8 ms·

SF's Rising Rental Prices beat NYC: $3500/month for single family homes

58 points by jackhammer2022 14y ago

roycyang 14y ago
I dont think this article is comparing apples to apples. There are no single family homes to be had in most of manhattan and parts of Brooklyn. I'm living in pacific heights now and also live in lower manhattan. Manhattan is still a bit more expensive IMHO.
jcfrei 14y ago
how are the prices in the rest of the bay? equally high?
- gwillen 14y ago
  No, they are high but not as high as SF. Honestly the quoted price sounds low to me for a single-family home in SF.
  - 001sky 14y ago
    What does $3,500 a month get you in a San Francisco house? In the <Sunset>, you can get three bedrooms, two bathrooms, an attached garage and a big yard. Not all neighborhoods are equal, presumably
    - gsibble 14y ago
      Yep. $3,500 gets you a 1br in SOMA where you actually see the sun.
- hox 14y ago
  I just started renting a 3BR house in the tri-valley area just east of Oakland at $3100/mo. It's a more suburban area with good schools, though, which tends to raise the price for potential families.
- hkarthik 14y ago
  Single family home rents vary a lot based on school districts. If you don't have school age kids, you can get something in most parts of the bay for $3500, but the schools are very medicore (and probably terrible compared to most other parts of the east coast or midwest). If you need good schools, bump your budget up to $4000-4500. You might find a deal somewhere, but it's rare.
- ChuckMcM 14y ago
  No they are lower. The 9 bay area counties have a lot of diversity from San Jose which is on the southeastern tip of the bay to Sausalito on the northern end. From rough patches in East Palo Alto to gated communities in Portola. Things that affect prices: schools, commute, amenities (near the woods, libraries, county services, etc), and micro-climate (farther south is a lot warmer than closer to the water).
- binarycrusader 14y ago
  Not equally high, but skyrocketing for sure. When I first moved to the Menlo Park/Palo Alto area two years ago, rent on a decent two-bedroom apartment was around $1400-1700 per month. Currently (two years later roughly), it's $2350+ a month and still climbing. In fairness, a lot of that has to do with Facebook moving into Menlo Park and the crazy demand for space in Palo Alto / proximity to Stanford University. I'd move farther south, but there's too much urban sprawl which makes it inconvenient at best to get around unless you drive everywhere. Mountain View is going up too thanks to Google. The last place of refuge is pretty much Sunnyvale and San Jose. But the rent there is still a few hundred higher per month at least than it was two years ago.
BadassFractal 14y ago
This chart from Lovely was making the rounds of /r/sanfrancisco the other day, sounds relevant to this post: http://cdn1.uptownalmanac.com/cdn/farfuture/N3k8kY5x460_wHNRZtkp6o_AmKVLJEfZ8idNV6rTQCU/mtime:1337022082/sites/default/files/images-on-cdn/5-14-12uuugggghhhh.jpg http://cdn1.uptownalmanac.com/cdn/farfuture/N3k8kY5x460_wHNR...
grimlck 14y ago
Isn't this just a symptom of san francisco proper being much smaller than new york city? A more fair comparision is comparing San Francisco to Manhattan.
- _delirium 14y ago
  Or the whole Bay Area to NYC. This is comparing large tracts of semi-suburban areas (outer parts of Queens, Staten Island, etc.) to a <50 sq mile city. A closer comparison would have to include the Peninsula and East Bay at the very least, which are essentially SF's "boroughs". The commute time by subway from Flushing, Queens to Lower Manhattan, for example, is about an hour. If you're willing to include that commute radius for NYC, the SF equivalent would also have a number of affordable places to live. For example, you can head 45-60 mins eastward on either the Dublin/Pleasanton or the Pittsburg/Bay Point BART lines. Or even closer, the going rate for a 2br single-family home in San Bruno (30 mins by Caltrain or BART) is around $2500.
- bearmf 14y ago
  I am not sure if there is any meaningful number of single-family homes in Manhattan. If you consider townhouses they are definitely more than $3500, even in Harlem.
- potatolicious 14y ago
  I just moved from SF to Manhattan. Apples to apples (insofar as it's possible), SF is more expensive. Obviously I wasn't looking at single-family homes in Manhattan, but when it came to studios and 1BR apartments, the busy parts of SF (e.g., not the Sunset or Outer Richmond) are probably marginally more expensive than Manhattan. If you want to get as close, lifestyle-wise, as possible, you're comparing Rincon Hill to Midtown, and Rincon Hill will be more expensive. Even if you expand the parameters out to the high-rises in western SOMA (towards crack-stab-town) SF will still edge out. If you're comparing more residential-y areas, like, say, the Upper East Side to Hayes Valley or the Castro, SF will still win out, though you will probably get a tad more space in SF for your troubles. It's hard to declare with great certainty who is the clear winner (or rather, loser), but SF is definitely neck and neck with Manhattan.
