83 percent of Bay Area renters plan to leave, says survey
sf.curbed.com
sf.curbed.com
Title should be "83 percent of ApartmentList visitors in the Bay Area plan to leave". While anecdotally I know a lot of people that are considering moving away, it's nowhere close to 83 percent, and the way the data was collected for this PR piece doesn't support that conclusion either.
As long as we're sharing anecdata... 83% sounds about right based on my friend cohort.
All this facilitates within-region moves at the expense of between-region moves.
If I go to ApartmentList.com, it defaults to San Francisco, but right underneath the three local metro areas (ironically, it doesn't have San Jose, where I am) are glossy photographs of Atlanta, Austin, Charlotte, Chicago, and 12 other metro areas. And if I click on one of them, the first filters that come up are by price, size, and amenities. Everything is located on a map, and I don't need to know anything about local neighborhoods.
ApartmentList is clearly using "people who are looking to move between cities" as their market segmentation and features for them as a differentiator, which is great, but also means that their data is suspect if generalized to the population as a whole.
(As for anecdata; I'd say that among my friends and acquaintances close enough to keep tabs on their life, maybe 50% are looking to move out of the Bay Area at some point, including myself & my wife. But only three - out of a sample size of several dozen, perhaps close to a hundred - have actually done it, and two of those moved back to their hometown to be close to family when kids arrived. Moving cities is a big commitment; people dream of it, but few do it.)
> Back in March, some 40 percent of locals responded to an annual phone survey saying they want to live elsewhere. But that was a survey of all residents, not just renters alone.
an annual phone survey saying they want to live elsewhere
Does that mean I want to live elsewhere within the intended interpretation for the context of that particular survey?
Fast forward to today. I've worked at startups, big tech, and generally have lived that tech life. I see my friends back in Ohio taking vacations, buying homes, and generally having a nice life. And I see myself here, paying more and more rent each year, working in the high stress of startups and in the tech scene as my own passion for the actual tech slowly wanes. Sure, I make a lot of money and I have a fancy job but money and prestige, I've learned, isn't everything. If you're pissing all that money away with no end in sight, except to become fabulously wealthy in some kind of exit that likely won't ever happen, you start to question your original motives.
At this point I have decided to stay another five years here, mostly so I can say I had a "10 year career" in the bay area. I will then take that experience, most likely back to the midwest, and try to leverage it into a better job than I'd be able to get by spending 10 years back in the midwest. Hopefully, this strategy will be successful for me. I think by then I'll have a shot at becoming director or VP-level, and coupled with my experience out here I will stand out in the midwest. I'll also have a far better experience-lead "technical education" out here than I would have ever had in Ohio, and that at least stands for something.
Best of luck in your venture.
"Mostly, because I'm a nerd and wanted to be around other like-minded nerds and fulfill my nerd dreams."
and
"taking vacations, buying homes, and generally having a nice life. "
Ideally, you wouldn't have to choose between the two. In fact, the two should compliment each other instead of trade-off.
New York and Bay Area tech companies can pay two or three times what the suburban office park type companies pay, and they have other benefits that add up as well (i.e. fully-paid tiny-copay health insurance). While housing costs will eat into that somehwat, whether you rent or buy, I don't think that they come close to cancelling out that increase.
Then, when we do go on vacation, there are more flights, since we're near major international airports. Since I live near EWR and JFK, I don't really need to consider connecting flights for European vacations, for example.
There are other less objective things for describing a "nice life", of course (IMO, renting vs. buying should be categorized as one of these, neither is superior). For example, non-chain restaurant availability, quality of cultural institutions, etc.
You're coming out ahead only if homeownership is not important to you, or you're willing to live in shared/substandard housing. Which is a perfectly reasonable thing to do in your early 20s, but not necessarily long term.
But I managed to keep a low/mid-range SF salary and work remote from Ohio. So, while I'm not a director or VP yet, I do have a house that will be completely paid for in about 8-10 years total, and I should be financially independent by age 45-50.
Smaller cities (the Portlands, New Havens, and Columbuses of the country) will continue to inherit the overflow, with those cities that have the lowest cultural cachet taking the lowliest remnants. Given the demand for urban environments by businesses and consumers, it seems like the only thing holding back any city from heavy growth is incompetence or negative reputations.
IMO, the problem is the policies of the city that are unfriendly to growth and make housing a zero sum game, the problem isn't than people expressing their preferences.
I'm not arguing against development, I just think a lot of the pro-development folks imagine that cities are making things zero sum with their policies, when real property will always have that element.
That's not what we should be striving for. We should be striving to allow people to comfortably live and work outside of just downtown Manhattan. The biggest obstacles to that are zoning laws and a decrepit subway system that makes traveling between boroughs outside of Manhattan practically impossible.
