Hacker News Reader

Comment by bsvalley | Hacker News Reader

I hate when people use the word bubble but I think we finally have a real bubble here. Google opening a new campus in San Jose, Amazon in NYC. I mean, how expensive can it be to live in one of these already expensive places? We’re at a breaking point where salaries offered by tech giants aren’t keeping up with the price of real estate. We’re talking engineers, etc. not even able to afford a home. Now if you don’t work for a google or an amazon etc. How do you survive in these places? We need stores, transportation, plumbers, gardners etc.

I see a bubble here. It’s gonna get ugly soon.

View on HN

NYC is surprisingly affordable if you can make the mental gymnastics that NYC != Manhattan.

You can get single family homes within city limits for $450-$750k. If you can't figure out how to afford a home like that on a six figure salary (let alone with 2 income earners in family situations), what you probably really need is a financial adviser. If you don't want to live in the city, Jersey City is swimming in sub-million dollars single family homes.

The D.C. area is actually more expensive in many cases, but you can haul out to a suburb 30 miles away and get more affordable housing on an engineer's salary and metro/commuter train in. It's not the end of the world.

Your commute may not be a 10 minute walk door-to-door, but...well...welcome to living in a large U.S. city where the jobs are.

The problem these companies are facing is availability of qualified staff. It'll take years to build out the facilities, and cheap places just will never attract the talent pool.

Hahah ; actually living here and no ; it’s not cheep .

Living in NY certainly isn't cheap but two six figure earners can more than live comfortably. Hell, if your household income is greater than like 75k then you're pretty much fine -- not living the high life but no real financial worry.

From a foreigner point of view, it seems completely ridiculous that we are even debating if a couple with 1M per year can afford or not living in NYC.

This is not 1M+ per year, this is 100k+ per year. Six figures = 100k+

> two six figure earners

Since we are talking about Amazon highly paid engineers, could be 2x 200-500k.

Amazon salary cap is 160k.

Doesn’t seem true: https://www.levels.fyi/SE/Google/Facebook/Microsoft/

I think they recently increased salary cap to $180k specifically for Bay Area. It varies by location.

The link I posted shows Amazon salaries above $400k.

Sure, but I'm assuming the worst case for six figures. If your household income is $200k then even in NY you can easily afford a nice house or high-end condo/apt in a good part of town, while living in comfort with no financial worry.

It's not cheap and frankly speaking, it's infested with roaches, rats, and mice. Don't ever want to live in LIC or the surrounding area. It's expensive, to rent and own. you need to be making a very high 6-fig salary (180+ base) or greater to counter balance the mortgage/rent and taxes. Otherwise you'll be house poor. Plus MTA is going up in price per ride very often and the quality is going to shit.

good luck. Only the rich can afford to live in NYC and the surrounding boroughs. I used to live in Queens Village, Moves out 20+ years ago. Even in the late 90's and early 2k, queens village was becoming expensive the Neighborhood was getting worse. houses are old and they're asking too much for them, even then.. forget about today.. astronomical..

Peace

> The D.C. area [...] haul out to a suburb 30 miles away [...] and metro/commuter train in.

That might as well be the end of the world. The commute from that distance can easily crack two hours; I'd have a shorter commute driving from DC to literally the capital of the confederacy (105 miles, 1.7 hours reverse commute) than I'd have driving from Dumfries, VA into DC (30 miles, 2+ hours traffic).

Source: lived/ing inside the beltway for decades until present. Also, I've made that DC-RVA drive more times than I'd care to admit, and it was less self-harm-inducing than my standard commute from inside the beltway into DC itself.

And it's been this way for a long time. In the mid-1990's I lived in Vienna, VA and my office was in Tyson's Corner just 1.5 miles away. Yet there was no way I could eat lunch at home and drive back to the office within an hour, and it was actually faster to walk to work than drive. The only bright side to that situation was that I lived a few blocks from the Orange Line (at Dunn Loring).

In 2020, would I want to be living in Vienna or Chantilly and commuting to Crystal City? No way.

Commute time has a much greater influence on your day to day experience and happiness than things like restaurants and museums, or even salary. The median commute is 25 minutes. Going significantly above that is rarely if ever a reasonable trade.

You’re only pointing out one little consequence of that bubble. It doesn’t fix the actual problem. Sure, I know people who live in Sacramento and work in Cupertino, I let you do the maths. Trust me it’s not about being an idiot who needs financial advise. Everyone is already doing that, obviously they can’t afford to pay $5000/mo on rent or to drop $1.5 on a 1bd apartment near their office. The real problem is that we are engineers, product managers, directors, etc making big money. We have to live at an hour away from places. How about the other people I mentioned in my previous message? What if Manhattan was a giant place full of office buildings with no homes, no stores, nothing but offices. Opening a Google campus in downtown San Jose is like throwing gas at a giant fire. Tech giants need to diversify their locations, starting probably with VC’s moving out of their little cocoons. People will follow them everywhere they go. They have to make the big move first.

