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‘The American dream is not working out here’
- the_gastropod 10y agoComplaining about the struggles of making ends meet while earning $160k is plenty absurd. Complaining about the same while earning $700k is maddening. The median household income in SF is $88k (as of 2015). When you earn 2x that and complain about being unable to make ends meet, I think it's time to admit you just suck at money.
- klipt 10y ago> Complaining about the same while earning $700k is maddening Yeah, I don't get that. Just pretend you "only" make $160k, save the rest, and you can still buy a house outright after several years. No idea how they thought moving to LA for a $350k paycut was worth it...
- linguae 10y agoKeep in mind that it's not just how much money one makes, but it's also when one moved to San Francisco and whether they bought when home prices were much lower than today or whether they secured rent-controlled housing at lower rents than today's market levels that makes a dramatic difference in affordability. There are some people making less than the median income yet have very low living expenses because they were able to secure a mortgage or rent-controlled housing back when housing was much cheaper.
- the_gastropod 10y agoLet's say this person making $160k takes home ~$90k after 401k and taxes and such. And let's say their rent is 50% of their take home ($45k/year or $3750/month). 1. That's ~$300/mo more than the average 1 BR apartment [1], so seems reasonable. 2. That leaves another $3750/month for non-rent spending money, which itself, more than most Americans earn in salary. (note: this leaves a LOT of room to spend more in rent if you need a 2br, 3br, etc) So yes. San Francisco is expensive. But if you feel like it's a struggle while earning $160k, you probably have a lot of fat you need to cut in your budget. [1] https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends/ https://www.rentjungle.com/average-rent-in-san-francisco-ren...
- talmand 10y agoRating cost-of-living solely by monthly rent is naive. Having a family is expensive, so be sure to cut that fat too.
- deleted 10y ago[deleted]
- SmellTheGlove 10y agoYou're pretty much making the same point as the people mentioned in the article, just framed positively. Single renters can get by if they're willing to spend a large portion of their take-home, but a family on the same salary cannot. 35 year old me could not live like 25 year old me.
- scarface74 10y agoSimple solution: Move There are plenty of great software developer jobs in major cities paying 130K+ where the cost of living is a lot lower.
- tradersam 10y agoOr learn how to manage monthly funds.
- sdflkd 10y agoExamples?
- patorjk 10y agoBaltimore/Washington DC area. Mostly government contracting stuff though.
- RickS 10y agoDC native, former SF resident: not really, any more. You can swing it, but it won't be fun. It's more comparable to SF than it is to someplace like portland. At least DC/DMV proper. Once you get into the "baltimore" parts I imagine the costs plummet.
- scarface74 10y agoAtlanta, Dallas,Austin, Raleigh, and Portland were on the top of my list as far as pay vs cost of living.
- RickS 10y agoSeattle is a lesser example. I say lesser because, relative to the other "second tier" cities, it's still pretty expensive. Regardless, my take home pay stayed the same, and my rent went way down for a house instead of an apartment. My only regret is that I stayed in SF as long as I did.
- ng12 10y agoIt's not just COL, it's bang for your buck. I sold my car, moved to NYC, and found a nicer apartment in metro Brooklyn for the same price I was paying in SF. I miss very few things about SF besides the weather, and if I missed it that much I would move to SoCal. The quality of life does not match the price.
- SmellTheGlove 10y agoBeing an east coaster, maybe I'm just not clear on this, but in proximity to the big tech companies, how far out are we talking for the examples discussed in this article? Put another way: How far out does one have to live to house a family of 3 or 4 affordably with respect to a 160k salary? Lets say, hypothetically, 2000 sq ft dwelling of some kind (house, condo, rowhome), good school district, for ~$2500-3500/mo - rent or mortgage? Or if that's a ridiculous question for the Bay Area, let's say 35-40% DTI and call it $5000/mo. Speaking anecdotally, when I lived in the DC area, it ran me ~2400/mo for my 900 sq ft rowhouse in a good zip code walkable to the metro. The problem being that a 3rd bedroom would put me north of 600k (closer to 750k today) for a home if I wanted to be in the same zip code, or move outside the beltway and commute 90 minutes. I moved... to northern new england.
