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Nation’s top three most expensive places for renters: all in Bay Area

129 points by Impossible 8y ago

dsfyu404ed 8y ago
>There is no state, metropolitan area or county in the U.S. where workers earning minimum wage can afford a two-bedroom rental home by working 40 hours a week, according to the study. This seems like an unreasonably high standard for a single minimum wage income unless they're using the excess here as a proxy for other necessities. Edit: This seems unreasonably high because it greatly exceeds the standard of living we expect for a single minimum wage income household. Sure it would be nice if a single minimum wage household could rend a 2br but that's not what we currently expect them to be able to do. Saying "people who make X can't afford Y" when we didn't expect them to afford Y in the first place isn't very meaningful when you're discussing the ability of people making X to have a standard of living that meets our expectations for people making X.
- chrisseaton 8y ago
  To need two bedrooms on a single income I guess you have a child or someone else you are supporting like an elderly relative, and possibly a partner as well. So that means attempting to support a family of two or three on one minimum-wage job.
  - monocasa 8y ago
    Which was the status of minimum wage jobs up until the mid 1970s. The average minimum age worker is 35, so it's not really fair to say "just don't have kids". https://mobile.nytimes.com/2014/06/10/upshot/minimum-wage.html https://mobile.nytimes.com/2014/06/10/upshot/minimum-wage.ht...
- ggg9990 8y ago
  Yeah... why would you be able to rent a 2BR house on minimum wage. More like a shared room in a house.
  - antisthenes 8y ago
    Exactly, and I'm not sure where people's entitlement here comes from. American 2-BR apartments in upscale complexes are HUGE (I've seen figures as high as 1300 sq. ft), and in Europe they would easily have a 3-4 person family living in them, with more than 1 person working.
- frgtpsswrdlame 8y ago
  Why does that seem unreasonable to you? Seems to me that there should be tons of places in this country where anyone would be able to afford to rent a small house. That literally none exist is pretty damning.
  - TheLoneAdmin 8y ago
    I cannot remember a time when one minimum wage job was enough to rent a two-bedroom. I rented my first apartment, with roommates, in the 80's.
    - monocasa 8y ago
      Minimum wage as adjusted in comparison to rent and home values, started going down in the mid 1970s, so that makes sense that you may not have seen it.
- cimmanom 8y ago
  There was a time when one could. The minimum wage was originally put in place to make sure a single wage earner could support a family.
  - PopsiclePete 8y ago
    A time when unions were strong, when the 1% were taxed at ~90% and when "social security" and "pensions" were not evil words. I feel zero sympathy for Americans and for the utter clusterfuck of misery that awaits them over the next 20 years. This is just the beginning.
    - pofilat 8y ago
      There never was a 90% tax rate. That was a marginal rate, and there were massive deductions.
      - monocasa 8y ago
        Then name those massive deductions. Edit: or just drive by downvote, I guess.
        crooked-v 8y ago
        You should expect people to downvote when you demand information you could get yourself just by skimming Wikipedia articles.
        monocasa 8y ago
        I asked about deductions, not just the marginal rate. That's not covered in the wikipedia articles.
        pofilat 8y ago
        From the 1950s, when the marginal rate was >90%: https://taxfoundation.org/taxes-rich-1950-not-high/ https://taxfoundation.org/taxes-rich-1950-not-high/ > per the Piketty, Saez, and Zucman data ... The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. From 1979 onward: http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf http://www.cbo.gov/sites/default/files/cbofiles/attachments/... Highest effective tax rate, before Reagan's reforms, was 37% of the income of the top 1%
- TheLoneAdmin 8y ago
  The price of the rental is derived: ========== Fair Market Rent (FMR) is typically the 40th percentile of gross rents for standard rental units. ========== A. If you are at minimum wage, look for apartments in the 5th percentile, not a mid-range priced apartment. B. Most minimum wage, one-income households only need one-bedroom apartment. C. Or, get a roommate, rent drops in half.
  - kingbirdy 8y ago
    The minimum was wage enacted such that a single breadwinner earning minimum wage would be able to support a family. A family needs 2 bedrooms and a livable apartment, not the bottom of the barrel, squeezed in to one bedroom.
    - pofilat 8y ago
      Do you have a source? The numbers don't back you up. Min wage is the single-person poverty level, and is much higher now than when it was enacted.
    - _dps 8y ago
      At least in the US this is not true. The very first minimum wage, inflation adjusted, comes out to something like $8k/yr in today's money (https://bebusinessed.com/history/history-of-minimum-wage/ https://bebusinessed.com/history/history-of-minimum-wage/). It is simply not viable or desirable to require the lowest skill jobs to pay enough to support a family. It has never been the case that the least skilled laborers in an economy were able to support families without support from other sources (e.g. a multigenerational house).
- ahoy 8y ago
  > This seems like an unreasonably high standard for a single minimum wage income Why should it be though?
  - pofilat 8y ago
    Because not all jobs are that valuable. This is essentially replacing welfare by minimum wage, and why should welfare be administered non-progressively through employers instead of the government tax and redistribution? Should it be illegal do do low positive value work?
    - gascan 8y ago
      Because not all jobs are that valuable. No argument. But you seem to be making a value inference that low-value jobs aren't good enough to merit the worker a 2br place without two incomes. Why not? What level-sets what you "should" be able to get, for your low-value work?
      - pofilat 8y ago
        The market sets the value, obviously. Social welfare is great -- Medicaid, Unemployment, SNAP, WIC, etc, but shouldn't be paid directly by employers to recipients. Why should an unemployed person getting a low-value job suddenly shift all their welfare support burden from the state to their employer?
      - TheLoneAdmin 8y ago
        Conversely, you are arguing that a minimum wage worker should be able to rent a mid-range (40%) 2-bedroom apartment. Who is suppose to rent the cheaper 10-20% apartments? Why do you think the lowest 4% in wages of USA population deserve an average apartment? Minimum skilled worker = minimum wage salary = minimum quality apartment.
        gascan 8y ago
        That's a good consideration, but you're forgetting about the part-timers & the unemployed. I'm not arguing that minimum wage should merit a 2br. I'm just challenging the notion that it shouldn't. There seems to be a sort of, "if you don't work hard and make lots of money, you don't deserve good things", built into that notion. When really, there's not exactly an intrinsic reason why a 2br is too good for a minimum wage worker. If it's a tight city with high demand and not enough housing, sure, competition for scarce 2br is intense. But if there is plenty of space & housing, why not? SF is a microcosm, most of the country is not like that.
- glup 8y ago
  I would like to see the comparison for the EU or Japan... I found this https://www.citylab.com/equity/2015/06/where-europeans-spend-the-most-on-rent-mapped/396833/ https://www.citylab.com/equity/2015/06/where-europeans-spend..., which suggests it is more reasonable, but doesn't reflect the minimum wage. Maybe it isn't such an unreasonably high standard?
realPubkey 8y ago
Well if you would define 'area' by something else, we would have 3 different places.
- meritt 8y ago
  That's true but they aren't arbitrary decisions designed to make one area look bad for the purposes of an article. They are well-defined areas [1] [2]. > Q10. What does the term "HMFA" mean? > HUD Metro FMR Area. This term indicates that only a portion of the OMB-defined metropolitan statistical area (MSA) is in the area to which the income limits (or FMRs) apply. HUD is required by OMB to alter the name of metropolitan geographic entities it derives from the MSAs when the geography is not the same as that established by OMB. Specifically the top 3 are: San Francisco, CA HMFA San Jose-Sunnyvale-Santa Clara, CA HMFA Oakland-Fremont, CA HMFA [1] https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf [2] https://www.huduser.gov/portal/datasets/il/il18/area-definitions-FY18.pdf https://www.huduser.gov/portal/datasets/il/il18/area-definit...
  - dionidium 8y ago
    The overriding, pervasive problem with regional comparisons is that people give undue attention to non-standard, arbitrary distinctions -- e.g. political borders -- where comparisons across standardized areas (e.g. those defined by the OMB) would be more useful and generate more informative results. This is an example of a good comparison in a never-ending sea of bad ones.
- dionidium 8y ago
