7 ms·

The salaries here are higher, but the housing prices are much, much higher. I live in Redwood City, which is a decent-but-not-amazing part of the Bay Area. A 15

The salaries here are higher, but the housing prices are much, much higher. I live in Redwood City, which is a decent-but-not-amazing part of the Bay Area. A 1500-sq ft home is about $1.7m here. In Palo Alto, it would be closer to $2.5m-$3m. In a place like Portland, that same home would be $400k. The problem is that salaries here are 100% higher, but house prices are 300%-600% higher. And housing is most people's biggest expense. It's very tempting to move to a place like Portland, and either take a lower paying job, work remotely for an SF job, or even fly in for an SF job for a few days every week. All of this feels completely untenable and unsustainable, and yet it sustains because there are enough affluent people that want to live here that their demand outstrips supply, and local city governments are criminally conservative when it comes to building more housing.

lr4444lr 8y ago
Same problem in NYC. Fortunately, we have relatively cheaper and desirable suburbs within 60 - 90 minutes upstate, on Long Island, northern NJ, and southern CT. (Hence the expression "tri-state area"). People commuting to higher paying jobs in the city are a significant - probably crucial - part of the economy of those places, and what keeps the housing prices rising, even though they are affordable for people making a commute time / space trade-off. I'm not familiar with the Bay Area. You don't have some equivalent communities?
- surfmike 8y ago
  The housing prices are increasing all throughout the bay area of course. Unlike NY however there are not great train connections to Silicon Valley; there is BART to SF and nice areas around Bart stations have also seen substantial appreciation.
  - samcheng 8y ago
    There is a perfectly feasible train connection to Silicon Valley (at least the western part of it). Trains are standing-room-only daily. The area around almost every Caltrain stop has already seen significant appreciation, of course.
    - nkoren 8y ago
      Coming back to the Bay Area after a decade in London, the difference is shocking, and it feels difficult to call the Caltrain "perfectly feasible". Coming into on a Sunday afternoon, I had to transfer at Millbrae. It was almost a 2-hour wait for the next train, with literally zero amenities at the station. Just multistory parking lots, surrounded by surface parking lots, surrounded by 8-lane roads, surrounded by freeways. Utterly dysfunctional and dismal. I don't doubt that the land is appreciating there, but why can't it be put to better uses?
      - samcheng 8y ago
        It's commuter rail, not an alternative for tourists. I agree that the Millbrae station is terrible! That's due to BART - most of the other stations up and down that line are in the downtowns of Burlingame, San Mateo, Redwood City, Menlo Park, Palo Alto, Mountain View, etc. All of those towns predate the automobile, and are certainly rail-friendly. Coincidentally, all of those rail-friendly suburbs I mentioned are the NIMBY anti-density insane-housing-price places lamented elsewhere in the thread!
        Symbiote 8y ago
        Are you suggesting no one goes to work at the weekend, or that no one who goes during the week goes to the city at the weekend? Outside the USA, public transport may run a little less often on a Saturday or Sunday, but it's still useful for people to use for shopping, going out and so on. For example, in Copenhagen the trains run every 10 minutes rather than five, and the rural trains are every 60 minutes on a Sunday, rather than 20. I think the metro is the same at the weekend as during the week.
        samcheng 8y ago
