Living in a Fool’s Paradise
boomcalifornia.com
boomcalifornia.com
I work in a fairly senior role in a well known South Bay tech company (you've heard of it). I live in Livermore. (For those of you not familiar with the Bay Area, Livermore is so far away from everything, it might as well be Nevada.) Why do I live in Livermore? Because I can't afford anything within a 20 mile radius of Stanford. All over the Peninsula (and the areas in Santa Clara county you'd want to live) are dotted with $1.5M single family houses and $4,000/mo apartments. Summoning the voice of Jerry Seinfeld, "Who are these people? Really, who are they?" They can't all be stock option multi-millionaires can they? I'm doing pretty well for myself, but I can't afford to live anywhere in basically two counties. What do these people do who can afford to live down there?
The Bay Area is going to eat itself soon. There's just no way this housing situation is sustainable? What is the end game? Is this going to turn into Elysium? How will normal people survive here without affordable housing?
Or, multiple people sharing a place.
It's more than I wanted to pay initially, but 4k minimum seems like a bald-faced lie.
Pre tax income: 41666/month
20% Down = $300000 Borrow 1.2M @ 4.0% = $5728.98/mo
This looks quite doable.
Heck, with half that income, you could do it!
Well back to the original question, who are these people earning $250k each? Is this common? Most people in the tech sector I know (ok not in SF) make about half that and I cant' say they are not productive or are stupid. Is that the valley of CEOs and upper management? Foreign investors buying up houses and not living in them just as a way to store their wealth...
Foreign investors buying up houses and not living in them just as a way to store their wealth...
This :
http://www.vanityfair.com/society/2013/04/mysterious-residen...
is quite an interesting read on the subject.
I just moved away from the Bay Area for this exact reason. I went from making $120k a year to $85k a year, but in Washington I can get a decent family home for $150k. The Bay Area can't come remotely close to matching that kind of deal, even with the ludicrous salaries.
[0] http://i.imgur.com/bdgZa.jpg, http://online.wsj.com/news/articles/SB1000142412788732368960...
Neither is Manhattan. From the NYT in 2009, and prices for schools and child care and real estate have only gone up since then:
http://www.nytimes.com/2009/02/08/fashion/08halfmill.html "Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast."
A lot of this is real estate and private schools, of course. You could get a 5br/5,000 ft^2 house in Green Bay, Wisconsin for 400K: http://www.zillow.com/homedetails/3318-Whittier-Ct-Green-Bay...
While a 5br/5,000 ft^2 prewar apartment (not even a single-family home!) in Manhattan would be $24M, and that's with a kinda small and not very attractive kitchen: http://www.mironproperties.com/NY/NYC-Apartment-38737-Upper-...
Many folks, like you, are better off moving away from the Bay Area and taking a salary cut if they don't already own a house and would like to buy one.
(If you're willing to live outside Manhattan, in one of the "outer boroughs", prices drop dramatically.)
If you use that Corcoran link you provided and restrict your searches to townhouses in the $2.3-$2.7M range with 5br, you get only Harlem, not Manhattan: http://tinyurl.com/nvftwqm
Yes, if you believe that ~100 cities in the Bay Area are somehow preventing housing from being built with laws, then certainly yes.
These $1.5M single family homes (and those would be far lower than the median in many towns around here) tend to be owned by double-income professionals or long-standing owners paying pennies on the dollar in property taxes who have little incentive to sell. On the higher end, I've seen folks with significant liquidity events who no longer rely on income move to Palo Alto or Woodside, or perhaps Los Altos or Portola Valley, but then you're talking $5M+ and over 4,000 ft^2 and possibly a guest house or pool house too.
In my neighborhood there's a CEO at a funded sensor chip startup whose wife works at a large tech company, a physician married to another professional, an investment banker whose spouse doesn't work, some Stanford faculty married to other professionals, a partner at a major Silicon Valley law firm, and some retirees. The retirees are often paying around 1/20th what I do in property taxes -- less than what they'd pay if they were to move to Florida or Nevada, I imagine.
To try to answer your question more directly, if you're buying a $1.5M place and putting 20% down, Zillow says you can afford the resulting mortgage on a $265K/year salary: http://www.zillow.com/mortgage-calculator/house-affordabilit...
That seems like a stretch to me, but if it's accurate and banks believe it, you could get a mortgage on that $1.5M house if each person is making $140K a year or thereabouts. Hope it doesn't need repairs or remodeling!