Better public transportation would also relieve pressure on the city center.
And about this time three years ago I was standing in an office in downtown Seattle and we could count fourteen cranes. There's still a lot of space for midrise buildings. I'm just not sure transportation is keeping up.
https://www.bizjournals.com/denver/maps/crane-watch
I keep wondering when the supply of 2k+/month shoddily constructed one bedroom rental apartments will catch up with the demand for them. That may not seem like a lot for the Bay types, but Denver has traditionally been a lot cheaper. The last 5-10 years have seen crazy population and rent growth.
Of course, everytime we go back to Seattle to visit the family we are reminded of what real heavy traffic looks like (though that still isn't anything like what LAs traffic look like where I once got into bumper to bumper traffic at midnight on a Sunday from Anaheim to Santa Clarita - now that is real traffic).
Remember: if housing is expensive, it must be because there aren't enough skyscrapers. There can be no other logical explanation.
I share the sentiment. I find it likewise amusing that the same crowd that argues that building additional highway capacity won't accomplish anything because it'll just get filled with more cars seems to think that additional housing capacity won't similarly be filled up immediately.
It will allow more people to commute into the city, which is the goal, right?
> seems to think that additional housing capacity won't similarly be filled up immediately.
And more people will be able to live there... Isn't that the goal?
Housing is boom/bust. Housing booms always attract dumb money and always bust.
So... it unlocked a whole bunch of housing supply? Sounds like a great policy!
The goal is "I want to be able to afford to live here." The only way to really affect prices is to absolutely flood the market with new housing. You can't just do it with a couple hundred units here, a couple hundred units there. Everyone in the world wants to live in SF, remember? They're just going to get snapped up and housing will still be expensive, the only real difference is that there's some more people living there now.
There's the Downs-Thomson paradox[1], which is usually quoted as adding capacity to highways to the road network will not reduce congestion, and the one I believe you mean. What the paradox actually states is that "the equilibrium speed of car traffic on a road network is determined by the average door-to-door speed of equivalent journeys taken by public transport." That is, as you add capacity to road networks, you disincentivize people from taking public transport, because the roads are quicker, until the two level out in terms of cost/benefit.
I'm not certain how directly applicable it is to the housing market. Essentially, what is the housing market's "public transport"? I suppose you could argue it's still public transit, since there is a trade-off between the more expensive, but closer housing and the cheaper but farther away public housing. But I'm also in favor (and I think most of the people in the HN SF crowd are) of better public transit in the Bay Area and better housing/zoning policy. (Either would help me and many others: a better public transit network would reduce the need for housing in cities closer & further up the Bay.)
There's also Jevons paradox[2], which says that when "technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the rate of consumption of that resource rises because of increasing demand." This is mostly concerned with reducing use of the resource though, and I fully expect that better zoning policy would result in more and cheaper housing, more use of said housing, and more demand — all in line with Jevons paradox, but none of which seems detrimental when compared to the current situation.
[1]: https://en.wikipedia.org/wiki/Downs%E2%80%93Thomson_paradox
In transport, more roads means more capacity to carry traffic, and hence, more induced traffic. The death-spiral effect comes from the fact that each additional car on the road produces far more congestion than its operator alone experiences (negative externalities). True costs aren't born by the operator, so gridlock ensues.
For housing, or rather, urban development generally, the challenge is that denser cities with more inhabitants (generally) give rise to greater opportunity. This is where the action is, for whatever definition of action you have.
I'm not entirely sure what produces the death-spiral of cities pricing themselves out of their own housing markets, as SF is doing, but I'm inclined to think that the general trend of holders of investment assets to seek inflation of those assets' values is a key element. That is, you have a house, you've sunk a lot of money into it, you want its value to increase (hey! free money, right?). This turns into collaterisable assets for loans or other opportunities as well.
There's also the fact that high-value urban real-estate markets make for good options to bank wealth appropriated elsewhere, or for money-laundering. Values are high, tend to remain high, the market is liquid, and urban cores are far more stable for real estate prices than outlying areas. Hence, the housing stock value is bid up further.
Land value tax might help address that. Something I'm looking at. Originally suggested by Adam Smith and David Ricardo, though championed by Henry George.
Basically they had a problem of high value 'factories' being undeveloped since there was only opportunity costs associated with their not producing goods. Government rents were increased such that factories were only profitable for people utilizing them, and they saw a huge increase in total gdp.
I keep hearing that gaming comes up with interesting case studies, but rarely specifics such as this.
That's not quite how housing works. Yes, I suppose there's a broad supply-demand dynamic inasmuch as areas with more affordable house prices tend to see bigger houses and land parcels bought, but still, people don't just use more units of housing stock in response to a slightly less onerous housing crunch. If housing in the SF Bay area suddenly became more attainable, I wouldn't buy 3 apartments just 'cause.
