What it’s like to house-hunt in Silicon Valley, the nation’s priciest market | Hacker News Reader

What it’s like to house-hunt in Silicon Valley, the nation’s priciest market

washingtonpost.com

71 pointstrusche101 comments

The Bay Area is real estate insane. Prop 13 driven NIMBY-ism prevents any reasonable density housing from being built.

After living there for 2 years and paying insane rent (more than $5K/mo on a 1200sqft house), I now telecommute for a Bay Area company, and live in central VA in a 3000sqft house in a good school district with a community pool, etc, which cost less than $400K. I telecommute most of the time, and I fly to CA 5-6 times per year (on the company's dime). My quality of life is so much better. I mostly miss the weather and the food, but not the traffic & the crowds and the prices.

Not to mention that I'm using one of my 5 bedrooms as a private office, which is so, so, so much better than a low-walled cube in an open office environment.

While it's perfectly reasonable to criticize housing policies that restrict density, there are plenty of densely-built areas of the world that also have very high real estate prices (NY, London). Silicon Valley/SF has become this perceived mecca of the tech world both because of the concentration of certain types of tech companies and the other nice features of northern California. But the reality is that there's an upper limit to how many people can live in a given area--even if more housing and transportation were built.

London is about 2.7 times as dense as Silicon Valley [https://www.washingtonpost.com/news/wonk/wp/2015/10/06/there...]. San Francisco has 18187/sq.mi while London has 14070 and Manhattan has 66940 [wikipedia]. Manhattan is a bit cheaper than San Francisco [http://sf.curbed.com/archives/2015/08/05/sfs_median_home_pri...] so it seems population density does not explain the bay area's high prices.

Only supply and demand explains prices.

Density is necessary to build more supply in the same area. Unless you have a plan to level mountains and use the rock to fill the bay, they aren't making any more land area.

That's why density is the alternative to crazy impossible housing prices.

Contrary to popular opinion, San Francisco is nowhere within the line of sight of an "upper limit to how many people can live in a given area".

Housing prices would seem to disagree with you given that waving a magic wand to create 10s or 100s of thousands of housing units in SF (and transit, etc. infrastructure to support them) isn't going to happen in less than decades even if the residents wanted it. Obviously, the technology exists to remake SF into a much denser city. But that's a different city.

This is a hodgepodge of several different arguments. You should pick one and flesh it out.

Do you mean to say:

1. That it's impossible to add 10,000 new housing units per year? That seems pretty unlikely.

2. If SF added 10,000 new housing units per year, housing prices wouldn't decline? Why not?

3. The politics of SF rule out the construction of 10,000 additional housing units per year? I agree, but think that needs to change; that's my whole argument.

4. That both politics and logistics would enable SF to add 10,000 additional new housing units per year, but that shouldn't happen because it would change the character of the city? That's an intellectually coherent argument, but one that I think a lot of people don't find compelling; I think if you're coming from a place of "save San Francisco's status as a postcard city", you should be up-front about that, rather than pretending that your argument is that fixing SF housing is somehow impossible.

(I took the "10,000" notion from your comment).

1.) Clearly not. Given the political will, it's technically possible (modulo earthquake safety) to make SF arbitrarily dense.

2.) Unclear. It's fairly well-established that building more roads leads to more traffic, for example. So building more housing--up to a point, of course--may just lead to that much greater a population.

3/4.) Politics (i.e. the preference of voters) do seem to rule out a mass increase in housing units and associated infrastructure. I don't have any opinion on what SF should or shouldn't do. I don't live there, don't particularly want to live there, and think the character of SF is a matter primarily for the existing residents.

I wasn't suggesting that I had four different rebuttals to your comment. I was saying that I didn't understand your comment because it seemed to hop from one argument to another, sometimes within the same sentence.

(3) and (4) aren't the same argument.

Argument (3) concedes that increasing housing supply in SF is a good thing, but that it can't happen because of political obstinacy. If you believe this, you're on the same page as I am, and we don't have much to debate.

Argument (4) suggests instead that increasing the housing supply of SF is a bad thing, because it's more important to retain the character of San Francisco than it is to accommodate people who want to live there.

There may be some argument (5) that I missed as well.

We remain in a place where I still don't understand your objection to my argument that San Francisco should resolve its housing problems by drastically increasing the supply of housing units.