- klipt 10y agoHere's a map of houses under $1M with at least 2000 sq ft: https://www.redfin.com/city/4561/CA/Cupertino/filter/max-price=1M,min-sqft=2k-sqft,viewport=37.79325:36.82551:-121.68934:-122.54352,no-outline https://www.redfin.com/city/4561/CA/Cupertino/filter/max-pri... Notice the peninsula (where a lot of the good school districts are) is pretty empty. Also most houses go for a large percent above asking.
- douche 10y agoI have about 2400 sq ft in Southern New Hampshire for a mortgage+taxes of about $1800/month. If you were willing to commute 30-60 minutes into Mass, there are jobs that would pay that kind of salary, although the local job market isn't quite that inflated right in New Hampshire. Of course, if you can find work in northern New England, things are much cheaper. I was visiting the folks this weekend, and my mom was showing me listings in the paper for four-bedroom houses with acres of back yard for $800/month, with heat and utilities included...
- throwaway_atl 10y agoI interviewed a few years ago at a Start up in San Francisco; I live and work in Atlanta. One of the things that worried my girlfriend to death was how we would afford to live there. One of the guys I interviewed with said he spent $1,800 a month to rent a single room in a house with a few other people. He didn't even have his own bathroom. My friend that tried to get me the job out there was paying over $3,000 a month for a small 1 bed room apartment across the street from Twitter. In Atlanta I was renting a 2,600 sq ft warehouse loft for $1425 a month. The weirdest part was they offered me the job of a Lead Android Developer for $135k. I make almost $160k here in Atlanta as an Application Architect, and it costs way less to live here. Glad I turned that down.
- wakkaflokka 10y agoI remember seeing a headline a while back about apartment square footage (I think it was this: https://www.rentcafe.com/blog/rental-market/us-average-apartment-size-trends-downward/ https://www.rentcafe.com/blog/rental-market/us-average-apart...), and Atlanta was at the top of the heap for size. I used to live right next to the Beltine near PCM in a 1 bedroom, 1 bath, 900 sqft, all upgraded unit for less than $1200 a month. Now the prices are ridiculous (for ATL) - $1800+ for a one bedroom. But it's still a hell of a lot cheaper than our most expensive cities. You would think the salaries would be adjusted accordingly, but from my experience job hunting, they aren't to any appreciable degree.
- sdflkd 10y agoWhat is the ATL market like for entry-level developers? Is it that salary isn't adjusting accordingly or that rent costs are catching up to the increased wealth?
- erentz 10y agoFor people curious about maybe checking out Atlanta - what are the good parts to live for 30 something's who like to walk to groceries, cafes, parks, etc?
- 10y ago
- tradersam 10y ago> “We make over $1m between us, but we can’t afford a house,” said a woman in her 50s who works in digital marketing for a major telecoms corporation If you make $1m/yr and are scraping by, I don't care where you live, you're terrible at managing money.
- AstralStorm 10y agoIt takes quite a lot of money or major tricks in some places to actually save anything. Tricks like buying out of the super expensive area, meaning paying in time. Plus they probably want a house in San Francisco itself, which has hyperinflated housing prices. She didn't say it was their net income either.
- undersuit 10y agoI wanted to fight you one this. I went out and found how much a couple in the SV making a million a year would take home every month. It's about $33k. My only friends that make that much money work in tech. $33k is a comfy yearly salary in Montana.
- reefoctopus 10y ago33k per month take home on 1 million per year would mean the tax rate is over 60%. There is no way that's right.
- mark_l_watson 10y agoI agree, generally, with the article. I worked as a contractor at Google for four months in 2013. Great experience but my wife and I burned through about $6000/month in living expenses. I returned home (mountains in Arizona) to earn much less writing books and remote consulting, but better off financially.
- andy-x 10y ago“We make over $1m between us, but we can’t afford a house,” - lying hypocrites. They probably cannot afford $20M house, but there are plenty $2M houses around even in relatively expensive areas.
- angry-hacker 10y agoWhy not rent for 10 years, save money, and then move to a cheaper city and own a damn mansion?
- bobosha 10y agois housing outside the valley core just as expensive, how about north bay such as sausalito or berkeley?
- jinushaun 10y agoYes. You don't pay less, but you get more/bigger. So many people just tough it out and optimise for a short commute, instead of a big place. The cost savings is also offset by paying for parking, since public transportation is very limited.
