and maybe 30 parking spots at best, and we laughed for 10 minutes straight.

bad_good_guy• 8 years ago

This thread really paints a bad picture for the mindset of a lot of people in the high-earning technology industry.

That someone would argue against every job being enough to afford a roof over your head just due to their own need for validation of their importance is frankly sickening.

malvosenior5• 8 years ago

There are very real reasons to object to an artificial floor to salaries (minimum wage) that have nothing to do with validation.

How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag.

Also, jobs should pay what they are worth to the business and nothing more. Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right.

Maybe we should be talking about realigning education to give people valuable skills instead of pushing for the non-skilled to get an artificial raise that evaporates in meaning due to inflation.

EDIT

I'm really surprised by the push back on this from a community of entrepreneurs. Anyone who has run a business will tell you that you can't just raise salaries without increasing costs. It's Econ 101 but apparently that's not the general sentiment here. I hear a lot of complaints about how things "should" be and what's "fair" but the math and reality isn't there to support that. Some jobs just don't have much economic value and pretending that's not the case isn't going to solve anything. It's nice to imagine a situation where janitors and fast food employees can have a middle class lifestyle but who is supposed to pay for that? When the costs of good raise dramatically, their additional pay will get sucked up by inflation. Again, Econ 101.

ryandrake2• 8 years ago

How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag.

This doesn't make sense to me. If it were possible to raise the price of that burger, why wouldn't it already be raised, regardless of operational costs? A business's costs to produce a good typically does not have much to do with the price customers are willing to pay for it.

lightbyte2• 8 years ago

Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right.

Unless you are advocating for age discrimination in pay, the fact that a "high school student" can be the one working at McDonalds is irrelevant. McDonalds employees an extremely wide age range of people. Does the 60 year old working the cash register (I've seen countless of these lately) who can't get a job anywhere else deserve to live on the street because you don't think they are important enough to rent?

cortesoft2• 8 years ago

As an individual, improving your education and skills can help solve your employment issues.

However, it is not so simple as a society. Even if we had a magic wand that could suddenly make everyone in the world an expert on every subject, we would still need people to work at McDonald's flipping burgers.

We don't have enough highschool students to fill those jobs. There are going to be adults supporting themselves and their families that are going to be working those jobs.

Improving the skills of people doesn't suddenly change the makeup of what work needs to be done in a society. Sure, in the long run, we can use those advanced skills to improve automation and make obsolete more of those lower skilled jobs, but that isn't going to happen overnight.

ball_of_lint• 8 years ago

Not everyone can be a highly skilled worker, and even people with valuable skills can and do end up jobless or working at minimum wage.

While I think a Universal Basic Income or stronger welfare is a better solution to the problems of homelessness and poverty, raising the minimum wage is a step in the right direction and one that is far more likely to be accepted by our lawmakers.

knuththetruth2• 8 years ago

Also, jobs should pay what they are worth to the business and nothing more. Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right.

If this is your argument, you’re going to have to explain why business owners are entitled to the surplus value created by their workers’ labor.

This arrangement seems to be currently enforced with all kinds of threats of violence and deprevation(loss of healthcare, housing, etc), all of which are barbaric by the standards of any other developed country.

ouid• 8 years ago

Not only high school students get paid minimum wage.

On minimum wage you cannot even afford a room in the bay area.

The economy is driven by demand. Economic prosperity is the result of EXACTLY the same thing that causes inflation. Dollars wanting to get spent on things that don't exist yet.

However, I will say that the problem is more easily solved by simply building more housing, but everyone who owns property resists that because shortages drive up the price of the thing they own. Imagine if there was a shortage of food, and the people with good refrigeration units and lots of stored grain were drafting and passing legislation against growing new crops. That is the housing situation in the bay area.

jupiter90000• 8 years ago

There are skills that are very valuable in society that pay very little. For example, maybe a software engineer gets married and has kids. Those kids go to school so the software engineer can go to work all day. The teachers and school staff are most likely getting paid way less than the engineer. Then one of those kids ends up with a mental health disorder or drug addiction. They see a social worker who helps them and gets paid much less than the engineer.

Then on the weekends the engineer wants to have fun with her family and goes out to eat at a fast food place, gets a lawn service so they don't need to do their own yardwork. Those people may be getting paid minimum wage.