Where we differ and where I was probably unclear is that I'm not arguing either for more housing or against more housing. I don't think that there is generally a good state or a bad state that exists independently of the desires of the voters of SF. So I don't think increased housing supply in SF will likely happen to any great degree because of "political obstinacy" but I don't have an opinion on whether that's a positive thing or a negative one. If I wanted to move there, I'd probably think it was a bad thing but would also acknowledge, it's not really my call.

Put another way, I don't consider growth to be a universal positive. I would certainly tend to vote against zoning changes that created more development in my semi-rural town.

At this point, #2 almost certainly won't help, but merely draw population from parasitical cities where jobs far exceed housing (mountain view, palo alto, menlo park, etc.) In this way, housing activists in SF are right to fight private buses: they enable companies located on the peninsula to dump their housing problem on SF.

I also think this is part of the reason people in SF (rationally, in a purely self-interested sense) oppose building: the amount of increased housing on offer won't help them. So they bear the costs of living in a construction zone with zero benefits.

Building 200k homes over the next 5 years would help, but no-one is in any way contemplating that. And even beyond the housing fight itself, the infrastructure here can't handle it.

Totally agree with your comments about the Bay Area screwing over people with Prop 13. I'm just amazed at how much better quality of life you get on the east coast vs the Bay Area- way more bang for the buck and also easier commutes and better public transit.

My friends who live in NYC metro area all have gorgeous estately 4bedroom 5 bathroom houses for between 500-700k in nice little commuter towns close to NYC like Rye and Stanford with simple commutes to NYC on the trains.

Whereas we make more than they do we are stuck scraping together 1.4 million for an ugly crack shack in redwood city. Seriously my wife and I looked at this piece of crap last weekend:

https://www.redfin.com/CA/Redwood-City/3452-Page-St-94063/ho...

Not only was it a mold filled fucking dump, it was located in the hood with no public transit nearby. meanwhile my friends who work in NYC are able to get something gorgeous like this for way less $$ and can walk to downtown and a train station:

https://www.redfin.com/CA/Norwalk/15203-Sylvanwood-Ave-90650...

or even if you want to get more expensive, this is still cheaper than the Redwood City dump, you get two stories, a deck and giant yard and you are right next to MetroNorth:

https://www.redfin.com/NY/Rye/200-Highland-Rd-10580/home/201...

Multiplying the growth of new housing units in SF by some low integer multiple won't decrease the cost of housing in SF? Can you go into more detail about the logic there?

The infrastructure in San Francisco (you mean, I assume, the roads and the public transit system) are abysmal, but they've been that way for a long time. It's possible that the Muni has actually improved since the second dot-com boom; when I lived there, it was a joke.

Cities up and down the peninsula -- MV, PA, etc -- have far more jobs than housing supply and that ratio continues to grow. viz MV approving 3+ million square feet of office space for linkedin, palantir, and google -- and then maybe, possibly, potentially authorizing up to 5k homes. Maybe. It's being discussed. So whenever SF builds housing, some goes to people from SF, and a lot of it goes to people previously renting in very supply constrained markets on the peninsula. Because of the foreign-to-sf buyers, and because new condos are generally of higher quality than much of sf's existing housing stock, and because these new buildings are cheaper than available houses on the peninsula, building more increases demand by bringing in such exogenous buyers.

Much of the increase in supply is in condos costing $1.2k +/ft2, ie more than $1mm, which exacerbates the above effects. They also don't help for people who can't afford to spend the roughly $5.5k or so that a $1mm property costs (after $200k downpayment, inclusive of tax and hoa fees.)

If you want to bring down house prices in sf, you have to build enough to satisfy pent-up demand from the peninsula, and outrun continued population movement from the whole US into SF. Or force the peninsula to build housing.

5k or 10k homes isn't going to to outrun demand, particularly after years of building virtually no housing in sf.

The "foreign to SF buyers" (most people who have lived in SF in the past 30 years were probably at some point "foreign to SF") are buying up leases whether SF makes more of them or not. How does increasing the supply of leases do anything but lower prices?

As I wrote: by drawing new buyers from the peninsula via two obvious mechanisms: increased availability, and increased quality/dollar. Where current residents came from is irrelevant to my argument. I don't understand where you get this faith that small amounts of construction magically decrease prices. Even micro-econ supply/demand curves don't say that, because of the aforementioned exogenous purchasers.