Homes in decent condition and school districts are not in the $450k to $750k range, and the added time and stress cost of using a failing public transportation system should be taken into account also. In addition to that, you won’t get access to nice big parks or trails or gyms with pools and saunas.

Manhattan is great, if you’re a millionaire and can put your kids in great private schools and hire private drivers or are single and don’t mind small living quarters and can walk to work. But for those with families, I don’t see how the commute time and lack of access to uncrowded and well maintained public facilities is worth it.

It’s crazy to me that people commute for 60 to 90 min each way on unreliable public transit from NJ and CT and NY, all to give their kids a decent school district or yard. Wasting their entire Mon to Fri slaving at work in exchange for the job market and pay of NYC. Personally, if you don’t make it big (at least $250k+) in your 20s and early 30s in NYC, and you want to or already have a family, I would get out and live somewhere where I can have access to all 7 days of my week for something other than work, dinner, and sleep.

I'm somewhat playing devil's advocate here, but isn't it better to drop new FAANG campuses in already large, expensive cities where housing will only get a couple percentage points more expensive than in, say, an affordable mid-sized city where their presence could totally destabilize the local housing market for decades?

This is what I always thought was problematic about putting a Google campus in a place like Boulder, a smallish college town with geographic constraints to new housing. Adding over 1,000 Googlers with $200-$500K total comp might as well be a tsunami for a town that size.

Boulder's constraints are almost entirely political. You could even build up in the mountains if you really wanted to (but that would be awful). There's tons of land in a green belt around it that's quite buildable, and of course most of the city is your basic single-family home western american town with a ban on apartments or building even human-scale 2/3/4 story housing.

eigenvector's point still stands.

You choose Detroit, or Cleveland, or Birmingham, or whatever and you completely distort their local economy.

Detroit I'm sure has plenty of real estate waiting for a good use. Yes, a lot of the blight has been razed, but my understanding is that there's still plenty of underused urban buildings.

Playing devil's advocate to your devil's advocate play, isn't it better when a tech giant opens up a new campus in a not-so developed area? This brings new jobs, raises equities, increase resources, etc. We're talking places like Austin TX, Portland OR, etc. They are at a sweet spot today. They should stop here.

Because there's a fine line where it has to stop otherwise it becomes a disruptive machine like the Bay Area and NYC.

In New York, living in Queens or Brooklyn isn't too bad on an engineer's salary. LIC is actually a pretty good location (although I would have preferred nearer the Barclays Center in BK for the number of trains that go there).

One of the obnoxious things about Google's NY campus is that it's on the west side of Manhattan, which means that to get a cheapish rent and a 40-60 minute commute, you have to live on the expensive edges of BK or Jersey. Doesn't really seem worth it imho.

> One of the obnoxious things about Google's NY campus is that it's on the west side of Manhattan, meaning to get a cheapish rent for a 40-60 minute commute

I don't think this is true. 60 minutes on the A/C/E lines gets you all the way to Jamaica. 45 Minutes gets you all the way to Inwood.

It's not convenient to every location, but it is convenient to some cheap locations.

> One of the obnoxious things about Google's NY campus is that it's on the west side of Manhattan, which means that to get a cheapish rent and a 40-60 minute commute, you have to live on the expensive edges of BK or Jersey.

Inwood, Washington Heights, and the western half of Harlem are still pretty reasonable, and on super convenient train lines to Google.

San Jose is among the most affordable urban locations in California.

Tech talent doesn't want to live in the sticks. Especially young tech talent.

I understand them because I am one of them. What good is a nice compensation package if I have to live in the middle of nowhere?

Affordable for whom? [1] Rent is extremely high and so is buying [2]

[1] https://www.zillow.com/homes/for_rent/san-jose,ca_rb/ [2] https://www.zillow.com/homes/San-Jose-CA_rb/

San Jose is more expensive than LA and close to Boston in rent: http://d3exkutavo4sli.cloudfront.net/wp-content/uploads/2017.... Also it really is the blandest area I've ever lived in in California. I don't think there's another city with a higher CoL:QoL ratio.

More expensive than LA? Where exactly in LA?

I'd suspect the parts of LA you'd like to live in - Santa Monica, for example - are far more expensive than the livable parts of San Diego.