So these people who are making the lifestyle you have possible, should not be allowed to afford a place to live because what they do is not valuable? Is that what you're saying?

jimbofisher113• 8 years ago

Given that Corporate profits have been at all time highs recently I think their responsibility to their workers is obviously being circumvented in order to increase shareholder value. You are stuck in this Corporation first mindset. You ought to get out of it.

rubicon334• 8 years ago

The problem isn't that we need to raise salaries to meet housing. The problem is a housing problem. We need to reduce the cost of housing so that people can afford a roof over their head.

charleslmunger• 8 years ago

There's two ways to reach the desired state here (no full time employed individual cannot afford housing) - increase pay, and decrease housing costs. The trouble with increasing pay is that the rents themselves are set by the market - the bay area has dramatically under built housing for decades, and is still not building much. Raising pay for everyone is essentially a giveaway to current landowners - rent will just rise to absorb the new money flowing into the same amount of housing units. This effect can be observed (at a much higher scale) in the Mountain View housing market - landlords adjust their rent increases with the google stock price. Better solutions include:

1. Get rid of single-family-home zoning for large swathes of the bay area. 2. Incentivize developers to build more units per site, rather than fewer - https://www.sfhac.org/state-density-bonus-arrived-san-franci...

closeparen5• 8 years ago

A floor on the minimum allowable job is not a floor on the minimum possible standard of living. $0/hr and homeless is also an option. Now, a UBI or job guarantee that pays the cost of our desired minimum standard of living - then we might have something.

CryoLogic• 8 years ago

In Seattle rents are not as high as SF yet, but the growth rate is stunning. 2bd just shy of $3,000 on avg now. https://www.rentjungle.com/average-rent-in-seattle-rent-tren...

anonymous513312• 8 years ago

Good

ahelwer• 8 years ago

Not really comparable. You can go on Craigslist and find decent 2bd apartments in Capitol Hill for $1500-2000 during winter when demand dies down (November-February). I've personally lived in these.

aphextron7• 8 years ago

I've lived here since 2014, and have been successively priced out of every single apartment I've had at the end of a lease. I had a ~10 minute commute from West Oakland at first, then when the landlord doubled my rent it became a ~30 minute commute from El Cerrito. When the rent went up 30% there, I was forced all the way out to Pleasant Hill after spending months looking in Berkeley/Albany for something affordable.

I now pay the same rent for a 1 bedroom in Pleasant Hill that my 3 bedroom in West Oakland rented for in 2014. And after 6 months of a hellish 1 hour+ commute I'm realizing it is completely untenable from a mental health perspective. This is for a single person who makes six figures. I can't even imagine what has happened to working class families in that time period.

AnsisMalins2• 8 years ago

Who is replacing you?

perfmode4• 8 years ago

people willing to spend 50% of their pay on housing

kcorbitt2• 8 years ago

That's surprising to me -- Craigslist shows a number of 1BR places around Oakland in the $1500-$2000 range. Which is still crazy expensive in an absolute sense, granted, but should be reasonably affordable for a single person with a 6-figure income.

aphextron7• 8 years ago

Have you tried showing up to one of these listing's open houses? Good luck.

acchow• 8 years ago

These are fraudulent postings.

closeparen5• 8 years ago

Deep East Oakland is one of the most dangerous places in the country. It’s on a whole other level from an iffy gentrifying area like SOMA. It’s something you just don’t mess with. $1500-$2000 in one of Oakland’s more acceptable areas is likely fraudulent, or is actually advertising a room and not an apartment.

stmfreak3• 8 years ago

People always set undisclosed criteria on "I cannot afford" statements. The problem isn't unsustainable rents, the problem is renting the size of place you want, in the location you think you deserve, at the price you (and everybody else) wants to pay.

temporaryacc62• 8 years ago

Shouldn't employers provide Japanese style sleeping capsules for employees at that point? Or can they keep up wages with the increasing cost of living?

thedirt01152• 8 years ago

That's how you end up with the factory-campus style places like the iPhone factories in China where the workers basically never leave.

On a more serious note, though, some employers do want to build housing near their headquarters (such as Google, for example), but are blocked by city councils. From what I read here, it sounds like you can't put up new housing anywhere near SF.

raitom• 8 years ago

There was something like that in North of France last century. The coal mining companies constructed a lot of houses for their employees (wikipedia page, in french https://fr.wikipedia.org/wiki/Coron_(urbanisme)).