London and New York are not good comparisons to San Francisco. Although SF is a global city which is well interconnected with the rest of the world, it doesn't come close to London and NY, which are the greatest metropolises in the world in terms of ease of access to just about any human capital or other trade good in the world. They are also many times larger than SF, both in total population and population density, + public transport is a lot better. It is unreasonable to expect that they would be cheaper in proportion to their density.

there is a lot more at play here than NIMBY-ism http://greyenlightenment.com/why-bay-area-real-estate-keeps-...

Economics is all about supply and demand. The article you quote lists several reasons for high demand (all of which I agree with). On the flipside, the prop-13 driven NIMBY-ism restricts the supply. Together they result in the perfect storm of an insane market where you have to submit a picture of your family along with an essay when you bid on a house.

My theory is that prop 13 is the root of all evil. If it were repealed, and the old timers were forced to pay market rate taxes on their houses (and hence forced to sell out), it would change the voting demographics. Eventually, zoning rules and city plans would be relaxed to allow taller, higher density housing. This would gradually ease the supply side, and result in a larger supply, and hence lower prices. That's how it seems to work in many other markets.

>the old timers were forced to pay market rate taxes on their houses (and hence forced to sell out)

So, force people to move out of the neighborhoods where they've lived all their lives. I'm by no means a general gentrification opponent but arguing that people should be forced to move out of their homes so that wealthy techies can move in?

Or stated differently, make everyone pay their fair share. The current system is "I got mine, screw you" for those fortunate enough to have bought property years ago.

It's surprising to me that people can look at the millionaire SF property owners as being deserving of public subsidy in perpetuity.

Where I live tax assessments are done regularly, tempered by a maximum 10% annual increase to prevent excessive shocks to the market. It seems like a reasonable compromise that puts all people on equal terms.

Yes, exactly. That's how it works everywhere else in the country. The entire valley should not be preserved as a 1950's time capsule.

In the rest of the country, when somebody like Google or Facebook comes to town property values shoot up. Property tax assessments follow 1-5 years later. The higher assessments combined with lucrative offers from developers convince the existing owners who cannot afford to live there to move. They take their windfall and move someplace more affordable. Meanwhile, developers build higher density housing, which keeps prices, while high, from reaching insane levels. Everybody wins.

I can sympathize with a lot of prop 13 opponents. The fact that it adds friction to mobility, making it oddly more expensive to downsize than to stay in a house that is too large, is a definite problem.

However, I have no sympathy for your argument. It is essentially, "I don't like the way people are voting so we should find a way to run them out of town."

Prop 13 correctly protects against such a situation. That is a good thing.

> However, I have no sympathy for your argument. It is essentially, "I don't like the way people are voting so we should find a way to run them out of town."

The argument is NOT to run them out of town. The argument is that them not feeling the pinch of high prices encourages them to vote for policies that drive housing supply down, to everyone else's detriment. This comment summarizes it better: https://news.ycombinator.com/item?id=10822124

From the linked comment:

> have not been forced to sell due to real estate taxes

We're discussing why high real estate taxes forcing people to sell is "good thing"... That's pretty much running them out of town.

I was trying to point out that drewg123 does make a meatier comment than the one you replied to. But your comment elsewhere (https://news.ycombinator.com/item?id=10823456) indicates that you are well aware and sympathetic to that general line of argument.

Like you, at the moment, I am not sure what a proper solution will come up to.

I don't understand what you mean. Looking at the wikipedia article on Prop 13, it says:

"It also prohibited reassessment of a new base year value except for in cases of (a) change in ownership, or (b) completion of new construction."

I live in Los Angeles and we have a similar problem being a popular location in California. Basically, there are people living in their homes paying the same taxes they paid in 1978, while anyone trying to buy a similar house will owe modern taxes. So you might be paying $15,000/yr. in taxes and your next door neighbor in a comparable house is literally paying $500/yr. That makes no sense. I've owned property in other states and assessments are done every 1-5 years.

The fallout is that certain areas pay significantly lower taxes, thus contributing significantly less to the community than other areas. It's made worse by the fact that if you inherit your house from your parents (or if they gift it to you before they die), you continue paying the 1978 taxes (or whatever year they bought or built the house). That's insane and it's unfair. It has nothing to do with how people vote. If they paid their fair share, you might have a point, but they don't, unless they decide to do construction on their house. It makes for a very uneven (and I would argue unfair) market.

Look at it from the other side of the coin.