  That's correct. That's why we don't use arbitrary distinctions for proper regional comparisons and why groups like the OMB spend so much time developing standardized areas for comparison. Your comment is more revealing than even you may realize. There are an infinite number of political borders to be drawn around any "city," but changing those borders doesn't actually change anything about the reality on the ground. That's why it's important to make like-like comparisons.
EGreg 8y ago
And if you subdivide those places just the right way you can have the top 45 most expensive places also be in the Bay Area. I mean, it is to be expected so the title of the article doesn’t pack the punch it seems to. In NYC and other places there are city blocks or neighborhoods that are the most expensive in the country, if you grouped by blocks. This is called Simpson’s paradox
- beat 8y ago
  Someone needs to name the process of nitpicking details over obviously true generalizations.
  - briga 8y ago
    Missing the forest for the trees? Cherry-picking?
    - beat 8y ago
      No, there's something else to it. It's often used as a misdirection technique, a way to change the subject from an uncomfortable discussion of something the commenter would like to avoid to a raucous debate about irrelevant details. (Not saying that's what's happening here, but.) Another form of the pattern is to just show off how smart the commenter is, disrupting the discussion in the process by getting caught up in details. I should go dig into the Greek Sophists. They probably had a word for it. They definitely taught it as a technique.
      - EGreg 8y ago
        WOW. How about misleading people with cherrypicked examples? That is what is done in Multiple Testing and reporting “sensational” findings. Here are two links: https://www.marketwatch.com/story/10-most-expensive-neighborhoods-in-the-us-2012-11-06 https://www.marketwatch.com/story/10-most-expensive-neighbor... https://xkcd.com/882/ https://xkcd.com/882/ Relevant topics: Simpson’s paradox Multiple testing Confirmation bias Tons of people on HN live in the bay area so they can’t imagine things being even more expensive elsewhere in the country. Thus a critique of the methodology behind the loaded headline is dismissed, even voted down.
oh_sigh 8y ago
I'm fairly sure that high rents in Marin County are not driving homelessness up. And why the focus on minimum wage? Most people who are working minimum wage jobs live with another primary earner.
- anonymous5133 8y ago
  Probably not by choice though.
  - oh_sigh 8y ago
    Yes, it is usually by choice, because half of minimum wage earners either live with their parents or a spouse that earns more: https://fivethirtyeight.com/features/typical-minimum-wage-earners-arent-poor-but-theyre-not-quite-middle-class/ https://fivethirtyeight.com/features/typical-minimum-wage-ea...
    - anonymous5133 8y ago
      They live there because they cant afford to move out....either they live there or they live on the streets.
      - oh_sigh 8y ago
        People live with their spouses because they can't afford ot move out? And maybe teenagers want to move out of their parents house, but I don't have much sympathy that they can't afford a 2 bedroom in marin county as their first place.
- bronson 8y ago
  Remember that homelessness includes people living in cars... something that is pretty apparent around Palo Alto, Menlo Park, and San Francisco.
  - oh_sigh 8y ago
    Yes, and are those people earning a living, but just falling a little short of the high prices those areas have? Or, if rents magically dropped in half over night, would they still be homeless?
Reedx 8y ago
At what point do we collectively decide, you know what, this is ridiculous. Why are we funneling most of our money to landlords? You'd think VCs would push back on this too, because that's where their money is going. VC -> Startup -> Employee -> Landlord.
- knuththetruth 8y ago
  You think VCs don’t have Bay Area real estate investments in their personal portfolios?
- deleted 8y ago
  [deleted]
- gnarcoregrizz 8y ago
  VC -> Startup -> Employee -> Landlord (VC)
  - ekianjo 8y ago
    The circle of life.
  - Gargoyle 8y ago
    That's my favorite conspiracy theory. That VCs own the property and are fine with channeling their fund's money (which isn't all or even mostly theirs) into rent. Disclaimer- I don't really believe it's that simple.
    - monocasa 8y ago
      I've seen some of that in Boulder at least. The VCs here will "strongly recommend" that you rent their office space.
    - gnarcoregrizz 8y ago
      Haha, no, it's definitely not that simple, but it is a fun conspiracy theory. It's really to highlight the "wealth funnels up" effect which happens in a very broad and indirect way
kcorbitt 8y ago
> The National Low Income Housing Coalition used that number to calculate the hourly wage a household must earn to afford a home while spending 30 percent or less of their income on rent. This is a nit, but I don't think that's a reasonable way to calculate the relationship between housing cost and affordability. Some expenses do scale with housing cost (mainly things that depend on local labor), but many important ones don't (car payments, grocery bills). So in an area with very high housing prices and a relatively-high minimum wage, you'd expect low-income workers to be able to spend more than the "standard" 30% on housing, and still be able to afford other daily necessities. I certainly don't mean this as a refutation of the article however -- the Bay Area is a very hard place to live on a low income.
aswanson 8y ago
Houston seems to have the best cost of housing to income ratio for technology people.
- cgb223 8y ago
  Is there a chart somewhere that has this kind of information? Especially if it pertains to tech jobs specifically
  - ccmonnett 8y ago
    Not your OP and not answering your question directly, but the aforementioned "tech-to-housing cost" ratio isn't so straightforward for finding out where to work. For the record, your parent seems to have thrown out Houston anecdotally. AFAIK it doesn't have a tech scene much different than would be expected from a metro area of ~6M people but it's super cheap to live in as cities go. The 'cheap' big cities (sticking to the US, those in the middle of the country: Chicago et Houston in particular) have just enough tech to show up on the hypothetical chart and are cheap enough to place well. But IMO, even as a U of Illinois alum and massive fan of Chicago, the tech density isn't such that you would be able to find particularly interesting work, especially compared to the Bay. That said, surely there enough startups that need app/web developers to pay your rent in those relatively inexpensive areas if that's your thing. The cities that interest me are those with a high density of tech at a lower cost: Austin, Portland, Raleigh, etc. The Bay housing cost is trickling down there too; there are so many people making _so much_ in the Bay that still can't afford to stay that when they start moving to these places they can really affect the smaller markets. Austin has had a crazy housing boom in the last ~15 years, but it would take a _lot_ more people moving to Chicago to move the needle there. You still face issues with inequality squashing culture, like in Austin, which has a strong history of art and music and is so much cheaper than the Bay but so much more expensive than the areas around it. Bigger cities can generally support the diversity of people needed to maintain a viable culture if they aren't 7x7 miles and surrounded by water on three sides like San Francisco is. In other words, you could move out of the Bay to one of these places and live happily for a few years before you find these same problems following you to your new home. This is a bit of an exploration but I think about leaving the Bay daily as my wife and I get more serious about starting a family. We talk about this often, and to each family, it's the most important thing in their lives. SV is really in for a wake-up call as it sheds talent that can't afford to stay.
bad_good_guy 8y ago
This thread really paints a bad picture for the mindset of a lot of people in the high-earning technology industry. That someone would argue against every job being enough to afford a roof over your head just due to their own need for validation of their importance is frankly sickening.
- deleted 8y ago
  [deleted]
- malvosenior 8y ago
  There are very real reasons to object to an artificial floor to salaries (minimum wage) that have nothing to do with validation. How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag. Also, jobs should pay what they are worth to the business and nothing more. Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right. Maybe we should be talking about realigning education to give people valuable skills instead of pushing for the non-skilled to get an artificial raise that evaporates in meaning due to inflation. EDIT I'm really surprised by the push back on this from a community of entrepreneurs. Anyone who has run a business will tell you that you can't just raise salaries without increasing costs. It's Econ 101 but apparently that's not the general sentiment here. I hear a lot of complaints about how things "should" be and what's "fair" but the math and reality isn't there to support that. Some jobs just don't have much economic value and pretending that's not the case isn't going to solve anything. It's nice to imagine a situation where janitors and fast food employees can have a middle class lifestyle but who is supposed to pay for that? When the costs of good raise dramatically, their additional pay will get sucked up by inflation. Again, Econ 101.
