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To an outsider that has spent nearly 80% of his time in SF on business travel for the last couple years: the cost of living in SF is unjustifiable. I was offere
by sithadmin 8y ago
To an outsider that has spent nearly 80% of his time in SF on business travel for the last couple years: the cost of living in SF is unjustifiable. I was offered a position with one of my clients in SF for roughly double my current income in Houston, TX. After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out in my favor without significant sacrifices on either count. In Houston, I live quite comfortably in one of the wealthiest neighborhoods with money to blow on a luxury car, 2+ extravagant international vacations a year, and decent amount of savings and investments. But in SF, I'd be uncomfortably close (relative to my Texan standards, anyway) to the 'low income' line. So I might as well keep on racking up the frequent flier miles, eh?
Something's gotta give. NIMBYism when it comes to affordable housing, the income disparity between 'techies' and everyone else in SF, and lack of sufficient investment in effective mass transit are all clearly driving the city into the ground. My teams in SF are constantly bleeding our best talent to places like Denver, Austin, Seattle, etc. because the youngest and brightest employees are realizing that SF is an unsustainable drain on their finances. It's not going to stop me from doing business there, but it's certainly going to mean that my firm just continues to feed the vicious cycle of wage inflation by attracting talent with higher and higher base salaries.
- alex_young 8y agoYou don't mention your income, but presuming you're in tech, you may well find that the bay area offers not quite the discretionary percentage, but far more in left over after rent etc. in total. There is a reason people move here.
- sithadmin 8y agoI live here (https://en.wikipedia.org/wiki/West_University_Place,_Texas#Demographics https://en.wikipedia.org/wiki/West_University_Place,_Texas#D...) and fit into the described demographics. SF in no way made sense at 2x my current income.
- alex_young 8y agoI must be missing something. The link you provided says ”The median income for a household in the city was $202,132, and the median income for a family was $227,425" That's more than double the median income in SF.
- meowface 8y agoMore than double the median income and also (presumably) less than half the cost of living. So they still made the right decision when factoring everything in.
- sithadmin 8y agoBingo!
- sithadmin 8y ago>That's more than double the median income in SF. Irrelevant. I wasn't trying to optimize for % gain over median income in SF. I was trying to optimize for moderate improvement in overall quality of life compared to what I have now.
- alex_young 8y ago"I was offered a position with one of my clients in SF for roughly double my current income in Houston, TX. After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out in my favor without significant sacrifices on either count." So assuming you were making ~200k, doubling that to 400k, it was still impossible to make your standard of living? I find that hard to believe.
- sithadmin 8y agoI found it hard to believe too ¯\_(ツ)_/¯ But I also built a model that put a lot of guesses about intangibles into numbers. It passed sanity checks when reviewed by several peers, but I could just have a bad model. Who knows.
- angersock 8y agoAnd then they get hit with state income tax, which the state wastes on frivolous policies and nannying. No thanks.
- komali2 8y agoWhat examples of policies do you feel are wasteful?
- abtinf 8y agoI grew up in CA and moved away just a few years ago, and I didn’t have an appreciation for the extraordinary corruption and wastefulness of state, county, and local policies. Only rarely did any single single policy seem particularly egregious or catastrophic. Then I moved to Washington State. No state income tax, but comparable sales and property taxes. Much less regulation at every level of government. The savings in income tax alone paid for my rent, until I bought a house. The house I bought is in an extremely high quality neighborhood. School ratings are almost maxed out. Professional or entrepreneurial neighbors. Responsive government services. My home costs less than a condo in south San Jose. I pay about half the Bay Area rate for full time childcare. Gas is significantly cheaper. 5 dozen eggs at Costco cost $6-8. Life is good. No one is dying in the streets. If anything, people are thriving and have hope to create a better future. It is not until I experienced the totality of difference between Silicon Valley and another west coast city (in my case Tacoma and its suburbs, though I suspect Portland is similar) that I groked the suffering inflicted by CA politics.
- abritinthebay 8y agoSo no specifics then? Just hand waving generalizations with no content?
- abtinf 8y agoI shared my personal experience based on living in the bay area for 30 years. YMMV.
- 8y ago
- NamTaf 8y agoAs a sort of tangent to your point, it is however beneficial to move to a high-cost-of-living area if you can get a roughly equivalent quality of life outcome. That is, if you can get a salary increase in line with the cost of living increase, it is worthwhile because it essentially deflates all other non-locale-related costs. For example, the $100 shirt off Amazon is suddenly far cheaper relatively speaking. So is the new phone or laptop. Ditto, overseas trips become much more affordable relatively speaking. I know it's not related to your original point much except that we're discussing regional cost-of-living disparities. I've just been thinking about this a bit, as I come from a high-cost-of-living country (Australia) and am considering moving overseas to locations that offer a lower cost of living (not that it's my impetus for doing said move). It's a factor I hadn't previously considered and does actually have some significance.