Silicon Valley for instance is sitting on top of a giant swamp. In the 70’s it looked like the middle of nowhere. In 2018, it looks like a bunch of office buildings and strip malls. Is this attractive?

Young folks are looking for the fame that’s what it is. The google’s, facebook’s etc. Yes there’s always san francisco but these are just extensions of the headquarters just to make sure they get hold of everyone.

If the fame was in the middle of nowhere people wouldn’t hesitate a second to move to that place. If it’s not you, someone else will.

I don't speak for all young folks, but at least for me I just want to be in a big city where there's a lot going on - people from all over, interesting events and new experiences. Oh and also good public transportation, most young people aren't super into owning cars. It's hard to say if people would move to the middle of nowhere for the big names, I'm sure a lot of people would but I definitely would not, and I believe many of my friends feel similarly.

It's a bit of circular logic. Big names are where big populations are. By that criteria San Francisco city has more "nowhereness" than San Jose.

New York metro area is much more nowhere than Tokyo metro if you want to go buy sheer population in a continuous urban conglomeration.

And to me, personally, NYC is just as nowhere as Boise, Idaho. Just a bunch of people living in groups doing things they find interesting, or can't leave due to financial/family/personal reasons. You can do lots of stuff in and around Boise that the same people can't do in NYC and visa versa, depending on individual preferences.

Many folks I know get bored quickly in NYC and SF. I do. I still love NYC and SF, though. I suffer from a bit of Stockholm Syndrome ;)

> NYC is just as nowhere as Boise, Idaho. Just a bunch of people living in groups doing things they find interesting, or can't leave due to financial/family/personal reasons

I am having difficulty thinking of any group of humans living anywhere that doesn't meet this definition. The same could be said for a mining town in Siberia, or an uncontacted tribe living in the Amazon, or prisoners in a prison.

> You can do lots of stuff in and around Boise that the same people can't do in NYC and [vice] versa, depending on individual preferences.

The list of things you can do in Boise that you can't do in NYC is effectively zero if you exclude "the outdoors" as a category. For people who don't prioritize the outdoors as highly as other things in life, this makes Boise effectively nowhere by comparison.

It's hard to definitively say, but I'd bet that the young people enjoy getting paid between 2x and 50x what they'd earn back home then retiring when they're 30 more than they enjoy the fame.

50x? FAANGs pay well, but you are wayyy off.

People mentioned multiple big offices being opened in various locations, none of them in SV.

I completely agree that SV isn't a very attractive place nowadays, especially not for young talent.

I'm a young person considering job offers in the Bay Area right now - one of my major considerations is that I want to live in a city. One company is in Oakland, which makes that possible, and the other two are in SV, which makes it very difficult. It's really dissuading me from wanting to do stuff in SV.

If you want to live in a city, don't go anywhere in SF Bay would be my advice.

SF is not a normal city anymore. Oakland isn't much of a city.

I'd focus elsewhere.

Sure, we just use SV as a great example of places located in the middle of nowhere with tones of potential for Tech Giants. Look at the FB campus in Menlo Park, the median employee age is 28 years old. Now look around the campus... it's a giant swamp and there's a free way. That's it... oh and it's next to East Palo Alto.

Young talented folks came en mass. It does work to open a campus in the middle of nowhere. Why Tech giants still go to large and expensive cities? It doesn't make any sense but to satisfy a few folks who for the most part share an apartment with roommates or rent a studio in downtowns making 6 figures.

The vast majority of employees who "moved" to the new Menlo Park office were old Facebook employees who worked for them in Palo Alto right before the move.

Facebook now has an NYC office too. My uneducated guess is that their candidates now have far more options than they did 10 years ago, and more people would rather not live in SV.

Have you ever visited their campus in Menlo Park? :) you’ll see young and fresh employees all over the place.. they finished their new campus next to their old buildings and are now building another campus next to the new campus. On top of that they’ve bought land around to build a Facebook village for employees. It looks like 5 college campuses in one. Offices in cities like SF are very limited in space and can hold only a few employees. This is true for google, FB, linkedin, etc. Majority of the folks are recruited on teir main campuses in SV.

No doubt many new hires are OK relocating to Menlo Park. Evidently, many are not. Facebook would not invest in an expensive offices in NYC, for instance, if everyone was just happy to relocate to its huge campus in Menlo Park.

My comment referred to the first proper Facebook campus was going to be very close to Palo Alto since that's where their first offices were. Just like has been the case for Google and a bunch of other SV employers.

One impression I got of San Jose was that it IS the sticks. Climate is nice, but culturally it is about as exciting as Omaha (no offense to Nebraska meant).

