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Employees at Airbnb, Square and Stripe Are Spending 50%+ of Income on SF Rent
- steven2012 11y agoMost people don't live by themselves in a 1 bedroom. They usually live 2+ people per room, so that they can afford it. For example, a 2 br apt might have 5 people living there, two couples and then one living in the living room. That's how they can afford the $5000/month rent.
- blisterpeanuts 11y agoBy "most people" you mean mostly 20-somethings? It's hard to imagine people in their 30s and older, married and starting to have kids, living like that. I mean, great if you can pull it off, but you'd have to stagger the shower schedule not to mention maybe get a 2nd refrigerator?
- Symbiote 11y agoThat's not uncommon in London, especially amongst immigrants from Eastern Europe — it makes sense, if the aim is to save money rapidly to put a deposit on a house in Poland/Romania etc — and people in their 20s. I took a room for ~9 months in what was originally a 3 bedroom house. It was (a) very flexible regarding the contract (b) very cheap (£400/mth). (I had to move out of my previous place, but was looking for a new job, so didn't want to commit to something that might be in an inconvenient area.) I had my own room, and for most of the time there were 4 people in the three other rooms, age 30-40s and one at 50. Everyone apart from me worked in the kind of jobs where you have to be in by 7-8am, so I never had an issue taking a shower. We had 2 fridges. This was a "nice" house, in a nice area, with nothing dodgy about the contract / rent etc. In other areas there are really scummy landlords overcharging people for individual rooms, often none of them are British / western European, so they don't seem to know that there are regulations in their favour, for example for getting a deposit returned, or not paying for wear-and-tear repairs.
- eitally 11y agoThis is the bigger problem. Companies like Google & Salesforce have been there long enough for their early hires to have grown up and gotten ready to lay down roots ... but they can't afford to buy a house and they don't want to raise a family in a small/crappy/inconvenient apartment or condo.
- nilkn 11y agoThat sounds like hell once one starts growing older -- and not a first world country.
- Symbiote 11y agoI thought it sounded like London. http://www.theguardian.com/society/2015/jun/25/overcrowding-housing-raid-26-living-three-bedroom-east-london http://www.theguardian.com/society/2015/jun/25/overcrowding-... https://www.rt.com/uk/312452-london-property-overcrowding-landlords/ https://www.rt.com/uk/312452-london-property-overcrowding-la... http://www.telegraph.co.uk/news/politics/10863346/Figures-show-surge-in-overcrowded-homes.html http://www.telegraph.co.uk/news/politics/10863346/Figures-sh...
- rco8786 11y agoThat's not at all common. In fact I know 0 households that operate like this.
- morgante 11y ago> Most people don't live by themselves in a 1 bedroom. Citation required. None of my post-college friends are sharing a room (though many do share their apartment). Yes, rent is high, but it's not that high when compared to dev salaries.
- bau5 11y ago"in a 1 bedroom" means living in a 1 bedroom apartment (might also include living in a studio. What you're referring to would be "in 1 bedroom". The article "a" changes the meaning of the phrase.
- deleted 11y ago[deleted]
- kajecounterhack 11y ago> Yes, rent is high, but it's not that high when compared to dev salaries. This is skewed if all your friends are devs. The sentiment is true to my experience as far as my non-dev friends go. Many share rooms with strangers or live with their significant other.
- gorkemyurt 11y agoyes people live with roommates in separate rooms, and some convert a part of their living room to another room (this is actually really common) but I know very few people living 2+ (you seriously mean 3 or 4 here?)
- 20years 11y agoWhy aren't more companies investing in building out remote teams? Have the main office with a small core team in SF but hire remote devs, customer service, sales. Seems like it would save companies a ton of money and devs would be happier too because they would actually be pocketing more.
- sawthat 11y agoPeople have been trying to do this for thirty years. No idea why it never seems to stick, but it doesn't.
- blisterpeanuts 11y agoI love these high salaries. My thought is to find a job in SF, live there temporarily for 3-6 months, then become remote and move back to my real home on the east coast. Is that feasible? Aren't these kinds of companies pretty comfortable these days with video conferencing, IM, screen sharing etc.?
- minimaxir 11y agoOne does not simply "become remote." There are strong advantages to working in direct contact, despite what sentiment on HN and logic dictates. Working in SF for a few months wouldn't make you super rich anyways.
- nilkn 11y agoI think his/her strategy of working in SF for a few months at first is not to become "super rich", but to establish a high salary that could then be "exported" to a cheaper area while staying on with the same company.