I bought a home. It was a responsible purchase, in line with my earnings. 30 years later, I pay the home off. I retire on a fixed income which accounts for the roughly fixed costs of my home and its upkeep.

Now a big company builds a campus next door. Home prices skyrocket. What do I do? If my property tax is bounded, I'm fine. If not, then suddenly I lose my home because my fixed income did not account for my property taxes skyrocketing.

Sure, Prop 60 accounts for that by transferring basis, but maybe I'm 54 when this occurs so it doesn't apply. Or maybe I'm not retired, but have 3 kids in the local school district and having to uproot my family because I can't afford my home is extremely disruptive.

One of the points in buying a home, rather than renting, is to guarantee that stability.

I agree that there are problems with prop 13, but fairness is a two sided coin. It is certainly not fair for my home (which I own) to suddenly become unaffordable due to external circumstances. Likewise it's not fair for a neighbor to pay double for roughly the same consumption of public services.

I don't know the solution. Possibly decoupling property tax from home values might be the answer. It certainly isn't a very good tracker for public good consumption.

I'd just add that, in many locales, property taxes largely go to fund school systems. So forcing a retiree to move because they can't afford increased property taxes is doubly unfair given that they're not getting the benefits of the higher taxes. As I said elsewhere, gentrification happens and I'd argue is largely a positive, but I'm very leery of forcing people out of property they own. And, in general, I don't think it's good for the community.

I don't see how the fact that someone might be on a fixed income makes it fair for their children to inherit the house and tax-basis from 50 years ago.

Also, I don't see why property tax increases for existing homes couldn't be capped in some way (say no more than inflation) to make this situation reasonable for people in the scenario you've laid out. But just saying, "Your taxes will never increase again as long as you stay in your home," hardly seems reasonable.

First, they do increase. Capped at 2%, correlated to inflation.

Second, I agree on the inheritance piece. That is a problem.

Interesting words there. "Old timers" and "forced". Pretty much the reason Prop-13 came about.

Telecommuting is a sweet deal, congratulations!

Realistically speaking, no amount of density housing would provide a 3000sqft house for 400k. Maybe a condo in a high rise, possibly skimping on "good school district". Density housing is not the path towards the 3000sqft SFH American dream, sorry.

Did you have to take a salary cut when you moved to VA? (e.g.: so your salary would be more in line with VA norms than silicon valley norms?)

That is the big problem with telecommuting for me - it seems hard to find companies which are willing to pay silicon valley level salaries to people living outside silicon valley, and if you take a pay cut, the savings in rent diminishes drastically.

I suppose it is different when you start in silicon valley and move elsewhere while staying in the same company, rather than just starting out elsewhere. But that is still an concern since your salary gets reset if you ever change companies without moving back to silicon valley.

Those companies do exist, and they're getting more common.

Not the poster you're replying to, but I manage both remote employees and local devs. We do adjust salaries based on location, but the adjustment data we use seems skewed in favor of remote employees. As an example, an employee in Florida gets $140k which is only $30k less than we'd pay him if he were local.

> But that is still an concern since your salary gets reset if you ever change companies without moving back to silicon valley.

I'm not sure if this is true. If you're going to work for another SV company and remote, it's quite common for you to be able to quote a number higher than you got from your previous remote job and negotiate your way down to at or just above where you actually were in the previous job. The only time where I'd see you needing to adjust your salary down is if you took a job with a non-SV company in the interim. Just be aware that the salary data used by each company may be different.

But it is probably helpful to come to SV/SF at some point in the beginning and transition to remote work initially because hiring out here is somewhat incestuous and having a well-known SV employer on your CV will help with getting past HR filters and ensure you get the necessary LI touches.

I changed jobs in order to return home from the Bay Area. With my old employer I would have taken a small pay cut, but that wasn't an option since my group did not have a presence in my home state, and the VP my group was under refused to consider telecommuters. I'm not certain what the pay cut would have been (since they were very secretive). There was a guerrilla salary survey which indicated that lower-cost areas did not have substantially lower salaries (maybe 20% less).

With my current employer, I get paid the same regardless of where I live.

I went through this but was lucky enough to do it 3 years ago. Our price point wasn't above a million but was around 600-700k. For good schools that pushed us out to the Tri-Valley area of the east bay where we finally bought a house.

We looked for 18 months. It got to the point where I'd leave work if a house came on the market on a Thursday so we could have our offer in on Friday. We were out-bid 12 times for all cash offers, mostly from overseas investors I was told.

