6 ms·

The major obstacle to living in SV is the insane cost of homeownership that puts the (pretty commonplace) aspiration of living in one's own home with a nice yar

by rmk 6y ago

The major obstacle to living in SV is the insane cost of homeownership that puts the (pretty commonplace) aspiration of living in one's own home with a nice yard out of reach of all but the richest (even being in the top 5% of incomes in the nation is no guarantee of being able to own a house in Palo Alto, for example.) With the recent passing of Prop 19, things get even worse: people who are looking to inherit homes from their parents are in for a shock if they have siblings --- they may be forced to pay a much higher property tax if they do not all live in the property! Prop 19 is written to benefit Realtors and Firefighters: realtors get to pry houses out of seniors' hands to sell, and firefighters get to increase their salaries and ranks. Prop 19 will also massively reduce incentives to rent (or alternately, bump up rents to much higher levels to cover the much higher property taxes), leaving housing the same or much worse off (my bet is on the latter.) Add to this the ridiculously high income tax burden and sales tax burden, and it becomes clear that raising children is also out of reach for most (particularly if you do not want to send your children to the piss-poor public schools in many areas.) For singles also, particularly men (who comprise the majority of techies), things are pretty bleak: there is too much competition for women, and opportunities to date do not come by easily at all. If homeownership and family formation are supremely hard, and so is finding a mate, what exactly is the rationale for continuing to live in the Bay Area? It seems to me that the Bay Area will become an in-and-out type of place (like Manhattan or some of the other New York boroughs perhaps), wherein you bust your ass for several years and decamp to a lower-tax (or better still, no-tax) jurisdiction to get on with the next phase of your life.