It's definitely not bad. It provided poor miners with a decent place to live. Today a lot of them are still here, renovated and retired miners still live in them, most of them for free (my grandparents for example).

bartozone• 8 years ago

If your apartment in Oakland was built before 1976, it's rent controlled and that's definitely illegal. Even if there wasn't a former lease, they can't raise the rent by more than a certain amount, often less than 1%.

samcheng• 8 years ago

The poster mentioned '3 bedrooms' which I'm guessing means a single-family residence. Houses are exempt from rent control.

massaman_yams• 8 years ago

Hasn't been below 1% since 2009. http://rapwp.oaklandnet.com/issues/rent-increase/

aphextron7• 8 years ago

I also found that specific 1976 law when he brought up the rent increase, but it turns out my building was built in the 80's. I don't necessarily agree with rent control anyways, and I'm not angry at the landlord for wanting to earn market rate on his property. It's just really exhausting to live somewhere like this.

liveoneggs4• 8 years ago

Move to Atlanta.

jimmy14• 8 years ago

Or Charlotte. Or RTP. Or Austin. Or Phoenix. Or Chattanooga. Or all the other various wonderful places to have satisfying lives and careers and not pay astronomical rent. Seriously getting sick of hearing about the renting woes. Give them the middle finger and move. It's not worth it.

Glyptodon• 8 years ago

I was shocked when I compared cost of living and discovered various online calculators show that making $60k in Tucson, Arizona is about the same as making somewhere in the $104-140k range in the Bay Area (I'm not sure of what the different assumptions are between calculators that lead to the range, could see it be something like including Oakland vs San Rafael).

pascalxus2• 8 years ago

The difference is much much greater than that if you have a family and are looking to buy a House in the bay area with a decent size back yard. In most parts of the country you can do that on a houshold income of about 40k to 100k.

In the bay area penninsula, currently, you would need an income of about 600K in order to get the same type of house and yard combination (which would roughly cost 2M to 3M). And that's with the vast majority of your income going towards paying off that mortgage AND property taxes.

anonymous513312• 8 years ago

Yup. I have a friend who works in a sf hospital. Works 2 weeks on and gets 2 weeks off. 12+ hour shifts and lives at the hospital. She owns a home in phoenix and flys into sf every 2 weeks. Gets the high salary and gets low col in phoenix.

jdhn3• 8 years ago

Does she sleep in a spare hospital room? I feel like the hospital wouldn't allow that due to the fact that the room would potentially need to be allocated to a patient.

nicodjimenez• 8 years ago

That's what happens when you don't allow population density to grow to its equilibrium state. An overpriced, congested city, with absolutely no culture, as the only people who can justify living in SF are basically engineers, designers, and marketing people at tech companies. People living on a dime trying to do something interesting (art, tech, music, ...) is what gives cities their characters. When you take that away, you get a homogeneous group of people making between 100k and 200k a year who think about nothing other than money.

jpao792• 8 years ago

I've always thought it would be cool to create a site which matched people living on a dime trying to do something interesting (art, tech, music, ...) with cities/suburbs (i.e. urban development organizations) looking to diversify and grow a culture scene. Like Sacramento/Gilroy/Detroit/Yakima.

Sort of like an Airbnb but matching cities/towns and culture makers wanting permanent, low cost housing.

anonymous513312• 8 years ago

No worries about that because you can always find an underemployed traveling artist willing to live in their van to score some gigs in sf.

thebradbain5• 8 years ago

I think it's very important to note that the entire purpose of minimum wage, per FDR, who instituted it, is to ensure it's enough to support an entire family of four on only one income earner alone, above merely sustenance levels, and allow them not only to rent but to own a home. And by that metric, we've horribly failed as a country.

“By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act)

The tech gravy train won't last forever –everyone, us tech workers included, will be better off from advocating for fairer wages, even if that means taking a pay cut in the meantime. Otherwise I fear the extreme wealth gap will bring upon a new Gilded Age worse than the one pre-1929. And we all know how that turned out...

gdilla2• 8 years ago

At the time, the labor pool wasn't truly global yet. It's one argument to pay living wages inside a closed-ish economy, it's another when low skilled jobs, especially in manufacturing, are done for pennies on the dollar across the globe. There's always tradeoffs.

thebradbain5• 8 years ago

Across the globe, in countries where they're paid pennies on the dollar, the cost of living is also a magnitude lower than it is here.

