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San Francisco Tech Firms See Workers Flee from $4,500 Rents
- simook 10y agoPortland resident here. What this article doesn't cover, is now locals are victim of gentrification. Rent prices are almost 2x, out of state buyers are throwing all cash offers on houses, and overall housing supply is low... I'm sure the commercial market is just as bad. Interesting times.
- paavokoya 10y agoHaving grown up in Portland, it's remarkable how quickly the housing prices have skyrocketed in less than 5 years.
- mcguire 10y agoWhen did San Francisco become the hot property? I know that the last time I was out there, about 2005, tech was still in the valley and SF proper was relatively low rent, bad neighborhoods, and no tech presence. Does this industry (to the extent that you can call AirBNB, Uber, and Twitter the same industry) really act like a flock of grackles or starlings, descending on a place, eating everything, and moving on?
- api 10y agoIt seems to be full of people who want to be near art and "cool" people. Unfortunately tech doesn't find a way to pay those creators of culture anything. If anything, the focus is on finding ways to make everything free. So tech moves in, enjoys the presence of creative culture they refuse to fund, but ultimately inflates real estate so much they drive that creative culture away. Rinse and repeat. If art and culture are so valuable to us why are those who create these things so poor? Why do people cringe at buying an album for $9 but then spend $11 on a coffee and a biscuit?
- cloudjacker 10y agoBecause its not just any form of expression that people want. The artists shouldn't have balked at taking a class in economics.
- Apocryphon 10y agoI'm not sure if a lot of the hip tech transplants want art. They just want the aesthetics.
- api 10y agoI think what they want is culture, which is produced by people who love their communities and who don't work 90 hours a week so they have time to actually do it.
- gd2 10y agoTrue, but isn't part of it that one thinks that on the $9 album, the marketing and media company folks gets $8.50 of $9.00 But there is also artistry in creating a coffee or dining experience, and hopefully that money spent on the meal and coffee goes more to the chef artist who prepared the meal, the architect artist who designed the space, and the line cook, waitress and dishwasher.
- seivan 10y agoTech isn't creative and artistic? Why is an "album" worth more than a graphics engine, drawing app or game? If anything music is overvalued. I'm surprised we haven't automated Skrillex and all that house crap yet. ;-)
- rco8786 10y agoIt's part of a nationwide(global?) urban renewal. Millenials and their successors are more likely to want to live in urban areas and stay single longer than their older counterparts. This is causing rents to increase noticeably in nearly every major urban area. Couple that with relatively high pay for tech sector jobs that like to hire these younger folks and you get it even worse in SF, Seattle, etc.
- ghaff 10y agoBe careful of overgeneralizing from the subset of the population you interact with in tech. For example, according to this FiveThirtyEight piece from last year, the actual trend is that college-educated millennials are slightly more likely to move to a subset of dense cities. [1] In general, it's unclear how much of an overall urbanization trend there is. [1] http://fivethirtyeight.com/features/why-millennials-are-less-urban-than-you-think/ http://fivethirtyeight.com/features/why-millennials-are-less...
- guyzero 10y agoSeriously that was 11 years ago. Yes, a lot of things changed in 11 years.
- mcguire 10y agoThat's my point. 11 years may seem like a long time to you, but it's really not. I've seen quite a few people here wanting high-rise residential buildings in San Francisco to alleviate the high rents there. A skyscraper is at least 40 floors, according to wikipedia and one rule of thumb I've seen puts the construction time for them at 1 month per floor, from ground breaking to completion. That's about 4 years in construction, plus design and planning time, plus site acquisition. That's five, six years (more?), total, even in the most positive political atmosphere. Someone who wanted to alleviate SF's high rents today, assuming you could do that by building high-rise apartment buildings, would had to have started at the height of the construction bust. That would be, I think, before San Francisco proper's tech boom, i.e. before there was a problem evident. And if you started building one today,... Once upon a time, Intel planned to build a 10 story office building in downtown Austin. They stopped, with nothing but the structure of the building up, in 2001. The incomplete building was demolished in 2007.
- ghaff 10y agoYep. The government and people of San Francisco and Silicon Valley could wake up tomorrow, all with the simultaneous revelation that OMG we need to build a massive amount of new housing and all the associated transportation and other infrastructure needed to support it. And you might start seeing the initial fruits in a decade. Meanwhile, in the real world, if attitudes and policies were to start shifting, 15 to 20 years is probably a more realistic planning horizon.
