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Families earning $117,000 now qualify as “low income” in California's Bay Area
- bocklund 8y agoOne thing that seems strange to me is that the cost of living is high, but so many things we buy are priced the same. No matter how high cost of living is, a MacBook Pro starts at the same price whether you’re making a measly 100k in the Bay or 25k in Podunk, Alabama. Out of state college tuition is the same price no matter which state you come from. Even if you have “low income” locally, there’s still so much more opportunity to be captured than others outside city bubbles.
- noobermin 8y agoCertain goods are similarly priced, the goods/rents most important for life are expensive. Also, there is a cost regarding loss of job opportunities outside of city centers.
- nugget 8y agoReal estate, education, and health care have become much more expensive, while most other products and services (clothes, electronics, travel, entertainment, etc.) have remained flat or become less expensive.
- NTDF9 8y agoIn short, everything necessary for survival has a hidden negotiation/no listed fees and thus is expensive.
- olliej 8y agoThe bulk of the vast majority of people’s expenses are the “fixed” living costs: utilities and rent/mortgage. So if the average property increases the average cost of living also increases. The cost of food, and utilities is tied to usage so those costs don’t really change (fungible) based on where you live; but your accommodation does. That’s basically because for non-luxury goods the price is a function of actual cost to produce and market supply. For accommodation it isn’t possible to just buy an additional house at a shop and live there - you are fundamentally constrained by what Is already available. Your example of a macbook isn’t actually super good as while you are right: a given MacBook model costs the same, but someone can always get a cheaper model, or just a cheaper laptop in general. But if your job is in place A, then you need to have a home that is close enough for that to be reachable, so your options are limited so you can’t reduce the cost of your job. Interestingly/depressingly this has the effect of further reducing the effective hourly wage of minimum wage workers, as they have to spend more time traveling to their place of employment. Your example of 25k in pdunk Alabama needs to account for the similarly reduced cost of housing. Take Merced, ca for example (a place I know)- that’s 2-3hours from San Francisco but house price there is like 200k. Before you say “why not commute from there”, that’s time without traffic. At commute times I would guess your looking at more than 4 hours each way. For an 8 hour shift you’re commuting another 8 hours, so functionally you’re getting paid half the minimum Wage (from your POV, I’m not saying your employer owes you for that) [edit typing on a phone is apparently hard. I corrected a bunch of awful and incoherent sentences]
- voltagex_ 8y agoDon't some schools require MacBooks or iPads for students?
- olliej 8y agoNot public schools, and private schools in America at least easily costs tens of thousands of dollars each year. (Public schools could use them, but need to provide them to so they don't deny education to students from poorer families)
- 5555624 8y ago>The cost of food, and utilities is tied to usage so those costs don’t really change (fungible) based on where you live; but your accommodation does. It depends on the utility. A larger home can mean increased costs for some utilities, such as those associated with heat and cooling. As an example, now that I am in a house, my electric bill is twice what it was when I was in a two-bedroom apartment, largely due to cooling costs. (The house is larger than the apartment.) Water and trash? About the same. Natural gas is slightly lower. (An actual meter versus a "formula" applied to all the apartments in the building.)
- olliej 8y agoAt the same time a bigger house may also be /cheaper/ due to better materials and higher quality equipment. That said I recognize that there is some variance, hence fungible :)
- garmaine 8y agoWhy should it cost different? Same factory, same suppliers, largely the same distribution chain.
- mgkimsal 8y agoif it's being sold in a store, that store has real estate, and presumably the real estate costs for business locations may be somewhat tied to other real estate-related pricing (individual housing, primarily). Those prices would affect the bottom line of the retailer. $21/sqft vs $80/sqft would probably have an impact on the margins many businesses would have.
- paxys 8y agoAmount of traffic in a store in a popular location usually makes up for the increased price. Plus a lot of companies run some retail stores at a loss just for the advertising.
- baddox 8y agoWell, clearly stores couldn’t charge much of a premium for items that aren’t impulse purchases and can be shipped from elsewhere in the country, because people would just have them shipped. Relatively small expensive items like phones and laptops would definitely fall into that category.