The very wealthy will do it, of course, as they always have, and always will.
No, but you'd have all those people waiting on the sidelines jumping in immediately. Net result, housing is still expensive (sorta like the highway analogy, we still have tons of traffic after building these lanes).
But that's equally true of the highways too. If you widen a freeway, I'm not going suddenly commute to and from work an extra 3 times each day just 'cause.
> when you make driving easier or cheaper, people will do more of it because they can.
Not really, not anywhere near the amount people claim. This is a common misconception made by miscounting traffic on freeways past capacity. They mistake failed trips as non-existent ones, and then mistakingly claim "new traffic" was created when failed trips stop failing.
It's like saying "if you make hospitals easier or cheaper, people will get more sick because they can". You could even support that false claim, by measuring patients in hospitals. "We had a 100 bed hospital last year, and it was full. We built a second 100 bed hospital this year, and now it's full too. Clearly building hospitals is a bad idea, because it just makes more sick people".
This obviously isn't true, people were still sick before, they were miscounted because they weren't in the hospital (it was full). Just like how new freeways don't create new traffic, they serve existing traffic that was miscounted before because it wasn't on the freeway (it was full).
Yes, this! One thousand times this!
Either additional capacity helps service that need or it doesn't. You can't argue it both ways simultaneously. So many people want to pick and choose where they apply that logic, just to fit their political desires.
These two ideas are inherently contradictory, and it is an constant pet peeve of mine that most people refuse to recognize the contradiction.
The difference between housing and cars-on-the-road is that housing is generally seen as a positive thing that people get real value out of, whereas cars-on-the-road are an unfortunate side effect of people not having housing near where they live. We explicitly want fewer people to drive into our cities; on the contrary we want more people living in housing near where they want to be.
To put it another way, if you really think that building more housing will make things worse, then why not argue for the destruction of existing housing stock to make things better?
Or do you think we're at a peak, where we have built just the right amount of housing and we should just leave it alone? I guess there probably is some amount that's just right for each city, though I have no idea what we'd have to look at to figure out that number.
I don't personally believe that. I think capacity solves shortage needs, consistently. But most don't.
Most people really believe your reasoning is valid, and they advocate for the exact destruction you've mentioned (see "Road Diets" / freeway removal / any article from CNU / etc).
> The difference between housing and cars-on-the-road is that housing is generally seen as a positive thing that people get real value out of, whereas cars-on-the-road are an unfortunate side effect of people not having housing near where they live
I think most people agree with you, but I personally believe this is a very dystopian view. Transportation is an inherently positive thing too, that real people get real value out of. Even if every single human lived right next to their work place, it's still a good thing that people have fast reliable easy freedom of movement in whatever method they prefer.
Even if you live right next to your workplace, your next job won't be. Your spouses job, or next job, won't be. Your parent's home won't be, your children's school won't be. Unless your constantly moving every 2 years, this idea of "transportation is just a bad side effect of not living inside your workplace" doesn't really hold up to regular life, in my opinion.
Fewer believe that people-living-in-homes is bad.
Both are laughably wrong.
That's more like a symptom.
Policies are shaped by people and people are motivated by forces. The motivating force in this case is probably money. There are lots of people who make money off real-estate and they're motivated to keep supply down to drive up costs. What better way than by influencing public policy to suit their agenda.
If you try to change city policy to make housing affordable then you're basically declaring war on a very influential portion of the population that has a lot to lose.
Edit: I can't read. Pittsburgh has only lost 0.7% since 2010: https://www.census.gov/quickfacts/fact/table/pittsburghcityp....
Broader urbanization is much less pronounced and, to the degree it's a trend, it's mostly to what a lot of people here would be more inclined to call suburbs than cities.
Out of curiosity, where did you get that information?
This article claims that the population of Pittsburgh is essentially static:
http://www.post-gazette.com/local/city/2017/05/25/2016-censu...
Also cost of living is LOW, any decent wage here, especially in tech. You'll live like a king.
I'd moved there after college because it seemed to be the last Upstate place with any life in it but that all drained away.
What's changed in the intervening time? What's drawing people there, specifically for jobs?
There's obviously a significant sample bias in the above.
Anecdotal obviously but after graduation everyone I know left, and those who couldn't still mostly want to. And to me that's the difference between say a city like Philly that's growing because people want to stay there after graduating.
Side note Rochester is the same day over and over. And that day is cold, dreary and probably snowing. The 4-5 months of Spring/Summer/Fall though is amazing though.
4-5 months of amazing is fine with me, spend the rest working on projects, and making money.
I have a few friends that are looking to move north. Georgia seems to be absorbing a lot of Florida residents.