- guyzero 10y agoIn 2008 I moved out of Toronto and when I went back a few years later there were dozens of new high- and mid-rise buildings that had been built downtown. Telus Tower was built from 2007 to 2009, 32 stories. 120 Bremner is 30 stories, same time period. Cityplace has about two dozen high-rise residential towers that were all built in 2-3 years and are 30+ stories tall. It does not take 4 years to construct a highrise. https://en.wikipedia.org/wiki/CityPlace,_Toronto https://en.wikipedia.org/wiki/CityPlace,_Toronto
- nostrademons 10y agoEarly adopters started moving in 2006 (remember the YScraper?). It really accelerated around 2010, when the economy started recovering. Prices started rising in earnest in the second half of 2011. I know a number of people here who are praying for a tech crash so they can afford housing again.
- davidw 10y agoPrices were already going up a lot in the dot com days.
- nostrademons 10y agoYeah, and then they went down in the dot-com crash, and then they went up again from 2005-2007, and then they went down again in 2009. I moved to Mountain View in 2009. In late 2008 (as the crisis was hitting the stock market, but before landlords had realized it would affect them), a realtor was showing me around, and I asked about a swanky corporate apartment complex we drove by. "Oh, that's out of your price range - they charge $2000+/month." I ended up living there for $1400/month in 2009-2010, then they started jacking up the rent. When I left in 2013, they turned around and rented it for $2700/month.
- Chlorus 10y agoAnd I'm sure it has nothing to do with the urban growth boundary or increasingly restrictive land-use regulations.
- pklausler 10y agoMetro (being the Portland area's multi-county regional government) voted last year to not expand the urban growth boundary. So the supply of single-family homes with yards is basically fixed, while demand is growing. Expect home prices to continue to grow (Portland's rate is top in the U.S.) as new housing construction continues to be constrained to dense multi-family structures for the next five years until Metro votes on UGB expansion again.
- FireBeyond 10y agoWhat rises with house prices - property taxes. Revenue for Metro. I am going to assume there's a non-negligible correlation.
- pklausler 10y agoProperty tax revenue would rise with new construction as well.
- FireBeyond 10y agoWow. Good point. No idea why I didn't consider this. :)
- Tiktaalik 10y agoNot necessarily. The city decides what amount of revenue it wants to generate, then divides that amongst all properties based on accessed value. If in a year everyone's accessed value increases by the exact same amount, and the city doesn't increase the amount of total income they want to generate, no ones property taxes change.
- rconti 10y agoExactly. They cover one side of the coin ("we could never have afforded this in San Francisco!") but not the other side, the person actually LIVING in Portland at the time of the purchase, saying "we can't afford this!"
- cmurf 10y agoSame in Denver. Realtor told me 1/4 of properties don't make the MLS, they're bought with cash before they can get listed.
- leesalminen 10y agoBoulder as well. A buddy of mine had a hell of a time getting a condo with a mortgage. They were all bought up in cash within a day or 2.
- talmand 10y agoSomebody's busy setting up another housing bubble.
- jrjarrett 10y agoWho are these people and where are they getting that kind of cash?
- nostrademons 10y ago(Not OP, but know several people that do this sort of investing...) It's a combination of 1.) Wealthy Asian businesspeople who are looking for a place to park some of the foreign reserves they own overseas. 2.) Hedge funds, investing institutional capital in relatively "safe" investments with guaranteed revenue streams. 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. This is what often happens after a speculative bubble bursts: all the folks who invested based on irrational exuberance get cleaned out of the market, and then assets are transferred to other investors who are generally much more prudent, often using spare cash that was sitting on the sidelines. In this case, the assets just happen to be where everybody lives.
- arcanus 10y agoAustinite here. Analogous situation happening here, massive gentrification and home building, but still a sellers market.
- wavefunction 10y agoI think there's a lot of luxury condo development going on in Austin, but actual homes? Even our existing home inventory has been hit hard by investors looking to set up STR2s with AirBnB. The properties they prize are the exact sort of starter homes first-time homebuyers are looking for. There was just an article recently on the dearth of 3/2 houses available. I'm looking to buy a home soon so the recent municipal prohibition on STR2s gives me hope that the inventory will increase and allow some downward pressure on prices.
- TYPE_FASTER 10y agoSame in Boston, especially South Boston and the Seaport area.
- dkopi 10y agoIt's 2016, and people still think that if someone moves into your neighborhood, someone else has to move out. Rising demand is great. It means people want to enjoy your neighborhood. You can either meet that demand by increasing supply, or you can restrict the demand, and let certain people be outpriced by the market. Locals aren't victims of gentrification. They're victims of zoning laws and nimbyism.
- seivan 10y agoLocals are also (usually anyway) the source of those. At least in Stockholm. Avoid building apartments for those less off because of "greenery". http://www.dn.se/sthlm/hyresgaster-stoppar-nya-grannar/ http://www.dn.se/sthlm/hyresgaster-stoppar-nya-grannar/
- sliverstorm 10y agoSo consider a nice, quaint neighborhood. Person A lives there. Person B wants to live there too, because it is so nice. Ok, let's say we double supply. All the houses are now either twice as high, or half as big, or maybe the trees were cut down and the bushes ripped out to make room. There's twice as many people & everything therein. Is it still the same nice neighborhood?