We finally found a house where an older lady was selling the house where she raised her kids in and after I saw it I went back the next day and knocked on her door and showed her some pictures of my family and almost begged her to pick our offer. We ended up having to bid +45k over asking.

The funny part is if I sold the house right now, I wouldn't be able to afford to buy it back.

> We were out-bid 12 times for all cash offers, mostly from overseas investors I was told.

I understand this is the case, but I don't know why it's better for the seller if the buyer pays cash: say the buyer takes out a mortgage to buy their house, doesn't the buyer's bank pay the seller in cash?

Things tend to go faster with cash buyers. In particular, no risk the bank will decline them for a mortgage. I suppose there's less difference if they're preapproved.

Even preapprovals can fall through as the bank can decline to fund when they see the home in question or the valuation comes in lower than the sale price.

In a hot market cash is king as it removes 2 of 3 most common contingencies people have. For the seller this is two less weeks where things can fall through.

Less paperwork and a quicker closing date.

There is zero risk of the deal falling through because the buyer's mortgage fails. In booming markets, people will make offers and then find they can't actually get a mortgage for that amount. For example, sometimes the bank will refuse the mortgage if the house doesn't appraise close to the value of the offer.

Greater chance of the deal going through. If they have so much cash they are also less likely to bail out on a small undiscovered defect.

The first offer we made on a house a few years back, the other bidder offered 50% cash so even though we were $10K more with 20% down, we lost out.

We literally did the same thing 18 months ago. 600k-700k, tri valley, appealed to the owner on grounds of nostalgia for raising their kids there, overpaid 30k. After a year we were in a position where we couldn't afford our own house if we sold it.

Two days ago I just closed on my second house. Brand new, gorgeous 3500 square feet house for $363k. Great schools and good commute. The company I work has over 10,000 IT workers world wide with four major hub offices in the US. None of the hubs are in SV because of reasons like this.

Which city are you in, out of curiosity?

Atlanta

Is being brand new a good thing in houses in the US? In the UK few people would prioritise a new house as it means no period features, no fireplaces, no history, almost invariably thinner walls, no established garden etc

Generally speaking, construction in the US is of very poor quality. Houses, even at the high end of the price scale, are invariably wood frame construction since at least the 1940s. That explains the preference for single-family housing (because noise insulation is so poor) and also the 30-year mortgage (without maintenance we are looking at a lifetime of ~ 25 years).

There's also the US way of dealing with crime - you move away from it. City centers are not desirable to live in, neither are inner-ring suburbs. These two factors really explain the exurban appeal.

In France a new house means you don't have to pay the notaire, which adds 7-10% to the price. A new house doesn't have liens or inheritance disputes.

A friend took 18months to close on a building in Paris. The notaire had to track down family in the US, Uruguay, Australia, and the U.K. and ask them to approve the sale and split the sale accordingly.

Pros and cons, that's for sure. My current house is from 1974 - it's built very well. There's a comment below about new houses being built poorly - there are builders that cut huge corners but still stay within code. The new builders will clear cut pristine forest areas, build houses and plant little twigs called 'trees'. My current house...I had to cut down an oak tree as it was getting a disease..I counted the rings and it was 90 years old. Same for all the houses around my old neighborhood. The houses are about 40+ years old but you can tell the trees are older than. Builders, and people cared back then. I love walking in my old neighborhood...tons of trees, you don't even feel like you're in a big city but I'm 15 minutes away from downtown Atlanta.

The new house is a open floor plan, 2 story foyer/family room, tall ceilings etc, 50% larger more square footage. The outside looks beautiful.The funny thing is, the price of my current house and new house are very similar...old is valued at $330k, old was purchased a $363k. But my old house is closer to the city in a nice area.

I am moving to a newer part of town. It's closer to work for both me and my wife. All houses around there are no more than 20 years old...most are within 10 with new construction everywhere.

This is mind-numbingly inefficient. We really need to build up.

As is the tech world being so concentrated in a single area.

Back to first principles: Location, location, location.

Either build more concentrated housing like Manhattan or make commuting from a longer distance more efficient. Perhaps a little of both.

Google has $60 billion in overseas cash. Negotiate a tax deal to build the Google Maglev from SF to San Jose, turning the 50 mile journey into a 20 minute commute.