- tsunamifury 10y agoBerkeley is easily as expensive as SF of not more.
- gydfi 10y agoI wouldn't say so. You can still get perfectly alright freestanding houses in the non-ghetto parts of Berkeley for under a million.
- tsunamifury 10y agoListed, not going. Berkeley right now has the highest over asking sale price in the bay, averaging 48%.
- bootload 10y ago"The cost of housing is a common complaint among Bay Area techies. Engineers can expect, according to one analysis, to pay between 40% and 50% of their salary renting an apartment near work." This is the core problem.
- Mc_Big_G 10y agoThe simple solution: Don't live near work. A 20-30 min. bart ride from East Bay to SF is not only reasonable but decreases your rent by half. The people in the article don't have a solid grip on reality.
- geebee 10y agoI'll be the first to admit that money doesn't go far in San Francisco, and that developers actually aren't especially well paid given the cost of living and the constant claims of a "critical" shortage talent. I live in an unfashionable neighborhood south of 280, but even here, you'd be lucky to get a decent 3br for less than a million. So assuming you have a down payment together, you're probably looking at 4k a month in mortgage. You get a tax break, yeah, but you also get property taxes, maintenance, and insurance, so it's a wash. Child care is the real killer. Standard 8am-6pm child care runs north of $2,500 a month. Same for preschool. If you have two kids, oh man. So now you're looking at 6,500 a month with one kid 8,000 a month with two kids Keep in mind, if you can afford the child care in SF, odds are you're too high income to qualify for the child care tax break. So all in all, it really is true that it isn't easy to make it on two incomes totaling 200k a year. Beyond that, though? If you're north of 350k, I'd say this is about expectations. You should be able to make it fine. There is one strategy - remain a one income family! $120k a year for a family of 4 qualifies for government housing assistance in SF. Developers must set aside a number of units for "middle". It's hard to get, but if you can pull it off, you're guaranteed a lower rent (I think it's about $2500 a month at that income level) and it's intensely rent controlled. So Silicon Valley employers, take note. Hire a middle aged person with a family for $120k a year, and you can get that highly skilled worker in critical shortage that you've told congress you can't hire at any price, and you can get the taxpayer to cover the gap between the salary you pay and the housing costs in the Bay Area! Seriously, consider the benefits of hiring older people with families.
- gydfi 10y agoIf childcare costs that much why not just hire a full-time nanny?
- angry-hacker 10y agoI can only guess because the nanny needs a salary that he or she can afford a place to live too? But seriously, fly me over from EU and I'll sleep in your basement and teach your kids computers, for 2000 per month.
- vlucas 10y agoI could generally understand some struggle for people with a family, even with a higher salary (due to the extreme housing costs) until I got to this: > "He said he won’t miss some of the more mundane day-to-day costs, like spending $8 on a bagel and coffee or $12 on freshly pressed juice." What. The. Hell. There are so many ways to save money that people just flat out ignore or pretend don't exist. This is much more about expectations of how they should be able to live rather than actual struggles. This article isn't going to go over well.
- danblick 10y agoI have this sense that home prices all over the US are being artificially inflated. That said, if you figure 4% interest on $1 million, that works out to about $3333 per month. Q: Are there enough people in the Bay Area who are willing to spend ~$3333/month to live in a home currently priced at $1M in order to support that price level? A: Yes, I think so. (Granted, $1M would be quite low for a house near where I live in Mountain View, but maybe the numbers don't seem so crazy?)
- sagarm 10y agoInterest isn't the only cost to own a home. http://www.nytimes.com/interactive/business/buy-rent-calculator.html http://www.nytimes.com/interactive/business/buy-rent-calcula...
- deleted 10y ago[deleted]
- danblick 10y agoI think "home price appreciation" is one of the more interesting factors here. If home prices grow at 4% and wages don't keep up, it seems like that's not likely to be a sustainable over the long term.
- sagarm 10y agoThat is why housing costs have generally risen with inflation on average. Appreciation in the Bay Area and other denser areas have seen prices grow at more than inflation, which is probably attributable to restrictive zoning limiting supply over the long term. I agree that's not sustainable economically, socially, and hopefully politically.