- minimaxir 11y agoI'm reasonably sure that a decrease in CoL would be adjusted into the salary, or at the least, any company in a lower CoL is less likely to give a competitive salary.
- omouse 11y agoSolution: buy a property in a lower CoL area and then rent it out to yourself. It helps if you establish a few shell and holding companies. Charge as much rent as you're paying in SF and then they can't lower your salary based on CoL because your CoL is still high. Win-win-win! ;-)
- blisterpeanuts 11y agoSo if you are living and working in SF and making $150K (plus bonus, stock options etc) and you decide to move to, say, Phoenix and buy a house for $140K, they'll say, "OK, minimaxir, we'll be cutting your salary to $90K to reflect the vastly diminished cost of living, although of course we'll be able to give your desk to a new hire and save money on office space!" -- ?? Seems unlikely. If you're contributing, no rational company is going to suddenly cut your salary. Basically, no one cuts salaries in the U.S. unless it's a company-wide belt tightening move to stave off bankruptcy.
- Animats 11y agoThat's the new normal. In the 1950s, the average New York City resident paid 10% of the income for rent. It was federal, state, and city policy to keep rents down, with new low-cost housing being built by Government agencies and insurance companies.
- deleted 11y ago[deleted]
- danso 11y agoDo (m)any of the SF startups allow workers to occasionally commute from places like Sacramento? I actually knew bankers who lived in Sactown and got up at 5AM to head out to SF every morning. But technology requires less in-person time. And Sacramento is much, _much_ cheaper than the Bay Area...I shared a great 2-bedroom place in the nicest area of town for around 1,200, where you could walk to great food, parties, and bars. I now pay way more for that to live in a converted garage in Palo Alto...in fact, this garage costs more than my nice 2-bdr apartment did in downtown Manhattan. Even if you commute 3 times a week from Sacramento, you'd save a lot of money while still having a good social life...and 3 days/week in-person seems sufficient for a lot of dev work projects.
- idlewords 11y agoThe commute from Sacramento to SF is not really workable. Traffic across the Bay Bridge has reached a point where there's almost no lull, and parking at BART stations is impossible to find. I go to a Sacramento colo sometimes and would never dream of trying to make the trip on a weekday or Sunday afternoon.
- danso 11y agoOh good point...I'm speaking from experience that is now about 7 years old...
- nullrouted 11y agoWhich is silly....honestly companies need to start opening offices in more affordable areas. Colorado (Blouder, Denver, The Springs), Texas (Austin, San Antonio), Missouri (Kansas City, Saint Louis)....there are so many places you can put your employees that saves them money as well as your company a lot of money not only in Salaries because you'll be able to employees less but your rent/power/etc.
- WalterSear 11y agoThis is one of those things that is a great idea until it isn't. When your employer goes belly up, in SF, you have to fight off job offers. That's not going to be the case elsewhere. It's also much harder on the employers: if you think finding one good job is hard, try hiring an entire team of decent employees at once. Ultimately, it's worth the extra cost of staying where the tech is, prefixing your city name ala 'Silicon xxx' not withstanding.
- rco8786 11y agoAnybody in tech in SF is constantly fighting off job offers, not just when their employers go belly up. At some point, costs will reach a tipping point where people will start to look elsewhere(I don't mean 1% of people and I don't mean the Easy Bay, but actual significant people moving away from the Bay Area).
- WalterSear 11y agoI've been here 20 years, and people have been saying that almost since I got here :)
- rco8786 11y agoNo doubt. I definitely didn't say, "we're at the tipping point"...but it exists...somewhere....
- jkestner 11y agoIt's not like those other cities are tech wastelands. You'll be able to find a good job. Maybe it won't pay as much as a city where you're being fought over, but then, it doesn't need to.
- jordigg 11y agoImagine those who don't work on tech.
- deleted 11y ago[deleted]
- intopieces 11y agoI imagine rent control comes in handy for some of those people. Then there are the few who won the lottery and have both!
- aaronbrethorst 11y agoThat's ok. When Airbnb, Square, and Stripe IPO in 12-36 months, all of the people currently flooding into SF to work for them will surely be able to sell their pre-IPO shares to ... Well, I don't know, honestly. I doubt that employee #1000 at Square would even be able to pay the down payment on a SF condo with their earnings. Also, just FYI: Seattle isn't that much cheaper than SF, the people are way meaner, traffic is awful, and the weather really sucks. So I highly recommend against moving up here. --- edit: Since people are apparently missing the joke, I've lived in Seattle for 12 years, consider it home, and can't imagine living anywhere else.
