Nation’s top three most expensive places for renters: all in Bay Area(mercurynews.com)
mercurynews.com
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/
304 comments
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.
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.
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.
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.
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...
“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...
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.
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.
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.
You'd think VCs would push back on this too, because that's where their money is going.
VC -> Startup -> Employee -> Landlord.
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.
> 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.
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.
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.
"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.
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.
Well if you would define 'area' by something else, we would have 3 different places.
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.
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.
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...
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.
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.
Houston seems to have the best cost of housing to income ratio for technology people.
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?
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?
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).
'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.
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.
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.
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.
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.
Office space rent is similarly outrageous in the bay area... forcing our company to be remote only.
#FirstWorldProblems
#FirstWorldProblems
>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.
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.
I moved to Brooklyn last year and have zero regrets.
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
edit: words
I would have thought that a 2 bed over looking central park in NYC would have been more expensive
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.
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.
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.
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
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
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.