We should be paying our workers here a wage that keeps up with the cost of living. That's the human thing to do. Otherwise, we're the cartoon evil economists in a "See why these two lines don't intersect? That's why the poor people must starve" type of situation.

jahewson2• 8 years ago

It’s a nobel intention but home ownership is always going to be impossible for many in a growing city which refuses to build new housing, no matter how much wages are. Elevating the salaries of those at the bottom isn’t a solution to SF’s current housing problems as those at the top will just bid higher. Building is necessary.

thebradbain5• 8 years ago

I totally agree. There is no excuse for SF and the Bay Area to be restrictively zoned the way it is.

ynot269• 8 years ago

Coming from someone not in the bay area the most expensive place I've ever lived was outside of Boston (Waltham) and even then it was a summer sublet. Why is housing so expensive, more importantly why are landlords allowed to adjust their prices so aggressively and based on some anecdotal evidence seen in this thread, randomly? I'm currently locked into a lease and I'm 95% sure the price is pay is what im locked into for a full year, but are landlords really raising prices monthly?

edit: words

Reedx2• 8 years ago

Not really, it's mostly once/yr (leases do lock the price). But they can be very aggressive increases (e.g., +$500/mo).

There are some areas/buildings that are rent controlled though, then the increase is very small once/yr. But in those cases new leases make up the difference. I had a rent controlled one bedroom apt in SF for $2k/mo, when I left it was then priced at $3k/mo.

pound• 8 years ago

It's not some landlords who randomly drive prices up, they just respond to increases in property value.

duckfruit• 8 years ago

"To remedy the situation, the coalition urges Congress to invest in housing assistance."

Of course their answer is federal subsidies. Never mind that regulations can be passed at the local level to ameliorate the situation -- without costing the government a cent -- by allowing for more housing construction. With interest groups like these we'll never get anywhere.

justinzollars• 8 years ago

After living here since 2009 I think I've figured out the Bay Area and San Francisco. SF is a city that doesn't want to be a city. It just doesn't want to grow up. Silicon Valley has since spilled over into San Francisco and we have a combination of massive job growth, prosperity and extremely limited new construction. Every year more people arrive than we construct housing for.

Compounding the problem are many local politicians. Serious local political players are divorced from reality denying the relationship between supply and demand with the cost of rent; while focusing on price fixing techniques such as rent control as a solution.

The only way out of this is to build. We have to make this decision.

anonymous513312• 8 years ago

The decision has already been made. No more building. More people can come but good luck to them getting housing. It is highest bidder wins.

kec• 8 years ago

Well, we could also repeal / sunset Prop13 and allow existing properties to reach their actual market values. This would suck in the short term, but it would lead to way more liquidity in the market, even if 0 new units were built.

toasterlovin2• 8 years ago

It doesn't need to suck in the short term, either. Phase things in over 10 years. That's plenty of time for people to adjust.

SoylentOrange2• 8 years ago

I have two nitpicks with the study:

1. It uses a two-bedroom home as a baseline instead of a one-bedroom. While I understand that may be interesting for historical reasons, it's not a practical metric for modern considerations. If we want to talk about housing affordability, it's more honest to discuss one-bedroom apartments for single earners. We could also talk about two-bedroom apartments for dual-income earners.

2. The 30% pre-tax rent metric doesn't make sense to me at all. Why would that be invariant across income levels, and across states, given both graduated taxation and the vast differences in both income tax and sales tax across different states? In California, 30% pre-tax works might work out to more than 40-45% post-tax, depending on your income, and the remainder doesn't translate well to purchasing power given varying state sales taxes.

I'm not saying that affordable housing is not a problem, because it clearly is. Just that, to address the problem honestly, we need to use better metrics to figure out what a fair solution is.

djrogers• 8 years ago

Re #1 - why would a 2 bedroom not be more applicable when discussing affordability? Having a roommate is pretty standard when trying to save money, and I don’t think ‘not wanting one’ changes wether or it it’s not affordable that way.