BTW, Zillow uses 36% debt ratio which is like the absolute max that you can possibly get mortgage (i.e. worse case scenario). That kind of debt ratio only makes sense for incomes > $250K. Once you can take out $10K as your monthly expenses, rest you can pour in to mortgage. With that calculation $260K income + $500K downpayment would allow you to live in 1.5M house without cutting too many corners. The downpayment can come in from previous house ownership gains or from equity stakes. This is probably not a good idea because you are in essence investing in already overpriced assets. There is no doubt that pressure is going to continue and bubble can only blow up so much.
I'm no housing bull, but this is simply not true.
Even after NYC was established, everything north of Wall Street (where there was a wall) was farmland.
What's the hierarchy of the upper-upper end neighborhoods?
It's not as much a hierarchy as different areas appealing to different types of people and families, with a big property size/walkability dividing line being I-280.
Let's say you have the nice problem of spending $10M+ on a house. If you want acreage and multiple guest houses and privacy and your own vineyard and stable, you might end up west of the 280 in Woodside off of Whiskey Hill Road. This is the Larry Ellison, Steve Jobs (Jackling House), Thomas Siebel, and Gordon Moore approach. Trivia: I was talking to a general contractor last week who said Gordon Moore's home upgrades/maintenance on his estate in a private valley on the north end of Woodside kept his business afloat during the 2008 downturn. If you want significant acreage, you'll need to budget tens of millions.
But in Woodside you don't get very much within walking or horseback distance, except Roberts Market/Bucks/Woodside Cafe. If you prefer the south bay with even less within walking distance, you might end up in Los Altos Hills or the hills overlooking Saratoga or Los Gatos. Portola Valley is another option.
If you want a 10,000+ ft^2 estate behind walls close to El Camino, you choose Atherton. If you want to be able to commute to SF and don't mind cooler weather, you choose Hillsborough. If you want to walk to a thriving downtown area with excellent restaurants, you (likely) lose the walls and gates and buy a more modest house for the same price in Palo Alto. The Palo Alto approach is what some Google and eBay executives have done, what Steve Jobs did in addition to the Jackling House, and what Tim Cook reportedly has done.
So this means a nurse and dental hygienist couple earns a family income of about 230K a year. They probably aren't buying in palo alto, but they aren't priced out of other nice suburbs. The sad thing is that most of the high salary is dumped into the housing market (and child care, which can be 25k per kid, which becomes a huge issue when you need two incomes). I guess it all depends on how much you love living here (if you have the right setup, it actually is pretty incredible, but you truly do pay).
It's not easy, but you don't have to scratch your head and wonder "who are these people". A two income middle class couple is in striking distance.
I can't stand dual income. I can't stand commutes now, either. That's why I left the bay area last year.
San Jose, East Palo Alto, parts of Redwood City, Pacifica, etc...
The parts of those places you listed that I can (could) afford, I wouldn't live due to various problems like crime, neglect, etc. They aren't really a good choice for normal, simple people like me.
I think most people aren't there by choice, but by necessity. I'd much rather have the people watching my kids in a spot by choice than necessity. You may ask why that would matter, but given a little thought it'll matter you as well.
Of course this may not all be attributable to high cost of living, taking a look at the BLS page on RN wages across the country, high RN salaries and states with strong union laws seem to run hand in hand.
Proposition 13?
- They bought their house fifty years ago when everything was peach orchards
- Split the apartment as many ways as mattresses will fit on the floor
What about Hayward or East Palo Alto? Or Oakland? I thought there was still plenty of cheap land in the Bay Area, but people all want to live in the ritzy bits.
Maybe that's OK, I suppose, but in this case it has meant finding a place to rent is very difficult.
There's lots of vacant land on the SF peninsula, but no cheap land. There is cheaper land (not the same as cheap land), as you say, in the east bay, but the non-SF tech jobs tend to be on the peninsula or south bay.
BTW, this is the first time that I've heard Belmont or San Mateo or Redwood City being described as "ritzy." :)
Around here (northern European capital), salaries are lower than the US counterparts. I would say a fairly qualified job in IT earns you around $100k (yearly, before all taxation). Houses cost around $1M outside town.
Even people with less qualified jobs buys at these prices. I would have expected $1.5M to be affordable with Silicon Valley salaries. I wonder if interest rates are that much higher in the US..?
It seems like real estate prices are increasing rapidly in every major city around the world. I hear the same story from London, Sydney, SF etc.
