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From what I see, the spin on this phenomena in this story is incorrect. The real story here isn't the tech companies, its the lack of available housing in the a

• lupin_sansei 10y ago
  Exactly. High house prices are caused by a scarcity of houses. This scarcity is often due to restrictive local laws to release more land for housing and/or the permission to build up if there isn't sufficient land.
  • anigbrowl 10y ago
    It's worth bearing in mind that most of said laws are the creation of existing property owners, who just happen to form the main tax base.
    • lupin_sansei 10y ago
      What they call in Economics - Baptists (environmental objection to sprawl, objections to building higher rise etc) and Bootleggers (people who benefit from selling high priced houses, land tax receivers etc)
    • stuckagain 10y ago
      On account of Proposition 13, existing property owners in fact do not form the main tax base. Personal income taxes are in total greater than property taxes in California. If you earn more wages your income taxes increase, but if your property appreciates your property taxes do not increase. Property owners get to vote and they stand to realize 100% of their capital gains, but they aren't really subject to taxation.
      • hkmurakami 10y ago
        And hence we have the boom-bust cycles of the California tax base, with alternating waves of budget surpluses and steep shortfalls.
        • zaroth 10y ago
          This is due mainly to CA's very progressive tax rate, it makes the lions share of income based on capital gains and therefore the tax revenue much more variable than in other states. This is unrelated to property taxes, which go to the city/town not the state.
      • WildUtah 10y ago
        Property owners do not get to vote in the USA, not even in the Bay Area. Citizens get to vote. Citizens that own property are very motivated to vote against construction and so far have shown extreme solidarity against allowing dense construction even in small zones. Meanwhile renters, who appear to be a slim majority of citizens in the area, are not organized and do not vote reliably. How much any one group may or may not contribute in taxes has very little to do with political outcomes since taxes don't vote. At most there is an indirect effect as city budgets drive strategies to collect more revenue by officials. Those officials still answer only to voting citizens.
        • Zach_the_Lizard 10y ago
          >Meanwhile renters, who appear to be a slim majority of citizens in the area, are not organized and do not vote reliably. Rent control / stabilization gives them an incentive to not allow construction as perhaps they, like all humans, oppose change but now don't have to face the negative consequences of opposing it. 50% of apartments in NYC are under some form of rent control / stabilization.
        • Decade 10y ago
          Even worse, renters groups and community organizations are divided. I never joined the San Francisco Renters Federation because of its devotion to rent control and its hostility to landlords. Similarly, the Council of Community Housing Organizations is focused on raising money to the detriment of making housing. When the Bay Area Renters Federation and Grow San Francisco started, I felt some joy. Finally, after all these years, here is a housing movement that I can support. http://www.sfyimby.org/ http://www.sfyimby.org/
    • toby 10y ago
      I think you'll find (in general) that the people most opposed to new housing (long time residents) are the ones paying the lowest property taxes, due to Prop 13. Newer homebuyers who are paying taxes on the actual market-value of their homes tend to spend far less time at Supervisor meetings.
      • pfarnsworth 10y ago
        Actually I think you'll find that your guess is completely wrong. Long term residents don't face as much issue with new housing because they already have made the lion share of their gains. Newer homebuyers are the most at risk if higher supply causes their 1.5M house to drop to 1.2M because of higher number of houses in the area.
        • toby 10y ago
          This is all true of course, but it's not what I said. While it might be more economically rational for newer homebuyers to be the ones fighting development, it hasn't been my observation that they are. Obviously I could be wrong, I'd love to hear stories of rampant NIMBYism among the newly-landed.
          • pfarnsworth 10y ago
            My anecdote counters your anecdote. I find that the newest members of a neighborhood are the ones most likely to fight new development. The older people care but they don't have as much vested interest because they don't lose as much money.
            • XenophileJKO 10y ago
              Where I live in Mountain View, it is definitely the older residents that are the most vocal against increasing density.