akhilcacharya 6y ago
> poor public schools in many areas What exactly makes them so bad?
- rmk 6y ago
  I don't know exactly, but my experience is that most parents say private schools do a better job (teachers are better engaged and aren't checked out, apathetic pencil pushers). In the areas with good school districts (and there are a handful of those), things swing to another extreme: too much pressure, like Singapore-style schools, which causes children to buckle under the pressure later in their lives.
  - akhilcacharya 6y ago
    > but my experience is that most parents say private schools do a better job This sounds more like classism to me.
    - elefanten 6y ago
      This reads like a knee-jerk reaction to me. There are data and experiences available for making these judgments. There might be a class divide underlying it, but to walk away with the assessment that one type of school on average does better than another is not a classist sentiment.
      - akhilcacharya 6y ago
        I always went to schools that are considered "bad" (including community college and undergrad!), so I'm genuinely curious as to what goes into these judgements.
    - rmk 6y ago
      It is not. Remember that public schools (they are essentially free for the parents) are competing with private schools that are charging 20k+ per year per pupil. Most people who have to work for a living will not shell out 20k+ or (50-60k if there are siblings involved) simply because they are classist: they see clear advantages in private schools. This year, most bay area public schools are online. Many private schools are still operating in person. For young children, this makes a world of difference. Just one instance of where private schools come out on top.
      - dragonwriter 6y ago
        > Most people who have to work for a living will not shell out 20k+ or (50-60k if there are siblings involved) simply because they are classist: they see clear advantages in private schools. Just because they see it doesn't mean it's actually there. Private schools attract the students that would do better in any environment (because of both socioeconomic class factors and involved parents making non-default choices), and measures of student performance reflect this. There's very little evidence that they do anything to actually improve outcomes, but what most people see (aside from marketing, which private schools put plenty of money into as well) is statistics that show correlation without controlling for other variables, from which it is easy to make incorrect inferences about causation.
cultofmetatron 6y ago
> there is too much competition for women, and opportunities to date do not come by easily at all. I can't agree more. Spent 5 years in SF single. I went down to Colombia to explore a different culture. I was unsingle in less than a month. The average "unlovable tech bro" in SF is considered a catch almost anywhere else.
- burnthrow 6y ago
  I'm a fan of fair career opportunities for women even if it means I have to work harder to find a date/mate.
  - cultofmetatron 6y ago
    my post has nothing to do with career opportunities for women.
    - burnthrow 6y ago
      To be fair, you'll have a much better time down there if you maintain the fantasy that you were a charming model all along and that American women are cold prudes. Wealthy geeks finding fulfillment of their "so rich that models have to fuck me" dream in the third world is a bit of a trope.
      - cultofmetatron 6y ago
        All I can say is.. YIKES Please see a therapist. whatever is going on in your headspace cannot be healthy
        burnthrow 6y ago
        I'm not the one who needs to travel to Colombia to get a date.
        cultofmetatron 6y ago
pbuzbee 6y ago
The cost of homeownership is a huge factor for me. When I started working in 2014, I figured I would need to save around $150k for a down payment because the median home price in Santa Clara county was around $800k. Now the median price is around $1.4M [1], so I'd need around $250k. The growth in home prices has roughly matched my ability to save for a home, so almost seven years later I'm not any closer than I was in 2014. I feel like my options are (A) live in an apartment forever, (B) hellish commute, or (C) leave. With starting a family on the horizon, Option C looks better every day. [1] https://www.bayareamarketreports.com/trend/santa-clara-home-prices-market-trends-news https://www.bayareamarketreports.com/trend/santa-clara-home-...
- Bhilai 6y ago
  Hah, I was in your exact same situation a couple of years ago and when my kid was born, I decided to leave Santa Clara for good. I have not regretted the decision yet. Not only was I able to afford a decent home, I am happy that I wont have to pay an insane mortgage for rest of my life. What I definitely miss about SFBA is the weather and diversity of good food.
- rmk 6y ago
  Not only that, but also consider the fact that you are paying 1.4M for a house that was likely built in the 60s, is not up to date at all, and has a perpetual tax liability of at least 15-18k per year (further raises in taxes are much more likely than not). The mortgage would also not be sustainable if one earner lost their job (or if the high-earner lost theirs), and remember that this high mortgage payment needs to be paid every month for 360 months. All of these are solid arguments against buying even if you did have the down payment.
  - pbuzbee 6y ago
    Yes, exactly. A $1M mortgage is about $5k/month. Paying that means sacrificing other uses of money like retirement, child's college savings, vacations, etc. And, as you pointed out, we would be in deep trouble if our income took a hit, or if housing prices tumble. If you buy into the high housing costs, you really need them to continue. It's a bad cycle.
dilap 6y ago
It's even worse in SF right now, where public schools are closed and private schools are open.
yonran 6y ago
For Proposition 19, if the house is in a trust that the beneficiaries can “share and share alike”, then the trustee can give the house to one sibling (the one who will live in the property) and give cash to the other siblings to avoid reassessment. Or you can transfer the property before February 16, 2021; see https://blog.yonathan.org/posts/2020-11-proposition-19-parent-child-deadline.html https://blog.yonathan.org/posts/2020-11-proposition-19-paren...
- rmk 6y ago
  Thank you for that excellent resource! Much food for thought.

by rmk 6y ago

akhilcacharya 6y ago

> poor public schools in many areas What exactly makes them so bad?

rmk 6y ago
I don't know exactly, but my experience is that most parents say private schools do a better job (teachers are better engaged and aren't checked out, apathetic pencil pushers). In the areas with good school districts (and there are a handful of those), things swing to another extreme: too much pressure, like Singapore-style schools, which causes children to buckle under the pressure later in their lives.
- akhilcacharya 6y ago
  > but my experience is that most parents say private schools do a better job This sounds more like classism to me.
  - elefanten 6y ago
    This reads like a knee-jerk reaction to me. There are data and experiences available for making these judgments. There might be a class divide underlying it, but to walk away with the assessment that one type of school on average does better than another is not a classist sentiment.
    - akhilcacharya 6y ago
      I always went to schools that are considered "bad" (including community college and undergrad!), so I'm genuinely curious as to what goes into these judgements.
  - rmk 6y ago
    It is not. Remember that public schools (they are essentially free for the parents) are competing with private schools that are charging 20k+ per year per pupil. Most people who have to work for a living will not shell out 20k+ or (50-60k if there are siblings involved) simply because they are classist: they see clear advantages in private schools. This year, most bay area public schools are online. Many private schools are still operating in person. For young children, this makes a world of difference. Just one instance of where private schools come out on top.
    - dragonwriter 6y ago
      > Most people who have to work for a living will not shell out 20k+ or (50-60k if there are siblings involved) simply because they are classist: they see clear advantages in private schools. Just because they see it doesn't mean it's actually there. Private schools attract the students that would do better in any environment (because of both socioeconomic class factors and involved parents making non-default choices), and measures of student performance reflect this. There's very little evidence that they do anything to actually improve outcomes, but what most people see (aside from marketing, which private schools put plenty of money into as well) is statistics that show correlation without controlling for other variables, from which it is easy to make incorrect inferences about causation.

