9 ms·

Nearly 90% of San Franciscans cannot afford a median-priced home in the city

88 points by pfarnsworth 10y ago

usaar333 10y ago
Ok, yes it is expensive, but I'm failing to understand how incomes lower than $270,000 are insufficient to cover $6,740 of housing costs. At $270k, even ignoring the large income tax break on mortgage interest, you have $92k/year left over to spend, a pretty large buffer. Looking at the linked report, it just multiplied the monthly housing costs (for all markets) by 40 to get the minimum annual qualifying income. But how is putting a max of 30% of your income toward housing true everywhere?
- nrb 10y ago
  The 40x rule is actually a decent guideline in most housing markets in the US.
- deleted 10y ago
  [deleted]
- foota 10y ago
  I say the same when people on here complain about housing in the Bay Area. 30% of income is only reasonable if you assume that housing costs are correlated with other costs of living, which is very markedly not true in places such as the Bay Area.
- Zombieball 10y ago
  Unless I misunderstood, 30% of gross income is likely 50% of your net income. Seems like a decent cap to put on housing expenses to me (especially considering other living costs in the SFO area as others pointed out).
- beedogs 10y ago
  At $100k a year, once you've factored in income tax, you'll still need to come up with about $1000 per month to make that $6740 mortgage payment.
- pfarnsworth 10y ago
  28-30% of monthly income is one of the ratios that is looked at when you apply and you can't exceed it if you're trying to get a mortgage. If you exceed that it's a no-brainer that you will get denied the mortgage.
  - deleted 10y ago
    [deleted]
  - eloisant 10y ago
    From my experience that 30% is strict when you have low income (because you don't have much left-over) but for high income you can go a bit higher. But it might depends on the country and stuff.
maximilianch 10y ago
And that, ladies and gentlemen, is how economics works. Lots of people want it? It's going to be expensive. Nobody wants it? It's going to be cheap. I, too, would like to live in a huge mansion in Beverly Hills for $3 a week. But should I complain that I can't?
- beedogs 10y ago
  "Posted from my iPhone during my interminable, soul-sucking 90-minute commute."
- zasz 10y ago
  The other half of how it works is that when demand is high, supply should increase to meet it. The reason supply remains constricted and hence prices high has nothing to do with economics, and everything to do with NIMBYists hostile to newcomers.
  - kyledrake 10y ago
    The other thing is that, as this article points out, this isn't just pure "supply and demand", because the government is pouring subsidies on property ownership, pushing interest rates to 50-year lows, and offering tax incentives for owning homes. None of which gets passed to the majority of renters who end up paying the higher rates. It's a very good point and it's worth talking about.
  - pascalxus 10y ago
    hostile doesn't even begin to describe it - there's outright hatred (and alot of ignorance of supply/demand). Sadly, we're getting to the point where people would rather make the housing problem even worse, rather than allow more tech people or anyone else for that matter to move into the city. Just lately they passed proposition C, which will reduce the overall housing supply even more.
cheriot 10y ago
The implication of these articles seems to be a very American idea that people NEED a house. Condo? Won't do. Rent and invest in something more diversified? Crazy talk. I'm American. I just don't understand why people here think so much space is so necessary. Just because we had that luxury for the last 75 years doesn't mean we always will. It's not even a bad thing.
- throwaway2048 10y ago
  as if condos are any cheaper, and who wants to rent their whole life?
  - hiram112 10y ago
    Not sure if you're from the US, but condos are usually apartment like dwellings that people do own outright. They are cheaper than houses of a similar size, but, at least where I live, the HOA fees negate about 50% of the difference in price.
- techsupporter 10y ago
  I'm selling my single-family house (in a large urban area) and moving to a small condo building (not an apartment conversion) for just this same reason. My house, small as it is, takes up such a minuscule amount of the actual dirt that I own. Just not having to maintain the yard--tiny amount that I do just to keep the weeds trimmed down--is motivation enough. And here's the thing: I still have an outdoor area, deeded to me as part of my condo unit, for doing things like having a small garden or woodworking (if I was interested in either of those, but they're the most common "but I couldn't possibly" rebuttals I've heard). I get a deeded parking space, can paint the walls whatever color I want, and even have approval from the (tiny) condo board to run all of the network wiring inside the walls I can stand. Obviously I'm unmarried sans kids and pets, yeah? Nope, I have a spouse, a kid, and a dog. And you know what? We're all going to fit perfectly. The new place even adjoins a public park, is across the street from a 24-hour grocery, has frequent all-day (and 24-hour) transit, and is within walking distance of two of the best schools in the city. And all for about $200k less than a free-standing house in the same area. I'm thrilled to not need as much space. And yes, parents, it is entirely possible do to so comfortably, even with your kid having his or her own bedroom.
brador 10y ago
The solution is to vote someone in who will loosen the law around building homes. More homes = more supply = reduced price (assuming fresh supply outpaces fresh demand). This is not magic. This can be fixed. It needs the knowledge, organisation, and will to fix it.
- mjevans 10y ago
  'loosening' isn't even the beginning of the solution. Build baby build; I would actually love to see this solved by taxing out building uses that are no longer congruent to the density of the surrounding area. Historical landmarks could become immune if they are deeded over to public trusts as a form of museum or park.
CalRobert 10y ago
Of course, it's worth noting that this wouldn't be such a big issue if nearly every city surrounding SF weren't hell-bent on remaining (depending on your perspective) either 'quiet leafy suburban utopia' or 'dystopian car-choked sprawling asphalt hellscape'. Maybe some of the other cities nearby should pick up their fair share of residents.
- WalterSear 10y ago
  The part of SF I live in hasn't seen the massive price and rent hikes that people are up in arms about. There has been some increase in the last six months, but before that, over the decade, it's been relativeley slow and stable. Why? Because it's unfashionable. It's hard not to see the entire 'crisis' as a bunch of techbros and hipsters squabbling over the same four city blocks in the mission.
  - nameless912 10y ago
    > techbros and hipsters Yeah, this is entirely accurate in my experience. I've lost a couple friends to the SF hype train, and all of them are complaining because the apartments that are walking distance from their offices cost too damn much. Bitch, I live 25 minutes away from my office and have a 2 bedroom townhouse for the same price you pay to rent a spare bedroom. Granted, I live in San Diego, not San Francisco, but still.
    - CalRobert 10y ago
      I did that in SD, and drivers nearly killed me while I cycled to work on a daily basis. It was too damn hot too. Great beer, though, and I did really enjoy my neighborhood (South Park) when I didn't have to leave it.
      - nameless912 10y ago
        > cycled THAT is your mistake. I would die if I tried to cycle to work every day. I take a car like a barbarian.
quantumhobbit 10y ago
How long until tech companies need to start offering free housing to attract talent to move to SF? Even with the higher salaries, high enough to afford the same caliber home, the stress of dealing with that market is a turn off. What if it turns out to be a bubble and the million dollar shack you bought is only really worth $200k. You could be trapped with an underwater mortgage easily. Not that I know if it is a bubble or not, but that is a large amount of risk that the employer is expecting the employee to take. Which is why I wonder if you tried to shift the risk. Say, give up 30%(the supposed standard amount spent on housing) of salary in exchange for the company providing housing.
- throwaway049 10y ago
  "the stress of dealing with that market" I could easily imagine a compensation package where the employer provides/pays for some kind of concierge-like service to take care of this for you. I would be stunned if there was more than token provision or uptake of company-provided accommodation.
- serge2k 10y ago
  > How long until tech companies need to start offering free housing to attract talent to move to SF? To do that they would have to build housing, and if you get permission to start building then you don't need to give it away as things should start to correct themselves. NIMBYs don't want that though.