BTW, I would take that 50 year and 30 year fixed mortgage term any day. 30 year fixed at 4.4% seems like extremely good offer from this side of the fence.
Most of the people I know who have bought real estate recently are scraping by and using their basement apartments as mortgage helpers. Another issue I have noticed is the lax standards in issuing mortgages, there are companies writing employment letters for $1-2k in order for couples to qualify for mortgages. Banks and government is wising up but the damage has already been done.
It appears to be: force the industry to move somewhere else.
Whether that's a good plan or not is moot. Decades of votes have underscored it repeatedly. That the situation is unsustainable seems to be the entire point.
I'm increasingly surprised people still insist on the region. I'd have thought more companies would have moved on by now.
It seems to me this is a cyclical issue. I'm guessing something major has to happen like the market crashes again, or the tech bubble bursts. This would make a lot of these high rent places either have to lower their rent, or go out of business.
Once they lower their rent, I'm sure more middle income people will move back into the city. This of course does not solve the affordable housing issue. As is the case in most gentrification situations, it just pushes lower income people out into the outer burbs, and this is already happening. I don't see any solution for more affordable housing. It seems this war has already been lost.
Housing prices on the SF peninsula once were in line with the rest of the country. Then came anti-development fervor, pushed in large part by existing homeowners who benefited from a rise in demand coupled by fixed supply.
That's one reason why, even though I have enough land to build a small guest cottage that I could then rent out on the SF peninsula, my local government makes it cost-prohibitive or impossible to do (can't cut down trees, can't disturb natural habitat, can't build within 40' of a stream, etc.). That's also why Facebook's massive new campus logically should be surrounded by high-density housing instead of ranch homes on quarter-acre lots, and isn't, and why no housing can be built within walking distance of the Googleplex in MV.
Thomas Sowell, an economist at Stanford's Hoover Institution, wrote about this back in April:
http://www.dallasnews.com/opinion/latest-columns/20140423-op... "There are people who claim that astronomical housing prices in places like Palo Alto and San Francisco are due to a scarcity of land. But there is enough vacant land (open space) on the other side of the Interstate 280 freeway that goes past Palo Alto to build another Palo Alto or two — except for laws and policies that make it impossible. As in San Francisco and other parts of the country where housing prices skyrocketed after building homes was prohibited or severely restricted, this began in Palo Alto in the 1970s. Housing prices in Palo Alto nearly quadrupled during that decade. This was not from expensive houses being built, because not a single new house was built in Palo Alto in the 1970s. The same old houses simply shot up in price. That is part of the unacknowledged cost of open space and just part of the high cost of liberalism."
The devotion to open-space around Stanford/Palo Alto actually comes out of the backlash to all the highway construction in the 50s and 60s. I find it odd to see opposition to big government programs described as "liberalism".
And here I thought it was because Stanford owns over 8,000 acres and is exempt from paying state property taxes on it. :) Cite: http://www.nytimes.com/2011/08/15/business/california-scruti...
I see this was published in a Dallas based newspaper. Ok, I'd like to go build a 20 story cinderblock apartment building called "the proletarian towers" in the middle of a wealthy, republican-leaning Dallas suburb. Hey, I bought the land, I should get to do what I feel like with it, right?
I was there in 2002 and there were people running mini mart stores out of their front porches, in a completey residential neighborhood.
The rejected project was 1,000 units in an area that is otherwise all office buildings.
6 times that number of units were approved by the city and are being built, yet the author makes no mention of that at all.
An old-school conservative op-ed--page troll who now looks moderate compared to tea-party FOX newsers -- boring but still toxic. Please leave him in his regional-newspaper dungeon where he belongs.
They have articles from both pro-growth and anti-growth people, including Rebecca Solnit, whose piece on Google buses in the February LRB really touched a nerve.
https://news.ycombinator.com/item?id=7957573
Solnit is of course anti-development, whereas the editorial stance of the issue is generally pro-development.
"the defeat of the proposition to prevent the blockage of construction on the waterfront proposed by the cool NIMBY elitist outcasts who are driving up housing prices to keep out the cool rich tech outsiders who are ruining this city"
...it's nice to have some history and context about what's actually going on. Thank you.
(BTW - I'm hiring engineers down here in SoCal if anyone is interested in the migration - contact in profile)
I guess I just went there to visit friends/family and we ended so much time stuck in traffic it really got to me after a while. (Usually visit a week at a time). One day the friends had to work and suggested we take the Metro around town. Except that Metro didn't seem to go where we wanted to go. We opted for a bus. It worked out ... ok, the bus ended up stuck in traffic just as well as the other cars.
