4 ms·

That's $50K/home. Is that even remotely realistic in the Bay Area?

nugget 7y ago
The headline is misleading. In the article it says Google is rezoning $750 million worth of land (+ $250m in subsidies) from commercial to residential use, and making it available for private development. It wouldn't surprise me if one of the biggest problems for Google was retention of young talent driven primarily by prohibitively high housing costs. In that way there is an incentive for them to bring down housing costs, although I'm not sure what impact 20k units will have unless they retained ownership and became a landlord to their own employees.
- TotempaaltJ 7y ago
  $750m worth of land, $250m investment fund for affordable housing.
- chucksmash 7y ago
  > It wouldn't surprise me if one of the biggest problems for Google was retention of young talent driven primarily by prohibitively high housing costs. Well, it would surprise me :-) According to levels.fyi, a new grad at Google is clearing $180k/year all-in. Next tier, still not senior, clears $250k/year. That's more than $20k/mo pre-tax. Even at an outrageous $5k rent on a single income and with no roommates, you're still talking about $6k or so >>monthly<< surplus for living your life and saving.
  - maxsilver 7y ago
    > Well, it would surprise me :-) According to levels.fyi, a new grad at Google is clearing $180k/year all-in. Even at an outrageous $5k rent Is that really enough to afford to live? Is that housing cost accurate? A programmer at Google making $180k/yr salary brings in about $9,315.58 in after-tax income (according to PaycheckCalculator). The average house within 10 miles of Google's HQ currently costs about $1.5 million dollars according to Zillow's current month averages. (That's $9,745/month in after-tax costs per month, assuming 0% down on 30yr mortgage). Like, maybe if you are single and live off of ramen and you pick the shittiest housing you can find, those numbers can work. But I personally couldn't afford to live in California on that salary (despite it being, under normal circumstances, an amazingly high salary).
    - iandanforth 7y ago
      Is it common where you are for new grads to buy homes right out of school?
      - maxsilver 7y ago
        It is common where I am for people who make 200%+ median income to be able to own a place to live, yes. This is true regardless of their age or education level.
        iandanforth 7y ago
        That's a useful perspective, thank you.
    - chucksmash 7y ago
      > Is that really enough to afford to live? Yes. I mean, of course it is. How is that in question even? I live in Manhattan, not the Bay Area, but the sum of my non-housing expenses are less than $4,315 (edit: your $9315 number minus my $5k lol rent) a month and I'm not exactly living that fresh-out-of-the-dorm lifestyle. Remember, this is the new grad number. > Is that housing cost accurate? Nope! It's high, obviously. I picked it out of thin air by picking a number we would be unwilling to pay as a two-earner household in NYC and then did a perfunctory check on Zillow to make sure there were Bay Area rentals at that price, which there are. Yes it's "unfair" in some sense that someone earning that much money can't afford to buy property, but you're moving the goalposts. My point was that a baby Googler could certainly prosper financially, not that Bay Area housing prices were fair.
onemoresoop 7y ago
Surprised as well, for that money in the bay area it sounds more like motor-homes or something like that. I still don't get why all this concentration is needed in the bay area in the first place and don't buy the argument that they need to be all in the same area. There could be multiple bay area like places throughout the US. All these problems would suddenly disappear. Other areas would flourish, more people could own property at acceptable prices. I can't stop thinking that some are profiting from this bubble and want to keep it this way but it's going out of hand..
- atwebb 7y ago
  It is expanding a bit and the housing prices are having ripple effects throughout second/third tier cities. Housing in some areas such as Nashville has more than doubled over the past decade, some areas have seen 5x price growth in less than 10 years and Amazon's not really even there yet.
  - onemoresoop 7y ago
    I think it should expand in more and more areas. I wish 5x turn into 2x and spread over more evenly.
detritus 7y ago
And unless I'm completely misinterpreting all of this, a "$1bn investment in 20k homes" that are each ultimately sold for an average of $100k (I'm assuming the average would actually be far higher) would net a $2bn return, so as much as the investment might be welcome, it's also hard-headed capitalism, not charity. - ed I'm busy and distracted and realised after I posted how obvious and unenlightening a post this was. Sorry!