- kyleblarson 8y agoIf this were a feasible business model a multistate / multinational company would have already tried it and succeeded.
- softawre 8y agoA business that doesn't have brick and mortar shops in high cost locations? All internet businesses?
- IAmGraydon 8y agoThat’s one major advantage of living in an area with high cost of living. National products are priced the same everywhere, making them much cheaper when measuring the price as a percentage of total income. Take your MacBook example and apply it to big ticket items like cars and vacations and you can really see how living in these areas makes a lot of things more affordable.
- briandear 8y agoAssuming you got to the area soon enough to avoid a $1.5 million entry level house and the taxes that go with it.
- nightski 8y agoThis may be true if you are tied to the average income of an area. But good software engineers generally are not. I am able to enjoy a SV level of income in a much lower cost of living area.
- raverbashing 8y agoYeah, but it depends on how much you can save beyond your cost of living It's easier to afford a new laptop when your rent is double of what it costs. But a new laptop is a once every couple of years expense, so
- everdev 8y agoYou can find affordable food, gas, insurance, etc. in the Bay Area. Sure, there are $20 burgers and $10 beers, but you don't need to consume them as the food in grocery stores is within a few % of most other areas of the country. As far as I can tell, the main driver of family expenses in mortgage/rent and keeping up with the Jones' (but I don't know if the last is a uniquely Bay Area problem). Unfortunately, many families reach for the max mortgage someone will lend them, which keeps expenses and housing prices going up. If you pay $50k/year ($4k/month) on a $850k mortgage and $30k/year in taxes, it's easy to see how $120k/year is low-income. The remaining $40k divided by 4 people = $833/month per person for food, clothes, transportation, insurance, etc. Not poverty, but not high living either. I know many families in the area that complain about the high cost of living yet frequently carry debt for that new car, or a credit card balance they can't afford. It's a self-generated problem that keeps going.
- king_nothing 8y agoCostco, dollar stores, buying on sale items only... you can save a ton by not going for fast food, dining out or convenience. I used to spend over $25k/yr dining out around 2007 and $18k on housing. Housing is now zero and food under $200.
- loteck 8y agoThe price of housing is a self-generated problem?
- tazard 8y agoIt is if you also get a new car, and can't properly afford either.
- TangoTrotFox 8y agoThe price of housing is a product of too many people wanting to live in too small an area. The huge salaries, probably driven in part by venture capital mardi gras, also certainly work to keep driving up prices. If somebody's willing to pay $4k a month for a modest place, then there will certainly be people willing to charge $4k a month for a modest place!
- paul7986 8y agoWhat is the median income for a Sr Front End Developer and or a Sr UI/UX Designer/Developer in the Bay Area now. Someone with 7 or more years of experience... is it 250k?
- paxys 8y agoWith stocks & bonuses, possibly. Base salary is unlikely to be that high for a senior role.
- owyn 8y agoIt's hard to say exactly and varies widely but I'd guess something like $120-160k range for a senior person even at most places that aren't the top 5. Stats I found say median pay is closer to $105k though (in 2017). Front-end/UI/UX seems to be in pretty high demand, so there aren't as many senior people to be found and most places that I've seen have been happy to hire junior people. Median pay at Facebook is $240k. Median pay at Twitter is $160k. That would be all-in with stock etc.
- gnarcoregrizz 8y ago120-160k sounds low for a senior role. kids out of college get offered 120k now for entry level roles.
- Bahamut 8y agoOnly if they're working for one of the big tech companies - they almost certainly won't be making that much at a startup out of college unless they happen to be uncommonly good at negotiating/have good experience from internships. $160k is low for a true senior though. I have been making $160k base at a startup since 2.5 years into my career, and basically negotiations have been name-your-price for me. I can confirm first hand that the big tech companies pay a lot for senior engineers though - if you're any good, you can hit $250k+ pretty fast (disclaimer: I work in a FAANG currently).
- apexalpha 8y ago
- king_nothing 8y agoI survive in the Valley on under $15k, all in. Now they want to take away the pittance that is SNAP Sept 1 declaring me ABAWD without any process, and I’ve never been ABAWD.