            • umanwizard 10y ago
              You're equivocating between "homeowners" and "residents". Even newer homeowners are likely to have lived in the area longer than many residents.
  • Hydraulix989 10y ago
    There's a lot of empty houses in Palo Alto owned by overseas investors. That is a huge problem, really limiting our housing supply.
    • lazaroclapp 10y ago
      Is this really the case? Or are there a lot of occupied (as in, rentals) houses owned by overseas investors? Why would it make any sense to leave a property in the bay area empty if you can add rent to the benefits of your investment?
      • pfarnsworth 10y ago
        Because they are so rich that renting is a hassle. They don't need the extra money. The exact same thing happens in Vancouver, BC and their is a new law that fines people that leave their house empty.
      • lupin_sansei 10y ago
        Often investors in Australia leave houses empty as there are different laws around capital gains taxes for investment properties (rentals) vs primary residence (which you don't have to actually live in all the time). It's often cheaper to not rent a property out and to get the lower CGT rate than to receive rent but have a 30% CGT when it's sold.
        • deleted 10y ago
          [deleted]
      • Hydraulix989 10y ago
        Have you ever been a landlord? It's a huge hassle (it's impossible to do property management remotely, let alone in a foreign country), and if you have the wrong tenants (an easy mistake to make if you aren't experienced enough), things can end up going pretty badly!
        • ams6110 10y ago
  • Tempest1981 10y ago
    Even if the cost of housing dropped 30%, do you think our bus drivers could afford a house/townhouse? And do you think we can build enough housing to cause, say, a 10% drop, or a 30% drop? (Not saying we shouldn't try... just that it'll have a minor effect.)
    • Retric 10y ago
      An 80% drop is probably achievable, it's also not going to happen. Housing in the US is a horrable mix of bad incentives resulting in a large drag on the economy. The indirect costs where a taxi is more expencive because rent is more expencive means homeoners should be better off with a drop in prices. However, everyone acts like their own investment is the only important thing.
    • sAuronas 10y ago
      You don't need an [overall] "drop" in prices. You need housing prices within a broader range. The other problem is Prop 13, which freezes taxes for the current homeowner, thereby incentivizing the fight against new development. Forget that I mentioned Prop 13 for a second and just imagine cities in the Bay moving mountains (or rather, single-story/use retail) to incentivize the construction of four times as much housing at all price ranges. There is a reason a place like Atlanta is affordable - they build. How we build is another topic but just focusing on underutilized properties and getting permissions and rights out of the way faster would make a huge difference in the cost - to - build. I come on HN to talk this a lot because I am a developer turned developer and if housing where as easy to build as software...you could drive a bus and not have to sleep in it.
    • surfmike 10y ago
      Probably not a house or townhouse, but there are many cities in the world where hardly anyone can afford that anyway. We should aspire to create affordable, nice apartments. You can raise a family of four comfortably (not by American standards, but world standards) in a 1000sqft apartment.
  • crdoconnor 10y ago
    High house prices are also driven by low interest rates and low property taxes. The land value (as opposed to the value of the buildings on top) is being extracted by landowners rather than the community. If instead it was taxed (by raising property taxes or LVT), this would have three follow on effects: * Treating housing as a bar of gold would stop (buying it as a store of value and leaving it empty). This would free up a lot of space. * The proceeds of the tax could be used to build more housing without slashing other parts of the budget. * Rich home owners - those who need the money the least - would stop getting effective handouts from those who need the money the most (renters).
• djsumdog 10y ago
  But their wages have gone down. They get passed to crappier and crappier staffing companies who find people who will work for less. Their wages are being cut at the same time housing is unavailable. You cannot separate the complexities of this situation, and there are a lot.
  • tmh79 10y ago
    So if we pay these workers more, and they compete more effectively for housing, then we will get a sob story about how industry XYZ is underpaying their workers and now their workers are unable to afford housing in the SFBA and net number of people who's lives have improved is 0 (well, maybe the landlords). I agree that its awful that their wages have gone down. This is a huge issue, but the issue should be looked at in isolation from the lack of secure housing within a reasonable commute distance for pretty much everyone in SFBA that makes less than ~80k. That issue is much larger than the unfortunate story of these service workers, and in my opinion is, by far, the largest social justice issue that the SFBA faces.