- davidw 10y agoWas it the same neighborhood when you moved there? Things change, especially in the US. "The immaculate conception theory of your neighborhood’s origins": http://cityobservatory.org/the-immaculate-conception-theory-of-your-neighborhoods-origins/ http://cityobservatory.org/the-immaculate-conception-theory-... And: if prices are going up that much, and you really want out, you can sell and move, to, say, Lakeview, Oregon.
- sliverstorm 10y agoYes, things change. But I contest the notion that adding more housing to a neighborhood is a magic bullet that will make everyone happy. Among many issues, the fundamental attractiveness of a particular neighborhood may be tied to low population density. In which case ripping down the neighborhood and rebuilding makes neither resident Person A nor prospective buyer Person B happy.
- jgmmo 10y agoDear folks interested in Oregon, come to Eugene!
- davidw 10y agoGrew up there. Still seems like it's struggling to put together much of a tech industry. More seems to be happening here in Bend in some ways, despite being a significantly smaller town. And the weather is way better over here too!
- jgmmo 10y agoFortunately the future is remote work. Local jobs don't matter nearly as much once you can work for anyone remotely.
- FireBeyond 10y agoAnd then there's the breweries!
- davidw 10y agoAre there any significant population centers in Oregon that don't have a good brewery or two?
- FireBeyond 10y agoTouché!
- eikenberry 10y agoWe're still recovering from the housing bubble bursting. When that happened a ton of developers went out of business and building came to a stand still. The market demand eventually caught up with the overbuilding from during the bubble and have passed it creating a shortage again while the developers get to building. It should level off again in a few years as long as the city doesn't make zoning mistakes.
- davidw 10y agoThe problem is that it's all very uneven. A lot of people would love to live in the bay area, or Portland, but not so many people want to live in Lakeview, Oregon. But building more housing in the Bay Area is very difficult due to NIMBY rules and regulations.
- kyledrake 10y agoAlso a Portland resident. Portland now has the fastest growing real estate price increases in the country: http://content.kgw.com/photo/2016/03/29/s%20and%20p%20home%20price%20increase_1459278018966_1266387_ver1.0.JPG http://content.kgw.com/photo/2016/03/29/s%20and%20p%20home%2... This increase is not being matched by increasing salaries (they're increasing, but not at the same rate): http://koin.com/2016/03/31/report-portland-wages-not-keeping-up-with-home-prices http://koin.com/2016/03/31/report-portland-wages-not-keeping... There are potential implications of this. Not just for people living here already, but for workers that may or may not be able to maintain mortgages at these rates if there's a contraction in the "tech" sector. I don't know how many people are weighing these decisions on a 10+ year timeline. At the end of the day, I'm not sure how much of this is sustainable wealth. Portland got burned pretty badly in the 2000 crash, and really badly in the 2008 crash (at one point the unemployment rate was around 14%). History suggests it's a legitimate concern.
- driverdan 10y ago> locals are victim of gentrification You say that as if gentrification is a bad thing.
- rconti 10y agoMany problems with this article. "A software engineer in Austin earning $110,000 would need to make $195,000 in San Francisco to maintain the same quality of life" Would they? They point out the median in the bay area is $118k, but there's no indication that the median in Austin is $110k; maybe they just pulled that number out of thin air? They cite slowing tech employment growth in SF, but it seems clear that it's a result of near-0 tech unemployment. They talk about the exodus "in the past year" as if it suddenly started happening; people have been bitching about the most recent cycle for years, but it's been going on for decades. "They've become tech hubs in their own right in a way they weren't three to five years ago" What? "We bought a beautiful Craftsman home in an awesome neighborhood and that just would not have been possible in San Francisco." I have no problem with people moving and displacing others, but you have to be clear that the reason you can afford that is bringing the fruits of a higher-cost-of-living area to a lower-cost-of-living one, not because it's inherently more affordable for people who actually (already) live there. In this case, he's .. moving his company? So I guess he's able to keep his pay the same (??).
- stepanhruda 10y agoThis report lists $110k as median for Austin: http://get.hired.com/rs/348-IPO-044/images/Hired-State-of-Salaries.pdf http://get.hired.com/rs/348-IPO-044/images/Hired-State-of-Sa...
- dionidium 10y agoI don't understand what you're pushing against. Do you dispute that an engineer's salary goes further in Austin than it does in San Francisco?
