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Comment by spyspy | Hacker News Reader

The sad fact is that long as people are willing to put up with this nothing is going to change. The crazy rents and terrible commutes sound insane to anyone living elsewhere but people are continuously more than happy to continue doing them to work at companies that haven't been priced out yet either. It's not an issue of social mobility either, since people living in the bay area are some of the most socially mobile workforce there is. Housing regulations may not be efficient given the circumstances but it'll only stop when everyone says enough is enough and leaves.

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> it'll only stop when everyone says enough is enough and leaves

Or, alternatively, when enough people start voting in politicians who would allow building lots of new homes in central locations.

Manhattan has 3.9× the density of San Francisco. At Manhattan density, the City of San Francisco could house 2.5 million more people.

This is such a tiresome argument. Even if you could suddenly build all of the housing required to reduce prices on a short timescale, you'd have to solve the infrastructural problems that come with it (roads and transit), and convince developers to build into a massive loss (i.e. I am a developer, and you expect me to build and finance at today's costs, and pay for it with tomorrow's lower rents).

Construction is a solution that takes long amounts of time to find a lower equilibrium, because nobody knowingly finances real estate projects into a falling market. In contrast, companies can build branch offices quickly. Spread the love.

Even with a massive drop in rents, rents would still more than cover development costs. The limiting factor isn't the cost to construct high density housing units - it's the difficulty of getting permission to build high density housing units.

The permission (via zoning and permitting) is part of the cost.

> The permission (via zoning and permitting) is part of the cost.

But if the gatekeepers aren't willing to grant permission, then that cost is ∞

Exactly. We need to make zoning and permitting easier, thereby lowering the cost...

"Even with a massive drop in rents, rents would still more than cover development costs."

Citation needed. You might also want to tell the construction finance industry of your discovery.

Instead lets do nothing? That is the tiresome argument.

Straw Man Fallacies are also tiresome.

Sounds like maybe both sides need a nap.

Building more housing decreases traffic as people move to shorten their commutes. Building offices without housing is what increases traffic, which is what most cities in the bay are currently doing.

Indeed. If the offices were in the same building as the homes, some of that commuter traffic even moves to the elevators and stairwells, and never leaves the site.

Not really. It changes things, but in the location of the new housing things get busier. The major hiways elsewhere see less traffic and the average is probably better, but the local situation needs to be fixed to handle it.

Of course ideally the local situation would be everybody works within a couple blocks and so the elevators and sidewalks can handle it. Most zoning boards hate this idea though.

It's a classic prisoner's dilemma. If everywhere built housing, traffic would get better everywhere, but no one individually has an incentive to build it because on its own it makes traffic in the immediate vicinity worse.

Not necessarily bluGill. If new housing is built across most of the city or state, there could well be less thru-traffic from the suburbs into the city.

I do agree with you though that if new housing is only built in a small number of areas, those areas could very well see more traffic. A goal of SB-827 was to increase housing across the entire state, particularly near areas well served by mass transit, in the hope it would result in less people commuting by car.

You are mistaking long term with short term. Short term it is impossible to build/rebuild housing. Short term that street is no longer big enough. Short term you will discover unintended consequences that don't work out for you.

Long term we will (as always) re-create the entire city. Long term we will notice that the street is too busy and do something about it. Long term we might even be do something about it people not working close to their home. Long term will will figure out what the true consequences of our decisions are and make further decisions to mitigate them which in turn will result in a new set of unintended decisions.

> Even if you could suddenly build all of the housing required to reduce prices on a short timescale, you'd have to solve the infrastructural problems that come with it

The value of new multi-story units along good commute in the most expensive housing market in the world would be so high that some taxation of that profit would be more than enough to fund building the required commuter rail or subway lines and also new schools. At least in an ideal world.

This is how Tokyo has funded new commuter rail lines. The increase of the land value in the new to-be-build neighborhood covers the cost of serving the neighborhood with a rail line:

https://www.citylab.com/transportation/2011/10/why-tokyos-pr...