- Pmop 8y agoUnbelievable. That's a truck load of money from my point of view as i'm living of 1200 usd/year (initiating researcher grant) with government subsided food.
- king_nothing 8y agoGas is ~ $3.50/gal even at the cheap places (Moffet Gas Mart, ARCO).
- wishinghand 8y agoEven with your food taken care of, how do you survive on $100/month? Is your housing subsidized too?
- tjr225 8y agoNo offense but I reckon that on that budget you could exist just about anywhere...but only because you have to.
- ibz 8y agoWoah, where is that? US?
- MentallyRetired 8y agoWhen loans come as easy as they do now, it's no wonder home prices are on the rise. It's not a sign of a good economy, it's a sign of an economy stacked toward corporate profit. Countdown until repeat of the housing crisis in 5... 4...
- ggreer 8y agoThe data comes from the Housing and Urban Development's FY 2018 Income Limits Documentation System, and is for a family of four.[1] The HUD explains their reasoning here[2]. Basically, it's all about housing costs. As a side note: I really wish news articles would link to the data instead of forcing me to go on an expedition. 1. https://www.huduser.gov/portal/datasets/il/il2018/2018summary.odn?STATES=6.0&INPUTNAME=METRO41860MM7360*0604199999%2BMarin+County&statelist=&stname=California&wherefrom=%24wherefrom%24&statefp=06&year=2018&ne_flag=&selection_type=county&incpath=%24incpath%24&data=2018&SubmitButton=View+County+Calculations https://www.huduser.gov/portal/datasets/il/il2018/2018summar... 2. https://www.huduser.gov/portal/datasets/il/il2018/2018ILCalc3080.odn?inputname=Marin+County&area_id=METRO41860MM7360&fips=0604199999&type=county&year=2018&yy=18&stname=California&stusps=CA&statefp=06&ACS_Survey=%24ACS_Survey%24&State_Count=%24State_Count%24&areaname=San+Francisco%2C+CA+HUD+Metro+FMR+Area&incpath=%24incpath%24&level=80 https://www.huduser.gov/portal/datasets/il/il2018/2018ILCalc...
- spyckie2 8y agoIf you read through the documentation, you'll see that they actually have a value of 145k as a calculation of the low income limit, but they are only allowed to grow the cap by 11.5% from last year, which was at 105k. This doesn't really tell you much about family incomes or the state of poverty in SF, it just tells you that housing prices are really high in SF (which we all know). Funny enough though, the median family income is at 118k and the income limit is at 117k, which means that roughly 50% of families living in SF qualifies for the low income limit for HUD.
- sjg007 8y agoWow.
- deleted 8y ago[deleted]
- sjg007 8y agoYeah it’s crazy. That qualifies you for housing assistance... too bad house prices are basically above the max assistance thresholds. At a minimum you need down payment assistance. You really need two professional incomes to make any headway.
- UperSpaceGuru 8y agoI wish this didn't bother me so much, but ever since the Silicon Valley Episode where Big Head says: " Jesus! Why is it so expensive here? Look at this place, it's a shithole.", I can't seem to find a good answer to this question... I certainly count myself fortunate to be able to afford to live here with my family. But I can't see the value of moving people to the area (as I was contemplating moving team members from out of state here). Even at six figure salaries they'd have to share an apartment to be able to save anything at all. - Better weather, but LA is arguably nicer & less expensive. - Better community of techies who somehow inspire you to do better? After being here for a year and attending meetups and community event, I know for a fact that's not true. Despite the density of people here, people are surprisingly disconnected, chance encounters are rare at best. Most of the interactions seem shallow at best and conversations often seem transactional. - Better job prospects for devs? I guess for a software engineer it'd come down to better job prospects, but to be honest, it's not like the rest of America sucks for software jobs. - Better social life? This may be availability bias as I am not single and live in the 'burbs with my family, but every single person I know seems pretty miserable & isolated. A couple of them actually moved out of the area because of the poor quality of human interaction/dating. It seems everyone works all the time. (Which works great for me as I'm on the employing side). + If you run a tech company & have enough money to move here and hire from the local talent pool, it's a decent proposition. + Relative to other places in the country it's pretty diverse and progressive Some might say access to VCs and funding etc, but that seems to take some pretty serious effort and it might be a better idea to make the hike up from Gilroy or Hollister and not spend a 6 figures in rent for the privilege. I think the area is beginning to emulate the inequalities that I saw growing up in a 3rd world country. The amount of homeless working people in the area is mind boggling. It seems like most people in the area are just too busy/too successful to do much about it (I include myself in this group unfortunately). California has been having an exodus of residents, but mainly middle class down. I don't see how this is sustainable long term. *https://www.springfieldspringfield.co.uk/view_episode_scripts.php?tv-show=silicon-valley-2014&episode=s01e01 https://www.springfieldspringfield.co.uk/view_episode_script...