  - ryandrake 8y ago
    > How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag. This doesn't make sense to me. If it were possible to raise the price of that burger, why wouldn't it already be raised, regardless of operational costs? A business's costs to produce a good typically does not have much to do with the price customers are willing to pay for it.
CryoLogic 8y ago
In Seattle rents are not as high as SF yet, but the growth rate is stunning. 2bd just shy of $3,000 on avg now. https://www.rentjungle.com/average-rent-in-seattle-rent-trends/ https://www.rentjungle.com/average-rent-in-seattle-rent-tren...
- anonymous5133 8y ago
  Good
- ahelwer 8y ago
  Not really comparable. You can go on Craigslist and find decent 2bd apartments in Capitol Hill for $1500-2000 during winter when demand dies down (November-February). I've personally lived in these.
aphextron 8y ago
I've lived here since 2014, and have been successively priced out of every single apartment I've had at the end of a lease. I had a ~10 minute commute from West Oakland at first, then when the landlord doubled my rent it became a ~30 minute commute from El Cerrito. When the rent went up 30% there, I was forced all the way out to Pleasant Hill after spending months looking in Berkeley/Albany for something affordable. I now pay the same rent for a 1 bedroom in Pleasant Hill that my 3 bedroom in West Oakland rented for in 2014. And after 6 months of a hellish 1 hour+ commute I'm realizing it is completely untenable from a mental health perspective. This is for a single person who makes six figures. I can't even imagine what has happened to working class families in that time period.
- AnsisMalins 8y ago
  Who is replacing you?
  - perfmode 8y ago
    people willing to spend 50% of their pay on housing
    - AnsisMalins 8y ago
      So, people who are more desperate rather than more rich?
      - perfmode 8y ago
        yes, but probably a combination of both
    - briandear 8y ago
      And people willing to have 3 roommates.
    - VonGuard 8y ago
      Been here 20 years, have done this almost the entire time...
Glyptodon 8y ago
I was shocked when I compared cost of living and discovered various online calculators show that making $60k in Tucson, Arizona is about the same as making somewhere in the $104-140k range in the Bay Area (I'm not sure of what the different assumptions are between calculators that lead to the range, could see it be something like including Oakland vs San Rafael).
- pascalxus 8y ago
  The difference is much much greater than that if you have a family and are looking to buy a House in the bay area with a decent size back yard. In most parts of the country you can do that on a houshold income of about 40k to 100k. In the bay area penninsula, currently, you would need an income of about 600K in order to get the same type of house and yard combination (which would roughly cost 2M to 3M). And that's with the vast majority of your income going towards paying off that mortgage AND property taxes.
- anonymous5133 8y ago
  Yup. I have a friend who works in a sf hospital. Works 2 weeks on and gets 2 weeks off. 12+ hour shifts and lives at the hospital. She owns a home in phoenix and flys into sf every 2 weeks. Gets the high salary and gets low col in phoenix.
  - jdhn 8y ago
    Does she sleep in a spare hospital room? I feel like the hospital wouldn't allow that due to the fact that the room would potentially need to be allocated to a patient.
nicodjimenez 8y ago
That's what happens when you don't allow population density to grow to its equilibrium state. An overpriced, congested city, with absolutely no culture, as the only people who can justify living in SF are basically engineers, designers, and marketing people at tech companies. People living on a dime trying to do something interesting (art, tech, music, ...) is what gives cities their characters. When you take that away, you get a homogeneous group of people making between 100k and 200k a year who think about nothing other than money.
- jpao79 8y ago
  I've always thought it would be cool to create a site which matched people living on a dime trying to do something interesting (art, tech, music, ...) with cities/suburbs (i.e. urban development organizations) looking to diversify and grow a culture scene. Like Sacramento/Gilroy/Detroit/Yakima. Sort of like an Airbnb but matching cities/towns and culture makers wanting permanent, low cost housing.
- anonymous5133 8y ago
  No worries about that because you can always find an underemployed traveling artist willing to live in their van to score some gigs in sf.
thebradbain 8y ago
I think it's very important to note that the entire purpose of minimum wage, per FDR, who instituted it, is to ensure it's enough to support an entire family of four on only one income earner alone, above merely sustenance levels, and allow them not only to rent but to own a home. And by that metric, we've horribly failed as a country. “By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act) The tech gravy train won't last forever –everyone, us tech workers included, will be better off from advocating for fairer wages, even if that means taking a pay cut in the meantime. Otherwise I fear the extreme wealth gap will bring upon a new Gilded Age worse than the one pre-1929. And we all know how that turned out...
- gdilla 8y ago
  At the time, the labor pool wasn't truly global yet. It's one argument to pay living wages inside a closed-ish economy, it's another when low skilled jobs, especially in manufacturing, are done for pennies on the dollar across the globe. There's always tradeoffs.
  - thebradbain 8y ago
    Across the globe, in countries where they're paid pennies on the dollar, the cost of living is also a magnitude lower than it is here. We should be paying our workers here a wage that keeps up with the cost of living. That's the human thing to do. Otherwise, we're the cartoon evil economists in a "See why these two lines don't intersect? That's why the poor people must starve" type of situation.
    - gdilla 8y ago
      The problem is, the Corporations building sneakers, toasters, and clothing aren't going to have ANY jobs here to pay living wages for. They're gonna ship the jobs overseas cuz, you know, profit.
      - thebradbain 8y ago
ynot269 8y ago
Coming from someone not in the bay area the most expensive place I've ever lived was outside of Boston (Waltham) and even then it was a summer sublet. Why is housing so expensive, more importantly why are landlords allowed to adjust their prices so aggressively and based on some anecdotal evidence seen in this thread, randomly? I'm currently locked into a lease and I'm 95% sure the price is pay is what im locked into for a full year, but are landlords really raising prices monthly? edit: words
- Reedx 8y ago
  Not really, it's mostly once/yr (leases do lock the price). But they can be very aggressive increases (e.g., +$500/mo). There are some areas/buildings that are rent controlled though, then the increase is very small once/yr. But in those cases new leases make up the difference. I had a rent controlled one bedroom apt in SF for $2k/mo, when I left it was then priced at $3k/mo.
- pound 8y ago
  It's not some landlords who randomly drive prices up, they just respond to increases in property value.
duckfruit 8y ago
"To remedy the situation, the coalition urges Congress to invest in housing assistance." Of course their answer is federal subsidies. Never mind that regulations can be passed at the local level to ameliorate the situation -- without costing the government a cent -- by allowing for more housing construction. With interest groups like these we'll never get anywhere.
justinzollars 8y ago
After living here since 2009 I think I've figured out the Bay Area and San Francisco. SF is a city that doesn't want to be a city. It just doesn't want to grow up. Silicon Valley has since spilled over into San Francisco and we have a combination of massive job growth, prosperity and extremely limited new construction. Every year more people arrive than we construct housing for. Compounding the problem are many local politicians. Serious local political players are divorced from reality denying the relationship between supply and demand with the cost of rent; while focusing on price fixing techniques such as rent control as a solution. The only way out of this is to build. We have to make this decision.
- anonymous5133 8y ago
  The decision has already been made. No more building. More people can come but good luck to them getting housing. It is highest bidder wins.
- kec 8y ago
  Well, we could also repeal / sunset Prop13 and allow existing properties to reach their actual market values. This would suck in the short term, but it would lead to way more liquidity in the market, even if 0 new units were built.
  - toasterlovin 8y ago
    It doesn't need to suck in the short term, either. Phase things in over 10 years. That's plenty of time for people to adjust.
    - stmfreak 8y ago
      Heard of fixed income?