But I am not sure whether California has the will and skill to tax those profits, and to direct that money for those purposes.

And that's why we can't have nice things: https://en.wikipedia.org/wiki/California_Proposition_13_(197...

"This is how Tokyo has funded new commuter rail lines."

Japan also runs a massive defecit relative to GDP (~250% vs our ~100% value). They spend like drunken sailors on public infrastructure.

Like the article explains, Tokyo's rail system is privately owned and operated.

I was talking about all of Japan, not just Tokyo. In any case, some of the lines are private, some aren't, and many were privatized after construction. The Tokyo Metro, in particular, was almost entirely built using public funds, and become "private" in 2004:

"Tokyo Metro is operated by Tokyo Metro Co., Ltd. (東京地下鉄株式会社 Tōkyō Chikatetsu Kabushiki-gaisha), a private company jointly owned by the Japanese government and the Tokyo metropolitan government.

The company replaced the Teito Rapid Transit Authority (帝都高速度交通営団 Teito Kōsokudo Kōtsū Eidan), commonly known as Eidan or TRTA, on April 1, 2004. TRTA was administered by the Ministry of Land, Infrastructure and Transport, and jointly funded by the national and metropolitan governments. It was formed in 1941, although its oldest lines date back to 1927 with the opening of the Tokyo Underground Railway the same year."

https://en.wikipedia.org/wiki/Tokyo_Metro

Most Japanese cities' subway systems are not private, and even many of the "private" train lines were built using extensive public subsidy.

Fortunately for developers it won't be suddenly. Most land in the city is already occupied: even if the construction and banking industry could rebuild the entire city in two years it takes longer than that to get the current land owners to agree to sell their current house which works just fine for them right now.

Companies only build new offices quickly because they are willing to locate to any new suburb that currently has land. Downtown areas that are already well developed might be more desirable but it takes time to get the land rights. (note they are always re-building something downtown in nearly any city, but it wasn't an overnight thing to decide to do that)

"Fortunately for developers it won't be suddenly. Most land in the city is already occupied: even if the construction and banking industry could rebuild the entire city in two years it takes longer than that to get the current land owners to agree to sell their current house which works just fine for them right now."

Well, yes. That's my point: construction takes a long time to change housing prices. It's not a universal, drop-the-mic response to every debate.

how was population growth ever possible before?

I feel like if you were to build a skyscraper full of condos and apartments in downtown SF, you could get massive rents from it. Especially if you were the only one doing it. The only problem would be if everyone was doing it. I guess nobody has the money to buy a building in downtown SF, and anybody that owns a building in downtown SF doesn't want to tear it down and lose the cashflow for a whole year or so.

To forestall responses decrying "Manhattanization," remember that every borough of New York City (except Staten Island) has a higher population density than San Francisco. San Francisco could add a couple hundred thousand people if just got as dense as Queens. At Brooklyn's density, the population would double.

Also building like Paris (France) or Barcelona (Spain) would add 1.7 or 1.1 million people to San Francisco.

Paris: 2.9× density, Barcelona: 2.2×.

> It's not an issue of social mobility either, since people living in the bay area are some of the most socially mobile workforce there is.

The article focuses on non-tech workers. Who may not be socially mobile.

These areas need non-tech workers just as they need tech-workers. It's tough to have teachers work and live in Sunnyvale, where the median house price is pushing $2M. Many of your Lyft and Uber drivers will be coming in from 90+ minute commutes.

Very few places on the planet are as temperate and offer so many options to escape into nature as the Bay Area. I agree that something has to change, but trying to convince people that the only answer is to move away is a non-starter for the majority of the population, especially those who want to live here.

The weather is nice, but nature is not really all that close. Sure, there's worse places. But growing up there I thought we had it good on the nature front, while really it was just the koolaid.

I guess it matters what you mean by close. I can get to a redwood Forest in a 25 minute drive from SF, which I consider pretty good for a large urban area.. I agree other, smaller cities have much closer nature.