- sithadmin 8y agoI totally agree with you. In my case, I countered with a proposal for roughly 3x my current income, which would have maintained roughly similar quality of life, if not some minor improvement. The client balked, mostly because they're not a tech firm and aren't used to paying folks outside their primary money-making departments that sort of salary. But if they had agreed, I definitely would have moved to SF.
- anothergoogler 8y agoThere are reasons real estate is more expensive in the bay area, and it's not just NIMBYs. Even if you build to the sky in SF, real estate is going to be much pricier in the bay area than Houston. Not caring about the things that make the bay area market pricier is an arbitrage of sorts for you. The heat and hurricane weather alone are enough to make Houston a non-option for many people, myself included.
- sithadmin 8y ago>The heat and hurricane weather alone are enough to make Houston a non-option for many people A factor in my favor: I'm a native, so it doesn't bother me. Same goes for most others that have lived in swamplands during the summer (even places like DC and Chicago have nearly identical summer weather compared to Houston).
- JumpCrisscross 8y ago> After running the numbers with an attempt to maintain similar standards of living and leisure, it was simply impossible to make the math work out Ditto. And I live in Manhattan. That said, it's important to think in terms of absolutes versus relative figures. You may not save 20% of your income. But the 5 or 10% you save may be more than 20% of your non-Bay Area income.
- sithadmin 8y agoYep, I agree. I only looked at absolute numbers. I built a relatively complex model of my expected income and expenses in Houston vs SF for 1, 2, 3, 5, and 10 year periods, factoring in things like annual COLA and potential deviations in things like the price of gasoline. A majority of the time, I would have ended up worse off. So I turned down the offer.
- baddox 8y agoWhy would the price of gasoline matter in SF? If you’re living and working in the city, you almost certainly aren’t driving enough for the gas price premium to matter. I don’t mean to pry, but I’m having trouble imagining an income that is so comfortable in Texas, but so uncomfortable in SF when doubled. There must be at least one major factor that doesn’t apply to my calculations, perhaps child care or private school or something.
- briandear 8y agoTaxes. A doubled income in California isn’t a doubled income. It’s much less: higher tax bracket, state income taxes. What needs to be compared is the after tax income. Because it sure isn’t doubled. Even if you add it property taxes — tax on a Houston $500k house is going to be less than taxes on an equivalent $2 million house. The median prices of condos in San Francisco is almost $1.4 million. $1.4 million could buy you a grand house in Houston. A nice condo might cost $350k. Because, even if you double the income, your post-tax pay isn’t actually doubled. Adding housing into the mix (even ignoring taxes) and the math is still rather difficult because houses cost far more than double what they do in Houston. That’s a big difference when you talk about doubling income. Taxes and housing; that’s the problem with California.
- deleted 8y ago[deleted]
- almost_usual 8y agoUnless you’re from the area you’re going to have a difficult time creating roots here to support a family. It makes sense if you’re single and in your 20s or early 30s but as soon as you start factoring in kids, childcare, and owning a home it gets crazy.
- sithadmin 8y agoI'm in my late 20s, no kids, with a wife that will shortly surpass me in terms of income. The math still didn't work for us in SF, unless we were willing to make big compromises in terms of living space and discretionary spending.
- charmides 8y agoYou are far from the only person who's saying this, but I don't understand how you can reach the conclusion that you would enjoy a lower standard of living in SF than Houston on a salary that is twice as high. The three things you say that you like to blow money on -- luxury cars, international vacations, and making investments -- are similarly expensive in both places. Care to share some of your math? To elaborate, I looked through this guide: https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&city1=Houston%2C+TX&country2=United+States&city2=San+Francisco%2C+CA https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou... and while a one-bedroom apartment in the centre of SF would cost around $41,000 a year in SF compared to $17,000 in Houston, that means that if your salary is Houston is around $100,000, you would still have around $70,000 more dollars a year in SF after rent has been taken care of, not accounting for taxes. How does the higher cost of living in SF manage to eat up all that money in just a year?
- overeater 8y agoAgreed. I think many people just don't do very precise math. But the other part is the extra income tax in CA versus TX, which is about 10% of the income, so subtract 10K from that 70K.
- tbrock 8y agoThere are SF taxes also so it’s even worse.
- URSpider94 8y agoSF does not have an income tax.
- overeater 8y agoThere's no SF city income tax. Are you thinking about sales tax? In most cases, sales tax should be negligible unless you're spending ALL of your money, and spending it ALL on local purchases. Things like flights, vacations, online services, etc. don't have local sales tax applied to them.