- washedup 11y agoMedian rent for a 1-bedroom in Seattle is $1,615, compared to $2,800 in SF (from Rent Jungle)
- Nicholas_C 11y agoWow, Seattle actually doesn't seem that much more expensive compared to the $1,263 average 1br in Dallas. But SF... Holy shit. And I'm actually seeing $2,965 on Rent Jungle for SF right now.
- dntrkv 11y agoThe crazy thing is that it will be very hard to find a decent 1 bedroom for even that price, realistically you are looking at $3.5k to $4k.
- bcbrown 11y agoThat's only true if you need to live in new construction. My previous apartment was an old crappy 2BR on Capitol Hill, with Cascade views, from 2012-2014, for $1500. Currently I'm paying $2200 for a 2BR house with a nice yard in the Central District. If anyone wants to rent a nice 3BR house north of the UW for $3-4K, email me, I know of one for rent.
- whalesalad 11y agoThis is not surprising at all. We keep complaining about it here and elsewhere but it's not going to change any time soon. The more people flock to SF the worse it will become. When I left SF my studio "jr. one-bedroom" in SOMA was $3100 a month. I'd walk or muni to work by the ballpark and usually saw at least one person smoking meth, shooting up heroin, or pissing on the street. I pay less than half of that now for a 2 bedroom house in Michigan and have a stress-free 20 minute commute to the FarmLogs office.
- suryon 11y ago3100 is almost double the average salary of IT worker in Central/Eastern Europe and these people are considered middle class. Take a look at China and India there they earn even less. How many and for how long can these companies keep hiring people for such huge salaries ? And if these people can't live comfortably off these salaries then there is something wrong.
- whyaduck 11y agoComplex cross-geo projects aren't the same as local projects, except everything happens overnight. There are explicit and implicit expenses involved in managing and supporting projects in widely varied time zones that aren't obvious until you're involved in one. Especially if there's hardware involved.
- link_108 11y agoA few questions if you don't mind. What percent of your after tax income was rent? Are you making the same salary in Michigan? And what is the percent of your after tax income is rent now? Thanks! I would love to work remote / in a cheaper location, but salary decrease is worrying me.
- VLM 11y ago"usually saw at least one person smoking meth, shooting up heroin, or pissing on the street." This is why I like living in an area with -20F winters... keeps out the riff raff, oh and winter sports too.
- dkasper 11y agoThis is not a great analysis. What they measured was average salary compared to average rent in the neighborhood where the company is located, not what their employees are actually paying. At Weebly I would estimate less than 10% of employees live in Soma where our office is.
- nickbauman 11y agoIn Minneapolis less than 6% of my pay is my mortgage and I have a 4 br, 2 ba home 3.75 miles from work. NoCal can't beat that.
- shlant 11y agoI had thought your office was in the financial district on Pacific? At least that's what the window said when I walked by it every morning on the way to work.
- dkasper 11y agoIt was for a few years. We moved last fall to 3rd and Bryant.
- JDiculous 11y agoI have no interest in moving to SF mostly because of the rent. Spending 33%+ of your paycheck on rent is absurd. I'd rather get a remote job and live somewhere cheap enough to where I could potentially put a down payment on my own place.
- justaburner2015 11y agoThe nicest, most expensive 1 bedroom apartment I can find in $my_medium_sized_city is $1200/mo. Brand new, great view, walking distance to everything...I don't even own a car anymore. Any kind of six figures goes very, very far if you are willing to be away from the center of the universe. If living in SF to work at a startup with options is speculating in penny stocks, living in a second or third tier city and squirrelling away a nice chunk from $120k a year is buying bonds. Lower variance, lower maximum rate of return.
- Thaxll 11y agoSo making 100k+/year doesn't allow you to live comfortably in SF nowdays?
- batbomb 11y agoThat depends when you got into your apartment.
- harryh 11y agoIt depends on what you mean by comfortable. It's worth pointing out that the median income in San Francisco is $50k or so.
- browseatwork 11y agoIt's worse than that. Here's some 2014 data (surely it's higher now?) http://www.sf-moh.org/modules/showdocument.aspx?documentid=7345 http://www.sf-moh.org/modules/showdocument.aspx?documentid=7...
- edgyswingset 11y agoGenerally speaking, not unless you're okay with roommates.