- rqebmm 10y agoI assume it's based on this report, which has the same numbers: http://get.hired.com/rs/348-IPO-044/images/Hired-State-of-Salaries.pdf http://get.hired.com/rs/348-IPO-044/images/Hired-State-of-Sa...
- maerF0x0 10y agoThe 110k vs 195k is just a comparison, not a statement of possibility. The real question is "does an engineer of X qualities" make more or less after cost of living adjustments? eg: Maybe you could live well on 110k , but would only earn 95k, suddenly SF seems better.
- 100k 10y agoLots of people want to live in an urban setting. Build more urban neighborhoods, everywhere.
- Apocryphon 10y agoThere's a lot of urban neighborhoods, even. Fund and found more startups in preexisting cities, all you VCs and entrepreneurs.
- davidw 10y agoThis is the answer. Deregulate housing/small businesse spaces/offices and let the market do its work. It's crazy the amount of regulation there is that pretty much dictates single family detached homes for large swaths of the country. Here in Bend, for instance, you must have a driveway with not one, but two parking spots. Land of the free indeed... http://marketurbanism.com/ http://marketurbanism.com/ Also, this book, although it's pretty high level: http://amzn.to/1qsn2RD http://amzn.to/1qsn2RD I think this is one of the most important issues in this day and age. It's happening everywhere, and things need to change. Edit: downvoters, care to actually state your opinions? I'm hardly a libertarian, and neither is Matt Yglesias, author of the aforementioned book. I don't think 'free markets' are the answer to all the world's problems. But I do think a more liberalized market would help housing a lot. These areas need more supply, and if you don't want LA style sprawl, the best way to do that is via density. And the best way to accomplish that is probably by letting the market work, within reason: I don't suppose I'd be in favor of allowing an outdoor thrash metal venue in the midst of an otherwise quiet neighborhood, but there are a lot of things you could add to make places more livable and walkable without cars.
- moheeb 10y ago"Here in Bend, for instance, you must have a driveway with not one, but two parking spots. Land of the free indeed..." Where I live people don't leave any room for parking on their own property and all of the streets are completely jammed with cars, every inch. You don't hardly dare move your car if you've been able to find a spot. Is that freer?
- Apocryphon 10y ago"They’ve increased 38 percent in Seattle, 12 percent in Austin and 6 percent in Phoenix." The article names the usual suspects for engineer emigrants (Austin, Portland, strangely no mention of NYC or Raleigh RTP), but why are people moving to Phoenix? Isn't living in the less sexy areas of South Bay (Sunnyvale, Milpitas, South San Jose) pretty much on par with urban life in Phoenix?
- TYPE_FASTER 10y agohttp://www.zillow.com/phoenix-az/home-values/ http://www.zillow.com/phoenix-az/home-values/ http://www.zillow.com/sunnyvale-ca/home-values/ http://www.zillow.com/sunnyvale-ca/home-values/
- Apocryphon 10y agoI wonder if the tech sprawl will force people to live further and further south. Coyote Valley, Morgan Hill, Gilroy?
- 1_2__3 10y agoDo you somehow think those places are significantly cheaper than San Francisco? They're not.
- 10y ago
- Apocryphon 10y agoSo are there any tech hubs right now that aren't dealing with issues of rent increases, gentrifications, and growing pains?
- davidw 10y agoBerlin definitely has gentrification issues. How's it doing in terms of rent increases?
- peterwwillis 10y agoThe DMV area? Its rents are fairly consistent, gentrification is pretty slow-and-steady, and the only growing pain I see is poor transportation options. But DMV is full of established companies and government work, not trendy startups. If San Francisco's high rents are due to startup culture, you may find more average rents where the tech isn't trendy.
- Apocryphon 10y agoSorry, but I've never heard of that acronym for a metro before. Where's the DMV?
- orestes910 10y agoDelaware, Maryland, Virginia
- peterwwillis 10y agoDC, Maryland, Virgina. Also known as the Washington metropolitan area (https://en.wikipedia.org/wiki/Washington_metropolitan_area https://en.wikipedia.org/wiki/Washington_metropolitan_area). Delaware doesn't have much of a tech sector.
- Apocryphon 10y agoI've heard Richmond, VA is a new hip city, but I'm unaware of tech being there.
- Gratsby 10y agoI pay about that for rent - it's the most I've ever paid for housing by a long shot, and it regularly freaks me out. I just can't get used to it. The thing that gets me is that I'm barely paying the property taxes on the place I rent. The landlord isn't gouging me. It's just the way it is here. Housing is so expensive because everyone wants to be here, and for good reason. This is the most thriving technical community in the entire world. We live different lifestyles as a result. It's not better or worse, just different. It seems like there are a fair amount of people who come for 2-3 years and then go back to wherever it is that they came from, but I think the amount of people who actually leave the bay area for tech jobs in Seattle/Portland/LA is pretty slim. I'm sure it happens, but if there's an exodus happening I for one am completely unaware of it.