Rochester and Monroe County have an amazing system of public parks and green space, and they're always well-kept. If you golf, there are many nice public courses. Bike trails abound for transit, and you can hop on the Erie Canal towpath trail and ride from Buffalo to Albany. Irondequoit Bay has sailing, and people row on the Erie canal and Genesee river. Club sports take advantage of the parks. Parks nearby have hiking, though not tall mountains.
The Public Market is an amazing resource as you mention. Vendors at "farmers' markets" in big cities have realized they can charge inflated yuppie prices, while the Public Market has farmers from the local area selling directly at wholesale rates, as well as third-party vendors selling overstock/ugly produce from local supermarkets. Wegmans is the best, for consumers and their employees.
The Rochester city government is (mostly) functional and well-meaning, and citizens generally have a sense of civic pride and interest in their communities. The tax base is not what it once was, but the city makes the most of what it can, with new experimental initiatives and impeccable maintenance of public services. Rochester weathered the recession well.
A downside is of course the grey skys of winter, but that is counterbalanced by four distinct seasons with a beautiful summer. When I lived in California I missed having four seasons.
It's a fairly future-proof place to live; Western NY is not prone to natural disasters like earthquakes, droughts, wildfires, volcanos, tornados, or hurricanes. Most areas are high enough where flooding is not a concern. Climate change will have less of an impact than many other areas. Blizzards are likely the most probable "natural disaster", but you can wait them out: snow melts.
If VCs were willing to take more risk, they could bankroll startups in cheaper areas like Rochester and spread their resources across larger portfolios.
Buffalo is having a similar resurgence, or so I've heard. Western NY is cheap enough to take risks, and people are. New restaurants; cocktail joints; art, dance, meditation, and yoga studios are opening all the time. Startups could be next; take a look at Rochester for your next company and lower your burn rate.
The growth in tech over the past decade had some clear winners, but any city that is just mobilizing now is entering a crowded pool. Anyone thinking ahead should consider how remote work will change businesses in 5 - 10 years, and start planning from there (schmooze freelancers instead of VCs and prepare legislation that would benefit the employee, rather than the business).
I live in New York City, and I can certainly empathize with the no one wanting to do endure a long daily commute in a crowed, cramped, subway full of people where you likely might not get a seat. (LIRR/MNR/NJT are great in comparison (but terrible in frequency).)
But I dissent on your comment on living and working in Westchester (or really any suburbia in general). I understand people think the city is hip and all, but I really like greenery, nature, having a lot of space, being able to get to places in the comfort of your car, reasonable/low cost to own a home, generally low cost of living, the lack of noise, clean air, etc, etc. What's so dull about it?
There is a lot of middle room between suburbia and NYC for build environments.
Right now I live in what I guess would be described as a town. Its ~100 miles from any major urban area and it's much more effective at providing the majority of the things you mentioned plus amazingly short commute times! It also has some sorts of benefits you would associate with the city as well - for example, I can walk to at least 10 establishments as well as 2 parks whereas when I lived in a suburb the street I lived off of was 4 lanes 45 MPH and didn't even have a sidewalk. Even if it did have a sidewalk the noise of a mass of neverending SUVs buzzing past is unpleasant.
You would also have no problem driving almost everywhere in a smaller city.
Luckily both exist -- often times the sweet spot is to live near downtown + transit of a smaller town. Then you get a faster commute, some walkability, and the option to do things in town as well.
My opinion on suburbia that I stated was based on what would be "suburban town" moreso than a "suburban bedroom community." I've never lived in the latter.
I know it's just my opinion though, I know some people like suburbia but smallish towns like mine are better at providing greenery, nature, and a low cost of living plus a pleasant environment. To me suburbs are the opposite of that. (Getting to the airport is a giant pain in the ass though...)
Pretty much the first thing I did when I moved here was take a walk!
Look at a town like Beacon NY. Beautiful place with ridiculously cheap real estate.
If we had high speed trains we could link these cities to NYC for daily commuting and it would pay for itself with increased property values.
There's so much value being lost and inconvenience beared by us because of shitty government.
Of course, you can run them express, but then they probably wouldn't stop in small towns like Beacon or Cold Spring. Amtrak is basically this on the New Haven line, how many people actually take it to commute?
I hope the trains pass you by. We don't want you.
Go drive South a couple thousand miles if you want to be an insular hillbilly.
Taking hints from the likes of Japan to support this growth; and other examples and ideas would be cool for discussion here as a solution to this metro-area-growth.
> https://www.theguardian.com/cities/2014/sep/30/-sp-shinkanse...
> https://en.wikipedia.org/wiki/T%C5%8Dkaid%C5%8D_Shinkansen
A big problem I see with going to westchester to nyc is the parking costs in nyc. Like $50/day is wayyyyyyyy too high to be sustainable. And the trains are just too slow, it is faster to drive from where I am in westchester than take the train.