- jkot 11y agoIn London it is more like 80%
- dijit 11y agoI was going to say something to this effect. This figure does not surprise me in the slightest. In London I was _easily_ paying 50% of my salary after tax in rent, because I didn't want to share an apartment with someone else.
- cdnsteve 11y agoSeriously, the number of companies still not hiring remotes is ridiculous. We work in the most flexible industry out there yet most companies still want you sitting in a chair in some downtown office of a giant and expensive city. No thank you. No you don't need to make your entire team remote but you can easily augment a large portion with talented remotes. Keep your high living costs and horrendous commutes, been there done that. There are other options.
- jaggederest 11y agoI deeply enjoy when recruiters are convinced that I'll move to SF for their company, even though I haven't over the past decade. They also balk when I ask for the cost of living adjustment to make the move (+180%, give or take).
- x0x0 11y agoHell, I live in the peninsula and I ask for a $40k ($2k/mo after taxes) raise to cover the rent differential to move back to sf in order to be in the office 5 days per week and companies are taken aback.
- shlant 11y agotry moving to SF short term, put in the hours in the office of a flexible, reasonable company and then ask to move to remote after they are more comfortable with you. It worked for me :)
- ionforce 11y agoIf working with remotes was so easy, don't you think people would have done it more by now? Clearly there are benefits (worth to many people) of being collocated.
- d4rkph1b3r 11y agoEmployees at these companies don't mind paying 50% of their salary for rent because their salary is at most only 60% of their total compensation. Lot of people are getting 1M + deals paid out over 4 years.
- eitally 11y ago"lots of people"? and, do you mean 4 years of salary + the equity grants, or just the equity grants, because not very many people get $250k/yr worth of equity [from any company]. A few do, but not the unwashed masses.
- minimaxir 11y agoThis article makes the rather flawed assumption that all the housing in SF is being taken up by people who work at startups, and not by people who work at Facebook/Google but live in the city and commute, who likely are both more numerous and have even greater salaries. The article doesn't mention studio prices at all, which are high but not stupid high.
- rco8786 11y agoFB/Google do not employ more in SF than the long, long, LONG tail of startups in the city. They probably do have higher than average salaries though.
- iamphilrae 11y agoOr you know, if it bothers you then find a job elsewhere. A mass exodus will help reduce rents and/or raise wages.
- nickbauman 11y agoAlways remember the #1 industry sector in CA is real estate, not tech. Furthermore, this is why I generally won't consider offers for work in the Bay area (as much as I love NoCal). I do the math and realize I'm cutting my own throat. On the other hand, I'd love to get a great offer and then buy a Blue Bird bus and convert it into a rolling home but only if I could semi-permanently park it in the company parking lot!
- chucky_z 11y agoI would say you can park in Palo Alto in an RV for free... but it looks like that's changed in recent history. Kind of sad! :(
- yellowbeard 11y agoPretty sure I see people living in RVs in Palo Alto, on El Camino and around Cal Ave. Definitely plenty doing it in SF. Has something changed in PA recently?
- chucky_z 11y agoI do as well, and while looking around for laws about it I stumbled across this: http://www.wsj.com/articles/SB10001424052702303847804579479930243974564 http://www.wsj.com/articles/SB100014240527023038478045794799... and a few articles like it. It seems the laws aren't well enforced though (probably for the better).
- bfrog 11y agoSurely this will end well
- snomad 11y agoI remain surprised that Bay Area tech companies don't move to Sacramento. Near the Bar Area for quick access, near the state seat of power for lobbying, well away from major faults so less prone to earthquakes, significantly lower costs of housing (2 Bdrm apt would be about $1k) - so presumably could save on salary.
- minimaxir 11y agoWhen engineers look for jobs, they clearly think "wow, I'd never work in a place prone earthquakes and far from government!"
- brezina 11y agoum, have you been to sac? Given the choice, people (both founders of the companies & the best employees) would rather live in the bay area vs. sac. Hence the price difference. SF bay people are paying for things like: 20 min access to world class airport, one of the most human friendly climates on the planet, access to the capital of the internet & the people from around world building said internet, a stop on world tours of every major music act or performance, Ocean, Bay, coastal ranges, the ability to get to work, beach, entertainment without getting in a car, etc etc. I personally trust the wisdom of the crowd and find the best places on the planet to live/visit are often the most expensive: NYC, Copenhagen, Tokyo, Paris, Maui, Coastal Los Angeles, SF
- wtracy 11y agoAnd don't forget fiber-to-the-premises being available in some residential neighborhoods!