        Certainly not suggesting that - in fact, I ride this particular rail on the weekend every few months. It's never crowded on the weekend, except before and after baseball games. It runs roughly every hour (with a few additional express trains) on the weekend, very similar to the rural trains you describe in Denmark. My point is that you can't just show up at a commuter rail station and complain that you have to wait a while at a bare-bones platform. It's built for people who take it at the same time every day, commonly driving to the station.
- Domenic_S 8y ago
  We do. I used to live in Pleasant Hill which is east of SF and about an hour by BART to SF, and housing is far less expensive. Now I live in Morgan Hill which is a great place for families. I drive in to SJ, about 45 minutes in rush hour each way. Caltrain is an option as well, although it takes longer. A nice, newer 2k square foot house runs about $1mm so not “cheap”, but 50-70% less expensive than most of the peninsula. My unscientific opinion is that the Bay Area skews younger (for people on HN who are bummed about housing) and most young people don’t like the ‘burbs. Anything outside the Real Bay Area (bounded on the north by SF, east by Oakland and south by SJ) is out of the running for a lot of people.
- joker3 8y ago
  Imagine what Manhattan would be like if you didn't have the option of renting in Brooklyn or Queens. That's roughly what the situation in San Francisco is like.
  - boulos 8y ago
    We call ours Berkeley and Oakland. It only works if you commute to San Francisco, but plenty of people do it. (As an amusing sidenote San Francisco was jealous of the NYC merging and tried to annex Oakland: https://www.google.com/amp/s/hoodline.relaymedia.com/amp/2017/03/that-time-san-francisco-tried-to-annex-oakland-berkeley-and-most-of-the-bay-area https://www.google.com/amp/s/hoodline.relaymedia.com/amp/201...)
scurvy 8y ago
You gotta do what every other long-term San Francisco resident did: Get a nice 2-3BR rent controlled apartment, then slowly become the sole tenant as roommates come and go. In 5-7 years time, the place will be way below market rate and you'll be ready to start a family. Then just shake your head and shrug your shoulders when newcomers complain how expensive it is. *Yes, there's some sarcasm in there, but this is what San Franciscans have done since the 70's.
- deleted 8y ago
  [deleted]
- _d8fd 8y ago
  I like to comment on how my next door neighbor's rent (here in SF) is under $300/month. He moved when in many years ago when the rent was $85/month. I pay just over $1600 for the same 250 square foot layout.
- abakker 8y ago
  I’m in this boat - 6 years in sf and my rent already seems so cheap by comparison. Any move I make now is. Move out the Bay Area. It is a pretty nasty choice. We have a nice house, but we either have to upend our life or stay put. Our rent is not cheap, but with the way rents have gone up, we can’t even downsize to a 2 bedroom unit to save money. So, we have 2 tenants in 3 bedrooms and rent control.
- sizzle 8y ago
  Until the landlord exploits some obscure rent control loophole where they can evict the entire building and start over at market value. I think they have to do major construction or demolish some % of the place. Can anyone confirm?
usaar333 8y ago
I find it better to look at rentals than house prices, because house prices are being driven up by people who really, really want to own (due to few sellers). (More at https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the-bay-area-right-now-9eff37da8d6 https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-t...) Your 1500 sq home probably would rent for about $4300 a month in Redwood City (https://www.zillow.com/redwood-city-ca/home-values/ https://www.zillow.com/redwood-city-ca/home-values/). That home would probably rent for about $1900 in Portland (https://www.zillow.com/portland-metro-or_r394998/home-values/ https://www.zillow.com/portland-metro-or_r394998/home-values...) A $30k/year rent difference requires ~$48k more income to cover (at 40% marginal tax rates). My guess is that the 100% salary jump is more than enough to cover the housing increase (probably handles all COL difference), making SF more favorable, especially if you don't want a very large home or are quite senior.