The headline is misleading. In the article it says Google is rezoning $750 million worth of land (+ $250m in subsidies) from commercial to residential use, and making it available for private development. It wouldn't surprise me if one of the biggest problems for Google was retention of young talent driven primarily by prohibitively high housing costs. In that way there is an incentive for them to bring down housing costs, although I'm not sure what impact 20k units will have unless they retained ownership and became a landlord to their own employees.

TotempaaltJ 7y ago
$750m worth of land, $250m investment fund for affordable housing.
chucksmash 7y ago
> It wouldn't surprise me if one of the biggest problems for Google was retention of young talent driven primarily by prohibitively high housing costs. Well, it would surprise me :-) According to levels.fyi, a new grad at Google is clearing $180k/year all-in. Next tier, still not senior, clears $250k/year. That's more than $20k/mo pre-tax. Even at an outrageous $5k rent on a single income and with no roommates, you're still talking about $6k or so >>monthly<< surplus for living your life and saving.
- maxsilver 7y ago
  > Well, it would surprise me :-) According to levels.fyi, a new grad at Google is clearing $180k/year all-in. Even at an outrageous $5k rent Is that really enough to afford to live? Is that housing cost accurate? A programmer at Google making $180k/yr salary brings in about $9,315.58 in after-tax income (according to PaycheckCalculator). The average house within 10 miles of Google's HQ currently costs about $1.5 million dollars according to Zillow's current month averages. (That's $9,745/month in after-tax costs per month, assuming 0% down on 30yr mortgage). Like, maybe if you are single and live off of ramen and you pick the shittiest housing you can find, those numbers can work. But I personally couldn't afford to live in California on that salary (despite it being, under normal circumstances, an amazingly high salary).
  - iandanforth 7y ago
    Is it common where you are for new grads to buy homes right out of school?
    - maxsilver 7y ago
      It is common where I am for people who make 200%+ median income to be able to own a place to live, yes. This is true regardless of their age or education level.
      - iandanforth 7y ago
        That's a useful perspective, thank you.
  - chucksmash 7y ago
    > Is that really enough to afford to live? Yes. I mean, of course it is. How is that in question even? I live in Manhattan, not the Bay Area, but the sum of my non-housing expenses are less than $4,315 (edit: your $9315 number minus my $5k lol rent) a month and I'm not exactly living that fresh-out-of-the-dorm lifestyle. Remember, this is the new grad number. > Is that housing cost accurate? Nope! It's high, obviously. I picked it out of thin air by picking a number we would be unwilling to pay as a two-earner household in NYC and then did a perfunctory check on Zillow to make sure there were Bay Area rentals at that price, which there are. Yes it's "unfair" in some sense that someone earning that much money can't afford to buy property, but you're moving the goalposts. My point was that a baby Googler could certainly prosper financially, not that Bay Area housing prices were fair.

onemoresoop 7y ago

Surprised as well, for that money in the bay area it sounds more like motor-homes or something like that. I still don't get why all this concentration is needed in the bay area in the first place and don't buy the argument that they need to be all in the same area. There could be multiple bay area like places throughout the US. All these problems would suddenly disappear. Other areas would flourish, more people could own property at acceptable prices. I can't stop thinking that some are profiting from this bubble and want to keep it this way but it's going out of hand..

atwebb 7y ago
It is expanding a bit and the housing prices are having ripple effects throughout second/third tier cities. Housing in some areas such as Nashville has more than doubled over the past decade, some areas have seen 5x price growth in less than 10 years and Amazon's not really even there yet.
- onemoresoop 7y ago
  I think it should expand in more and more areas. I wish 5x turn into 2x and spread over more evenly.

detritus 7y ago

And unless I'm completely misinterpreting all of this, a "$1bn investment in 20k homes" that are each ultimately sold for an average of $100k (I'm assuming the average would actually be far higher) would net a $2bn return, so as much as the investment might be welcome, it's also hard-headed capitalism, not charity. - ed I'm busy and distracted and realised after I posted how obvious and unenlightening a post this was. Sorry!