- bogomipz 10y agoReally - "This is the most thriving technical community in the entire world"? I'm calling BS. Have you been to New York City recently? Rents for a 1 bedroom are nowhere near that. Lets talk about that community - there are meetups? Wow. You can go to a meetup on any night of the week in New York or Austin. Besides that explain "the community"? Oh you go out and drink craft beers after work? You can do that anywhere. Whats this different lifestyle of which you speak? Dodging panhandlers on Market Street? Stepping over human excrement? Using Uber b/c the city in which you have chosen to piss away your money doesn't provide decent mass transit for most? People like you perpetuate some myth that you have to pay $4500 a month if you want to work in tech. Nonsense.
- funkaster 10y agoI live in SF and 100% agree with you. There's nothing in SF that you can't find in some other place. I do like living here, but I don't see myself living here longer than a few years. If I had to start my own tech company, I would probably have the exec team here (because of VCs, really, that's the only reason, not a "tech thriving community") and build my team in EU, maybe Berlin. We're currently hiring at my job and it's getting harder and harder to get high quality candidates.
- CiPHPerCoder 10y agoIt's worth mentioning: This isn't just causing people to flee. It's actively repelling people from moving there. (Personally, I've turned down job offers for ~2x what I make now just so I don't have to endure today's rent prices, which I anticipate are only going to increase.) If you're in SF and you want better access to talent, consider a distributed team instead of expecting everyone to move to SF.
- ferenstein 10y agoif anyone is interested in solving the problem, im putting together a campaign for major housing reform through the ballot measure. email me greg@gregferenstein dot com
- Shebanator 10y agoyou should probably mention what state/city/whatever your ballot measure is intended for...
- dv0rak 10y agoFuck. And I thought paying $1k a month in Toronto was too much. I've been looking for work in cheaper cities like Hamilton or London literally because what I make versus what it takes to survive don't sit well with me - and never have.
- stuxnet79 10y agoOh cool, another Toronto developer!! I never see a lot in HN. Are you working for a startup? Also, why Hamilton or London? Have you tried looking for jobs in the Kitchener / Waterloo area? There are a lot of nice startups there as well as established companies. My friend recently got a job there at a bank.
- dv0rak 10y agoWorking for a design firm handling all their development. Hamilton and London also have the same kind of start up communities that the KW has without the pretension of going to UW (I'm a college drop out). Also more expensive in KW than Hamilton. Plus n other reasons why I don't like Toronto and prefer smaller cities, etc.
- stuxnet79 10y agoWell Hamilton is pretty nice (from the little I've seen). I know there's stereotypes and what not for Hamilton as a whole but I've been there and it's great so if you are looking for cheaper rent I don't think you could go wrong. I've never been to London funny enough but I don't doubt it's a great place to live, a lot of hot girls apparently :-) Anyways good luck on your search. I'm sure you will be able to find something since you are currently employed. Just gotta keep on plugging away.
- dv0rak 10y agoThanks for the encouragement! And London is decent, they really love their craft beer out there. I have a lot of friends and family out that way but I think Hamilton is where I'll end up.
- tryitnow 10y agoYes, rents are high, but if you invest even a little bit of time you can find a fine residence in the Bay Area for a lot less than $4,500. I rent a two bedroom house in Oakland for $2,200. My commute is not too much longer than it would be if I live in certain parts of San Francisco. There's simply little advantage to living right in the heart of a major city. You have to ask yourself: "Instead of renting in a high-profile location, what else could I buy with an extra $24,000 a year?" Yes, average rents are too high, but nobody says you have to pay the average rent.
- msutherl 10y agoThere's a lot of room for expansion to the South as well – I pay $1,300 in Bayview.
- zzz157 10y agoWell you also have a significantly higher probability of getting shot when you live in Oakland. So there's always that.
- vosper 10y agoIt's not like the Mission, Tenderloin or SOMA are especially safe, either. In SF, as in Oakland, there are good spots and bad spots. I haven't felt unsafe in Lake Merritt, and my place is way nicer than what I got for the same price in Cole Valley. And the weather's better (it really is).
- nostrademons 10y agoDepends which part of Oakland. Some parts of Oakland (eg. Rockridge, Temescal) are significantly nicer than SF. They aren't exactly cheap, but your safety : price ratio is significantly better than in say, the Mission.
- mrgordon 10y agoThey may appear nicer but when I read Yelp reviews in Rockridge and Temescal they occasionally mention the bars on the windows or robberies taking place which I've never seen in San Francisco. Not trying to say the average person will encounter problems but I do think even those areas have more crime than you'd think. As someone who lived in Oakland and now has rent control in the Mission, I would say that my safety : price ratio is significantly higher here in SF after a relatively small period of time.