Regardless, the "corporate campus" will need to go through a reimagining if it wants to appeal to city-weary knowledge workers. This will require some more lateral thinking beyond replicating Facebook's Headquarters in White Plains, NY.
Well I think this is it. I was born in New York City, and while it may be more expensive than some town in the Midwest, the housing problem is not like it is in San Francisco. On the other hand, if you insist on living in Greenwich Village or Williamsburg then you will have to pay. If you're OK with living in a slightly older, not super exciting, middle class neighborhood that has a half hour commute to the city, then you have plenty of affordable options. Another thing about New York affordability is rent in some towns in the Midwest is cheaper but you need a car, in New York City you can get around pretty well without a car.
Also a commute into Manhattan does not have to be an hour. You can make a map of the rent prices of apartments in boring but decent neighborhoods that are within 10 minutes commute of Manhattan, then 20 minutes, then 30. Plenty of options. For myself, I can walk out my door and in less than thirty minutes walk out of a train in Penn Station. I used to live in another part of the city and my apartment door to office desk commute was less than 30 minutes.
Those fun bars and restaurant become generators of noise and parking problems. The fun diverse neighborhood translates into a school district where the legacy of desegregations means your kid will be dragged across the city for school. The list goes on.
NYC used to be a city where artists and writers could live, but it's become a city of trust fund kids, corporate shmucks, and tourists. Everybody works all the time - not because they're working on groundbreaking stuff - but to make a buck.
Personally my plan is to work remotely and go somewhere else, most likely outside the country because nothing in the car-obsessed suburban sprawl-infested U.S. compels me.
It's also very true that so many Americans are willing to put up with NYC because there's not many other options for proper cities in the US. The public transportation sucks and there's now a divide where everyone I know seems to be grabbing Uber to work which is totally ridiculous and irresponsible.
- AB 71 would raise $300 million a year for affordable housing, call your CA Assemblymember.
- SB 35 would take power from local NIMBY's for projects that meet affordable housing targets. Call your CA Assemblymember.
- Email baylands@ci.brisbane.ca.us and ask them to build 4400 units of housing on the Baylands, just south of San Francisco. They are waffling but the local residents want to build an office park.
- Email your C level employees and VC's and tell them about your struggles to continue staying here, afford a babysitter or find a good school, and ask them to get involved in developing better housing policy for the Bay Area.
Not having enough housing forces people to commute from further out, which adds congestion all along their path.
This is just an indirect subsidy of Facebook, Google, etc. By providing low income housing and food assistance to low income workers in high cost of living cities, it simply allows the well to do companies to continue not paying a living wage that corresponds to the situation that they've created by concentrating their businesses in the same area.
Any political body that tries to foster the growth of high-paying jobs in an area should also put in place policies so that there is at least 1 bed for every desk. More if they want to allow children, retirees, and manual laborers to live there.
NIMBYism cuts supply because existing homes are worth more when there are fewer new homes available. Any economically rational homeowner would want that (even though it sucks for everyone else).
Demand is high because people have gotten rich! Google and Facebook stock prices have increased over 2x in nearly 2 years. That probably made a $1M+ for a few THOUSAND people. Then extrapolate all the other big exits or stock growth in time period... unreal wealth creation for many people. Demand isn't going anywhere. It's a supply issue.
The problem is that big tech companies have practically unlimited money at their disposal, but are surrounded by communities that like their low density housing, open space lifestyle, think the traffic is terrible already, and aren't really interested in giving it up for any amount of money.
The reason the big tech companies are there is because these communities are really nice and venture capital people, CEOs and top engineers want to live in these nice neighborhoods. If it was just a cost issue, they'd be located in Fresno.
Of course real estate developers are hungry to build new rental apartments because the rents are so high and frame it as some sort of populist issue. It's really just rich people vs other rich people. There is no way they're ever going to build enough for prices to come down. Every tech company would move their entire workforce here if they could do so affordably.
The best solution, IMHO, is to improve public transit, which would have all other sorts of beneficial side effects. The downside is that it would bring poor people into the area which would cause quality of life issues as far as the existing residents are concerned.
This is changing; Facebook is sponsoring 1500 units, 300 affordable, in Menlo Park, Mountain View also becoming more welcoming of new housing, they recently approved 10,000 units in the North Bayshore area. Cupertino (where Apple is located) continues to distinguish itself in a bad way; they approved 11,000 new office spaces for Apple without any corresponding increase in housing, and routinely send people to San Jose city council meetings in an attempt to block housing on San Jose land.
> The best solution, IMHO, is to improve public transit
Again, there are promising developments here. Facebook sponsored a Dumbarton Corridor study, and all of the tech companies are throwing their money behind a new bridge tax ballot measure that would raise money for public transit. http://www.greencaltrain.com/2017/08/dumbarton-corridor-stud...