      - toasterlovin 8y ago
        Somehow the rest of the country manages to regularly increase property taxes as property values go up...
SoylentOrange 8y ago
I have two nitpicks with the study: 1. It uses a two-bedroom home as a baseline instead of a one-bedroom. While I understand that may be interesting for historical reasons, it's not a practical metric for modern considerations. If we want to talk about housing affordability, it's more honest to discuss one-bedroom apartments for single earners. We could also talk about two-bedroom apartments for dual-income earners. 2. The 30% pre-tax rent metric doesn't make sense to me at all. Why would that be invariant across income levels, and across states, given both graduated taxation and the vast differences in both income tax and sales tax across different states? In California, 30% pre-tax works might work out to more than 40-45% post-tax, depending on your income, and the remainder doesn't translate well to purchasing power given varying state sales taxes. I'm not saying that affordable housing is not a problem, because it clearly is. Just that, to address the problem honestly, we need to use better metrics to figure out what a fair solution is.
- djrogers 8y ago
  Re #1 - why would a 2 bedroom not be more applicable when discussing affordability? Having a roommate is pretty standard when trying to save money, and I don’t think ‘not wanting one’ changes wether or it it’s not affordable that way.
  - SoylentOrange 8y ago
    The study talks about a 2-bedroom apartment on a single, minimum-wage income. There is no discussion of dual incomes or roommates. The idea is for a single family to live in the 2-bedroom
  - thedirt0115 8y ago
    My gut feeling is that they had the prices for 1BRs and for 2BRs, and the numbers sounded more impressive with the 2BR. They could've easily displayed both so people could do their own calculations for roommates, etc.
- briffle 8y ago
  We'll just forget people have kids..
notadoc 8y ago
Opening satellite offices all over the midwest, NE, and south is just begging to happen. Cost of living is comparatively dirt cheap in MN, MI, WI, OH, IL, IN, MS, TN, GA, AR, AL, NY (outside of NYC), PA, etc, and quality of life is very high. But alas those locations aren't trendy, so the west coast obsession continues despite the wild costs.
- Apocryphon 8y ago
  I'm surprised that not more tech companies are opening branches in Sacramento. There are already some far-distance commuters going from Sac to the Bay on 4 AM carpools.
  - anonymous5133 8y ago
    It is happening slowly. Job seekers just need to put their preference to those employers.
- boxy310 8y ago
  Mid-tier Midwestern cities are quickly gentrifying with bikeshares, kombucha shops, craft breweries, and bookstore/brewpub combos. Madison, Indianapolis, & Cincinnati often get mentioned in these conversations, but I know Detroit is having a bike renaissance right now and land is _dirt cheap_ in all of these cities. I know Indianapolis in particular has had an influx of tech companies opening large campuses, including Salesforce, Genesys, and Infosys. This has gone hand-in-hand with rises in indie music festivals and a blossoming craft brewing industry.
- lotsofpulp 8y ago
  It's also possible that those places don't have something many people (especially young and tech/science oriented) want, such as temperate weather, mountains to hike, national parks, beaches, low humidity, politics, food, marijuana, etc. It's trendy for a reason.
  - notadoc 8y ago
    Everything you list is in each of those locations, though admittedly California has among the best weather in the world.
perfmode 8y ago
I moved to Brooklyn last year and have zero regrets.
agrippanux 8y ago
When I left San Diego for the Bay Area in 2008, I repeatedly heard from others, "I could never leave this place". As I prep to sell my Bay Area house and move back to San Diego, I have only heard "I don't know if I can stay here much longer". That sentiment is the same regardless of the person's occupation, from VC partner to guy at Staples recycling my old electronics.
jcadam 8y ago
This is why I just ignore Bay Area (in fact, all of California) recruiters these days. I know y'all work on some cool poop over there, but unless you're willing to triple my salary, I'll stay put here in Florida.
- anonymous5133 8y ago
  Imo smart move. No income tax in fl, cheap housing, beaches, decent weather, toruism etc. Making 50k in fl will net you more cash in your pocket compared to living in sf making 100k after your bills are paid.
xtrapolate 8y ago
So, which came first to the bay area? the engineers, or the companies? Are we at a point where most people move in to the bay area for work? Or is it the other way around (ie. companies wanting to establish a foothold in an area known for its prestigious/unique population of software-engineers)? My point is, not only are the employees losing here, but also the employers. I no longer understand the motivation of companies to continue expanding at problematic locations (such as the bay area and new-york). If Google left the bay area completely tomorrow, would that somehow restore the equilibrium?
- jpao79 8y ago
  For better or worse, I think a good analogy is making a movie in Hollywood versus anywhere else. Yes you could make your movie in New Hampshire, but it'd be that much more inertia to find a screenwriter, to cast the talent, find the crew and get funding, etc. And for tech startups, where time is of the essence and the secret recipe for making a blockbuster tech IPO is somewhat ephemeral, why risk it if the opportunity really is as amazing as you are telling the VCs and LPs. Another aspect is a lot of startups have the back-up plan to get acqui-hired by FANG or Cisco which are located in SF/Bay Area, so it make sense to have the key talent on the team prepared for that eventual integration/docking with the mothership.
  - jdhn 8y ago
    The new non-Hollywood hotspot is Atlanta. Apparently their movie industry has been growing by leaps & bounds.
- briffle 8y ago
  I think that the success of the Amazon HQ2 process (for amazon, its a success) will lead to many other companies starting the same process. Towns are bending over backwards, and throwing money at the possibility..
walshemj 8y ago
I would have thought that a 2 bed over looking central park in NYC would have been more expensive
matchagaucho 8y ago
Office space rent is similarly outrageous in the bay area... forcing our company to be remote only. #FirstWorldProblems
iamcasen 8y ago
I'm still surprised by that. I visited Manhattan in 2010 and was noticing 1br rents that average around 6k per month. Nothing luxurious, just a decent 1br. Manhattan is far larger than the entirety of SF, but when they talk about rents, they compare the entire greater NYC area to SF, which is disingenuous. Honestly, I don't think SF is equipped to handle such a high population density. I'm not sure it ever will be. Oakland probably could though.
11thEarlOfMar 8y ago
'Root Cause' of high housing costs is in the success of the tech companies that are rooted in Silicon Valley. Specifically tech because of their: 1. Penchant for offering stock options as a form of compensation. 2. Extraordinary growth in scope and profits. 3. Leverage of virtually free computing and network power, which makes the output of a single engineer distributable to billions of consumers. This justifies 'whatever it takes' salary structures. 4. Very high density of these companies in Silicon Valley. Among the current top 100 US tech companies by Market Cap, 14 are in Silicon Valley, representing > $4 Trillion in 'new money' market cap, combined: Apple: $929 Billion Google: $830 Billion Facebook: $557 Billion Intel: $256 Billion Cisco: $207 Billion Oracle: $187 Billion Netflix: $171 Billion Nvidia: etc. Comcast: etc. Adobe: etc. Broadcom: Paypal: Qualcomm: Tesla: (#100 as of this writing) The housing costs what it costs because supply is highly constrained and the companies that are headquartered here can afford to pay the salaries that enable their workers to pay these astonishing prices.
throw2016 8y ago
Its only a matter of time before marriage rates and families crash. No one can have kids or get married when they can barely survive. That will change the nature of society, the economy, demand, demographics and the labour pool. Most societies at this point start trying to bribe people to get married and provide incentives for kids but usually its too late. The sense of well being has been replaced with insecurity and businesses then get increasingly desperate about promoting immigration to keep wages down. Libertarians and their 'wealth creators' benefactors still stuck in the settler mindset may soon find themselves in the odd position of trying to bribe people to get married and women to have kids. Life is too complex to be reduced to self serving ideologies. Everything has consequences.
snarfybarfy 8y ago
Duh! Those places are probably also the most expensive to buy. I don't really know about the Bay Area but I would bet that rents are probably "cheap" compared to prices. Where I live, it currently takes 30 annual rents to buy the same place. The average over the last couple of decades is 26 annual rents. Which means renting has relatively become cheaper. I bet the same holds true for the Bay Area.