- randycupertino 8y ago
  Except then you're always at the mercy of a landlord who can raise your rental rates, and you won't be building any equity. There's no rent control on the Peninsula. I know people who have gotten a $600/month rent increase and been totally screwed. Whereas owners benefit from Prop 13 which is basically rent control for owners- their property taxes never go up.
  - sdenton4 8y ago
    Not building equity == ploughing piles of money into better investments than a house...
    - lpolovets 8y ago
      I agree and disagree. In most areas, I think it's true that other asset classes outperform real estate. One challenge in the Bay Area is that housing has been going up faster than non-housing investments. For example, I just checked the house next door to me on Trulia, and it's up 6X in 20 years. That's an almost 10% annual rate of return. So in fact if you don't own a house, you're probably falling even further behind from your house-owning peers. At least in this area.
flashman 8y ago
> The salaries here are higher, but the housing prices are much, much higher. I'm Australian so YMMV, but six months ago I took a 25% pay cut to move out of Sydney to somewhere with lower housing costs and a shorter commute. I'm never going back.
- prawn 8y ago
  I co-run a small co-working space and we've had a couple of tenants join who were relocating from the East coast of Australia to Adelaide for similar reasons.
  - nailer 8y ago
    Haha Adelaide is for religious dorks! You should definitely live somewhere cool like Melbourne and Sydney [1] [1] Please don't mention Adelaide publicly. Coopers beer, the fringe festival, great weather, great wine, housing for families that's close to town, and beaches where you can be the only person for miles. I want to buy a house there and demand will drive pricing up.
- devjam 8y ago
  Where did you move to if you don't mind me asking?
  - deleted 8y ago
    [deleted]
  - flashman 8y ago
    Newcastle. It's taken nearly 20 years but it's starting to recover from the post-BHP doldrums.
    - devjam 8y ago
      Yes, it has changed a lot since those days... I visited some friends there about a year ago and was very pleasantly surprised. Glad to hear it is working out for you :-)
justherefortart 8y ago
Build more housing where? Belmont? Woodside? Atherton? The Bay itself? I loved my time in Redwood City, more housing would certainly not make it better. If you live in a nice house, the idea of a huge apartment complex next door would not be remotely appealing. That's the only way you can "build more" in the vast majority of the City/Peninsula. I don't blame them one bit.
- Domenic_S 8y ago
  The public transit is the problem. Too many fiefdoms - Amtrak, Caltrain, VTA, ACE, bart, muni. If Bart served all those corridors instead, the South Bay as far as hollister would be reasonable to commute from. Plus the eastern towns.
vanrysss 8y ago
Reality check, a 1500 sqft house sold for $400k will be in an awful school district at least 45mins from downtown. You're probably looking at closer to $600k for anything decent especially if you have kids.
notacoward 8y ago
> It's very tempting to move to a place like Portland, and either take a lower paying job, ... OTOH, as long as you can sell your house for at least as much as it cost you, that money's not lost. There's something to be said for a few years' of Silicon Valley salary, then pulling up stakes and moving somewhere more reasonable. Best of all is to draw a Silicon Valley salary while actually living somewhere else, but I'm not supposed to talk about that. ;)
laurex 8y ago
Portland, while way cheaper than the Bay Area, has seen home prices rise significantly in the last few years, likely due to Bay Area Exodus. http://money.cnn.com/2016/02/05/pf/oregon-unaffordable-california/index.html http://money.cnn.com/2016/02/05/pf/oregon-unaffordable-calif...

