5 ms·

This trend renders the high wages of high tech meaningless, since it all goes to real estate. https://en.m.wikipedia.org/wiki/Law_of_rent https://en.m.wikipedi

by api 7y ago

This trend renders the high wages of high tech meaningless, since it all goes to real estate. https://en.m.wikipedia.org/wiki/Law_of_rent https://en.m.wikipedia.org/wiki/Law_of_rent

buf 7y ago
Only part of this is true. Rent is a percentage of a budget. If you're playing with bigger numbers, the absolute dollar amount is still much higher after the rent percentage is taken out. When I bring home 20k a month and only 7.5k goes to rent, I still have 12.5k remaining, which is more than most of the country's entire take home pay. When I travel the world, everywhere else feels so inexpensive.
- ghaff 7y ago
  Of course, exchange rates--which depend on a lot of factors--have a lot to do with that. But, yeah, with some exceptions like the Nordics, Europe seems pretty inexpensive these days for a traveler from the US. Hotels are much cheaper than expensive cities like SF of course. (Which has gotten pretty much out of control over the past year; one can trivially spend $1,000/night during a big conference.) But even London and Paris are often pretty reasonable compared to random mid-tier business hotels around the US.
- duelingjello 7y ago
  Rents in SF are crazy and unsustainable for long-term living. It's like people who pickup bottles for recycling or are Uber drivers to live in SF without a $300k/USD job. Nearly everyone there is living beyond their means (housing >30% of net income) because "it's SF." Also, the oost-of-living is much higher too.
NDizzle 7y ago
Not necessarily. I’ve been working full time remote for SF companies and getting SF wages since 2010.
- ghaff 7y ago
  I'm assuming you're not counted in the SF growth numbers though. For that matter, Boston is one of the listed cities but I live far enough out of Boston that I may not be counted in the Boston numbers and I'm also far enough out that property values haven't inflated nearly as much as in the city proper.
ghaff 7y ago
It seems unlikely it all goes to real estate. However, extremely high geographic concentrations of growth will tend to mean that, even given the political will to do so, getting building ahead of housing prices/long commute times/etc. is going to be very challenging and the results probably won't make anyone very happy.
burlesona 7y ago
It's really complicated. Living in SF, with a family, what I would observe is that people mostly just live in housing units / arrangements that their peers in other cities would find "unacceptable," for the "percentage of budget" reason mentioned in a sibling comment. I know some married couples that still have "roommates" to cut costs. I know a lot of families with one or more kids in apartments < 1000sqft. The majority of single folks I know have 4-5 roommates in small apartments, some sharing bedrooms. None of that is, in and of itself, that unusual or problematic. What's unusual is that the people who do this often earn somewhere from $200-$500k/yr. It's pretty difficult to explain to people who live elsewhere why you'd be willing to live in a small apartment and pay $4k/mo... unless you're willing to break out your budget spreadsheet and show them that by putting up with the housing, you get to have a very interesting job and that you are putting six figures a year into savings. When you know that you only have to put up with it for 5-10 years to be able to semi "retire" to anywhere else in the country, it's much easier to put up with. See also places like the North Slope in Alaska, where living conditions are rather harsh but people take the work because of the extraordinary pay.
- root_axis 7y ago
  > $200-$500k Anything over 250k is not a typical salary though, even in SV land. It is definitely attainable, but most engineers will never see that type of salary.
  - lawnchair_larry 7y ago
    The difference tends to come from RSUs or ISOs, not salary.
  - burlesona 7y ago
    Not salary, but total compensation. At public companies, total comp is a mix of Salary, Bonus, and RSU. In most cases I've heard it's something like 50%, 15%, 35% of your total compensation.
- ghaff 7y ago
  >See also places like the North Slope in Alaska, where living conditions are rather harsh but people take the work because of the extraordinary pay. There certainly are jobs that some mostly younger people take with the expectation that they come with sort of a lousy lifestyle but they'll put away lots of money and they'll do them for a fairly limited length of time. (A lot of these jobs are in the oil business but it arguably also applies to things like investment banking and Big Law where you pay your dues for a few years and either make partner or get out.) I'm not sure how many people working for big tech companies in the Bay Area have that sort of mindset though. [And, as root_axis notes, I'm not sure the numbers work for most developers starting out. One difference with the North Slope, etc. example is that you don't have a lot of expenses with those kinds of jobs.]
incantations 7y ago
if only californians were willing to stop voting for open-borders and legalize housing just like the rest of the civilized world. Or even better, only allow citizens to buy housing while retroactively abolishing the fictional birthright citizenship law.