brokenlogins 14y ago
Why cite the rental for an entire house? In a city like San Francisco, rental rates for apartments would be way more interesting.
mc32 14y ago
San Francisco has limited land, so there is a natural constraint on growth; in addition, there is a form of rent control and then there are lots of stipulations for building new units in the city. these things contribute to the low inventory, I think. I wish they would allow more common sense building in the city. For example, in some areas, the shadows from new buildings may not be allowed to cast on neighborhood parks from 10am to 4pm, or so. This has killed a few projects. Then you have powerful neighborhood groups (like the ones along the embarcadero) who won't allow dense building because they would limit their view. I understand their position, but it's a selfish one. No one "owns" a view. More over, their buildings obstruct buildings behind them, but they would insist on having their own buildings be demolished to give others a view --nevermind that this could go on till very few houses were left. The building requirements, in my layman's view, is that the requirements are onerous (compared to say San Jose) and make housing in SF an artificially limited/scarce resource which puts pressure on housing. The Peninsula is not much better. Neighbors always bring up traffic but then never approve BART to alleviate some of that traffic concern (or some other form of local mass transit (let's say spurs from the main Caltrain stations meandering to the local downtowns which host offices). My frustration is such that I wish someone like ABAG were given the power to overrule locals and allow them to do proper (integrated regional) planning and allow building up (vertically) to take the pressure off of housing in the Bay Area.
- deleted 14y ago
  [deleted]
- jowiar 14y ago
  I see it less on aggregate as a limited land issue, and more of a topography issue. SF is inherently not going to have the character of an east coast city because the hills provide natural divisions in development. San Francisco is a city of neighborhoods, each with their own character, and it's probably most reasonable to look at development on a neighborhood-by-neighborhood basis. Increasing the density in Pac Heights is never going to happen, but building a residential high-rise in the FiDi? Look at the Transbay Terminal project. http://www.sfredevelopment.org/index.aspx?page=54 http://www.sfredevelopment.org/index.aspx?page=54. All of that said, any time you're talking SF, there is the elephant in the room: http://www.sfgate.com/bayarea/article/Next-big-quake-could-be-worse-than-1906-3290285.php http://www.sfgate.com/bayarea/article/Next-big-quake-could-b... In general, I don't actually see a limited supply as a bad thing. As long as office space and residential stay within the right balance, the mix should be sustainable. The goal should not be to make every city look like Manhattan. The suburb I grew up in effectively ran out of land, demand increased in the next town out, and it got built up. There is no real shortage of land in CA as a whole - It doesn't take much of a road trip from SF to find an area where cows outnumber people, and it's reasonable that groups of people are able to define the character of an area in which they live. The slippery slope view argument doesn't really hold water, largely because much of the city was built a century ago, long before the current residents settled there. Zoning restrictions caused views to be priced into the value of the property. Current owners bought their properties largely with the view-restrictions intact. You buy something, you know what the view you have, you know what view you don't have, you know what restrictions there are on what you can do with your property, and it's priced accordingly. It's a reasonable system for all. I do second your suggestion of better regional planning as a whole, though, mostly with regards to transportation, though the Bay Area is better than most in that regard.
cletus 14y ago
San Francisco is now for all intents and purposes a boom town. At one end of the spectrum it is awash with tech money from the likes of Google, Facebook and Twitter. On the other you have pretty much everyone else. I'm familiar with this coming from Perth, Western Australia. Australia is undergoing an unprecedented resources boom thanks to China's insatiable appetite for metals and petroleum products. This has affected different parts of the country differently. Perth, Brisbane and some region centers have ridden this wave for more than a decade. On one side you have those who have owned property for this entire time who are sitting on huge windfalls (eg a house you could buy for $85,000 in 2001 cost $350,000 by 2005). Now you won't find a house cheaper than $250,000 in the Perth metropolitan area which stretches for 100 miles of coast and 50 miles inland (at peak; it's in between a triangle and a semicircle). To view this is a positive is ultimately shortsighted. You see, it's incredibly difficult for new people