• matt_wulfeck 10y ago
  Absolutely this. The fix is not to build more luxury houses (which is the only way to profitably build here because of building and permitting costs) but to build more regular houses. Less Ferraris, more Honda Civics.
  • tmh79 10y ago
    More of everything. If there are 10 people looking to buy a car (one from each decile of income in the US), and there is only one car for sale, a Honda Civic, the Civic is going to be sold to the richest person of the 10, at a price slightly more than the second richest person can afford.
  • lets-tryagain 10y ago
    One major problem is developers want to build housing but not schools. It was once common for developers to build schools along with new housing developments. Also; highways. You cannot simply drop new housing capacity without providing for quality of life...the answer of just permitting more housing is not that simple. The Bay Area has poor transit infrastructure and many communities don't have excellent schools. You need to connect these and other dots. Yet people call us "NIMBY" when we protest our kids' schools going from 25 to 35 kids per class since no one will commit to funding the educational needs of the new residents.
• alphonsegaston 10y ago
  Until the tech industry is willing to show some true solidarity with the class of workers who serve it, this is a distinction without a difference. I guarantee that if the collective influence of some of the world's most powerful companies wanted there to be more affordable housing, either out of some noblesse oblige like you see in NYC, or because their employees really turned the screws on them, it would get built.
  • moultano 10y ago
    I don't think that's true. Lots of local governments in the bay are actively hostile to the tech companies located there.
  • Inconel 10y ago
    You seem very sure by offering a guarantee, but how exactly would these companies go about bypassing city councils, regional authorities and current long term residents, many of whom seem quite hostile to the idea of density and housing? Sure, Google/FB/Apple have plenty of money and power, but I don't think they have so much power that they could simply build whatever they wanted without approval.
    • alphonsegaston 10y ago
      By the same kind of organized political resistance that affects changes of a much larger scale all over the country. It amazes me that in a year where a coalition of white working class voters were able to propel someone like Trump to the highest office in the land, that people of far greater means see much smaller political change as impossible. The coalition impeding affordablity now thrives precisely because tech industry workers refuse to align themselves with the lower classes suffering the brunt of the damage under these circumstances. The ownership class then gets to paint themselves as trying to defend against all these encroaching barbarians that are making things tough for the little folks, all the while profiting from the exploding housing costs. They consolidate power around keeping out the "other," and then turn around and use it to soak tech workers (and by extension their companies) with higher rents. The play the bottom and the middle against each other and stay on top. The hostility is a ruse, just like it is in politics on the national level, and it has to first be shown for the lie that it is. As an example, what if wide swathes of tech workers held rent strikes until more affordable housing is built for low income residents? Suddenly the narrative that sustains the ownership class becomes less and less coherent, and space is opened up for actual reform.
• jmspring 10y ago
  Typical HN response. If an area is basically built out (which most of Silicon Valley is), how do you build more housing? And no, the answer is not change zoning laws and build apartment towers -- places like Mountain View, Palo Alto, Cupertino, Saratoga, even San Jose -- aren't going to suddenly build dense housing on residential lots.
  • jmspring 10y ago
    Down vote with no comment on reality of Bay Area housing dynamics? I'm a native, lived from the east bay down to Santa Cruz. The answer to every housing problem is not build more density. Sorry, the valley was built as a suburban sprawl and you have generations of families on parcels as well as recently purchased. Newly constructed housing in Morgan Hill, an hour+ commute to Silicon Valley during peak rush hour is still $1M plus. Love the down votes without comment.