by api 7y ago

This trend renders the high wages of high tech meaningless, since it all goes to real estate. https://en.m.wikipedia.org/wiki/Law_of_rent https://en.m.wikipedia.org/wiki/Law_of_rent

buf 7y ago

Only part of this is true. Rent is a percentage of a budget. If you're playing with bigger numbers, the absolute dollar amount is still much higher after the rent percentage is taken out. When I bring home 20k a month and only 7.5k goes to rent, I still have 12.5k remaining, which is more than most of the country's entire take home pay. When I travel the world, everywhere else feels so inexpensive.

ghaff 7y ago
Of course, exchange rates--which depend on a lot of factors--have a lot to do with that. But, yeah, with some exceptions like the Nordics, Europe seems pretty inexpensive these days for a traveler from the US. Hotels are much cheaper than expensive cities like SF of course. (Which has gotten pretty much out of control over the past year; one can trivially spend $1,000/night during a big conference.) But even London and Paris are often pretty reasonable compared to random mid-tier business hotels around the US.
duelingjello 7y ago
Rents in SF are crazy and unsustainable for long-term living. It's like people who pickup bottles for recycling or are Uber drivers to live in SF without a $300k/USD job. Nearly everyone there is living beyond their means (housing >30% of net income) because "it's SF." Also, the oost-of-living is much higher too.

NDizzle 7y ago

Not necessarily. I’ve been working full time remote for SF companies and getting SF wages since 2010.

ghaff 7y ago
I'm assuming you're not counted in the SF growth numbers though. For that matter, Boston is one of the listed cities but I live far enough out of Boston that I may not be counted in the Boston numbers and I'm also far enough out that property values haven't inflated nearly as much as in the city proper.

ghaff 7y ago

It seems unlikely it all goes to real estate. However, extremely high geographic concentrations of growth will tend to mean that, even given the political will to do so, getting building ahead of housing prices/long commute times/etc. is going to be very challenging and the results probably won't make anyone very happy.

burlesona 7y ago

It's really complicated. Living in SF, with a family, what I would observe is that people mostly just live in housing units / arrangements that their peers in other cities would find "unacceptable," for the "percentage of budget" reason mentioned in a sibling comment. I know some married couples that still have "roommates" to cut costs. I know a lot of families with one or more kids in apartments < 1000sqft. The majority of single folks I know have 4-5 roommates in small apartments, some sharing bedrooms. None of that is, in and of itself, that unusual or problematic. What's unusual is that the people who do this often earn somewhere from $200-$500k/yr. It's pretty difficult to explain to people who live elsewhere why you'd be willing to live in a small apartment and pay $4k/mo... unless you're willing to break out your budget spreadsheet and show them that by putting up with the housing, you get to have a very interesting job and that you are putting six figures a year into savings. When you know that you only have to put up with it for 5-10 years to be able to semi "retire" to anywhere else in the country, it's much easier to put up with. See also places like the North Slope in Alaska, where living conditions are rather harsh but people take the work because of the extraordinary pay.

root_axis 7y ago
> $200-$500k Anything over 250k is not a typical salary though, even in SV land. It is definitely attainable, but most engineers will never see that type of salary.
- lawnchair_larry 7y ago
  The difference tends to come from RSUs or ISOs, not salary.
- burlesona 7y ago
  Not salary, but total compensation. At public companies, total comp is a mix of Salary, Bonus, and RSU. In most cases I've heard it's something like 50%, 15%, 35% of your total compensation.
ghaff 7y ago
>See also places like the North Slope in Alaska, where living conditions are rather harsh but people take the work because of the extraordinary pay. There certainly are jobs that some mostly younger people take with the expectation that they come with sort of a lousy lifestyle but they'll put away lots of money and they'll do them for a fairly limited length of time. (A lot of these jobs are in the oil business but it arguably also applies to things like investment banking and Big Law where you pay your dues for a few years and either make partner or get out.) I'm not sure how many people working for big tech companies in the Bay Area have that sort of mindset though. [And, as root_axis notes, I'm not sure the numbers work for most developers starting out. One difference with the North Slope, etc. example is that you don't have a lot of expenses with those kinds of jobs.]

incantations 7y ago

if only californians were willing to stop voting for open-borders and legalize housing just like the rest of the civilized world. Or even better, only allow citizens to buy housing while retroactively abolishing the fictional birthright citizenship law.