With that level of traffic, unless there is Metro and it is effective or some other public transportation system, I would go crazy. (Note: I haven't visited SF so not comparing it with, maybe it is just as bad there).
You can almost never have to drive if you work it out this way - I bike to work along the beach every day and drive somewhere maybe once a week if that. It's amazing, and it's pretty much 70-80 degrees every day.
You could also live downtown (which has turned around in the last couple years and now is becoming very nice) - the Metro will connect there and Santa Monica in another year or two.
Sidebar: what I've also found here (I moved down from SF around 2002 & have lived all over the US) is that you really get back what you bring here. If you want to connect with smart, creative, great people, they're all over here. If you expect to meet a bunch of a-holes, well... They're here too, if that's the attitude you're bringing.
there's nothing even listed in my zip code for < 700k.
when i moved here in 2008 (from SF) people were still talking about scripts and auditions in the cafes and bars. now it's all startups and web technology. i moved 500 miles and ended up in the same damn place.
life is funny like that.
LA is full of people living exactly the lives they set out to live. That's the biggest plus for me.
LA does have somewhat dirty air, compared to SF, this is true. However, out by the coasts, it's not too bad, and the water quality at the beaches is actually very high (it has improved immensely over the years, but perception hasn't quite caught up). LA also has a lot of old neighborhoods with a really cool vibe. Hiking and more remote beaches aren't nearly as difficult to come by as people up here think, and the beach towns (Manhattan, Hermosa, and so forth) are pretty great. Also, people in LA don't start sentences with "as a fourth generation native LA resident" crap that is truly irritating in SF, and they don't seem to think that "right to move" is unidirectional (we can move out, but nobody's allowed to move in… I'm looking at you, Seattle). LA is also adding more and more density, getting more urban (as the bay area sprawls out due to severe building constraints).
Also, there's quite a bit of very interesting and creative work here. I worked for a film compositing software company, and it was kind of great.
With electric cars on the way? Eh, maybe some days LA will get its air quality under control. Then it really will be a huge, traffic clogged, overcrowded, clean, creative gem of a city… well, at least parts of it.
Ok, one thing - I've been hard on SF here, but that's because this is a particular issue where I think SF residents have it totally wrong. On the balance, I actually do think SF is a beautiful place - it's got problems, but the undeveloped coast, redwood forests, hills over the bay, and so forth are also spectacular, and some sections of the city are historic, dense, urban, and walkable in a way that you still don't really find almost anywhere else west of the Mississippi. There does seem to be a tendency toward hyperbole on the "sf suks" style post that would rival the knee jerk reaction to LA you sometimes see here as well.
I imagine Google's thought about this more than I have though.
>that workers in the technology industry do not belong here and are not the type of people who are supposed to be in San Francisco. It is a strangely unprogressive attitude for this open-hearted city.
It's always ironic to see how people in 'rejected' subcultures tend to reject outsiders as well ( this happens way too much in tech as well).
Google is doing that to an extent. They have a lot of campuses world wide, mostly due to their acquisitions. It also decreases the amount of sway an individual municipality has over their growth and operation, which isn't a bad reaction given how much MV is mucking around with them.
To fully understand what’s happening here, let’s zoom out and take in the wider picture. San Francisco is a relatively small part of a much larger nine-county metropolitan area of over seven million people. Within this area, governance is fragmented at the county and city levels and it is served by a slew of separate transportation agencies, including six separate but overlapping bus agencies and four regional rail or light rail agencies. There are three major airports, run by separate agencies, and while regional housing policy is supposed to mandate that all municipalities provide their respective shares of housing demand, based on employment patterns, this is often undermined at the local level. Public policy is often not coordinated in any meaningful way at the regional level.
On top of that in Tokyo there are 23 wards each with it's own laws, taxes, etc.
What's special about California? Why does it work in Tokyo with 25 million people (or maybe it doesn't?) and why doesn't it work in the bay area with only 9 million?
Much of California public services are provided by local taxes. I'm not sure about Japan, but if it's anything like Canada then much of it provided at the state or federal level. Add in things like Prop 13, "Pay for government?! That's Somebody Else's Problem", and you end up with huge incentives to externalize your costs.