88 points by pfarnsworth 10y ago

Ok, yes it is expensive, but I'm failing to understand how incomes lower than $270,000 are insufficient to cover $6,740 of housing costs. At $270k, even ignoring the large income tax break on mortgage interest, you have $92k/year left over to spend, a pretty large buffer. Looking at the linked report, it just multiplied the monthly housing costs (for all markets) by 40 to get the minimum annual qualifying income. But how is putting a max of 30% of your income toward housing true everywhere?

nrb 10y ago
The 40x rule is actually a decent guideline in most housing markets in the US.
deleted 10y ago
[deleted]
foota 10y ago
I say the same when people on here complain about housing in the Bay Area. 30% of income is only reasonable if you assume that housing costs are correlated with other costs of living, which is very markedly not true in places such as the Bay Area.
Zombieball 10y ago
Unless I misunderstood, 30% of gross income is likely 50% of your net income. Seems like a decent cap to put on housing expenses to me (especially considering other living costs in the SFO area as others pointed out).
beedogs 10y ago
At $100k a year, once you've factored in income tax, you'll still need to come up with about $1000 per month to make that $6740 mortgage payment.
pfarnsworth 10y ago
28-30% of monthly income is one of the ratios that is looked at when you apply and you can't exceed it if you're trying to get a mortgage. If you exceed that it's a no-brainer that you will get denied the mortgage.
- deleted 10y ago
  [deleted]
- eloisant 10y ago
  From my experience that 30% is strict when you have low income (because you don't have much left-over) but for high income you can go a bit higher. But it might depends on the country and stuff.

maximilianch 10y ago

And that, ladies and gentlemen, is how economics works. Lots of people want it? It's going to be expensive. Nobody wants it? It's going to be cheap. I, too, would like to live in a huge mansion in Beverly Hills for $3 a week. But should I complain that I can't?

beedogs 10y ago
"Posted from my iPhone during my interminable, soul-sucking 90-minute commute."
zasz 10y ago
The other half of how it works is that when demand is high, supply should increase to meet it. The reason supply remains constricted and hence prices high has nothing to do with economics, and everything to do with NIMBYists hostile to newcomers.
- kyledrake 10y ago
  The other thing is that, as this article points out, this isn't just pure "supply and demand", because the government is pouring subsidies on property ownership, pushing interest rates to 50-year lows, and offering tax incentives for owning homes. None of which gets passed to the majority of renters who end up paying the higher rates. It's a very good point and it's worth talking about.
- pascalxus 10y ago
  hostile doesn't even begin to describe it - there's outright hatred (and alot of ignorance of supply/demand). Sadly, we're getting to the point where people would rather make the housing problem even worse, rather than allow more tech people or anyone else for that matter to move into the city. Just lately they passed proposition C, which will reduce the overall housing supply even more.