SoylentOrange2• 8 years ago

The study talks about a 2-bedroom apartment on a single, minimum-wage income. There is no discussion of dual incomes or roommates. The idea is for a single family to live in the 2-bedroom

thedirt01152• 8 years ago

My gut feeling is that they had the prices for 1BRs and for 2BRs, and the numbers sounded more impressive with the 2BR. They could've easily displayed both so people could do their own calculations for roommates, etc.

briffle2• 8 years ago

We'll just forget people have kids..

ggg99902• 8 years ago

You’re not supposed to be able to support a kid on a minimum wage. The minimum wage supports the minimum lifestyle - single person household with minimally acceptable levels of food/clothing/shelter/other.

jahewson2• 8 years ago

2. The standard in the Bay Area is for landlords to require tenants have gross earnings of 2.5 to 3.5 times the rent and to verify this with pay stubs. Personally I think this is ridiulous and antiquated as it should be my personal choice to blow half my cash on rent if I want to! But that’s the way it is.

sjg0072• 8 years ago

Yeah it's weird b/c they can easily rent it out for more if you default. Some of the big corp run apartments only require $500 security.

nradov2• 8 years ago

Landlords don't care about personal choices. They want tenants who can still afford to pay rent even if they have an unexpected major expense one month.

In practice some prospective tenants simply falsify their incomes. I'm not condoning this but all it takes is Photoshop and a ladder printer.

closeparen5• 8 years ago

Hmm? Blowing 1/3rd of your gross income and 1/2 your cash are approximately the same thing under our tax rates.

notadoc2• 8 years ago

Opening satellite offices all over the midwest, NE, and south is just begging to happen. Cost of living is comparatively dirt cheap in MN, MI, WI, OH, IL, IN, MS, TN, GA, AR, AL, NY (outside of NYC), PA, etc, and quality of life is very high. But alas those locations aren't trendy, so the west coast obsession continues despite the wild costs.

Apocryphon• 8 years ago

I'm surprised that not more tech companies are opening branches in Sacramento. There are already some far-distance commuters going from Sac to the Bay on 4 AM carpools.

anonymous513312• 8 years ago

It is happening slowly. Job seekers just need to put their preference to those employers.

boxy310• 8 years ago

Mid-tier Midwestern cities are quickly gentrifying with bikeshares, kombucha shops, craft breweries, and bookstore/brewpub combos. Madison, Indianapolis, & Cincinnati often get mentioned in these conversations, but I know Detroit is having a bike renaissance right now and land is _dirt cheap_ in all of these cities.

I know Indianapolis in particular has had an influx of tech companies opening large campuses, including Salesforce, Genesys, and Infosys. This has gone hand-in-hand with rises in indie music festivals and a blossoming craft brewing industry.

lotsofpulp• 8 years ago

It's also possible that those places don't have something many people (especially young and tech/science oriented) want, such as temperate weather, mountains to hike, national parks, beaches, low humidity, politics, food, marijuana, etc. It's trendy for a reason.

notadoc2• 8 years ago

Everything you list is in each of those locations, though admittedly California has among the best weather in the world.

jdhn3• 8 years ago

I've mentioned this before, but I'm surprised that more companies aren't looking at opening a satellite office in Reno. 4 hour drive to SF, 1 hour flight, and it's half an hour away from Tahoe.

perfmode4• 8 years ago

I moved to Brooklyn last year and have zero regrets.

agrippanux• 8 years ago

When I left San Diego for the Bay Area in 2008, I repeatedly heard from others, "I could never leave this place".

As I prep to sell my Bay Area house and move back to San Diego, I have only heard "I don't know if I can stay here much longer". That sentiment is the same regardless of the person's occupation, from VC partner to guy at Staples recycling my old electronics.

jcadam• 8 years ago

This is why I just ignore Bay Area (in fact, all of California) recruiters these days. I know y'all work on some cool poop over there, but unless you're willing to triple my salary, I'll stay put here in Florida.

anonymous513312• 8 years ago

Imo smart move. No income tax in fl, cheap housing, beaches, decent weather, toruism etc.