    • 2trill2spill 10y ago
      > The answer to every housing problem is not build more density. Sorry, the valley was built as a suburban sprawl and you have generations of families on parcels as well as recently purchased. Sorry the answer to every housing crisis is build more housing your attitude is the exact reason why housing is so expensive in the bay area. I mean you could try to reduce demand but good luck with that, and if you can't reduce demand you have to increase supply.
    • ScottBurson 10y ago
      Your perspective as a native and long-term resident is of some interest, but it doesn't mean you automatically understand the economics of the situation. I don't think anyone imagines that the needed changes are going to be politically easy. But as long as more and more people want to live here -- a trend that shows no sign of slowing down -- our only choices are to bulid more housing or tolerate ever-higher housing costs. There is no third option.
    • Decade 10y ago
      I'm a native of San Francisco, a lifelong resident. But I'm also a millennial raised with both a conservative concern for the long term and an optimism for the future via science. And the big story is that the suburbs are unsustainable in every way. Preserving neighborhood character feels nice, but life is change. Preventing old houses from being torn down does not prevent old residents from leaving. You want preservation, then you better be prepared to pay for it. But the middle class suburbs, all those miles of pipes and miles of roads and miles of wires, are fundamentally insolvent. Even before you consider Proposition 13. http://www.strongtowns.org/journal/2011/10/10/suburban-salvage.html http://www.strongtowns.org/journal/2011/10/10/suburban-salva... Silicon Valley is not built out. Silicon Valley needs to be torn down and replaced.
• mempko 10y ago
  You missed the point. The trend towards contract workers with fewer benefits and lower wages. Wages are actually going down at the same time housing is going up. Yes they fucking need better wages and benefits.
  • marknutter 10y ago
    Why would they increase wages when there are people willing to live out of their cars to be bus drivers?
    • burkaman 10y ago
      Because they're human beings, not money robots.
    • untog 10y ago
      Even on an absolutely selfish level: because someone who had a good night's sleep is a lot less likely to crash the bus into a wall. Experimenting with pushing a human being to their very limits just because you can tends to have blowback, eventually. If I found out my company shuttle underpaid its drivers like this I'd be disgusted, but I'd also be worried for my own safety.
    • eli_gottlieb 10y ago
      Because on of those working homeless is going to bring a gun to the head office someday. On a related note, holy hell California was the most gun-obsessed place I've ever visited. Weapons stores everywhere! Shut some of that down before someone gets hurt.
  • tmh79 10y ago
    So if we pay these workers more, and they compete more effectively for housing, then we will get a sob story about how industry XYZ is underpaying their workers and now their workers are unable to afford housing in the SFBA and net number of people who's lives have improved is 0 (well, maybe the landlords). I agree that its awful that their wages have gone down. This is a huge issue, but the issue should be looked at in isolation from the lack of secure housing within a reasonable commute distance for pretty much everyone in SFBA that makes less than ~80k. That issue is much larger than the unfortunate story of these service workers, and in my opinion is, by far, the largest social justice issue that the SFBA faces. (copy/pasted from my comment below)
• panic 10y ago
  More housing is the long-term solution, but higher wages will help in the short term. They aren't mutually exclusive.
  • tmh79 10y ago
    1 in 10 Cal State university students are homeless [0]. Anecdotally, I know of people with mega commutes (2.5 hrs from central valley), my phd student friends at Stanford live in garages. There is a housing crises in the entire state of California. The article seems to direct the blame for the insecure state of these drivers living situations at tech companies, that is a red herring. The tech companies might be able to help the situation by paying more, but the "blame" should assigned to the ~200 municipalities in the SFBA that have produce more office space than housing over the past 30 years. 0. http://www.latimes.com/local/lanow/la-me-cal-state-homelessness-20160620-snap-story.html http://www.latimes.com/local/lanow/la-me-cal-state-homelessn...