- chipotle_coyote 11y agoThe problem is that "near the Bay Area" is pretty relative; the travel between them is 2+ hours without substantial traffic, and most people aren't going to want to make that commute. So that leaves you with some of the drawbacks others have mentioned in this thread: if your company is there, you'll likely have a smaller talent pool to draw from; if you live there and you lose your job, you'll have a smaller pool of companies to move to. Having said that, Sacramento is a much nicer place than a lot of folks in the Bay Area give it credit for -- a lot of pretty, walkable neighborhoods, a lot of good cafes and bars and restaurants and "third wave" coffee places, and as you mentioned a way lower cost of living. The only real downside (setting aside the commute) is that it gets ungodly hot in the summer.
- PinguTS 11y agoI don't know about the US. In Germany there is the general rule that you not pay more than 30% of your income for rent, if you want to have decent living. May be in the US it is different because there are diffrent costs for food. 50% and more just for living seems to be to high for me.
- rco8786 11y agoMost of the U.S. 25-30% would be considered normal. That's why the 50% figure in SF is newsworthy.
- dataker 11y agoAnother missing 'variable' in the cost of living is taxation. Either income or sales taxes do add up in this calculation.
- roymurdock 11y agoI always see articles like this and I wonder...who is winning here? I'm waiting for an article to break out the stats on who owns which property in these types of areas. What % of housing is owned by the government, foreign investors, domestic investors, institutional investors, real-estate holding companies, and the actual inhabitants of the property? For all we know, the whole story could just be that tech companies are hiring some kids from ivy leagues and well-off families that are just paying rent back to their parents, who somehow or other own shares of the SF property market. Or that a lot of rent money is flowing to foreign investors, as is the case in NY and London. So while it's interesting to see who is losing and by how much, what I'd really like to know is - who are the winners? Where is the money flowing?
- balls187 11y agoCommercial realestate owners, and the companies that serve them.
- sawthat 11y agoLong story short: people that own single family homes in SF are winning the most because of the massive gains in value and we don't have to pay increased property taxes because of proposition 13. Basically anyone who currently owns property in SF is a "winner" and that includes the many small time property owners that own the 2-6 unit buildings that dominate the city. The rent money is flowing to those people. Who probably are mostly local.
- slg 11y agoI certainly think rising housing costs are a problem, but is no one going to comment on the fact that this company put together a list that just so happens to put them in a very favorable light against companies they are competing with for talent? We probably shouldn't just accept RadPad's statement as fact that RadPad's employees are much better off than other startup employee even though they are paid less. I would be very interested in seeing the actual raw data that includes companies not listed here and includes other costs besides housing (e.g. transportation costs are higher in LA due to a worse public transit system).
- nilkn 11y agoUnless I won the stock option lottery, I think it'd be more cost effective for me to do a complete career transition to, say, medicine or dentistry, including lost income and educational debt, than it would be to move to SF as a programmer. Granted, I'm fortunate to have a relatively high salary in a much cheaper location right now.
- ec072201-474b 11y agoI was recently contemplating the hostility between tech workers and some SF residents who have lived here longer. Long-term residents blame tech workers for increasing housing prices and resulting evictions, but high rent is detrimental to both groups. Then I considered the interest group who is coming out on top in all of this: SF property owners. The total value of all residential property in SF is probably well into the hundreds of billions (a few hundred thousand units, multiplied by a resale value probably approaching a million dollars per unit). That value is driven by scarcity. So you have a group protecting a half trillion dollar investment. Is it really so surprising that they have convinced long-term residents (most of whom still rent) and populist politicians to rally in favor of scarcity? Is anyone trying to organize a coalition of tech workers _and_ long-term residents against SF property interests?
- raldi 11y agoYes, and they're doing a really good job: http://sfbarf.org http://sfbarf.org
- rconti 11y agoProp 17 in CA magnifies the effect. When your property taxes can only go up by a small amount every year, there's literally no incentive for your property values to not go sky-high.
- vonmoltke 11y agoThe critical flaw in Prop 17 is that it applies to nearly all properties. Florida did homestead protection right. The homestead protections there are nearly as strong as, if not stronger than, Prop 17; however, only owner-occupied residential properties qualify. I think it is ridiculous that someone can move out of their house or condo in SF, rent it out, and still reap the property tax benefits.
- amorphid 11y agoI'm pretty sure you mean Prop 13... https://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197... Prop 17 is something else entirely :) https://en.wikipedia.org/wiki/California_Proposition_17_(1972) https://en.wikipedia.org/wiki/California_Proposition_17_(197...