lr4444lr 8y ago

Same problem in NYC. Fortunately, we have relatively cheaper and desirable suburbs within 60 - 90 minutes upstate, on Long Island, northern NJ, and southern CT. (Hence the expression "tri-state area"). People commuting to higher paying jobs in the city are a significant - probably crucial - part of the economy of those places, and what keeps the housing prices rising, even though they are affordable for people making a commute time / space trade-off. I'm not familiar with the Bay Area. You don't have some equivalent communities?

surfmike 8y ago
The housing prices are increasing all throughout the bay area of course. Unlike NY however there are not great train connections to Silicon Valley; there is BART to SF and nice areas around Bart stations have also seen substantial appreciation.
- samcheng 8y ago
  There is a perfectly feasible train connection to Silicon Valley (at least the western part of it). Trains are standing-room-only daily. The area around almost every Caltrain stop has already seen significant appreciation, of course.
  - nkoren 8y ago
    Coming back to the Bay Area after a decade in London, the difference is shocking, and it feels difficult to call the Caltrain "perfectly feasible". Coming into on a Sunday afternoon, I had to transfer at Millbrae. It was almost a 2-hour wait for the next train, with literally zero amenities at the station. Just multistory parking lots, surrounded by surface parking lots, surrounded by 8-lane roads, surrounded by freeways. Utterly dysfunctional and dismal. I don't doubt that the land is appreciating there, but why can't it be put to better uses?
    - samcheng 8y ago
      It's commuter rail, not an alternative for tourists. I agree that the Millbrae station is terrible! That's due to BART - most of the other stations up and down that line are in the downtowns of Burlingame, San Mateo, Redwood City, Menlo Park, Palo Alto, Mountain View, etc. All of those towns predate the automobile, and are certainly rail-friendly. Coincidentally, all of those rail-friendly suburbs I mentioned are the NIMBY anti-density insane-housing-price places lamented elsewhere in the thread!
      - Symbiote 8y ago
        Are you suggesting no one goes to work at the weekend, or that no one who goes during the week goes to the city at the weekend? Outside the USA, public transport may run a little less often on a Saturday or Sunday, but it's still useful for people to use for shopping, going out and so on. For example, in Copenhagen the trains run every 10 minutes rather than five, and the rural trains are every 60 minutes on a Sunday, rather than 20. I think the metro is the same at the weekend as during the week.
        samcheng 8y ago
        Certainly not suggesting that - in fact, I ride this particular rail on the weekend every few months. It's never crowded on the weekend, except before and after baseball games. It runs roughly every hour (with a few additional express trains) on the weekend, very similar to the rural trains you describe in Denmark. My point is that you can't just show up at a commuter rail station and complain that you have to wait a while at a bare-bones platform. It's built for people who take it at the same time every day, commonly driving to the station.
Domenic_S 8y ago
We do. I used to live in Pleasant Hill which is east of SF and about an hour by BART to SF, and housing is far less expensive. Now I live in Morgan Hill which is a great place for families. I drive in to SJ, about 45 minutes in rush hour each way. Caltrain is an option as well, although it takes longer. A nice, newer 2k square foot house runs about $1mm so not “cheap”, but 50-70% less expensive than most of the peninsula. My unscientific opinion is that the Bay Area skews younger (for people on HN who are bummed about housing) and most young people don’t like the ‘burbs. Anything outside the Real Bay Area (bounded on the north by SF, east by Oakland and south by SJ) is out of the running for a lot of people.
joker3 8y ago
Imagine what Manhattan would be like if you didn't have the option of renting in Brooklyn or Queens. That's roughly what the situation in San Francisco is like.
- boulos 8y ago
  We call ours Berkeley and Oakland. It only works if you commute to San Francisco, but plenty of people do it. (As an amusing sidenote San Francisco was jealous of the NYC merging and tried to annex Oakland: https://www.google.com/amp/s/hoodline.relaymedia.com/amp/2017/03/that-time-san-francisco-tried-to-annex-oakland-berkeley-and-most-of-the-bay-area https://www.google.com/amp/s/hoodline.relaymedia.com/amp/201...)

scurvy 8y ago

You gotta do what every other long-term San Francisco resident did: Get a nice 2-3BR rent controlled apartment, then slowly become the sole tenant as roommates come and go. In 5-7 years time, the place will be way below market rate and you'll be ready to start a family. Then just shake your head and shrug your shoulders when newcomers complain how expensive it is. *Yes, there's some sarcasm in there, but this is what San Franciscans have done since the 70's.

deleted 8y ago
[deleted]
_d8fd 8y ago
I like to comment on how my next door neighbor's rent (here in SF) is under $300/month. He moved when in many years ago when the rent was $85/month. I pay just over $1600 for the same 250 square foot layout.
abakker 8y ago
I’m in this boat - 6 years in sf and my rent already seems so cheap by comparison. Any move I make now is. Move out the Bay Area. It is a pretty nasty choice. We have a nice house, but we either have to upend our life or stay put. Our rent is not cheap, but with the way rents have gone up, we can’t even downsize to a 2 bedroom unit to save money. So, we have 2 tenants in 3 bedrooms and rent control.
sizzle 8y ago
Until the landlord exploits some obscure rent control loophole where they can evict the entire building and start over at market value. I think they have to do major construction or demolish some % of the place. Can anyone confirm?