Wouldn't we be needing something more like 1 Million new units to fully satisfy demand for housing and bring prices back to levels similar to the rest of the USA?
A 30x30 grid of 100 story residential towers with 10 apartments per floor would nicely solve your issue...
So in theory they would solve the issue, it's just that your solution dwarfs the number of humanity's 100 story buildings by a factor of almost 50.
The issue is zoning regulations that make cheap enough and dense enough housing illegal.
Increased supply would boost the American economy and make everyone happy except the NIMBYs. But the NIMBYs have the political power.
If you really wan't to fix it, call your legislator and tell them to get rid of Prop 13. It's not commonly known for transplants to the Bay, but property taxes only get re-assessed upon sale of the property in California. They do not get reassessed every 5 years or so, like in most states (read the wiki article for more info, and yes, what I said is not exactly true, things get complicated very quickly, but I think the gist of what I said was true)
My folks in the East Bay paid ~70k for the house in about 1970. Their monthly taxes are under $200 and they paid off the mortgage a few decades ago. Their new neighbors paid ~1 million for the exact same 3 bed/1 bath but just filled with black mold. We estimate they pay ~2.5k/month in taxes, let alone the mortgage (likely ~6.5k/month total with electricity, water, sewer, etc. every month, for the rest of their lives).
https://en.wikipedia.org/wiki/California_Proposition_13_(197...
I think you see now why things are so crazy in the CA property market then. For a few years after the repeal, you'd be kicking a LOT of older home-owners out of their homes. My folks, likely, included.
However, what is the alternative? My siblings and I moved out of state a long time ago, due specifically to the housing issues. Most of my former HS classmates do not own homes in CA. They simply cannot afford it. Prop 13 'ate the seed-corn' of California youth's property aspirations. We simply cannot afford to own homes.
This is why I said that GP's ideas were only band-aids. The giant elephant in the room in CA housing discussions is Prop 13, something that is abhorrent to continue on with and something that cannot possibly be removed now.
CA will have to remove it someday, to give the youth any hope at reasonably 'owning' California, and everyday that it does not, things will get worse for when they do remove it. It's a quagmire, but it is the thing to talk about, not higher density band-aids.
Sure you can. Maybe not in LA, Palo Alto, or SF, but somewhere in California. I mean just how affordable do you think housing would get on the peninsula without Prop 13? $300K starter homes? Surely you jest. Manhattan doesn't have a Prop 13, still pretty expensive last I checked.
Everyone is moving to the area, and any additional supply is going to get snapped up instantly. And the issue of "grandma getting kicked out of her home" will always loom large in such a desirable and expensive part of the country, it's not something that would just happen in the aftermath of a repeal. I mean that was the driving force behind Prop 13 in the first place.
My Mom has a fixed income and owns her home. Plenty of savings for retirement like a responsible person. My Dad retired in 1986. This is in Fremont, California. Since then, prices have skyrocketed. In your example, she would have to pay $30K/year in taxes.
So here's the problem: how do you plan for retirement if reassessments are a thing? Depending on luck, you may live for 40 years or more past retirement. Must one move away from family that serves as a support system?
Some states do reassess, but recognize that that is a policy choice. California has made a choice which results in predictable tax consequences which can be planned for. It's not a perfect policy choice, but it is a legitimate choice that results in predictable outcomes.
Another solution would be to design the reform bill to grandfather in people who have lived in their homes for some long amount of time, or are above a certain age, or whatever.
In some sense, though, the way we are using land is currently very inefficient and improvements necessarily mean changing how we use the land.
The younger/new home-owners of CA are subsidizing your mother's housing costs, not the other way around. I'm happy that my folks are happy and healthy, and I know if they paid more taxes, they'd be in Reno or Phoenix.
But the couple next door to them? She's a teacher and he's a recruiter for some tech-firm in SF. He drives 2 hours each way, 4 a day, to get into SF each morning and then out again. We think her parents are helping out with the costs, there is almost no other way they can make those payments. Their little boy can't see his dad most of the days of the week, and when he does, it's after 2 hours of traffic. That's 2 families, one working full time and one retired (we assume, so heavy caveats here) that are now required to make ends meet for one little boy. How the hell are they gonna pay for his college? Will that boy know his father at all? What happens when Daddy gets laid off? Are they going to continue to be my folk's neighbors? Where are they going to go then?
Prop 13 is taxing the younger/newer homeowners for the benefit of the older homeowners. Many of these younger/newer people can't make the payments, not even close. So they need help from their own parents who are benefiting from the tax structure. This assumes that those parents are alive themselves, willing to help, and can help at all. Not all younger couples have that; it shouldn't be a requirement.