Yes! It's super lame here, please move away or don't move here - I'd like to bring the orchards back to my hometown.

Fins has a point though.

I live in SF but was down in SJ recently and honestly... it's just nice suburbia with the same strip malls and everything that's copy-pasted across the US?

Am I missing something there that makes it... unique?

I absolutely agree that fins has a point, and I'm serious - if it doesn't work for you, move away. There is certainly no lack of people.

I also dislike the strip malls everywhere; I was serious about the orchards part too. I wish that I could rewind to having fewer houses and strip malls and more orchards.

But for people who like suburbia but also want to work for technology companies, it works out pretty nicely. If you take the "everything that's copy pasted across the US" and splash in world class semiconductor company HQs (in San Jose and surrounding areas, like Sunnyvale, Santa Clara, etc), you get San Jose. Seems sorta unique to me, but I won't try too hard to sell it to anyone else who disagrees.

don't forget the landfill that tends to stink up every year when it starts to warm up.

It used to be quite a nice place to grow up in.

Proximity to San Francisco.

Sarcastically, not everyone enjoys stepping into human feces and dodging used needles.

Less sarcastically, how is that an advantage?

Culture - shows, restaurants, museums, etc.

> Am I missing something there that makes it... unique?

I would almost live in San Jose for La Victoria Taqueria... almost. Their orange burritos are so damn good.

There is no better place for growing apricots.

Apricots are simply divine. For this alone, bulldozing would be justified.

Actually, just did., and being 1700 miles away from SJ already feel much better.

I guess if you move to SJ from some hamlet 3 hours outside of Cheyenne, it's probably exciting. When I got there from Chicago, I couldn't believe that people actually might think it is a great place to live. Other than some career considerations, it's really a bland suburbia with nothing exciting about it.

There are a lot of places in the United States that are well between "middle of nowhere" and current high housing cost markets like San Francisco and NYC.

Technology wise I have heard of decent activity (including in a few of these cities some startup ventures) in places like Austin, the North Carolina research triangle, Miami, Boulder, Phoenix, Portland, Boston, etc. (Internationally, I'm sure there's some other markets people can add.) I have heard of housing costs creeping up in a few of these locations, but as far as I know, most of these still have pretty affordable housing compared to the Silicon Valley as a whole currently. Yes, the culture varies considerably between all these cities, but none of them I would describe as "middle of nowhere".

One way to describe the difference between SF/NYC and all these other places is that the former have people from all over the place, and that makes them interesting and sort of mind expanding in a way that's hard to describe.

The latter have varying degrees of "melting pot"-ness.

What good is a nice compensation package if I have to put most of it towards rent, live in a crap apartment, or both?

I don't understand how this constitutes a bubble? I totally understand how it is frustrating, even angering, that tech companies continue to do this. But, how's that causing a bubble? In other words, how is this going to "pop"?

You're probably thinking Manhattan but NYC has a lot of affordable areas.

Queens or Brooklyn are obvious alternatives to Manhattan but, with the right long-term planning and development, Bronx or Staten Island could make great options.

Staten Island has transportation headaches (no subway) but the Bronx is well connected to Manhattan. It's also close to northern suburbs like Westchester County and Connecticut where many people might want to live and commute from.

Staten Island has the SIR.

But that is not helpful in commuting to Manhattan, is it? You'd still have to use the ferry.

It gets you to the ferry or the express buses. You can easily take quite a few very very limited stop buses from SI to midtown.

I can't speak to home prices but my anecdotal experience is that rents in New York are not outrageous. They're high, but generally you get more apartment for less money compared to San Francisco. Particularly if you look at living in uptown Manhattan, Brooklyn, Queens or Jersey City the rents can actually be a pretty good deal on an engineer's salary. And because New York is much more dense than SF, commutes are generally also much shorter given the abundance of public transportation options.

I suppose there are two models: blame successful companies and their employees for high housing prices and try to make them go somewhere else, or derive (huge) economic benefit from their presence by building enough housing to meet demand.

If you find yourself hoping that successful companies and successful people don't move to your area, that's a sign that you are doing something seriously wrong.

3 million people work in Manhattan. What will an additional 25,000 people do to the real estate market?

Many of the 25k being high-paid white collar professionals.

> Many of the 25k being high-paid white collar professionals.

Which is already a big chunk of NYC. Adding 25K tech folks into the current mass of financiers, hedge fund managers, and tech peeps in a city of 8.5 million isn't going to change much.

Brooklyn, Queens and even Jersey, are all fine, affordable, decent and nearby.

Reply on news.ycombinator.com