129 points by Impossible 8y ago

>There is no state, metropolitan area or county in the U.S. where workers earning minimum wage can afford a two-bedroom rental home by working 40 hours a week, according to the study. This seems like an unreasonably high standard for a single minimum wage income unless they're using the excess here as a proxy for other necessities. Edit: This seems unreasonably high because it greatly exceeds the standard of living we expect for a single minimum wage income household. Sure it would be nice if a single minimum wage household could rend a 2br but that's not what we currently expect them to be able to do. Saying "people who make X can't afford Y" when we didn't expect them to afford Y in the first place isn't very meaningful when you're discussing the ability of people making X to have a standard of living that meets our expectations for people making X.

chrisseaton 8y ago
To need two bedrooms on a single income I guess you have a child or someone else you are supporting like an elderly relative, and possibly a partner as well. So that means attempting to support a family of two or three on one minimum-wage job.
- monocasa 8y ago
  Which was the status of minimum wage jobs up until the mid 1970s. The average minimum age worker is 35, so it's not really fair to say "just don't have kids". https://mobile.nytimes.com/2014/06/10/upshot/minimum-wage.html https://mobile.nytimes.com/2014/06/10/upshot/minimum-wage.ht...
ggg9990 8y ago
Yeah... why would you be able to rent a 2BR house on minimum wage. More like a shared room in a house.
- antisthenes 8y ago
  Exactly, and I'm not sure where people's entitlement here comes from. American 2-BR apartments in upscale complexes are HUGE (I've seen figures as high as 1300 sq. ft), and in Europe they would easily have a 3-4 person family living in them, with more than 1 person working.
frgtpsswrdlame 8y ago
Why does that seem unreasonable to you? Seems to me that there should be tons of places in this country where anyone would be able to afford to rent a small house. That literally none exist is pretty damning.
- TheLoneAdmin 8y ago
  I cannot remember a time when one minimum wage job was enough to rent a two-bedroom. I rented my first apartment, with roommates, in the 80's.
  - monocasa 8y ago
    Minimum wage as adjusted in comparison to rent and home values, started going down in the mid 1970s, so that makes sense that you may not have seen it.
cimmanom 8y ago
There was a time when one could. The minimum wage was originally put in place to make sure a single wage earner could support a family.
- PopsiclePete 8y ago
  A time when unions were strong, when the 1% were taxed at ~90% and when "social security" and "pensions" were not evil words. I feel zero sympathy for Americans and for the utter clusterfuck of misery that awaits them over the next 20 years. This is just the beginning.
  - pofilat 8y ago
    There never was a 90% tax rate. That was a marginal rate, and there were massive deductions.
    - monocasa 8y ago
      Then name those massive deductions. Edit: or just drive by downvote, I guess.
      - crooked-v 8y ago
        You should expect people to downvote when you demand information you could get yourself just by skimming Wikipedia articles.
        monocasa 8y ago
        I asked about deductions, not just the marginal rate. That's not covered in the wikipedia articles.
      - pofilat 8y ago
        From the 1950s, when the marginal rate was >90%: https://taxfoundation.org/taxes-rich-1950-not-high/ https://taxfoundation.org/taxes-rich-1950-not-high/ > per the Piketty, Saez, and Zucman data ... The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. From 1979 onward: http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf http://www.cbo.gov/sites/default/files/cbofiles/attachments/... Highest effective tax rate, before Reagan's reforms, was 37% of the income of the top 1%
TheLoneAdmin 8y ago
The price of the rental is derived: ========== Fair Market Rent (FMR) is typically the 40th percentile of gross rents for standard rental units. ========== A. If you are at minimum wage, look for apartments in the 5th percentile, not a mid-range priced apartment. B. Most minimum wage, one-income households only need one-bedroom apartment. C. Or, get a roommate, rent drops in half.
- kingbirdy 8y ago
  The minimum was wage enacted such that a single breadwinner earning minimum wage would be able to support a family. A family needs 2 bedrooms and a livable apartment, not the bottom of the barrel, squeezed in to one bedroom.
  - pofilat 8y ago
    Do you have a source? The numbers don't back you up. Min wage is the single-person poverty level, and is much higher now than when it was enacted.
  - _dps 8y ago
    At least in the US this is not true. The very first minimum wage, inflation adjusted, comes out to something like $8k/yr in today's money (https://bebusinessed.com/history/history-of-minimum-wage/ https://bebusinessed.com/history/history-of-minimum-wage/). It is simply not viable or desirable to require the lowest skill jobs to pay enough to support a family. It has never been the case that the least skilled laborers in an economy were able to support families without support from other sources (e.g. a multigenerational house).
ahoy 8y ago
> This seems like an unreasonably high standard for a single minimum wage income Why should it be though?
- pofilat 8y ago
  Because not all jobs are that valuable. This is essentially replacing welfare by minimum wage, and why should welfare be administered non-progressively through employers instead of the government tax and redistribution? Should it be illegal do do low positive value work?
  - gascan 8y ago
    Because not all jobs are that valuable. No argument. But you seem to be making a value inference that low-value jobs aren't good enough to merit the worker a 2br place without two incomes. Why not? What level-sets what you "should" be able to get, for your low-value work?
    - pofilat 8y ago
      The market sets the value, obviously. Social welfare is great -- Medicaid, Unemployment, SNAP, WIC, etc, but shouldn't be paid directly by employers to recipients. Why should an unemployed person getting a low-value job suddenly shift all their welfare support burden from the state to their employer?
    - TheLoneAdmin 8y ago
      Conversely, you are arguing that a minimum wage worker should be able to rent a mid-range (40%) 2-bedroom apartment. Who is suppose to rent the cheaper 10-20% apartments? Why do you think the lowest 4% in wages of USA population deserve an average apartment? Minimum skilled worker = minimum wage salary = minimum quality apartment.
      - gascan 8y ago
        That's a good consideration, but you're forgetting about the part-timers & the unemployed. I'm not arguing that minimum wage should merit a 2br. I'm just challenging the notion that it shouldn't. There seems to be a sort of, "if you don't work hard and make lots of money, you don't deserve good things", built into that notion. When really, there's not exactly an intrinsic reason why a 2br is too good for a minimum wage worker. If it's a tight city with high demand and not enough housing, sure, competition for scarce 2br is intense. But if there is plenty of space & housing, why not? SF is a microcosm, most of the country is not like that.
glup 8y ago
I would like to see the comparison for the EU or Japan... I found this https://www.citylab.com/equity/2015/06/where-europeans-spend-the-most-on-rent-mapped/396833/ https://www.citylab.com/equity/2015/06/where-europeans-spend..., which suggests it is more reasonable, but doesn't reflect the minimum wage. Maybe it isn't such an unreasonably high standard?

realPubkey 8y ago

Well if you would define 'area' by something else, we would have 3 different places.

meritt 8y ago
That's true but they aren't arbitrary decisions designed to make one area look bad for the purposes of an article. They are well-defined areas [1] [2]. > Q10. What does the term "HMFA" mean? > HUD Metro FMR Area. This term indicates that only a portion of the OMB-defined metropolitan statistical area (MSA) is in the area to which the income limits (or FMRs) apply. HUD is required by OMB to alter the name of metropolitan geographic entities it derives from the MSAs when the geography is not the same as that established by OMB. Specifically the top 3 are: San Francisco, CA HMFA San Jose-Sunnyvale-Santa Clara, CA HMFA Oakland-Fremont, CA HMFA [1] https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf https://www.huduser.gov/portal/datasets/il/il18/FAQs-18r.pdf [2] https://www.huduser.gov/portal/datasets/il/il18/area-definitions-FY18.pdf https://www.huduser.gov/portal/datasets/il/il18/area-definit...
- dionidium 8y ago
  The overriding, pervasive problem with regional comparisons is that people give undue attention to non-standard, arbitrary distinctions -- e.g. political borders -- where comparisons across standardized areas (e.g. those defined by the OMB) would be more useful and generate more informative results. This is an example of a good comparison in a never-ending sea of bad ones.
dionidium 8y ago
That's correct. That's why we don't use arbitrary distinctions for proper regional comparisons and why groups like the OMB spend so much time developing standardized areas for comparison. Your comment is more revealing than even you may realize. There are an infinite number of political borders to be drawn around any "city," but changing those borders doesn't actually change anything about the reality on the ground. That's why it's important to make like-like comparisons.