I'm saying that you should just let the market decide how these taxes are allocated, it seems to work pretty well for nearly every other state in this country.
Yes, it would be chaos for a few years. No doubt, my own folks would be forced to move. Just nuts all around. But every day that Prop 13 continues, it gets worse and worse for the youth of California and for their children too. Via Prop 13, California is directly hurting it's sons and daughters futures and therefore it's own. California is eating it's seed corn.
The dam has to break sometime.
Without roots in the city, there doesn't seem to be much to recommend it these days besides the weather and the massive, insane availability of liquid capital compared to the extensive dearth in other markets. But as long as the money is there, and other sources of investment capital remain locked away, that's not a bad recommendation.
SV VCs may be getting more cautious, but investors in other markets don't seem particularly eager to loosen the purse strings. So they may say they plan to leave, but I just finished a comic fantasy novel called 'Thud!', and this (lightly edited) passage comes to mind:
-
"I'd wonder...you know, if I were a king...I'd wonder why people were happier living in squalor in [the city] than staying back home. ...
"There's dwarf bars all over, and they've got mining tools wired to the wall, and there's dwarfs in 'em every night quaffing beer and singing sad songs about how they wish they were back in the mountains digging for gold. But if you said to them fine, the gate's open, off you go and send us a postcard, they'd say, 'Oh, well, yeah, I'd love to, but we've just got the new workshop finished...maybe NEXT year we'll go back home.'"
There is some sort of irony in SV VCs being at a keystone of the internet and yet somehow being unable to invest outside of SV.
If you want to make something physical, you can't hand-wave and make wild assumptions about growth rates and user acquisition and ARPUs. You have a Bill of Materials, distribution costs, a slim margin, and rapid competition from cheaper and often outright dangerous knock-offs with little recourse. Look what happened with hoverboards.
So in a market that is as jaw-droppingly risk averse as this, but people still want to grow their huge hoards of capital, the money takes the path of least resistance and follows the only available market that can theoretically produce an exponential growth curve more than once every few decades.
It's where I cut my chops because I could get a 6 figure engineering job without a relevant degree. Very few people expect to stay in a city permanently, and remember many of those workers aren't even citizens, so many of them plan to return "home" at some point.
This doesn't mean anything unless the influx is less than the outflux.
That said, I'm part of the 83% who are planning on leaving, but there are two main problems:
• If I leave, where will I go? As many faults as SF has, it's still a beautiful, world class city, rich with culture. Walkability is huge for me, and I don't want to live someplace where I'm tied to my car.
• Salary. Usually the cost of living follows the pay scale of a local economy, but that doesn't help you when you want to buy things priced at a national level: computers, cars, bikes, etc. If you earn $160k/yr, buy a new MacBook Pro isn't a big deal; if you make $60k/yr, you have to put a little more thought into it.
I see this brought up a lot, but these expenses are such a small portion of my outlay that it barely moves the needle. Maybe I'm just weird.
Also, cars do vary across geographical areas. The MSRP may be the same nationally, but the drive-off price is pretty variable.
If you're really affording all these things then your housing expense is manageable.
But most in these cities are not. At least in NYC it seems to be just trust fund kids who aren't running off debt / paycheck to paycheck living.
You'd need to put down $50k to mortgage a 3-bedroom house in a good school district normal housing market, or $250k to mortgage a 2-bedroom condo in a distressed urban neighborhood. That $200k gulf is 10 years of maxed-out 401k plus a new top-of-the-line Mac every year. Hardly anyone has that much to cut. But if they did, after 10 years, the gulf in necessary down-payment would be much wider than $200k and they'd still come up short.
That's why people are comfortable entering these situations as new grads (you can have a comfortable life as a young single renter in a small or shared space), but feel a need to leave them eventually (starting a family is basically off the table as long as you live there, and you're always at risk of being priced out if your rent rises faster than your salary).
Lyman Stone wrote a good piece on this where he speculates that part of the reason Millenials have been clustering in cities is that "Given that student loans have a fixed nominal value, they are often easier to pay off in high-wage, high-cost cities."[1]
[1] https://medium.com/migration-issues/millennials-have-less-de...
These companies need to realize that the market rate for the kinds of engineering and talent they demand is set in the bigger cities, not their little slice of the Midwest. I understand why they're doing it, but for all the issues in the Bay Area the opportunities are still better than almost anywhere else and so is the pay.
Housing costs are eye-watering from my perspective, but cheap for someone from SV or even Seattle.
A culture of remote work takes a lot of discipline, as it's so easy to have an in-person conversation, make a seemingly small decision at the time, and immediately the remote workers feel out of the loop.