entering the market. And I'm not just talking about purchasing. It flows on to renting. Those rents are inputs into all other costs and this all adds up to an inflation bomb just waiting to explode. The "haves" in Australia are those associated with mining and construction (since mining demands a lot of infrastructure). The "have nots" are everyone else. The have nots are, at best, asset rich and cash poor. At some point the economy simply ceases to function. Office space is incredibly expensive in Perth such that, for example, there are fewer and fewer software engineering jobs as companies relocate or centralize to Sydney and Melbourne (exacerbating a natural trend), which incidentally is one of the reasons I moved a couple of years ago. Honestly I think it's cheaper for me to live in Manhattan than anywhere central in Perth now. Manhattan. Rents are more expensive here but not by much. Everything else is cheaper. I can walk into a large number of eateries and have appetizers for <$5 and entres for <$10, just as one data point. Utilities in Perth are super-expensive. I know people with $1500 electricity bills... for two months. Now Perth isn't land-contrained like San Francisco (or Manhattan) for that matter but the socialist bent in SF is ultimately a problem. Rent control is a huge problem in SF. This has been covered here previously. Some estimates run at 1 in 8 rentable units being left permanently vacant, arguably due to rent control. The city's building restrictions mean new units simply aren't entering the market. NYC has several things going for it here: 1. It did away with rent control in 1973. It provided a smooth landing with rent stabilization, which is now rapidly disappearing from Manhattan; 2. Manhattan has excellent transport links, probably the best in the country. The fact is if you work in Manhattan, you can live in the five boroughs, New Jersey, upstate New York, Long Island or even further afield without having to drive into the city. Compare this to the woeful transport situation (in comparison) in the Bay area. Caltrain is barely serviceable and at best runs once or twice an hour. 3. New York allows new construction, at least in some areas. Financial district, Battery Park, Midtown West, etc; 4. The surrounding areas of NYC are more densely populated. Compare this to, say, Menlo Park, which reserves almost all land for single-family residences on large blocks and like much of the rest of the Valley, virtually prohibits high-rise construction. This low density is ultimately shortsighted as it comes at the expensive of amenities and will at some point impact the ability for employers to stay in the area as the rising property prices make commercial activity increasingly untenable. 5. The geography doesn't help SF. Whereas New York, London and other densely populated urban centers can expand in multiple directions, SF is more constricted. Facebook really wanted to stay in Palo Alto. Zoning restrictions made it difficult. They had split offices and eventually had to move. Twitter for some reason is sticking to SoMA but as the seedier areas gentrify and go up in cost, this is going to become increasingly difficult. At some point it's simply going to make more sense to relocate out of these kinds of areas. What happens to SF when large numbers of jobs move out of the city? The whole rent control and construction limits is going to have to end. The longer it goes on, the worse the correction will be (IMHO).
jboggan 14y ago
I think the increase in rental prices is going to continue for quite awhile. My recent experience moving to SF and trying to find a place was incredible. I was just looking for sublets, but most people that I got to personally meet told me their email rate for a CL ad was 150-300 emails a day. I quickly learned that unless I was discovering the ad within 2 hours of posting there was no point to even replying. I was only able to get an apartment after (1) enlisting my mother on the East Coast to spend all her spare time on CL forwarding me appropriate listings, (2) calling an ad's phone number 22 minutes after it was posted, (3) making sure I was the very first person that was personally screened, and (4) forcing a check for two months' rent into their hand unsolicited with the message that if they found anyone better I'd just stop payment. It's a rough market and it is still getting crazier. I think someone on a previous HN comment thread mentioned the city gained only 270 new housing units last year.
- bearmf 14y ago
  Sounds crazy. Are there any real estate brokers who can do this job for you?
  - potatolicious 14y ago
    This tickles my funny bone. Of all the New York-isms to import to the west coast! So now instead of signing away your firstborn for a studio at a stabby corner of the Mission, it's now your firstborn and 2 months rent for the privilege!
    - bearmf 14y ago
      Skipping the above process is clearly worth something! Though two months is too much, even in Manhattan.
briandear 14y ago