- whack 10y agoIt's hard to overstate the impact this is going to have on San Francisco, long-term. As Technology becomes the most important industry in America, a well-governed San Francisco could have positioned itself as the next NYC. The hub where all of tech gathers, the same way all of finance gathered in Wall St. Replace the 70 year old 2-storey homes with Manhattan style apartment buildings, and rent in San Francisco would have remained very reasonable, despite the rapid economic growth. This would have prevented exactly this problem where tech workers are forced to disperse to other mini-hubs, due to lack of capacity in San Francisco. 20 years on, San Francisco could have become what New York City is today. One of the top 5 cities in the world, and the undisputed hub where all of technology resides. Instead, it's on track to be just another major city, in the same league as countless others like Chicago/Seattle/Boston.
- jjtheblunt 10y agoThat's implausible: San Francisco is overbuilt to the extent that green areas are sparse, though those which exist are decent, rather than distributed throughout the city. That contrasts in the extreme with the other cities you mentioned, and matters to many people.
- BurningFrog 10y agoYou don't need to build on any green areas to double the housing capacity of SF. Compared to actual dense cities in the world, SF is nearly empty.
- woah 10y agoThe majority of SF is two story suburbs (and as the song goes, they are made out of ticky-tacky). Height wise, it is underbuilt, and that's why SF has such a low population density despite every piece of land being covered in these rickety little bungalows. The bungalow owners fight tooth and nail against denser multistory construction because they realize that the housing crunch is the only possible way that their shacks can have such high prices.
- thedufer 10y agoSF has 1/4 of the population density of Manhattan, the city it is often compared to, and about 1/6 of the densest city in the world (Manila in the Philippines). I wonder where all those extra people are being put if SF has capped out?
- sfotoatx 10y agoLots of naysayers on HN, but I left SF last year and moved to Austin. I have zero regrets. In SF, my 1 bedroom, 650 square foot apartment in SOMA went from $2,600 to $3,200 over 3 years. In Austin, my salary went down $10k to $120k/yr. My 2 bedroom, 1,100 square foot apartment is $1,150/mo. The tech scene here isn't as vibrant as SF, but there's still plenty of great meet ups. All in all, yes there are some things I miss about SF, but the benefit of having way more cash month to month outweigh the negatives. Edit: Clarity.
- qntty 10y agoSorry if this is off-topic (and maybe a bit personal), but as a recent graduate, I'm not sure what I would do with all that extra money. What do you (or most people) generally spend it on? I make less than that, but if I didn't have student loans, I wouldn't know what to do with it besides leave it in the bank.
- fokinsean 10y ago> leave it in the bank cha-ching That and invest.
- vitd 10y agoI'm not the original poster, but I'll tell you what I've done in the past which has worked fairly well. I put as much as I'm allowed to into an IRA for retirement and into my spouse's IRA, too. I max out the matching amount on my 401k. (Those 2 things alone ensure that I'm putting away 10-15% for retirement.) I do some additional short to medium-term investment in the stock market. Nothing too risky, but enough to hopefully beat inflation. I also bought a few expensive toys that I really wanted (nice high-end camera, for example) and take regular vacations to nice spots. I started giving to charity, too. I also decided to do something closer to home and helped a relative with their student debt. I started taking some of the free time I have and that nice camera to do photography for a local charity.
- vinceguidry 10y agoIf you're not already married, you should be using it to date. College is hands-down the best place to find a significant other. Once you've graduated, the social life you took for granted quickly fades away and finding people to spend time with and then actually spending time with them becomes vastly more difficult. If you're a cisgendered male, it can be absolutely brutal. Cisgendered female, much less so but still a problem. One of the few things that makes it easier is the willingness to be generous. Leaving it in the bank is an excellent option. You've got two main things to save for, a down payment for a house and your wedding. Better still is a balanced and sane investment portfolio, but leaving it in the bank is better than a bad portfolio, so take some time to learn how investing works if you choose to go that route.
- mc32 10y agoIn the immediate sense, this is bad, long term one hopes, this will just accelerate the diffusion of technology centered companies away from the bay area and to the valleys and prairies and cities around the country, slowly transforming the economy as they spread out, or likely just spread out from these distant outposts. Once the startups make it, rather than develop large campuses in the bay area they can expand elsewhere and take advantage of those workforces.
- thegayngler 10y agoThis is the result of people trying to get rich quick by simply having stuff rather than producing and maintaining stuff. I don't know what the answer is. I do think that San Francisco is poorly planned out based on my observations last year when I visited to see if I could live there. There is no mass transit system on the scale of NYC or one that's even trying to be. Everything seems really spread out. I felt like you needed a car to really be able to adequately take advantage of the area. I'm not really a fan of expensive rents and car culture. I also noticed people cheering when Twitter announced layoffs. I didn't leave with the impression the community had adequately benefited from the tech industry being in the area. The people I spoke with felt that the tech industry takes away but doesn't give back to the community.