Note that 50 mile in 20min is a (relatively modest for european standards) 240 km/h. The fastest links in europe can sustain 270-300km/h, using traditional, overground trains. Since you would probably need to dig, you don't care as much about noise and you could easily go at top speeds using 70s technology.

However, you probably can't succeed with just two terminals 50 miles apart from each other. It'll likely be more successful with 3-4 outlying stations, meaning you won't be at "cruise" for the entire 50 mile journey. Still, 30 minutes is also a win over the current status, especially if it's direct to the campus where you work (no "last mile" problem on that end).

Those are long distance TGV trains not commuter services - though I can get from 65 miles out of London to work (near st Pauls) in just over an hour.

Why not run the Maglev the other direction into Stockton or even Sacramento? The last thing San Fran needs is even more housing competition. Stockton is dirt cheap, San Fran is still crazy expensive.

But "Mag lev to Stockton" doesn't sound so sexy despite being a more rational idea.

Maybe Google instead ought to learn about remote work instead of blowing billions on a Mag Lev.

Yeah, even as far out as Dublin is still very pricey.

Remote work is the cheapest most efficient way if you really look at it. It is the future. The culture is growing and slowly and organically we'll get there.

Hopefully it's a future of options: not mandatory to work remotely. I'm with the majority though: I prefer to work from the office most of the time

If you want to make commuting more efficient, wouldn't it make more sense to have the maglev run from the east bay (or somewhere much more affordable) than SF? I haven't read great things about real estate affordability in that market. How would such a maglev will help affordability in SV?

I think more likely alternatives are:

* build up if a high density coalition can be assembled (unlikely, but possible)

* people stop moving to the bay area or leave when they are ready to settle down. Remote work becoming more acceptable may be part of this.

We face some of the same issues where I am (Boulder), but of course nothing near the intensity. We have huge chunks of uninhabited plains to our east that are being built out. If we have the water for it, and can handle the in commute traffic, we are good to go. (I realize those are big ifs!)

Good luck trying to get any high capacity public transport built in California in less than 20 years. That's the main problem, everybody is fine with stuff being built just not in their back yard or with their tax dollars.

Why not make working from home more efficient instead? We run from home and it works fine. Meet once every few minths somewhere nice (as you save all those costs for an office, expensive housing etc). I did both scenario's multiple times and I have not found more efficiency in sitting in an office together /most/ of the time.

The D programming language dev team is all over the world, every continent but Antarctica. I initially worried that it would be a mess to work together, but with github/Skype/email/forums and the annual D conference it works surprisingly well.

Doesn't work as well as collocated teams even more so for a start-up where team collaboration is key.

Life is about tradeoffs. There are certainly successful startups that are significantly distributed. But I don't really disagree with your general point. I suspect that we'll see startups for which collocation is a priority increasingly looking outside the Bay area.

We are a startup. We collaborate fine; I think this is a myth and/or it depends on getting the right people.

And to that point; you can sit in an office in another city or state which costs a fraction. You are not in silicon valley just because you need to sit together in your startup right?

But from experience a collocated team works better - some types of work are more suited to remote working LOB support for a mature system for example.

> Either build more concentrated housing like Manhattan

Manhattan is not affordable either. Especially considering that getting kids in good schools is famously challenging.

But one could argue that Manhattan's ultra density tends to geographically consolidate lots of the craziness to a small area. The outer boroughs are quite reasonable in comparison to either the article, SF or Manhattan, but are still within NYC boundaries.

another solution is to spread out the interesting stuff more.

I think higher-density zoning is an easier thing to do in real life, but if this were Sim City I'd concentrate on making more areas be somewhat independent, so we don't all feel the need to go to the same spot

No, that doesn't help much either: see New York city. Besides the point of buying a house is to have a yard and not have neighbors bouncing on your ceilings or leaving trash in the hallways or stealing your bike.

What's actually needed is more remote working and a departure of the colocation mentality for businesses that don't actually need colocated employees.

Software engineers rarely ever need to be in an office. A hardware engineer almost certainly does. SaaS sales people: no need for an office. Customer support -- no office needed there either.

Even many lawyers don't need an office (by office, I mean a traditional office, not a home office.) I was a plaintiff in a lawsuit and never once did I even see my attorney face-to-face.. And it was complex litigation.. And we won.

Doctors obviously do, content marketers obviously do not. Accountants.. Definitely not.

My point is that the problem isn't housing, it's the density of tech companies that seem to think physical proximity to Sand Hill Road actually matters. The problem is also that Sand Hill Road also seems to think it matters. But it doesn't. Cases in point Basecamp and Github.