"Rent control protects tennants from higher prices.." That's bullshit. What rent control does is distorts the market so you have people hanging onto apartments when they may not need them. As a result, it creates shortages. When some dude in Soho NYC is paying $600 for a nice two bedroom, and his next door neighbor is paying $4500, then there's a big problem with that system.
- daveman 14y ago
  Absolutely correct. When prices go up, newer tentants end up subsidizing squatters who are paying below-market rates. If rent prices were variable then the market would be more liquid and the total supply would be higher, and thus new rentals would be lower. I guess it's nice not having your landlord jack up your rent each year (and landlords can't price little grannies out of their homes). But you also get stuck in one apartment because the cost of moving keeps getting higher.
andrewfelix 14y ago
This is nothing compared to Sydney. We were paying $4k AUD for a run down 3 bed apartment in Newtown. This has been the norm for quite some time, and is probably down to the fact that Sydney has 1% vacancy. I've since moved to a town called Newcastle and pay $1700.
briandear 14y ago
San Francisco is a nice enough place, but I fail to see the attraction: high taxes, fees for everything you do, a fascist city council, homeless people pretty much do whatever they want and people that love to berate you for not driving a Prius. The geography of San Fran is nice but it's like living in an Al Gore version of Animal Farm. Aside from the weather, Texas is a far more logical place to be. In Austin, $3500 per month would buy a palace compared to San Fran.
- rayiner 14y ago
  The Texas cities (Houston, Dallas) have some of the most pollution this side of NJ. They're like LA without the culture.
  - xradionut 14y ago
    > "The Texas cities (Houston, Dallas) have some of the most pollution this side of NJ. They're like LA without the culture." Much of the pollution in North Texas, (from traffic, cement and power production), is due to the influx of people from the surrounding states, the coasts and overseas by the looser regulations attracting businesses. Eventually I will probably move elsewhere. The pollution and the allergy environment is wreaking my health. Traffic is a crazy mix of over aggressive yuppies, over careful illegals and commercial trucks. The water system is stressed and the deregulated power system is over priced and in decay to increase profits.
- gsibble 14y ago
  I live in SF and the other option I actively consider is Austin. Fairly accurate statement (but as the other comment said, Dallas and Houston are miserable). Honestly, the income and opportunity in SF is still larger, so I stay.
- spaghetti 14y ago
  I also fail to see the attraction of SF. It's foggy, cold, filthy, crowded and expensive. Sure there's perks like great food and awesome beers on tap that are hard to find elsewhere. But is it really worth it?
mixonic 14y ago
Finally, something New Yorkers are happy to be #2 at.
vinayan3 14y ago
:( I've been living with roommates for a few years in SF. I want to move to a 1BR place I guess it won't happen till the bust happens.
steve8918 14y ago
We got lucky. 1.5 years ago, we rented a house in SF for $2700, and the rent was frozen at $2700 for up to 3 years. A friend of ours moved into our neighborhood and is paying $3300/month for a comparable place. I'm not sure what we're going to do once the lease is up in 1.5 years, hopefully the rent prices will stabilize. I know my friend in SOMA who bought his 2 br condo for $580k can now sell it for probably $800k, and charge at least $4k/month for it. It's absolutely crazy how much rents have gone up, it's as bad as during the dotcom boom, where my rent went up $500/month after the 1st year lease. (I moved out to a worse neighborhood instead of renewing the lease).
ajays 14y ago
Let's not forget: AirBnB isn't helping either. No, not the AirBnB employees; but the loads of people renting out their spare rooms, when earlier they would have taken in a roommate. I just checked, and 2300 listings came up for San Francisco. Plus, SF Tenants Union is very powerful. Once you are a renter, you can basically do anything and the landlord can't kick you out. Consider this example from today's paper: http://www.sfgate.com/bayarea/article/Landlord-nightmare-in-eviction-attempt-3849250.php http://www.sfgate.com/bayarea/article/Landlord-nightmare-in-... . As a result, some people are leery of renting. In other words: while the demand has gone up, the supply seems to have come down.
- mmagin 14y ago
  There's even a (1990) film, _Pacific Heights_, about the nightmare of being a landlord.
- patio11 14y ago
  Once you are a renter, you can basically do anything and the landlord can't kick you out. People seem to think that this is entirely independent from the evil tech firm seducing naive owners into believing 40% utilization of a room non-regulated beats 90% utilization regulated.
ronaldj 14y ago
My friend and I always talk about how, given our salaries, we could have both bought houses by now if we weren't living in the Bay Area. A tempting idea is just to save as much as possible for a few years and then move someplace cheaper.