- BurningFrog 10y agoA car won't help you much in SF. You can get to where you want to go, but not park there. People end up using Uber.
- nether 10y agoComing from LA, whenever I visit SF I always use transit. With Google Maps on phone it works amazingly well, comparably to NYC MTA. I don't miss my car in SF at all.
- EricBetts 10y agoAs a software developer already living in Portland, I'm loving this. I have no quantitative proof, but it feels like, even as recent as 10 years ago, the high tech in the Portland area was very hardware oriented. These days it seems like there are more software startups, and more high profile software companies (Amazon, Google, Ebay) with offices in the area.
- exolymph 10y agoPeople who are saying that you should be able to work on software from anywhere are underestimating the importance of IRL network effects.
- Ephori 10y agoAt least SF still has the jobs and industry to drive the insane housing prices. Try somewhere like Vancouver where the prices are just as crazy but minus any connection to an actual economic or technological driver; there's zero industry left, zero investment, and a pervasive Stockholm syndrome where the entire city population convinces itself it's the 'best place on Earth.' It's turning into an epic ghost town of real estate speculators and low-rent TV post-production sweat shops with all the real tech talent draining to places like SF and NYC.
- Apocryphon 10y agoYeah, the existence of Vancouver, London, and Hong Kong's housing markets make me feel grateful that at least SF isn't that bad.
- msoad 10y agoI live in a high rise in SF and pay $4400 for a one bedroom. Although it sounds expensive but it's like $800 more than the least expensive place we could find near this place but it's a well built apartment with lots of amenities. I thought about moving out of SF but I don't have any social connection outside of San Francisco. Plus weather is very nice here and there are lots of diverse cultural events happening in San Francisco. Add very thick job market on top of it. I was able to interview 50 companies when I was looking for a new job. I'm saying I, as a case study is paying this rent because of reasons and I'm well aware how much more it is compared to other cities. There are 600 apartments in this high rise and out unit is one of cheapest ones. Most of units are having residents, so there are people who pay those rents.
- msoad 10y agoI don't know why I'm getting downvoted! Don't you want to hear WHY people paying those rents or you want to believe everybody paying those rents are just plain stupid?! Markets are smart!
- justinhj 10y agoYou shouldn't be getting downvoted because it's interesting to hear from someone paying relatively high rent. I'm in a similar situation in that I live somewhere where buying a place is out of reach, but I have too much attachment to the area to go live somewhere cheaper.
- whitenoice 10y agoUp-voted, Are average SF rents that high? Boston is probably less than half that cost, with salaries comparable to the west coast and similar cultural events and excellent public and private schools. Weather is not that great though. Genuinely asking - So what makes SF so worth it, that it justifies its high cost of living? in comparison to other top class states, is it just the weather?
- x0x0 10y agojobs. You can be a half-assed engineer here and be employed; if you're good, you have dozens of choices of place to work. Whenever I ponder leaving (and I'm a data scientist, so more specialized) I look around at cities like Salt Lake or Denver or other places close to good skiing and see like 3 employers. Total. What happens if I don't like my job / my boss changes / whatever? I'd probably have to move. It's just a ton of risk for the employee. And not just jobs, but other people who do the same thing that you can learn from. And full stack: from the people building javascript libs to new programming languages (swift, rust) to chips (Apple, Intel, hardware startups), etc. Proximity to the outdoors. If you want great surfing, hiking, skiing (well, ex the drought years), climbing, camping, etc -- it's here. And the state is dry, so no mosquitos or flies. ie it's much more enjoyable to be outside than in the midwest. It's fun to be outside 340+ days/year. Non-competes are invalid by state law. And this isn't a theoretical problem; I had a job offer withdrawn in NY because the new employer's counsel determined they were covered by then-current employers non-compete contract and they didn't want the hassle. People who view quitting their jobs and starting companies as merely modestly crazy/risky, instead of something only a lunatic would do. Oh, and as for your average rents: yes. You can get cheaper rents, but at the price of shitty public transport, a terrible commute, and a lack of local services where you live. Which is particularly punishing if you don't own a car. sf as a city is run by worthless idiots who decided to play city, so big pieces of it have terrible (unreliable, slow, unsafe, etc) public transport (yet it manages to be some of the most expensive transit in the nation as the cherry on top). Plus there are 3 public transport systems that essentially were built independently and operate without any coordination, two of which only serve pieces of the city (muni, bart, caltrain). And until the age of uber a taxi system that specialized in shitting on their customers. Because where, besides sf, would a taxi that actually comes be worth paying a 50% premium ala uber when it debuted? So yeah, wildly incompetent city government.