If they tried Colorado they’d change their mind quick. I always thought I’d end up in the valley, but after ten years here and seeing how bad the Bay Area has gotten, there isn’t enough money to convince me to make the switch.

True, Colorado has some gorgeous backdrops, but then again, you'd also have to be into 1/2 a year of intense snowy winters.

Actually we really don't get that much snow. In Boulder January and February are cold and snow can stick around for a week or two. But no joke, it can be sunny and 60 a day after a snowstorm.

Now go up into the mountains instead of the foothills, yea, you're gonna get that winter you're talking about.

It's highly subjective, I personally cannot stand temperatures below 15C or so, it's "painful" (yes, I'm a wuss).

I haven't lived in Colorado but I did live in Europe and recently looked at the climate/temperature tables of Boulder to compare to Bay Area. It rather seems to me that it has weather similar to where I lived in Europe (hot summers, cold winters) with a large variation of daytime/nighttime temperature and a bit drier climate (in Boulder at least) because of the nearby mountains. All in all, lots of days in Boulder where temperature average would be <15C so not that good.

I don't like anything over 15C, at 20C I'm uncomfortable, at 25C I'm miserable and at 30C I just want to crawl into a (cool) dark hole and die.

Funny how different people are.

I don't know. I've lived all over the country from the east to the west from the north to the south and the midwest and I've found that every area has things to recommend it.

I know I chose to move out here because it was the best career move I could make. Having a FANG company on my resume plus the ridiculous salary and equity while I'm here would be foolish to pass up.

the ridiculous salary and equity while I'm here would be foolish to pass up

So - how much of the "ridiculous" salary is left after subtracting living costs and taxes, actually?

Much more than other places in the US. I keep seeing this type of comment, do the math, 2-3X salary increase, rent 2X increase, but rent is only ~25% of your salary, cost of things around ~25% higher. You are much better of in Silicon Valley as a techy in general.

Besides rent, are other things really 25% higher in the Bay Area? Taxes are a bit higher, but cars, computers are about the same, groceries can even be cheaper. A plane ticket to Tokyo is probably even cheaper than most places.

Hell, even rent is cheaper in Tokyo: https://www.expatistan.com/cost-of-living/comparison/san-fra...

Now factor in the fact that you spend 15 hours a week driving - not working, jogging, cooking, singing, or making friends. Factor in the gas and maintenance for your car and the medical costs to you for your sedentary time and to society for your exhaust.

"driving" could be "riding a bus" aka "working at the office".

Few programmers are doing that.. you can rent 3 bedroom homes for under $4k within 20 minute driving distance of any job.

The super commuters tend to be lower paid workers.

Unless you want to have square footage and not have roommates.

Average FANG salary is $200k with roughly another $200k in equity each year spread out over 4 years. So that's roughly $400k per year in total comp. Conservatively 40% of that is going to taxes, so take home is closer to $240,000.

While $240,000 is a nice salary it's not even close to what you'd need to afford a house in SV. And that's just housing. All in all it feels like a bad deal.

While $240,000 is a nice salary it's not even close to what you'd need to afford a house in SV

This cannot be correct. If you are taking home $20,000 a month and cannot have a house in SV the problem is not affordability but availability. Or what kind of house are you talking about.

You can move out of SV when you want to buy a house.

Do you have a source for the average FANG salary being $200k cash plus $200k in equity?

Glassdoor shows Google software engineers make a base of $127k cash plus $75k bonus and stock:

https://www.glassdoor.com/Salary/Google-Salaries-E9079.htm

Senior software engineers make more, but there seem to be many fewer of them relative to software engineer.

It can still make sense to live there while you're young, save a bunch, and then move to a lower cost of living area later. I know a few people who did this. Then you can buy a house in a great neighborhood in a smaller city closer to things you like doing. Because of compound growth saving as much as you can when you're young and have few obligations really adds up later in life.