cheriot 10y ago

The implication of these articles seems to be a very American idea that people NEED a house. Condo? Won't do. Rent and invest in something more diversified? Crazy talk. I'm American. I just don't understand why people here think so much space is so necessary. Just because we had that luxury for the last 75 years doesn't mean we always will. It's not even a bad thing.

throwaway2048 10y ago
as if condos are any cheaper, and who wants to rent their whole life?
- hiram112 10y ago
  Not sure if you're from the US, but condos are usually apartment like dwellings that people do own outright. They are cheaper than houses of a similar size, but, at least where I live, the HOA fees negate about 50% of the difference in price.
techsupporter 10y ago
I'm selling my single-family house (in a large urban area) and moving to a small condo building (not an apartment conversion) for just this same reason. My house, small as it is, takes up such a minuscule amount of the actual dirt that I own. Just not having to maintain the yard--tiny amount that I do just to keep the weeds trimmed down--is motivation enough. And here's the thing: I still have an outdoor area, deeded to me as part of my condo unit, for doing things like having a small garden or woodworking (if I was interested in either of those, but they're the most common "but I couldn't possibly" rebuttals I've heard). I get a deeded parking space, can paint the walls whatever color I want, and even have approval from the (tiny) condo board to run all of the network wiring inside the walls I can stand. Obviously I'm unmarried sans kids and pets, yeah? Nope, I have a spouse, a kid, and a dog. And you know what? We're all going to fit perfectly. The new place even adjoins a public park, is across the street from a 24-hour grocery, has frequent all-day (and 24-hour) transit, and is within walking distance of two of the best schools in the city. And all for about $200k less than a free-standing house in the same area. I'm thrilled to not need as much space. And yes, parents, it is entirely possible do to so comfortably, even with your kid having his or her own bedroom.

brador 10y ago

The solution is to vote someone in who will loosen the law around building homes. More homes = more supply = reduced price (assuming fresh supply outpaces fresh demand). This is not magic. This can be fixed. It needs the knowledge, organisation, and will to fix it.

mjevans 10y ago
'loosening' isn't even the beginning of the solution. Build baby build; I would actually love to see this solved by taxing out building uses that are no longer congruent to the density of the surrounding area. Historical landmarks could become immune if they are deeded over to public trusts as a form of museum or park.

CalRobert 10y ago

Of course, it's worth noting that this wouldn't be such a big issue if nearly every city surrounding SF weren't hell-bent on remaining (depending on your perspective) either 'quiet leafy suburban utopia' or 'dystopian car-choked sprawling asphalt hellscape'. Maybe some of the other cities nearby should pick up their fair share of residents.

WalterSear 10y ago
The part of SF I live in hasn't seen the massive price and rent hikes that people are up in arms about. There has been some increase in the last six months, but before that, over the decade, it's been relativeley slow and stable. Why? Because it's unfashionable. It's hard not to see the entire 'crisis' as a bunch of techbros and hipsters squabbling over the same four city blocks in the mission.
- nameless912 10y ago
  > techbros and hipsters Yeah, this is entirely accurate in my experience. I've lost a couple friends to the SF hype train, and all of them are complaining because the apartments that are walking distance from their offices cost too damn much. Bitch, I live 25 minutes away from my office and have a 2 bedroom townhouse for the same price you pay to rent a spare bedroom. Granted, I live in San Diego, not San Francisco, but still.
  - CalRobert 10y ago
    I did that in SD, and drivers nearly killed me while I cycled to work on a daily basis. It was too damn hot too. Great beer, though, and I did really enjoy my neighborhood (South Park) when I didn't have to leave it.
    - nameless912 10y ago
      > cycled THAT is your mistake. I would die if I tried to cycle to work every day. I take a car like a barbarian.

quantumhobbit 10y ago

How long until tech companies need to start offering free housing to attract talent to move to SF? Even with the higher salaries, high enough to afford the same caliber home, the stress of dealing with that market is a turn off. What if it turns out to be a bubble and the million dollar shack you bought is only really worth $200k. You could be trapped with an underwater mortgage easily. Not that I know if it is a bubble or not, but that is a large amount of risk that the employer is expecting the employee to take. Which is why I wonder if you tried to shift the risk. Say, give up 30%(the supposed standard amount spent on housing) of salary in exchange for the company providing housing.

throwaway049 10y ago
"the stress of dealing with that market" I could easily imagine a compensation package where the employer provides/pays for some kind of concierge-like service to take care of this for you. I would be stunned if there was more than token provision or uptake of company-provided accommodation.
serge2k 10y ago
> How long until tech companies need to start offering free housing to attract talent to move to SF? To do that they would have to build housing, and if you get permission to start building then you don't need to give it away as things should start to correct themselves. NIMBYs don't want that though.