I dont think this article is comparing apples to apples. There are no single family homes to be had in most of manhattan and parts of Brooklyn. I'm living in pacific heights now and also live in lower manhattan. Manhattan is still a bit more expensive IMHO.

jcfrei 14y ago

how are the prices in the rest of the bay? equally high?

gwillen 14y ago
No, they are high but not as high as SF. Honestly the quoted price sounds low to me for a single-family home in SF.
- 001sky 14y ago
  What does $3,500 a month get you in a San Francisco house? In the <Sunset>, you can get three bedrooms, two bathrooms, an attached garage and a big yard. Not all neighborhoods are equal, presumably
  - gsibble 14y ago
    Yep. $3,500 gets you a 1br in SOMA where you actually see the sun.
hox 14y ago
I just started renting a 3BR house in the tri-valley area just east of Oakland at $3100/mo. It's a more suburban area with good schools, though, which tends to raise the price for potential families.
hkarthik 14y ago
Single family home rents vary a lot based on school districts. If you don't have school age kids, you can get something in most parts of the bay for $3500, but the schools are very medicore (and probably terrible compared to most other parts of the east coast or midwest). If you need good schools, bump your budget up to $4000-4500. You might find a deal somewhere, but it's rare.
ChuckMcM 14y ago
No they are lower. The 9 bay area counties have a lot of diversity from San Jose which is on the southeastern tip of the bay to Sausalito on the northern end. From rough patches in East Palo Alto to gated communities in Portola. Things that affect prices: schools, commute, amenities (near the woods, libraries, county services, etc), and micro-climate (farther south is a lot warmer than closer to the water).
binarycrusader 14y ago
Not equally high, but skyrocketing for sure. When I first moved to the Menlo Park/Palo Alto area two years ago, rent on a decent two-bedroom apartment was around $1400-1700 per month. Currently (two years later roughly), it's $2350+ a month and still climbing. In fairness, a lot of that has to do with Facebook moving into Menlo Park and the crazy demand for space in Palo Alto / proximity to Stanford University. I'd move farther south, but there's too much urban sprawl which makes it inconvenient at best to get around unless you drive everywhere. Mountain View is going up too thanks to Google. The last place of refuge is pretty much Sunnyvale and San Jose. But the rent there is still a few hundred higher per month at least than it was two years ago.

BadassFractal 14y ago

This chart from Lovely was making the rounds of /r/sanfrancisco the other day, sounds relevant to this post: http://cdn1.uptownalmanac.com/cdn/farfuture/N3k8kY5x460_wHNRZtkp6o_AmKVLJEfZ8idNV6rTQCU/mtime:1337022082/sites/default/files/images-on-cdn/5-14-12uuugggghhhh.jpg http://cdn1.uptownalmanac.com/cdn/farfuture/N3k8kY5x460_wHNR...

grimlck 14y ago

Isn't this just a symptom of san francisco proper being much smaller than new york city? A more fair comparision is comparing San Francisco to Manhattan.

_delirium 14y ago
Or the whole Bay Area to NYC. This is comparing large tracts of semi-suburban areas (outer parts of Queens, Staten Island, etc.) to a <50 sq mile city. A closer comparison would have to include the Peninsula and East Bay at the very least, which are essentially SF's "boroughs". The commute time by subway from Flushing, Queens to Lower Manhattan, for example, is about an hour. If you're willing to include that commute radius for NYC, the SF equivalent would also have a number of affordable places to live. For example, you can head 45-60 mins eastward on either the Dublin/Pleasanton or the Pittsburg/Bay Point BART lines. Or even closer, the going rate for a 2br single-family home in San Bruno (30 mins by Caltrain or BART) is around $2500.
bearmf 14y ago
I am not sure if there is any meaningful number of single-family homes in Manhattan. If you consider townhouses they are definitely more than $3500, even in Harlem.
potatolicious 14y ago
I just moved from SF to Manhattan. Apples to apples (insofar as it's possible), SF is more expensive. Obviously I wasn't looking at single-family homes in Manhattan, but when it came to studios and 1BR apartments, the busy parts of SF (e.g., not the Sunset or Outer Richmond) are probably marginally more expensive than Manhattan. If you want to get as close, lifestyle-wise, as possible, you're comparing Rincon Hill to Midtown, and Rincon Hill will be more expensive. Even if you expand the parameters out to the high-rises in western SOMA (towards crack-stab-town) SF will still edge out. If you're comparing more residential-y areas, like, say, the Upper East Side to Hayes Valley or the Castro, SF will still win out, though you will probably get a tad more space in SF for your troubles. It's hard to declare with great certainty who is the clear winner (or rather, loser), but SF is definitely neck and neck with Manhattan.