Schools are cheap if all your workers live somewhere else. Low-income assistance is easy if the cheapest place to live is $2000/month for a room-share. Most of the local legislators are home owners and decreasing costs by increasing supply will directly hurt them and their paper gains.
Japanese zoning and urban development policy are set by the central national government. That policy is considered the gold standard for simplicity and promoting quality development by planners everywhere in the developed world.
If the quality and honesty of government urban planning that Japan has could be transplanted, life in the Bay Area would improve immensely. No amount of land scarcity or Google shuttles or rising demand or offshore Chinese corrupt officials parking money or anything else would be able to make things unaffordable if local governments were good, honest, and effective. But quality government is simply not possible with the current politics of California.
[0] http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
Nnnno, they're not. In fact, Japanese zoning -- which, incidentally, is set at the federal, prefectural and local level -- is widely regarded as batshit insane. For example, there's a giant garbage incinerator right in on the northern side of central Tokyo (Ikebukuro); taxation makes "used" houses nearly worthless and thus encourages building new cheap crap; draconian building restrictions make Japanese apartments tiny; the well-intentioned "sunshine laws" have all sorts of perverse side effects like making it well-nigh impossible to build tall, high-quality residential buildings in the city center but encourage tall but cheap, crappy ones in the middle of nowhere, etc etc.
This Nomura Research report is an excellent read: http://www.nri.com/global/opinion/papers/2008/pdf/np2008137....
If one local wards would take decisions to enrich itself to the cost of others the system would break down. It wouldn't last a day in California.
That said, there are some problems there too, such as the aforementioned quintillion public transport lines. (Source: a few friends who moved there)
Yes the tax in CA is higher than other states but not THAT high. CA state tax is not 100% or 200% higher than most states. But housing is.
The point of moving to CA for most people is to live on or near the coast, I think... Thus most centers of commerce in CA is relatively close to the beach, like SF or LA or San Diego.
What this does is it almost immediately cuts the the available land for housing by HALF. In midwest of US (including Texas), you put a dot and draw 30 mile circle around it. All of that land is available for housing. In coastal regions like coastal California, put a dot near coast and draw a 30 mile circle around it. You get HALF of a circle available for housing.
No wonder house price in coastal CA is easily double of equivalent in Texas and other cities.
Tax in CA is not that bad. But the geography is bad for making affordable housing available, and that's not the fault of the politicians or Democrats or etc.
I find this kind of phobia as repulsive as xenofobia or discrimination against blacks.
Why are they so holy they can't accept the Google employees as regular folks?
For an industry that boasts connectivity it sure seems location bound at times. Frankly, the fact they have to have / desire to have charted bus services just for themselves should be a hint - your living in the wrong place, be closer to work.
However, many in the industry who like think they are open minded and above it all it must be fun to find out that your not wanted by people that are normally associated with open mindedness.
To be a real NIMBY is to be able to say with a straight face that those darn people ought to be fighting other NIMBYs somewhere else.
You seem to think this says something about people in the industry; To me it seems the only sane reaction is to conclude that the association of the second group of people with open-mindedness is an illusion.
If SF is being so hostile towards basically the driving engine of their local economy the best option is to relocate to a place where there are fewer restriction.
A build your own small city kind of situation. They can certainly afford it.
It's win-win Google gets their employes close to the office the employees get cheaper housing and if it's a large enough community you will be getting new people coming in opening shops and other stuff to take advantage of the demand.
The only one slightly worse off is SF with all the money leaving the place but it's not like they appreciate what they have now anyway.
There is no land with 100 miles of Silicon Valley where you could "build a town". Supposing they went the necessary distance (500 miles, or even more, into Nevada perhaps) how practical would it be to get 1000s of employees to relocate to live in a "company town" in the middle of nowhere?
Plus once you do it you have all the room you need to expand build towers, create housing etc.
It doesn't even need to be something very complex at first just something quick and dirty to see if it's a valid solution.
I find it amazing that there's no large areas of land for sale withing a 100 miles of Silicon Valley.
As for as employee relocation is concerned don't they already have to relocate to SF and the surrounding suburbs to work there?
Yes, and they choose to live in San Francisco, with bars, members of both sexes, restaurants, museums, parks, baseball, etc...
How fun do you think this theoretical company town is going to be for someone in their 20s?
So, in practice, you're asking "Why doesn't Google just pack up and move to Nevada or Kansas City?" Such a move would probably be highly disruptive to business (probably at least two months of lost productivity (even if you pay relocation consultants to handle everything) for all employees being moved, and you're talking about moving substantially all employees).