    • trome 10y ago
      This low slung, suburban sprawl is strangling growth in California, and eventually towns like Vista won't be able to afford the maintenance costs on their aging infrastructure, at which point Vista ends up like Detroit. We should be building centrally located, high density developments that are transit oriented, instead of light rail and commuter rail stations being surrounded by 1 to 2 story office slums, they should be surrounded by 6+ story mixed use buildings, with retail, office space & residential appropriately intermingled. Even with land prices in SoCal & the Bay Area, safe & comfortable housing can be affordably built without government subsidies, we only have to lower the barriers to allow this to happen. Additionally, it will put our towns on a solid financial footing with lower taxes to boot. http://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money http://www.strongtowns.org/journal/2017/1/9/the-real-reason-...
• closeparen 10y ago
  It takes two to tango. Shortage takes both low supply and high demand. The tech industry did create this problem by suddenly attracting a ton of talent to the region. The municipalities passed on their opportunity to avert the housing crisis by embracing the change and their new role as Manhattan's tech counterpart, but it also could have been avoided had we chosen some other place, or a more remote/distributed mode.
  • tmh79 10y ago
    It is the responsibility of industry to attract people to a region, so these people can fill the jobs that industry requires; in most other places, this is celebrated. It is the responsibility of government to ensure a well functioning society. It appears clear to me that the government is failing its responsibility. The governments could have averted this crises by not zoning their municipalities for 3x, 4x, 5x more jobs than housing units within their borders. Its not like many of these offices have existed forever, they willingly allowed the creating of new offices, with out the requisite housing to support. (See, New Apple Spaceship HQ, Facebook campus, and expansion in Menlo Park, Google's constant expansion, the numerous new office parks that have sprung up in every city on the peninsula in the last 10 years). Much of this is jobs/housing imbalance is a result from prop 13, which disincentivized housing construction by making the development of commercial property more net tax advantageous (taxes in minus services provided) when compared with housing.
    • Hondor 10y ago
      Democratic governments exist to serve the people who vote for them. I'd say they have succeeded in increasing property values for property owners who voted for them. Every single house in SF is owned by someone, and that someone benefits from this situation persisting, so there are quite a lot of winners.
      • narag 10y ago
        Democratic governments exist to serve the people who vote for them. Democratic governments should serve everybody, not only the people that voted for them. Of course they'll have some obvious preferences, but neglecting or even crushing a sizeable group of people because they're not their voters is not what democracy is meant to be. It's not even wise.
• counterpoint89 10y ago
  Or maybe reduce the number of jobs available.
• throwaway91111 10y ago
  As a tech worker who was made to move to the Bay Area--the tech scene is definitely part of the problem.
• Tempest1981 10y ago
  Well, and the tech industry loves to locate in "hip" high-density areas, when they know that nearby housing and traffic are problematic. And who can argue -- it's good for their business to be in "hip" areas... it attracts talent. At some point, as prices skyrocket, it will slowly make sense to locate a business in less congested areas: Livermore, Tracey, Gilroy, or Merced.
• forgetsusername 10y ago
  >The real story here isn't the tech companies, its the lack of available housing in the area due to a decades long aversion to building more housing and a huge jobs/housing imbalance amongst almost every city in the SFBA. Don't you think, say, Mark Zuckerberg buying and bulldozing neighbouring homes for privacy is the epitome of the tech world's affect on this? Tech workers aren't that concerned, are they?
• stefantalpalaru 10y ago
  > the lack of available housing in the area due to a decades long aversion to building more housing and a huge jobs/housing imbalance amongst almost every city in the SFBA http://www.bizjournals.com/sanfrancisco/blog/2011/03/san-francisco-bay-area-vacant-homes.html http://www.bizjournals.com/sanfrancisco/blog/2011/03/san-fra... : > San Francisco, one of the most coveted places in the world to live in, has more than 30,000 empty homes according to 2010 U.S. Census data. That means about 8.3 percent or about one in every dozen homes is vacant — more than any other surrounding county.
• sigi45 10y ago
  Everyone has a responsibility. The city but also the tech companies. It can't be that those people, with best jobs, best money don't have to be care or are not responsible because the city should have done something and some time. Better your live means more responsibilities.