- supergeek133 10y agoI keep saying it, and I'll keep on saying it.. Who is going to be the first to move? The capital or the talent? One has to drive the other out. VC money isn't going as far as it used to, and talent has to increasingly eat more ramen just to live and keep the lights on in their company.
- sologoub 10y agoLos Angeles got lumped in with other places in this article, but it completely misses the sprawl problem - you want to pay less? sure! Just sit in traffic! >$569,500 in Los Angeles, Zillow data show. If you want a decent quality of life without 1-2 hour one-way commutes and you work in tech, most likely you need to live either in Sillicon Beach (Santa Monica/Pacific Palisades to about Redondo) or Pasadena or Irvine areas. None of these are as cheap as $600k. Rents are catching up quickly as well. If you are trading traffic for cheaper rent, Bay Area has those options too.
- tn13 10y agoAs soon as I have sufficient savings I plan to move to Texas. I will work for 30% less salary than paying 50% of my salary as rent for a completely worthless apartment that is not even being maintained properly.
- binarysolo 10y agoI'm a contrarian voice here, but I strongly value my day-to-day encounters and connections with exceptional individuals who I cross paths with in daily life... moreso than the exorbitant cost-of-living in the area. The access to opportunities, collaborations, and community here is unparalleled (comparisons: Taipei, New York City, Boston, and London, all of which I've spent prolonged periods due to business). Spend one weekend hiking in Yosemite, another working on a digital arts project in Oakland, and you still got plenty of bandwidth to sip your fancy coffees and swing by Stanford for some lectures and run into competent friends to solve some business problems for fun and profit... life is pretty damn good for work and play. Caveat: Of course, this is coming from a position of privilege: that I spent both undergrad and grad in the area and have built up a strong base of connections here within the profession world and academia, and that the $10k-20k net salary optimization does not meaningfully affect my quality of life.
- sjg007 10y agoI'm about ready to cry uncle. Maybe now tech companies will consider remote work. Everyone will be happier.
- ryandrake 10y agoCareful what you wish for. If your job can be done from home, it can be done from India.
- quicklyfrozen 10y agoYou can collaborate effectively with remote people a couple time zones away. India is much harder -- also much harder to periodically bring everyone together for a few days.
- Apocryphon 10y agoWorking at hardware companies, you quickly realize the toll taken by having to deal with vendors in Shenzhen. Meetings at the extremities of the day on both sides of the Ocean isn't fun for anyone. Outsourcing your core development team, let alone QA or sysadmin, to Asia isn't a panacea.
- sjg007 10y agoThat's a redhering. All the good Indians are inported.
- sjg007 10y agoThat's a redhering. All the good Indians are inported.
- traskjd 10y agoWe've just setup a new office for our company (https://raygun.com https://raygun.com) in Seattle. We have a small office in SF, but going to building a much larger one up here (we're HQ'd in Wellington, New Zealand) Seattle locals complain a little about all the cranes across the skyline. I see it another way - Seattle is absolutely going to eat SF's lunch if it doesn't change. You already have Microsoft, Boeing, etc here. Google, Facebook and Space X have now opened offices too. This city seems to be fully engaged handling that growth and how to capitalize on it. We've been receiving flyers about developing the transit system for the next 25 years. A far cry from the sassy (and painfully accurate) BART twitter account calling out the lack of investment in it. I'm not saying it's perfect, but there's some real problems with the inelastic supply of housing in the SF/Bay Area.
- jseliger 10y agoSeattle locals complain a little about all the cranes across the skyline. I see it another way - Seattle is absolutely going to eat SF's lunch if it doesn't change. One underestimated part of CA's success, though, is the fact that non-competes are illegal: http://asr.sagepub.com/content/76/5/695.short http://asr.sagepub.com/content/76/5/695.short. If Washington State banned non-competes, it would have a really tremendous long-term advantage.
- umbs 10y agoAnother angle to this is cost of sending kids to schools (my kids are elementary school age). I support public schools and frequently volunteer to teach stress management programs in public high schools. However, few years back, to cut down on housing costs, I purchased a condo in "very low API score school district". When my kids were ready for school, we hesitated to send to public school and choose private school. Now, my wife and I are shocked with the costs and have been inconclusive on private school vs owning a house in "good" school district. I learnt from others that in other parts of US, we get good schools and decent house at reasonable price in Seattle/Portland/Austin etc. But uprooting entire family looks extreme at this point and we don't have stomach to do it. Curious, as to what others in similar situation are doing.
- SmokyBorbon 10y agoIt's almost as if government interupting supply and demand causes high prices and shortages.