Remote work is actually /hard/ to support, and a company has to make it a priority to do it well and be disciplined about writing down all communication. Otherwise, they're setting up their remote employees for failure, which nobody wants.
Also, there are things a remote worker just can't do; stand at a whiteboard and evaluate paths forward, for example. If a company values that sort of collaboration above anything else, it is certainly not "insane" to want people in the office.
Edit: I just got out of a meeting with someone in eastern Europe. An extra $20 for a camera pointed at the whiteboard solves the collaboration problem 90% of the way.
In my experience, meetings like this are more often than not a huge waste of time. Since I started working remotely I am less distracted and more productive, and have no trouble collaborating with other devs.
While it's true you have to have software and processes in place to communicate, it is doable.
Effectively managing an organization that is at least partially remote is more difficult, and my experience in the Bay Area is that management skill is often overlooked and underdeveloped, particularly in startups.
I've seen several companies with very very competent technical founders, very capable engineering team, and not one person in the company that can manage their way out of a brown paper bag. The only way for that kind of structure to work is having everyone in the same room.
Second, don't try to "time the bubble". Instead think about your goals. What do you actually want, and what is best for you (and your family if applicable). What's going to make your life more meaningful? What would make it a better story if someone were to tell it?
If cashing in now and moving someplace cheaper is in line with your goals, then do it!
If staying put and finishing off the mortgage is a better match, then so be it.
Lastly, financial independence doesn't have to mean not working. I'm still 10-15 years away from that point, but I certainly plan to keep working well after I have enough to retire. I'll just have a bit more flexibility in what I choose to work on.
Even if you're paying $2k to rent a studio, if your take-home pay goes from $500 to $1500 you're coming out way ahead dealing with the headaches of living here. But you need to move away to truly realize those gains.
Still love that city, though.
"The two-question survey (“Do you plan on settling down in another city?” and “What’s your biggest reason for leaving?”) covered 24,000 respondents nationwide."
If I was living in SF and someone asked me "Do you plan on settling down in another city?" - my answer would be yes, somewhere in the Bay Area suburb like Palo Alto. I think very few people are looking to "settle" in SF.
It could just be that renters in SF are the grumpiest ;-)
Disclaimer: don't live in the Bay Area and don't plan to, so have no dog in this fight.
That being said, I do think the bay area is a great place to start one's career.
The sentence that explains it all.
Most people want to move at some point and often do for jobs, kids, spouse's job, etc. But whether this is impending (this year) or "an acknowledged desire" is a big difference.
I'd like to own a home one day and there is no one in hell that is happening in the Bay.
(The Californian invasion has always been a thing in the PnW)
Uhm...wow, that's cheap. If you had a decent tech job in Boise (at HP?) it might work out pretty well.
Boise has been really slow to recover from the recession, where many people used to be able to get decent jobs at Micron, HP, Simplot, etc. there's much less available - call centers and other service industry positions have begun to dominate. The median cost of a house in the area is back to pre-2008 levels and rising fast, but wages aren't.
You can always visit the big cities on vacation.
California is messing up the HSR project by not getting SF to Gilroy and LA to San Diego completed first. Sacramento to Nowhere is a PR blunder for the state.
https://www.paloaltoonline.com/news/2015/10/14/palo-alto-bla...
http://www.smdailyjournal.com/news/local/high-speed-rail-met...
I'm not sure CA could do SF to Oakland by HSR in a decade.
https://en.m.wikipedia.org/wiki/Silicon_Valley_BART_extensio...
It's one big difference between Boston/Cambridge and some other places like the Bay Area. You can get away from some of tthe really high real estate prices relatively quickly and a lot of the tech jobs aren't even in the city anyway.
There's not much to be gained by living in Fitchburg. The real benefit is that a commute from somewhere rural to a train station in Fitchburg (or the "end of the line" for some other city train system) is painless.
I guess it's just a function of overall population but it's nonetheless interesting that while Boston/Cambridge have indeed gotten very expensive, there's a lot of pretty reasonably-priced housing not all that far out.
I don't know. I work with someone who recently sold their house in Leominster (next to Fitchburg for those not from the area). He said there had been very little appreciation over a long timeline.
ADDED: The problem when these old small New England manufacturing cities gentrify is that you end up with a dozen square blocks of upscale and the rest is like it's been for decades. I worked in downtown Nashua for a long time and it was like that. Which, for me, makes it get boring quickly.
You would think that they would simply sell their million-dollar bungalow and move to greener pastures, but that's just not what happens.
I had lived in the Bay Area, moved to Austin just to move to another place within a year. Austin has many nice things, but definitely not one of the top US cities I would consider building a family in. I can list out tons of things about Austin that would be deal breakers for many people and there are better cities out there in many aspects.
I'm truly puzzled by this sentiment from Austin people.
I can not wait for CA to become independent from the states.