- samskeller 11y agoYeah this is expensive, but they're talking about living right next to your office. Of course the rents are extremely high there -- you're downtown. Kind of a misleading article
- sjg007 11y agoRents all over SF and the bay area are expensive. SOMA within 0.5 miles is not really the point.
- mightybyte 11y agoI'm in NYC and I pay ~10% of after-tax income for rent. I visited a friend in SF recently and after hearing about his situation I concluded it would be very difficult for any company to get me to move to the Bay Area. It just doesn't make financial sense for me. NYC has plenty of tech opportunity, so that doesn't tip the scale either.
- jwoah12 11y agoCare to elaborate? You either live with several other people, make upwards of $500k/year and live very modestly, or both.
- mightybyte 11y agoI live with one other person. Combined rent is less than $2k / month for a good sized 2 bedroom apartment a block and a half from a big subway hub. We have a full size grand piano in the living room and it's still spacious. The kitchen is also a pretty good size (at least by Manhattan standards). I suppose some might call this modest. But I wouldn't consider it "very modest". I also have friends who live in the city fairly comfortably on as little as ~30k / year.
- stepanhruda 11y agoSounds like you either earn a ton of cash or live far from the city. I'm spending ~30% after tax.
- mightybyte 11y agoNeither. You probably can't live in Manhattan for that price, but you don't have to be too far out.
- prospective4334 11y agoI have to ask: which neighborhood do you live in, and how far do you commute? I'm moving to NYC in two days and I still don't know where to live (thankfully, my company will pay for a nice apartment for 30 days). I actually wrote off SF and the entire Bay Area during my job search, largely due to the cost of living. I know that in New York I'll at least be able to find a 1br for $1700 (in Western Queens or Wash Heights, whatever), which is 25-30% of take home.
- pbreit 11y agoNot only is the headline different, it's misleading or plain wrong.
- geogra4 11y agoI live in Detroit, own a 4bed/2bath and bike to work everyday for a mortgage that's less than 1/4 of the rent median SF 1br. SF is a cartoon world. Yes salaries are less here, but I feel so much more at ease owning my place and can live a pretty comfortable life. If worst comes to worst, there is always remote work.
- gk1 11y agoI live in Baltimore, which is only a notch above Detroit in people's minds (we're talking perceptions here...). I work remotely and can afford to live a life I'd only dream about in Brooklyn, NY: Great apartment, great neighborhood, and enough disposable income left over for travel and other activities.
- geogra4 11y agoThe nice thing about owning a reasonably sized home is that I have a pretty decent home office setup when I need to WFH. I can segregate it from my 'play' area enough so I don't feel like I'm constantly on the clock. Baltimore seems like a great place. Plus you have the advantage to ultra-commute to DC if you need to.
- balls187 11y agoThere is a reason why it's cheap to live in Detroit, and why salaries are less. Cheap cost of living isn't unique to Detroit.
- geogra4 11y agosure, a cheap cost of living can be had anywhere in the world. but I think it's unique in a 4 million+ person metro area in the united states. Especially with the history and architecture that Detroit has.
- balls187 11y agoNot really. Check out Indy, Columbus, and Nashville, just to name a few.
- SovietDissident 11y agoI mean, I like LA a lot better, but I think even that is too expensive, especially when you're getting hit with CA taxes. I moved to Tennessee. No income tax, friendly people, fewer NIMBYs and restrictive building policy, fewer feminist harpies, etc. Apparently many others have had the same idea, since people are streaming into the state from places like NY and CA. You'd be surprised how much tech is here as well. Unfortunately, winter is way worse and there are no real beaches, but you can always buy a plane ticket.
- foobar2020 11y agoThis is insane. I work as a software engineer in Zurich, and I'm able to set half of my net salary aside as soon as it arrives. Without any significant saving efforts.
- baddox 11y agoOf course, that's not actually a bad thing if their remaining income is higher in absolute terms (or adjusted for non-rent cost of living) than it would be in other cities. The percentage income isn't really relevant on its own. I'd rather make $10m a year and spend 90% of it on rent than make $100k a year and spend 20% of it on rent. And when you add in the subjective value of living in SF (which is small or perhaps slightly negative to me, but surely large for many people), it could still be a perfectly reasonable decision to live and work in SF.
- frogpelt 11y agoAre they complaining?
- BYWallace 11y agoMaybe a good number of these people are subsidizing their rent by listing their places on AirBnB?