Commuting to an office only to use Slack as the primary day-to-day communication. THAT'S mind numbingly inefficient. Commuting to an office only to stand in a circle for standup and then going back to a desk to work all day.. That's inefficient. Marissa Mayer is wrong.

> No, that doesn't help much either: see New York city.

NYC manages to have cheaper housing than SF despite having radically more demand, thanks mostly to the ability to add supply at a reasonable rate.

I think the point is already lost if NYC is an example of affordable housing. Houston is probably a better example if you want to talk about affordable housing in a major city. But commutes in Houston are getting pretty crazy even.

> I think the point is already lost if NYC is an example of affordable housing.

NYC is actually quite affordable though. If you're willing to have a ~30 minute commute, you can easily live in some affordable places.

There are even more affordable options internationally though. Berlin, for example.

I feel like the problem with working from home is that people tend to procrastinate and do anything to avoid doing actual work.

There's a new guy at the coworking space I work at who is self employed, and specifically moved from his home office to the coworking space, just to get himself out of the house and stop procrastinating.

I'm the same, I can't get anything done at home. Having a dedicated work space improves productivity a heap.

That being said, it's totally possible to have the staff spread through coworking spaces or serviced offices through different cities, working remotely.

Also, I spend a lot of time at work interacting with other developers, which is a lot easier and better to do in person. Pair programming is an exercise in frustration trying to do it remotely.

Not everybody is equal. I really like to work from my little 1 square meter here in my house and I'm by far the most productive here, rarely get any work done in regular offices with all kinds of distractions around me.

It's richly ironic that everybody out to innovate and "disrupt" every other traditional business is so conservative about remote working. I've been working remotely for five years now. I'll admit it comes with its own set of challenges but with good people it can be very productive and efficient.

I could easily get a job in Silicon Valley right now but why would I?

I'm in a wheelchair - I wonder if you can still build in accessibility while constrained to tiny apartments.

Of course. There won't be any internal stairs, and you may well prefer to take a ground floor apartment. If it's a new building, it's more likely to have wider doors and a completely level floor.

If the housing is reasonably dense, there should be useful shops close by.

(In the UK, two friends of mine get an allowance from the state for their disabilities — one uses a wheelchair, the other is blind. It might be £56/week, I'm not sure, but it is paid even though they both have good jobs. Part of the purpose is so they can afford to live a little closer to a station, or in a larger apartment, or whatever.)

The ground floor could be reserved for wheelchair bound people. I'm surprised that isn't more or less a rule anyway, it seems to make perfect sense. In NL elevators are pretty rare in the inner cities so we have these things called staircase elevators, little platforms that you can roll onto with a wheelchair which will then take just about forever to go up one floor.

The problem with this is that there are often more disabled people in an area than there are ground floor units.

I absolutely loathe staircase elevators although in 2015 they proved more reliable than the standard elevators I had to use.

One of the things that make Silicon Valley unique is its low density. Almost all other tech hubs are located in extremely dense cities: NYC, London, Seoul, Tokyo... Rather than turning Silicon Valley into another one of these, I'd prefer to see other tech hubs flourish and offer viable alternatives. (I don't own a house in Silicon Valley, nor can afford one.)

NYC, a tech hub? London, a tech hub? Perhaps you have some persuasive arguments to the contrary but in my direct experience there is far more "tech" going on in places like Seattle, Portland, Denver and Austin than these places which have some tech work.

My few examples were not meant to be sorted nor exhaustive. They were meant to illustrate the fact that places that offer a lot of tech jobs tend to be high-density cities, rather than a collection of comparatively lower-density areas like Silicon Valley. The places you mention all seem to be high-density cities as well. Maybe I shouldn't have written "extremely dense" then, I guess Austin isn't that dense compared to NYC—but still much denser than Silicon Valley surely?

The bay area is quite dense. SF, Oakland, San Jose combined come close to the population of Chicago. Austin and Denver are much less dense than the bay area.

Denver is only recorded as "not dense" because the city technically includes all the land around the airport where there is very little built. If you don't include the airport property the density is pretty close to San Jose.

If we are discussing tech hubs, then the surrounding area should be included such as Boulder, Broomfield, etc. Just like we should include Mountain View, Palo Alto, etc. Having lived in both places for ~4 years each, the density in the Denver area is not even close to the bay area.