EGreg 8y ago

And if you subdivide those places just the right way you can have the top 45 most expensive places also be in the Bay Area. I mean, it is to be expected so the title of the article doesn’t pack the punch it seems to. In NYC and other places there are city blocks or neighborhoods that are the most expensive in the country, if you grouped by blocks. This is called Simpson’s paradox

beat 8y ago
Someone needs to name the process of nitpicking details over obviously true generalizations.
- briga 8y ago
  Missing the forest for the trees? Cherry-picking?
  - beat 8y ago
    No, there's something else to it. It's often used as a misdirection technique, a way to change the subject from an uncomfortable discussion of something the commenter would like to avoid to a raucous debate about irrelevant details. (Not saying that's what's happening here, but.) Another form of the pattern is to just show off how smart the commenter is, disrupting the discussion in the process by getting caught up in details. I should go dig into the Greek Sophists. They probably had a word for it. They definitely taught it as a technique.
    - EGreg 8y ago
      WOW. How about misleading people with cherrypicked examples? That is what is done in Multiple Testing and reporting “sensational” findings. Here are two links: https://www.marketwatch.com/story/10-most-expensive-neighborhoods-in-the-us-2012-11-06 https://www.marketwatch.com/story/10-most-expensive-neighbor... https://xkcd.com/882/ https://xkcd.com/882/ Relevant topics: Simpson’s paradox Multiple testing Confirmation bias Tons of people on HN live in the bay area so they can’t imagine things being even more expensive elsewhere in the country. Thus a critique of the methodology behind the loaded headline is dismissed, even voted down.

oh_sigh 8y ago

I'm fairly sure that high rents in Marin County are not driving homelessness up. And why the focus on minimum wage? Most people who are working minimum wage jobs live with another primary earner.

anonymous5133 8y ago
Probably not by choice though.
- oh_sigh 8y ago
  Yes, it is usually by choice, because half of minimum wage earners either live with their parents or a spouse that earns more: https://fivethirtyeight.com/features/typical-minimum-wage-earners-arent-poor-but-theyre-not-quite-middle-class/ https://fivethirtyeight.com/features/typical-minimum-wage-ea...
  - anonymous5133 8y ago
    They live there because they cant afford to move out....either they live there or they live on the streets.
    - oh_sigh 8y ago
      People live with their spouses because they can't afford ot move out? And maybe teenagers want to move out of their parents house, but I don't have much sympathy that they can't afford a 2 bedroom in marin county as their first place.
bronson 8y ago
Remember that homelessness includes people living in cars... something that is pretty apparent around Palo Alto, Menlo Park, and San Francisco.
- oh_sigh 8y ago
  Yes, and are those people earning a living, but just falling a little short of the high prices those areas have? Or, if rents magically dropped in half over night, would they still be homeless?

Reedx 8y ago

At what point do we collectively decide, you know what, this is ridiculous. Why are we funneling most of our money to landlords? You'd think VCs would push back on this too, because that's where their money is going. VC -> Startup -> Employee -> Landlord.

knuththetruth 8y ago
You think VCs don’t have Bay Area real estate investments in their personal portfolios?
deleted 8y ago
[deleted]
gnarcoregrizz 8y ago
VC -> Startup -> Employee -> Landlord (VC)
- ekianjo 8y ago
  The circle of life.
- Gargoyle 8y ago
  That's my favorite conspiracy theory. That VCs own the property and are fine with channeling their fund's money (which isn't all or even mostly theirs) into rent. Disclaimer- I don't really believe it's that simple.
  - monocasa 8y ago
    I've seen some of that in Boulder at least. The VCs here will "strongly recommend" that you rent their office space.
  - gnarcoregrizz 8y ago
    Haha, no, it's definitely not that simple, but it is a fun conspiracy theory. It's really to highlight the "wealth funnels up" effect which happens in a very broad and indirect way

kcorbitt 8y ago

> The National Low Income Housing Coalition used that number to calculate the hourly wage a household must earn to afford a home while spending 30 percent or less of their income on rent. This is a nit, but I don't think that's a reasonable way to calculate the relationship between housing cost and affordability. Some expenses do scale with housing cost (mainly things that depend on local labor), but many important ones don't (car payments, grocery bills). So in an area with very high housing prices and a relatively-high minimum wage, you'd expect low-income workers to be able to spend more than the "standard" 30% on housing, and still be able to afford other daily necessities. I certainly don't mean this as a refutation of the article however -- the Bay Area is a very hard place to live on a low income.

aswanson 8y ago

Houston seems to have the best cost of housing to income ratio for technology people.

cgb223 8y ago
Is there a chart somewhere that has this kind of information? Especially if it pertains to tech jobs specifically
- ccmonnett 8y ago
  Not your OP and not answering your question directly, but the aforementioned "tech-to-housing cost" ratio isn't so straightforward for finding out where to work. For the record, your parent seems to have thrown out Houston anecdotally. AFAIK it doesn't have a tech scene much different than would be expected from a metro area of ~6M people but it's super cheap to live in as cities go. The 'cheap' big cities (sticking to the US, those in the middle of the country: Chicago et Houston in particular) have just enough tech to show up on the hypothetical chart and are cheap enough to place well. But IMO, even as a U of Illinois alum and massive fan of Chicago, the tech density isn't such that you would be able to find particularly interesting work, especially compared to the Bay. That said, surely there enough startups that need app/web developers to pay your rent in those relatively inexpensive areas if that's your thing. The cities that interest me are those with a high density of tech at a lower cost: Austin, Portland, Raleigh, etc. The Bay housing cost is trickling down there too; there are so many people making _so much_ in the Bay that still can't afford to stay that when they start moving to these places they can really affect the smaller markets. Austin has had a crazy housing boom in the last ~15 years, but it would take a _lot_ more people moving to Chicago to move the needle there. You still face issues with inequality squashing culture, like in Austin, which has a strong history of art and music and is so much cheaper than the Bay but so much more expensive than the areas around it. Bigger cities can generally support the diversity of people needed to maintain a viable culture if they aren't 7x7 miles and surrounded by water on three sides like San Francisco is. In other words, you could move out of the Bay to one of these places and live happily for a few years before you find these same problems following you to your new home. This is a bit of an exploration but I think about leaving the Bay daily as my wife and I get more serious about starting a family. We talk about this often, and to each family, it's the most important thing in their lives. SV is really in for a wake-up call as it sheds talent that can't afford to stay.

bad_good_guy 8y ago

This thread really paints a bad picture for the mindset of a lot of people in the high-earning technology industry. That someone would argue against every job being enough to afford a roof over your head just due to their own need for validation of their importance is frankly sickening.

deleted 8y ago
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malvosenior 8y ago
There are very real reasons to object to an artificial floor to salaries (minimum wage) that have nothing to do with validation. How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag. Also, jobs should pay what they are worth to the business and nothing more. Why should a high school student working for McDonald's be able to afford a 2 bedroom apartment in the Bay Area? That's not some sort of right. Maybe we should be talking about realigning education to give people valuable skills instead of pushing for the non-skilled to get an artificial raise that evaporates in meaning due to inflation. EDIT I'm really surprised by the push back on this from a community of entrepreneurs. Anyone who has run a business will tell you that you can't just raise salaries without increasing costs. It's Econ 101 but apparently that's not the general sentiment here. I hear a lot of complaints about how things "should" be and what's "fair" but the math and reality isn't there to support that. Some jobs just don't have much economic value and pretending that's not the case isn't going to solve anything. It's nice to imagine a situation where janitors and fast food employees can have a middle class lifestyle but who is supposed to pay for that? When the costs of good raise dramatically, their additional pay will get sucked up by inflation. Again, Econ 101.
- ryandrake 8y ago
  > How expensive do you really want your burger to be? Operational costs get passed on to the consumer after all. Raising the minimum wage just increases the rate of inflation leaving everyone holding the bag. This doesn't make sense to me. If it were possible to raise the price of that burger, why wouldn't it already be raised, regardless of operational costs? A business's costs to produce a good typically does not have much to do with the price customers are willing to pay for it.