- kilroy123 8y agoI grew up in California, but not the bay area. I personally refuse to live there. Pretty much for all the reasons you mentioned.
- nodesocket 8y agoI recently fled San Francisco (was downtown) to Nashville Tennessee and could not be happier. I will try to stay neutral politically, but I also think it is somewhat ironic the most liberal city in the US also has the highest income "inequality", homelessness, drug, and petty crime problem in the US. It all wreaks of hypocrisy and downright poor fiscal judgement to me. I have friends that are making $160,000 a year (single no families) and not saving anything. That is absurd. Not to mention being a single self-employed LLC company in California the taxes are anti-business and constraining. California dream'in... Ehh no thanks for me anymore.
- iancmceachern 8y agoLikewise but to Sacramento. It's nice here.
- dzink 8y agoIt’s correlation vs causation. The presence of income inequality makes the city more and more liberal. Politics is a dial between fairness and freedom. There are downsides to both, so elections tune the setting depending on your current conditions. CA is the state where the pursuit of happiness is most fruitful. There are 124 Billionaires in CA (only 400 something in the entire united states). Of those 70+ are in the Bay Area (most are locally grown in this tiny region of 7million people). All of Germany has 48 or something. Thus in the land of opportunity, you are either a billionaire, or act like you want to be in the future, or you push on the dial for fairness.
- nodesocket 8y agoIn Tennessee for example you can achieve the American Dream, a beautiful house by working hard in the middle class. In fact some of the most beautiful houses I have ever seen are here in Tennessee and I've lived in Santa Barbara, San Diego, and San Francisco. This is just not possible in the bay area.
- sudouser 8y agobeautiful houses there!
- anikdas 8y agoAnd here I am earning $1200/mo (3 year dev xp) and considered one of the highest paid! Also living a pretty comfortable life (own house/car/heated water/AC). It's pretty strange how geography affects living standard!
- NullPrefix 8y agois it a Tesla?
- anikdas 8y agoNot a Tesla but gets the job done!
- coryfklein 8y agoEDIT: the below is a stream of consciousness invoked by the parent comment, not an attempt to comment on said parent's specific situation. If I asked every person I know, "What is a comfortable life?" I don't think a single person would cite "heated water". In my circles that's as given as the air I breathe. Comments like this startle me to the reality of the insulated life I live. Similar to the 30 minutes I spent on GiveWell the other day realizing how much I take for granted things like, say, the fact that I am not at risk of dying from malaria. And yet I still struggle between the idea of buying an even bigger house vs saving the lives of hundreds of children. Whenever I recognize this mismatch between the stark reality of life on earth and my own uncaring attitude about others, I wish there was a YouTube channel I could watch that was designed to evoke sympathy in me for those less fortunate. Like maybe just documentaries about the challenges of regular life outside my bubble? Sympathy as as Service anyone?
- kaizendc 8y agoI had that same realization, that watching documentaries about the world could increase both my compassion and my gratitude. I've found this channel to be helpful towards that end: https://www.youtube.com/channel/UCW39zufHfsuGgpLviKh297Q https://www.youtube.com/channel/UCW39zufHfsuGgpLviKh297Q DW Documentaries.
- RickJWagner 8y agoCrazy. If I were single, I'd move to SV and live like a pauper a few years, saving the excess. You could retire to another part of the country shortly after.