- sologoub 11y agoThe rent around RadPad is not that cheap. While you might be able to find something for that price, it won't be pretty. Most of westside is starting to be as expensive as Venice/Santa Monica and these two aren't that different from SF in prices. Unfortunately, you don't get much besides weather and ocean breeze, unlike in SF where public transit and neighborhood cafes actually exist.
- jsn117 11y agoThey were no where near SF prices when I lived in both places last year
- sologoub 11y agoThat was last year :) Friends are looking for a 2BR with $2500 budget and it's a really sad experience. If you are willing to spend $3500, you can do much better, but still not prime SM or Venice locations or Playa Vista (newest hotbed in the area for tech). The article mentions Hawthorne, but that's not the best of neighborhoods and has a good amount of industrial/petrochemical activity near by. Redondo Beach is still sort of affordable, but you have to deal with traffic going north/west in the morning and back.
- azakai 11y agoThe reasoning here seems wrong. Yes, > "the rule of thumb is that you shouldn't spend more than 30% of your monthly take home on rent", as they say, but that's just a rule of thumb. What actually matters is how much money you end up with. For example, assuming taxes remove 30% of income (probably close enough; would need to look up federal and state tax codes to be precise), 1. A Zynga employee makes 147,000, loses 30% to taxes, spends 3,545 times 12 on rent, and ends up with 60,360 to spare. 2. A RadPad employee makes 120,000, also loses 30%, and spends 1,475 times 12 on rent, giving them 66,300. In other words, while the Zynga employee spends 47% on rent, and the RadPad employee a mere 23% - less than half! - the difference is much smaller than that would imply. At the end of the year, the RadPad employee has an extra 5,940. Certainly a significant amount of money, and noteworthy in that the person has a lower salary but still ended up with more income after taxes and rent, but the amount is in the single digit percentage of the salaries we are talking about here. More importantly, the problem becomes more obvious if we look at second place after Zynga. Doing the same calculation on a Google employee, then we get that despite paying 42% on rent, the employee is left with 71,128, which is more than the RadPad employee. In other words, looking just at % of take home spent on rent is a useful rule of thumb, but looking at the actual money is better, and it can lead to different conclusions than the article would imply. edit: Perhaps the best conclusion from their data is that it actually doesn't matter where you live, since salary actually compensates surprisingly well for location. Whether you work at Google or Zynga in SF, or RadPad in LA, you'll end up with +- a few % of the same amount of money in your bank account anyhow.
- rconti 11y agoIndeed. The cost of living is a powerful multiplier as long as you don't overspend. The same car is that much cheaper in a high COL area, you can contribute more to your retirement, and so on. The problem with living in a low-COL area is, even if you save a very high % of your income, you're "stuck" and unable to move somewhere cheaper. There's a reason New Yorkers retire to Florida. You have options. That doesn't mean it works for everyone, but do your own numbers and make your own decisions.
- eastbayjake 11y agoThe other faulty reasoning here is that living without roommates is a reasonable expectation for most single, urban twentysomethings. Most engineers I know have roommates as much for social reasons as economic reasons. If you take most of those two bedroom rents and look at the cost per month per room, most are less than 30% of after-tax income. (And that's if you choose to live in SOMA, which also seems like an extravagant and uncommon choice for most engineers I know, many of whom are happy with a short commute to the Mission, Pacific Heights, or Oakland.)
- rdl 11y agoIs this submarine hiring post for SpaceX? They have offices in Hawthorne and in Redmond; both are nice (Redmond is way nicer IMO).
- gricardo99 11y agoI recently turned-down a great job offer for a Bay area tech company. Their office was just too far outside my commute range. I even offered to remote-work part-time and be in the office some days a week (I had already been a 100% remote worker for 3+ years, so I had a proven track record as a remote worker). But the founder insisted everyone be on-site, daily, even though many aspects of the company were quite comfortable and capable with remote-work (they had a remote team in Europe). This "must be colocated" mind-set is lose-lose no matter which way you cut it. I turned down a compelling/interesting job, the company lost a great-fit. If I had taken the job, burdened with an absurdly long daily commute, we both would have lost time/productivity to commuting (not to mention the broader societal costs). Maybe it's going to take a billion-dollar startup to scale-up with a remote/distributed approach to really shift things.
- sjg007 11y agoI thought the example already was Atlassian.
- gricardo99 11y agoIf you're talking about their products, yeah that's my point. Plenty of products for remote/distributed collaboration. If you're talking about their workforce... not so much. Just checking their careers page, and every job I saw was tied to some location. Didn't see a single "Location: Anywhere" job posting.