Making 50k in fl will net you more cash in your pocket compared to living in sf making 100k after your bills are paid.

xtrapolate• 8 years ago

So, which came first to the bay area? the engineers, or the companies? Are we at a point where most people move in to the bay area for work? Or is it the other way around (ie. companies wanting to establish a foothold in an area known for its prestigious/unique population of software-engineers)?

My point is, not only are the employees losing here, but also the employers. I no longer understand the motivation of companies to continue expanding at problematic locations (such as the bay area and new-york).

If Google left the bay area completely tomorrow, would that somehow restore the equilibrium?

jpao792• 8 years ago

For better or worse, I think a good analogy is making a movie in Hollywood versus anywhere else. Yes you could make your movie in New Hampshire, but it'd be that much more inertia to find a screenwriter, to cast the talent, find the crew and get funding, etc.

And for tech startups, where time is of the essence and the secret recipe for making a blockbuster tech IPO is somewhat ephemeral, why risk it if the opportunity really is as amazing as you are telling the VCs and LPs.

Another aspect is a lot of startups have the back-up plan to get acqui-hired by FANG or Cisco which are located in SF/Bay Area, so it make sense to have the key talent on the team prepared for that eventual integration/docking with the mothership.

jdhn3• 8 years ago

The new non-Hollywood hotspot is Atlanta. Apparently their movie industry has been growing by leaps & bounds.

briffle2• 8 years ago

I think that the success of the Amazon HQ2 process (for amazon, its a success) will lead to many other companies starting the same process. Towns are bending over backwards, and throwing money at the possibility..

walshemj• 8 years ago

I would have thought that a 2 bed over looking central park in NYC would have been more expensive

matchagaucho• 8 years ago

Office space rent is similarly outrageous in the bay area... forcing our company to be remote only.

#FirstWorldProblems

iamcasen• 8 years ago

I'm still surprised by that. I visited Manhattan in 2010 and was noticing 1br rents that average around 6k per month. Nothing luxurious, just a decent 1br. Manhattan is far larger than the entirety of SF, but when they talk about rents, they compare the entire greater NYC area to SF, which is disingenuous.

Honestly, I don't think SF is equipped to handle such a high population density. I'm not sure it ever will be. Oakland probably could though.

11thEarlOfMar• 8 years ago

'Root Cause' of high housing costs is in the success of the tech companies that are rooted in Silicon Valley. Specifically tech because of their:

1. Penchant for offering stock options as a form of compensation.

2. Extraordinary growth in scope and profits.

3. Leverage of virtually free computing and network power, which makes the output of a single engineer distributable to billions of consumers. This justifies 'whatever it takes' salary structures.

4. Very high density of these companies in Silicon Valley.

Among the current top 100 US tech companies by Market Cap, 14 are in Silicon Valley, representing > $4 Trillion in 'new money' market cap, combined:

Apple: $929 Billion

Google: $830 Billion

Facebook: $557 Billion

Intel: $256 Billion

Cisco: $207 Billion

Oracle: $187 Billion

Netflix: $171 Billion

Nvidia: etc.

Comcast: etc.

Adobe: etc.

Broadcom:

Paypal:

Qualcomm:

Tesla: (#100 as of this writing)

The housing costs what it costs because supply is highly constrained and the companies that are headquartered here can afford to pay the salaries that enable their workers to pay these astonishing prices.

throw2016• 8 years ago

Its only a matter of time before marriage rates and families crash. No one can have kids or get married when they can barely survive.

That will change the nature of society, the economy, demand, demographics and the labour pool. Most societies at this point start trying to bribe people to get married and provide incentives for kids but usually its too late. The sense of well being has been replaced with insecurity and businesses then get increasingly desperate about promoting immigration to keep wages down.

Libertarians and their 'wealth creators' benefactors still stuck in the settler mindset may soon find themselves in the odd position of trying to bribe people to get married and women to have kids. Life is too complex to be reduced to self serving ideologies. Everything has consequences.

snarfybarfy• 8 years ago

Duh! Those places are probably also the most expensive to buy.

I don't really know about the Bay Area but I would bet that rents are probably "cheap" compared to prices.

Where I live, it currently takes 30 annual rents to buy the same place.

The average over the last couple of decades is 26 annual rents. Which means renting has relatively become cheaper. I bet the same holds true for the Bay Area.

Nation’s top three most expensive places for renters: all in Bay Area

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