CryoLogic 8y ago

In Seattle rents are not as high as SF yet, but the growth rate is stunning. 2bd just shy of $3,000 on avg now. https://www.rentjungle.com/average-rent-in-seattle-rent-trends/ https://www.rentjungle.com/average-rent-in-seattle-rent-tren...

anonymous5133 8y ago
Good
ahelwer 8y ago
Not really comparable. You can go on Craigslist and find decent 2bd apartments in Capitol Hill for $1500-2000 during winter when demand dies down (November-February). I've personally lived in these.

aphextron 8y ago

I've lived here since 2014, and have been successively priced out of every single apartment I've had at the end of a lease. I had a ~10 minute commute from West Oakland at first, then when the landlord doubled my rent it became a ~30 minute commute from El Cerrito. When the rent went up 30% there, I was forced all the way out to Pleasant Hill after spending months looking in Berkeley/Albany for something affordable. I now pay the same rent for a 1 bedroom in Pleasant Hill that my 3 bedroom in West Oakland rented for in 2014. And after 6 months of a hellish 1 hour+ commute I'm realizing it is completely untenable from a mental health perspective. This is for a single person who makes six figures. I can't even imagine what has happened to working class families in that time period.

AnsisMalins 8y ago
Who is replacing you?
- perfmode 8y ago
  people willing to spend 50% of their pay on housing
  - AnsisMalins 8y ago
    So, people who are more desperate rather than more rich?
    - perfmode 8y ago
      yes, but probably a combination of both
  - briandear 8y ago
    And people willing to have 3 roommates.
  - VonGuard 8y ago
    Been here 20 years, have done this almost the entire time...

Glyptodon 8y ago

I was shocked when I compared cost of living and discovered various online calculators show that making $60k in Tucson, Arizona is about the same as making somewhere in the $104-140k range in the Bay Area (I'm not sure of what the different assumptions are between calculators that lead to the range, could see it be something like including Oakland vs San Rafael).

pascalxus 8y ago
The difference is much much greater than that if you have a family and are looking to buy a House in the bay area with a decent size back yard. In most parts of the country you can do that on a houshold income of about 40k to 100k. In the bay area penninsula, currently, you would need an income of about 600K in order to get the same type of house and yard combination (which would roughly cost 2M to 3M). And that's with the vast majority of your income going towards paying off that mortgage AND property taxes.
anonymous5133 8y ago
Yup. I have a friend who works in a sf hospital. Works 2 weeks on and gets 2 weeks off. 12+ hour shifts and lives at the hospital. She owns a home in phoenix and flys into sf every 2 weeks. Gets the high salary and gets low col in phoenix.
- jdhn 8y ago
  Does she sleep in a spare hospital room? I feel like the hospital wouldn't allow that due to the fact that the room would potentially need to be allocated to a patient.

nicodjimenez 8y ago

That's what happens when you don't allow population density to grow to its equilibrium state. An overpriced, congested city, with absolutely no culture, as the only people who can justify living in SF are basically engineers, designers, and marketing people at tech companies. People living on a dime trying to do something interesting (art, tech, music, ...) is what gives cities their characters. When you take that away, you get a homogeneous group of people making between 100k and 200k a year who think about nothing other than money.

jpao79 8y ago
I've always thought it would be cool to create a site which matched people living on a dime trying to do something interesting (art, tech, music, ...) with cities/suburbs (i.e. urban development organizations) looking to diversify and grow a culture scene. Like Sacramento/Gilroy/Detroit/Yakima. Sort of like an Airbnb but matching cities/towns and culture makers wanting permanent, low cost housing.
anonymous5133 8y ago
No worries about that because you can always find an underemployed traveling artist willing to live in their van to score some gigs in sf.

thebradbain 8y ago

I think it's very important to note that the entire purpose of minimum wage, per FDR, who instituted it, is to ensure it's enough to support an entire family of four on only one income earner alone, above merely sustenance levels, and allow them not only to rent but to own a home. And by that metric, we've horribly failed as a country. “By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act) The tech gravy train won't last forever –everyone, us tech workers included, will be better off from advocating for fairer wages, even if that means taking a pay cut in the meantime. Otherwise I fear the extreme wealth gap will bring upon a new Gilded Age worse than the one pre-1929. And we all know how that turned out...

gdilla 8y ago
At the time, the labor pool wasn't truly global yet. It's one argument to pay living wages inside a closed-ish economy, it's another when low skilled jobs, especially in manufacturing, are done for pennies on the dollar across the globe. There's always tradeoffs.
- thebradbain 8y ago
  Across the globe, in countries where they're paid pennies on the dollar, the cost of living is also a magnitude lower than it is here. We should be paying our workers here a wage that keeps up with the cost of living. That's the human thing to do. Otherwise, we're the cartoon evil economists in a "See why these two lines don't intersect? That's why the poor people must starve" type of situation.
  - gdilla 8y ago
    The problem is, the Corporations building sneakers, toasters, and clothing aren't going to have ANY jobs here to pay living wages for. They're gonna ship the jobs overseas cuz, you know, profit.
    - thebradbain 8y ago

ynot269 8y ago

Coming from someone not in the bay area the most expensive place I've ever lived was outside of Boston (Waltham) and even then it was a summer sublet. Why is housing so expensive, more importantly why are landlords allowed to adjust their prices so aggressively and based on some anecdotal evidence seen in this thread, randomly? I'm currently locked into a lease and I'm 95% sure the price is pay is what im locked into for a full year, but are landlords really raising prices monthly? edit: words

Reedx 8y ago
Not really, it's mostly once/yr (leases do lock the price). But they can be very aggressive increases (e.g., +$500/mo). There are some areas/buildings that are rent controlled though, then the increase is very small once/yr. But in those cases new leases make up the difference. I had a rent controlled one bedroom apt in SF for $2k/mo, when I left it was then priced at $3k/mo.
pound 8y ago
It's not some landlords who randomly drive prices up, they just respond to increases in property value.

duckfruit 8y ago

"To remedy the situation, the coalition urges Congress to invest in housing assistance." Of course their answer is federal subsidies. Never mind that regulations can be passed at the local level to ameliorate the situation -- without costing the government a cent -- by allowing for more housing construction. With interest groups like these we'll never get anywhere.

justinzollars 8y ago

After living here since 2009 I think I've figured out the Bay Area and San Francisco. SF is a city that doesn't want to be a city. It just doesn't want to grow up. Silicon Valley has since spilled over into San Francisco and we have a combination of massive job growth, prosperity and extremely limited new construction. Every year more people arrive than we construct housing for. Compounding the problem are many local politicians. Serious local political players are divorced from reality denying the relationship between supply and demand with the cost of rent; while focusing on price fixing techniques such as rent control as a solution. The only way out of this is to build. We have to make this decision.

anonymous5133 8y ago
The decision has already been made. No more building. More people can come but good luck to them getting housing. It is highest bidder wins.
kec 8y ago
Well, we could also repeal / sunset Prop13 and allow existing properties to reach their actual market values. This would suck in the short term, but it would lead to way more liquidity in the market, even if 0 new units were built.
- toasterlovin 8y ago
  It doesn't need to suck in the short term, either. Phase things in over 10 years. That's plenty of time for people to adjust.
  - stmfreak 8y ago
    Heard of fixed income?
    - toasterlovin 8y ago
      Somehow the rest of the country manages to regularly increase property taxes as property values go up...