Source -- I work for a company that moved it's office from the South Bay to the City and a lot of people quit.
Because they've weighed all the options and decided that's not the best thing for their business.
This is what many people simply don't understand. Businesses are profit-maximizers and it simply makes economic sense for them to be located in the Bay Area.
One may not like the cost of housing, and businesses may have to pay employees more to live in the Bay Area, but overall the advantages outweigh the disadvantages.
But from what I recall after moving to San Francisco in 2005, you would not have been able to.
And from what I've been told, if you moved to San Francisco in 2000, you also would have had a difficult time.
boomcalifornia seems to be an appropriate name.
Manhattan is expensive, but relative to the local job market, it's cheap. It has its problems, but it's relatively smartly designed. San Francisco is expensive, relative to the job market. Even in California, it's almost impossible to crack $175,000 doing real work, and every corrupt official in Asia has bought housing in SF and the Valley, driving prices into the millions.
California seems to insist that it is building the future, and yet it lives so much in the past.
https://news.ycombinator.com/item?id=7926038
Edit: And another time:
Generally, the corrupt scum of Europe and Africa and the Americas focus on New York while the corrupt scum of Asia (where half the world's people live) tend to use California. I'm not sure if that's because geographical proximity matters, or if it's something else.
In addition to the purchase of safety housing by corrupt foreign officials, much bigger is the secondary market in U.S. real estate that exists because of this purchase pattern. The fact that every overseas scumbag wants a U.S. house (preferably a high-value one, because if your assets are frozen and have to change your identity, you may have to borrow against the house for 3 years while your fixers buy you a resume and get you able to work legit) in case shit goes seriously wrong, U.S. real estate has become a store of value.
I don't know the numbers. I don't think anyone does, but as for how much housing is being bought by foreign scumbags (or to sell to them, but speculators betting on scumbaggery) it's probably on the order of 1-10% on the high end, and possibly much higher (10-50%) on the ultra-high ($5M+) end. That might not seem like a big deal, but there are two things to consider. First is the push-down effect. Billionaires buying penthouses push modest millionaires into 3BRs and upper-middle-class families into 1BRs and the middle- and working classes out. It propagates down the socioeconomic chain, making everyone pay higher prices.
The second issue is extreme price inelasticity. 1% supply destruction doesn't increase prices by 1%, as one might hope or expect. It can cause them to double.
Price inelasticity. A 1% supply destruction is going to have much more than a 1% impact on prices. Possibly 20%, possibly 2x.
and only for the 1M+ homes, which is way above median price in the US.
This problem isn't felt out in the Midwest, because you're right: corrupt officials aren't interested in $300,000 houses in Wisconsin.
On the other hand, middle-of-the-road San Francisco houses, at $1.5 million, are ideal for a scumbag trying to hide from extradition and reprisal. You're going to have a hard time bringing assets over quickly, so borrowing against your house is how you're going to get your first few years of "living money" while your fixers buy you a resume and references and set up your career (this takes about 3 years, for an executive-level makeover) over here. Bay Area houses are also well-located for general money laundering, for obvious reasons.
That's an interesting situation to try to understand. It's not an especially sound basis for an angry rant about corrupt foreigners ruining the housing market there.
"is generally not considered as a sign of poverty or lower standards of living, as compared to public housing in other countries. Although they are cheaper than privately built homes in Singapore, they are also built in a variety of quality and finishes to cater to middle and upper middle income groups"
I'd estimate that less than 5% of Manhattan's residential space exists in buildings taller than 20 stories, and maybe 15% of said space exists in buildings taller than 5 stories.
There seems to be a glut of office space, so for now this is where the market is going. Much of it is luxury unfortunately, but not all of it.
However, you can still fit quite a lot of people into 5-story buildings if you build them densely over a region and connect them well with transit. I don't think the problem with the SF Bay Area is that it has 5-story buildings, but that for the most part it doesn't have 5-story buildings, rather 1-2 story houses with yards. The urbanized part of SF is tiny, effectively a small part of the eastern side of the city around downtown, SoMa, and the Mission. Not even the Sunset or Burlingame are built up with 5-story buildings. And Palo Alto, despite being both a university/research and business hub that has housing demand sufficient to support much denser housing, is instead occupied by things that look like countryside vacation homes, failing to even approach "medium-sized town" level of density, let alone some wild dream of getting near the density of 5-story apartment buildings.
Most buildings are uninsulated, two-story split-level.