New York has Columbia University and NYU, as well as nearby schools like Stony Brook, Cornell, Princeton and Yale. New York has commercial banks and investment banks and hedge funds based in New York with massive worldwide networks, huge machine learning setups generating billions in trades (I used to administer one machine which had over $1 billion a day flow through it). Someone like Peter Weinberger (the "w" in awk) bounced between Bell Labs and Rentech. Speaking of AlcatelLucent Bell Labs, there are other R&D departments like IBM research. Plus most of the major advertising and design shops. I know the Facebook Android UI is done in Facebook's NYC office. Google owns a huge building in New York, and many Bay Area companies have large offices in New York. Not to mention publishers and their networks - the New York Times, Time-Warner, Viacom and so forth.

In 2000-2001, when people like Marc Andreessen were having trouble getting VC, investment banks and hedge funds were splurging on tech investment, even after all the Y2K money they had just spent.

One thing is hedge funds don't jump up and down saying look at our algorithms, look at our infrastructure. They tend to be very low key - I only know of one Youtube video with the currnt head of RenTech, which has $65 billion of assets under management, almost all of which is capital from the firm's 300 employees. They are no slouches, and have had some excellent computer scientists, mathematicians and scientists work for them.

New York does not have to persuade anyone it is a tech hub, especially relative to Austin, Denver, Portland and Seattle.

And Cornell Tech campus in NYC starts running business in 2017.

London has become a massive tech hub. The digital technology sector employs 200k people [1] and is makes it one of the biggest global tech hubs outside of the Valley.

[1] http://www.computerweekly.com/news/4500248323/London-steams-...

Pittsburgh, Austin, Portland, and Raleigh - Durham also have a decent tech scene and sane housing prices.

Portland's housing market is incredibly hot right now and their prices are definitely edging out of (if not already) sane territory. The big difference is that you don't have to go quite so far out of town to get back to better prices.

It is nearly impossible to build up in Silicon Valley, due to prop-13 driven NIMBY-ism. Thanks to prop-13, most of the people that bought their houses in the 60s and 70s have not been forced to sell due to real estate taxes on their absurdly overpriced homes. These people vote, and they are dead-set against anything that "changes the character of the neighborhood". That translates to anything other than single-story, single family housing.

Add to that the fact that most of the "new" people who would benefit from an increased housing supply are in multiple non-voting demographics (young, non-citizen immigrants of various visa statuses), and the old-timers hold all the political power. Why would they ever vote for anything that might decrease their property values? If you talk to them in person, they will occasionally grumble about traffic, or that they have to drive 1.5 hours to visit their grandchildren (because their children cannot afford to live in the area), but they will not actually do anything to change it. The reliably vote against universal mass transit in the valley, and against dense housing.

The only logical choice is not to play the game at all. Most large employers with satellite offices in other areas of the company do not give an appropriate salary penalty for living in a low-cost area of the company -- at least nothing that resembles the actual cost of living difference between silicon valley and other markets. So the best option is to work for a company where you can transfer to an satellite office in a low cost city (eg, Google Pittsburgh), or to just work for a company that allows telecommuting (which is what I did).

>Most large employers with satellite offices in other areas of the company do not give an appropriate salary penalty for living in a low-cost area of the company -- at least nothing that resembles the actual cost of living difference between silicon valley and other markets.

This has been the case forever though. Back in the 1980s, northern California jobs didn't compensate for higher cost of living even relative to fairly expensive east coast cities. And the cost of living in crappy apartments in Manhattan was a trope back then as well.

Sidenote: Eichler homes look very modern. Definitely better looking than your standard SV brick-and-wood-paneling matchboxes.

Compared to central London SV is cheaper and London does' not pay as well for techies.

Id love to live in say fitzrovia or one of the lovely Georgian houses in the city near st pauls - but unless I win the lottery that's not going to happen.

There is no doubt Silicon Valley real estate is expensive. But this article is extreme.

For starters, Los Gatos is an upscale city nestled down at the bottom of SV. Bentleys and Ferraris are everywhere and the Tesla Model S is a downright common car. It's not representative.

If you look around in San Jose, Campbell, Mountain View, Sunnyvale, etc, the prices come down and quality goes up. No, they don't approach the national average, not even close. But 1.5 million for a fixer upper is ridiculous.

What is the market like in the East (Oakland) or North Bay (Sausalito and north?

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