- s73v3r 11y ago"This "must be colocated" mind-set is lose-lose no matter which way you cut it." Is it? Are they that starved for talent? You turned it down, but was it that hard for them to find another?
- gricardo99 11y agoSure, they'll find someone more local, eventually. recruiting is a cost and challenge. Self-imposing an additional barrier, one that technology melted away over a decade ago, just baffles.
- newsreader987 11y agoThis is precisely the reason why I turned down an offer with a big company in SF to work for a software company in Utah. I just graduated from school 6 months ago, but I am living very comfortably - the payment on my 4 bedroom house is less than half of what I would have paid in SF for rent in a 2 bedroom apartment.
- jaz46 11y agoThis article is missing one really key point about working for these unicorn companies, the stock that goes along with salary. The article is comparing salaries of mid-senior level engineers and that $120k-$150k salary also often comes with $200k - $1+M in stock. As a SF-based startup founder and having been in tech recruiting for years, the clear upside of working for a unicorn is the stock with much lower risk of downside, but still plenty of upside growth. If you look at percentage of Total Comp to rent, the numbers aren't nearly as outrageous.
- ryandrake 11y agoUnless you're getting actual, liquid, tradable stock, it's fictional compensation. You can't pay rent with "upside".
- notNow 11y agoI think it's safe to assume that the rent is too damn high for companies relocating or setting up offices in SF. It would have been much more insightful of they could supply that graph with office or residential space data over time to get the full picture.
- SeoxyS 11y agoThis article can't even get basic geography right… (no, Stripe is not in Soma, it's in the Mission). And that's just the tip of the iceberg.
- joshrotenberg 11y agoAnd no one spells "hella" with a final h.
- joeyspn 11y ago50%+ of Income on rent is just ridiculous. Seems like someone needs to read 37signals' book Remote: http://37signals.com/remote/ http://37signals.com/remote/ Some great companies like StackExchange or GitHub read it long ago...
- lobster_johnson 11y agoNYC is also expensive. Spending 50% on rent for a 2BR. (That said, I elected to pay a little more to get a clean, modern place in a new building. A lot of NYC apartments look like something out of 1980s Russia, only not as nice.)
- aries1980 11y agoSame here in London, but for a 1BR.
- caseyf7 11y agoI'm surprised it's only 40-50% now. That was the norm 10 years ago in SF.
- burnallofit 11y agoNobody wants to bother questioning the numbers. The first line shows Zynga, $3545, $147K, 47%. First hit on federal income tax calculator using single standard deduction no kids gets a federal tax liability of $30K, leaving $117K or a monthly of $9750, so $3545 is 37% of after tax income, which is not too bad. And anyone making a decent income should put some thought and money into deductions: 401k+HSA/FSA being the obvious ones. But actually, the 30% of monthly is generally calculated before taxes, so at 147K the monthly rent could be up to $3675. Not that I'm recommending spending that much or approving of the astronomical SF rents, but any article on the subject should at least do math correctly. No, what's really going on is a certain company is trying to justify paying employees 20% less, under the excuse that local cost of living is lower. So if I live in SF in my parent's house and pay little to no rent, someone can pay me less? What if I eat ramen instead of going out to eat every night? That's absurd -- we should be paid according to what value we bring and it's up to us how much we spend on cost of living. In fact, a company in LA that can't attract top talent such as presumably are now in SF should be offering even higher salaries.
- doyoulikeworms 11y agoI don't know if this kind of comment is appreciated on HN, so I apologize in advance. Why is rent so high in SF and the Bay Area in general? Can anyone recommend good reading material on this topic?
- tdylan 11y agoAny econ101 book will do. I'd suggest Basic Economics by Thomas Sowell. Short version: Supply (housing) is being artificially restrained from being built out (through regulation). While demand (those moving to the area) keeps increasing. Low supply and high demand = higher prices. Solution: Build more housing. It's a simple problem, navigating the bureaucracy is the hard part.
- tdylan 11y agoIt's not a coincidence that the two cities which have the most regulation on housing are also the two most expensive cities (SF & NY).
- morkfromork 11y agoThe startups I have talked to in SF don't take you seriously unless you live there. They are real jerks about it. Tell them you live in San Jose and can take Caltrain and they never call you back.
- iz4e 11y agoThis salary data is questionable. $160k at google is highly unlikely, unless this counts total comp.