I make ~175k/year cash, and I'm able to put away about 60k/year in savings. If you add in the equity I'm receiving (currently illiquid, but company is one of the mega-corns), I'm able to save an additional 60-100k/year on top of savings from salary.

I live a decent life, 2 annual international trips, own a car, lease a ski house with friends in the winter, if you make over 120k, life in the bay area is quite nice.

You're putting $5k away every month when your take home pay is ~$8k a month?

I assume you must live a VERY spartan life in the Bay. Basically pay your rent (which must be shared or very cheap for the Bay) and utilities and not do much else...

I mean the average Bay area rent is more than the difference between your take home and your savings...

edit: I'm using ADP's calculator, don't know why SmartAsset is different but ADP is pretty legit so I'm going to continue to lean towards those numbers.

Take-home pay on $175K in CA is $10k/month, not $8k/month

https://smartasset.com/taxes/california-tax-calculator#RZ3V1...

Sharing an apartment isn't "spartan", it's "normal"

Earning 10k/month after taxes and still having to share an apartment is not normal.

If you're single I can see the advantages (beyond the obvious financial savings) of sharing an apartment. Doesn't really work as a couple/family.

I was saving much less per month because as a couple we rented our own single bedroom apartment and my SO doesn't work. However, we still managed to save enough in 5 years (while still not having sold most of the vested equity) to buy a house in the Bay Area. So I agree that the pay is worth the hassle, so far at least.

I'm curious how much you spend for food monthly (including restaurants)? Somewhat surprisingly this is the highest cost for us, after rent/mortgage, and we do cook a lot at home (go out maybe twice a month).

Sharing an apartment isn't "spartan", it's "normal"

It may be "the new normal" in the Bay Area and other hyperstressed markets.

But it's not a living standard most people aspire to.

> Sharing an apartment isn't "spartan", it's "normal"

From my perspective, as the sole income earner of a family of four, that's a pretty shocking statement.

I feel like I've built a very comfortable life for myself and my family, and I make quite a bit less than that.

Take home is closer to $10k. I'm assuming he's including 401k as part of his savings as well

Might be but most I find 401ks rare in the Bay due to most startups not offering them...

A lot. My expenses (having moved from NZ) are probably 2-2.5x of what my friends back home pay - and I don't live a particularly frugal life. My income is 4-5x (probably even higher) what they make. Tech people on HN in the Bay Area talk about saving $25-50k / yr. The average household income in America is roughly $50k.

*Caveat: I'm unmarried and don't have kids. I don't own a house yet. I think that might change the equation a bit.

I grew up in the Bay Area. Spent several years at a FAANG company. About 2/3 of the time, I lived with my parents. The remainder was with housemates. In my early 30s, I decided that I couldn't continue living with parents, while there wasn't any place in the BA that I cared to pay money to live in.

Now I live in NYC, same salary, but finally have my own place that's not shared with others. I live in a 30th floor studio apartment in Manhattan, take the subway to work, and pay less rent than my friends in the Bay Area who live in 1-bed apartments.

Average rent in NYC - $3,375

Average rent in SF - $3,558

I don't know your situation but NYC is basically in the same boat (just with a better rail system).

That's a coarse comparison. Most housing in the bay area is multi-room units. Even the relatively new apartments in North San Jose are mostly 2 bedrooms. If you're single and want your own place, there's very few studios and 1 bedroom apartments to go around.

For a more precise comparison, see: https://www.expatistan.com/cost-of-living/comparison/new-yor...

As of this writing, rent for a one bedroom apartment is 30% more in SF than in NYC.

My rent is $2640. I know people in Pacifica, Palo Alto, and Mountain View paying anywhere from $2700 to $3200 for a 1 bedroom.

Bay Area is a far more pleasant environment to live in than North Atlantic

I agree actually. I don't intend to stay here for the long term, but I don't plan to move back to the bay area anytime soon either. I already spent most of my life there.

Isn’t there a saying in economics: “That which cannot continue, will stop.”

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