SoylentOrange 8y ago

I have two nitpicks with the study: 1. It uses a two-bedroom home as a baseline instead of a one-bedroom. While I understand that may be interesting for historical reasons, it's not a practical metric for modern considerations. If we want to talk about housing affordability, it's more honest to discuss one-bedroom apartments for single earners. We could also talk about two-bedroom apartments for dual-income earners. 2. The 30% pre-tax rent metric doesn't make sense to me at all. Why would that be invariant across income levels, and across states, given both graduated taxation and the vast differences in both income tax and sales tax across different states? In California, 30% pre-tax works might work out to more than 40-45% post-tax, depending on your income, and the remainder doesn't translate well to purchasing power given varying state sales taxes. I'm not saying that affordable housing is not a problem, because it clearly is. Just that, to address the problem honestly, we need to use better metrics to figure out what a fair solution is.

djrogers 8y ago
Re #1 - why would a 2 bedroom not be more applicable when discussing affordability? Having a roommate is pretty standard when trying to save money, and I don’t think ‘not wanting one’ changes wether or it it’s not affordable that way.
- SoylentOrange 8y ago
  The study talks about a 2-bedroom apartment on a single, minimum-wage income. There is no discussion of dual incomes or roommates. The idea is for a single family to live in the 2-bedroom
- thedirt0115 8y ago
  My gut feeling is that they had the prices for 1BRs and for 2BRs, and the numbers sounded more impressive with the 2BR. They could've easily displayed both so people could do their own calculations for roommates, etc.
briffle 8y ago
We'll just forget people have kids..

notadoc 8y ago

Opening satellite offices all over the midwest, NE, and south is just begging to happen. Cost of living is comparatively dirt cheap in MN, MI, WI, OH, IL, IN, MS, TN, GA, AR, AL, NY (outside of NYC), PA, etc, and quality of life is very high. But alas those locations aren't trendy, so the west coast obsession continues despite the wild costs.

Apocryphon 8y ago
I'm surprised that not more tech companies are opening branches in Sacramento. There are already some far-distance commuters going from Sac to the Bay on 4 AM carpools.
- anonymous5133 8y ago
  It is happening slowly. Job seekers just need to put their preference to those employers.
boxy310 8y ago
Mid-tier Midwestern cities are quickly gentrifying with bikeshares, kombucha shops, craft breweries, and bookstore/brewpub combos. Madison, Indianapolis, & Cincinnati often get mentioned in these conversations, but I know Detroit is having a bike renaissance right now and land is _dirt cheap_ in all of these cities. I know Indianapolis in particular has had an influx of tech companies opening large campuses, including Salesforce, Genesys, and Infosys. This has gone hand-in-hand with rises in indie music festivals and a blossoming craft brewing industry.
lotsofpulp 8y ago
It's also possible that those places don't have something many people (especially young and tech/science oriented) want, such as temperate weather, mountains to hike, national parks, beaches, low humidity, politics, food, marijuana, etc. It's trendy for a reason.
- notadoc 8y ago
  Everything you list is in each of those locations, though admittedly California has among the best weather in the world.

perfmode 8y ago

I moved to Brooklyn last year and have zero regrets.

agrippanux 8y ago

When I left San Diego for the Bay Area in 2008, I repeatedly heard from others, "I could never leave this place". As I prep to sell my Bay Area house and move back to San Diego, I have only heard "I don't know if I can stay here much longer". That sentiment is the same regardless of the person's occupation, from VC partner to guy at Staples recycling my old electronics.

jcadam 8y ago

This is why I just ignore Bay Area (in fact, all of California) recruiters these days. I know y'all work on some cool poop over there, but unless you're willing to triple my salary, I'll stay put here in Florida.

anonymous5133 8y ago
Imo smart move. No income tax in fl, cheap housing, beaches, decent weather, toruism etc. Making 50k in fl will net you more cash in your pocket compared to living in sf making 100k after your bills are paid.

xtrapolate 8y ago

So, which came first to the bay area? the engineers, or the companies? Are we at a point where most people move in to the bay area for work? Or is it the other way around (ie. companies wanting to establish a foothold in an area known for its prestigious/unique population of software-engineers)? My point is, not only are the employees losing here, but also the employers. I no longer understand the motivation of companies to continue expanding at problematic locations (such as the bay area and new-york). If Google left the bay area completely tomorrow, would that somehow restore the equilibrium?

jpao79 8y ago
For better or worse, I think a good analogy is making a movie in Hollywood versus anywhere else. Yes you could make your movie in New Hampshire, but it'd be that much more inertia to find a screenwriter, to cast the talent, find the crew and get funding, etc. And for tech startups, where time is of the essence and the secret recipe for making a blockbuster tech IPO is somewhat ephemeral, why risk it if the opportunity really is as amazing as you are telling the VCs and LPs. Another aspect is a lot of startups have the back-up plan to get acqui-hired by FANG or Cisco which are located in SF/Bay Area, so it make sense to have the key talent on the team prepared for that eventual integration/docking with the mothership.
- jdhn 8y ago
  The new non-Hollywood hotspot is Atlanta. Apparently their movie industry has been growing by leaps & bounds.
briffle 8y ago
I think that the success of the Amazon HQ2 process (for amazon, its a success) will lead to many other companies starting the same process. Towns are bending over backwards, and throwing money at the possibility..

walshemj 8y ago

I would have thought that a 2 bed over looking central park in NYC would have been more expensive

matchagaucho 8y ago

Office space rent is similarly outrageous in the bay area... forcing our company to be remote only. #FirstWorldProblems

iamcasen 8y ago

I'm still surprised by that. I visited Manhattan in 2010 and was noticing 1br rents that average around 6k per month. Nothing luxurious, just a decent 1br. Manhattan is far larger than the entirety of SF, but when they talk about rents, they compare the entire greater NYC area to SF, which is disingenuous. Honestly, I don't think SF is equipped to handle such a high population density. I'm not sure it ever will be. Oakland probably could though.

11thEarlOfMar 8y ago

'Root Cause' of high housing costs is in the success of the tech companies that are rooted in Silicon Valley. Specifically tech because of their: 1. Penchant for offering stock options as a form of compensation. 2. Extraordinary growth in scope and profits. 3. Leverage of virtually free computing and network power, which makes the output of a single engineer distributable to billions of consumers. This justifies 'whatever it takes' salary structures. 4. Very high density of these companies in Silicon Valley. Among the current top 100 US tech companies by Market Cap, 14 are in Silicon Valley, representing > $4 Trillion in 'new money' market cap, combined: Apple: $929 Billion Google: $830 Billion Facebook: $557 Billion Intel: $256 Billion Cisco: $207 Billion Oracle: $187 Billion Netflix: $171 Billion Nvidia: etc. Comcast: etc. Adobe: etc. Broadcom: Paypal: Qualcomm: Tesla: (#100 as of this writing) The housing costs what it costs because supply is highly constrained and the companies that are headquartered here can afford to pay the salaries that enable their workers to pay these astonishing prices.

throw2016 8y ago

Its only a matter of time before marriage rates and families crash. No one can have kids or get married when they can barely survive. That will change the nature of society, the economy, demand, demographics and the labour pool. Most societies at this point start trying to bribe people to get married and provide incentives for kids but usually its too late. The sense of well being has been replaced with insecurity and businesses then get increasingly desperate about promoting immigration to keep wages down. Libertarians and their 'wealth creators' benefactors still stuck in the settler mindset may soon find themselves in the odd position of trying to bribe people to get married and women to have kids. Life is too complex to be reduced to self serving ideologies. Everything has consequences.

snarfybarfy 8y ago

Duh! Those places are probably also the most expensive to buy. I don't really know about the Bay Area but I would bet that rents are probably "cheap" compared to prices. Where I live, it currently takes 30 annual rents to buy the same place. The average over the last couple of decades is 26 annual rents. Which means renting has relatively become cheaper. I bet the same holds true for the Bay Area.