usaar333 8y ago

I find it better to look at rentals than house prices, because house prices are being driven up by people who really, really want to own (due to few sellers). (More at https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the-bay-area-right-now-9eff37da8d6 https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-t...) Your 1500 sq home probably would rent for about $4300 a month in Redwood City (https://www.zillow.com/redwood-city-ca/home-values/ https://www.zillow.com/redwood-city-ca/home-values/). That home would probably rent for about $1900 in Portland (https://www.zillow.com/portland-metro-or_r394998/home-values/ https://www.zillow.com/portland-metro-or_r394998/home-values...) A $30k/year rent difference requires ~$48k more income to cover (at 40% marginal tax rates). My guess is that the 100% salary jump is more than enough to cover the housing increase (probably handles all COL difference), making SF more favorable, especially if you don't want a very large home or are quite senior.

randycupertino 8y ago
Except then you're always at the mercy of a landlord who can raise your rental rates, and you won't be building any equity. There's no rent control on the Peninsula. I know people who have gotten a $600/month rent increase and been totally screwed. Whereas owners benefit from Prop 13 which is basically rent control for owners- their property taxes never go up.
- sdenton4 8y ago
  Not building equity == ploughing piles of money into better investments than a house...
  - lpolovets 8y ago
    I agree and disagree. In most areas, I think it's true that other asset classes outperform real estate. One challenge in the Bay Area is that housing has been going up faster than non-housing investments. For example, I just checked the house next door to me on Trulia, and it's up 6X in 20 years. That's an almost 10% annual rate of return. So in fact if you don't own a house, you're probably falling even further behind from your house-owning peers. At least in this area.

flashman 8y ago

> The salaries here are higher, but the housing prices are much, much higher. I'm Australian so YMMV, but six months ago I took a 25% pay cut to move out of Sydney to somewhere with lower housing costs and a shorter commute. I'm never going back.

prawn 8y ago
I co-run a small co-working space and we've had a couple of tenants join who were relocating from the East coast of Australia to Adelaide for similar reasons.
- nailer 8y ago
  Haha Adelaide is for religious dorks! You should definitely live somewhere cool like Melbourne and Sydney [1] [1] Please don't mention Adelaide publicly. Coopers beer, the fringe festival, great weather, great wine, housing for families that's close to town, and beaches where you can be the only person for miles. I want to buy a house there and demand will drive pricing up.
devjam 8y ago
Where did you move to if you don't mind me asking?
- deleted 8y ago
  [deleted]
- flashman 8y ago
  Newcastle. It's taken nearly 20 years but it's starting to recover from the post-BHP doldrums.
  - devjam 8y ago
    Yes, it has changed a lot since those days... I visited some friends there about a year ago and was very pleasantly surprised. Glad to hear it is working out for you :-)

justherefortart 8y ago

Build more housing where? Belmont? Woodside? Atherton? The Bay itself? I loved my time in Redwood City, more housing would certainly not make it better. If you live in a nice house, the idea of a huge apartment complex next door would not be remotely appealing. That's the only way you can "build more" in the vast majority of the City/Peninsula. I don't blame them one bit.

Domenic_S 8y ago
The public transit is the problem. Too many fiefdoms - Amtrak, Caltrain, VTA, ACE, bart, muni. If Bart served all those corridors instead, the South Bay as far as hollister would be reasonable to commute from. Plus the eastern towns.

vanrysss 8y ago

Reality check, a 1500 sqft house sold for $400k will be in an awful school district at least 45mins from downtown. You're probably looking at closer to $600k for anything decent especially if you have kids.

notacoward 8y ago

> It's very tempting to move to a place like Portland, and either take a lower paying job, ... OTOH, as long as you can sell your house for at least as much as it cost you, that money's not lost. There's something to be said for a few years' of Silicon Valley salary, then pulling up stakes and moving somewhere more reasonable. Best of all is to draw a Silicon Valley salary while actually living somewhere else, but I'm not supposed to talk about that. ;)

laurex 8y ago

Portland, while way cheaper than the Bay Area, has seen home prices rise significantly in the last few years, likely due to Bay Area Exodus. http://money.cnn.com/2016/02/05/pf/oregon-unaffordable-california/index.html http://money.cnn.com/2016/02/05/pf/oregon-unaffordable-calif...