cultofmetatron 6y ago

> there is too much competition for women, and opportunities to date do not come by easily at all. I can't agree more. Spent 5 years in SF single. I went down to Colombia to explore a different culture. I was unsingle in less than a month. The average "unlovable tech bro" in SF is considered a catch almost anywhere else.

burnthrow 6y ago
I'm a fan of fair career opportunities for women even if it means I have to work harder to find a date/mate.
- cultofmetatron 6y ago
  my post has nothing to do with career opportunities for women.
  - burnthrow 6y ago
    To be fair, you'll have a much better time down there if you maintain the fantasy that you were a charming model all along and that American women are cold prudes. Wealthy geeks finding fulfillment of their "so rich that models have to fuck me" dream in the third world is a bit of a trope.
    - cultofmetatron 6y ago
      All I can say is.. YIKES Please see a therapist. whatever is going on in your headspace cannot be healthy
      - burnthrow 6y ago
        I'm not the one who needs to travel to Colombia to get a date.
        cultofmetatron 6y ago

pbuzbee 6y ago

The cost of homeownership is a huge factor for me. When I started working in 2014, I figured I would need to save around $150k for a down payment because the median home price in Santa Clara county was around $800k. Now the median price is around $1.4M [1], so I'd need around $250k. The growth in home prices has roughly matched my ability to save for a home, so almost seven years later I'm not any closer than I was in 2014. I feel like my options are (A) live in an apartment forever, (B) hellish commute, or (C) leave. With starting a family on the horizon, Option C looks better every day. [1] https://www.bayareamarketreports.com/trend/santa-clara-home-prices-market-trends-news https://www.bayareamarketreports.com/trend/santa-clara-home-...

Bhilai 6y ago
Hah, I was in your exact same situation a couple of years ago and when my kid was born, I decided to leave Santa Clara for good. I have not regretted the decision yet. Not only was I able to afford a decent home, I am happy that I wont have to pay an insane mortgage for rest of my life. What I definitely miss about SFBA is the weather and diversity of good food.
rmk 6y ago
Not only that, but also consider the fact that you are paying 1.4M for a house that was likely built in the 60s, is not up to date at all, and has a perpetual tax liability of at least 15-18k per year (further raises in taxes are much more likely than not). The mortgage would also not be sustainable if one earner lost their job (or if the high-earner lost theirs), and remember that this high mortgage payment needs to be paid every month for 360 months. All of these are solid arguments against buying even if you did have the down payment.
- pbuzbee 6y ago
  Yes, exactly. A $1M mortgage is about $5k/month. Paying that means sacrificing other uses of money like retirement, child's college savings, vacations, etc. And, as you pointed out, we would be in deep trouble if our income took a hit, or if housing prices tumble. If you buy into the high housing costs, you really need them to continue. It's a bad cycle.

dilap 6y ago

It's even worse in SF right now, where public schools are closed and private schools are open.

yonran 6y ago

For Proposition 19, if the house is in a trust that the beneficiaries can “share and share alike”, then the trustee can give the house to one sibling (the one who will live in the property) and give cash to the other siblings to avoid reassessment. Or you can transfer the property before February 16, 2021; see https://blog.yonathan.org/posts/2020-11-proposition-19-parent-child-deadline.html https://blog.yonathan.org/posts/2020-11-proposition-19-paren...

rmk 6y ago
Thank you for that excellent resource! Much food for thought.