brokenlogins 14y ago

Why cite the rental for an entire house? In a city like San Francisco, rental rates for apartments would be way more interesting.

mc32 14y ago

San Francisco has limited land, so there is a natural constraint on growth; in addition, there is a form of rent control and then there are lots of stipulations for building new units in the city. these things contribute to the low inventory, I think. I wish they would allow more common sense building in the city. For example, in some areas, the shadows from new buildings may not be allowed to cast on neighborhood parks from 10am to 4pm, or so. This has killed a few projects. Then you have powerful neighborhood groups (like the ones along the embarcadero) who won't allow dense building because they would limit their view. I understand their position, but it's a selfish one. No one "owns" a view. More over, their buildings obstruct buildings behind them, but they would insist on having their own buildings be demolished to give others a view --nevermind that this could go on till very few houses were left. The building requirements, in my layman's view, is that the requirements are onerous (compared to say San Jose) and make housing in SF an artificially limited/scarce resource which puts pressure on housing. The Peninsula is not much better. Neighbors always bring up traffic but then never approve BART to alleviate some of that traffic concern (or some other form of local mass transit (let's say spurs from the main Caltrain stations meandering to the local downtowns which host offices). My frustration is such that I wish someone like ABAG were given the power to overrule locals and allow them to do proper (integrated regional) planning and allow building up (vertically) to take the pressure off of housing in the Bay Area.

deleted 14y ago
[deleted]
jowiar 14y ago
I see it less on aggregate as a limited land issue, and more of a topography issue. SF is inherently not going to have the character of an east coast city because the hills provide natural divisions in development. San Francisco is a city of neighborhoods, each with their own character, and it's probably most reasonable to look at development on a neighborhood-by-neighborhood basis. Increasing the density in Pac Heights is never going to happen, but building a residential high-rise in the FiDi? Look at the Transbay Terminal project. http://www.sfredevelopment.org/index.aspx?page=54 http://www.sfredevelopment.org/index.aspx?page=54. All of that said, any time you're talking SF, there is the elephant in the room: http://www.sfgate.com/bayarea/article/Next-big-quake-could-be-worse-than-1906-3290285.php http://www.sfgate.com/bayarea/article/Next-big-quake-could-b... In general, I don't actually see a limited supply as a bad thing. As long as office space and residential stay within the right balance, the mix should be sustainable. The goal should not be to make every city look like Manhattan. The suburb I grew up in effectively ran out of land, demand increased in the next town out, and it got built up. There is no real shortage of land in CA as a whole - It doesn't take much of a road trip from SF to find an area where cows outnumber people, and it's reasonable that groups of people are able to define the character of an area in which they live. The slippery slope view argument doesn't really hold water, largely because much of the city was built a century ago, long before the current residents settled there. Zoning restrictions caused views to be priced into the value of the property. Current owners bought their properties largely with the view-restrictions intact. You buy something, you know what the view you have, you know what view you don't have, you know what restrictions there are on what you can do with your property, and it's priced accordingly. It's a reasonable system for all. I do second your suggestion of better regional planning as a whole, though, mostly with regards to transportation, though the Bay Area is better than most in that regard.

cletus 14y ago

San Francisco is now for all intents and purposes a boom town. At one end of the spectrum it is awash with tech money from the likes of Google, Facebook and Twitter. On the other you have pretty much everyone else. I'm familiar with this coming from Perth, Western Australia. Australia is undergoing an unprecedented resources boom thanks to China's insatiable appetite for metals and petroleum products. This has affected different parts of the country differently. Perth, Brisbane and some region centers have ridden this wave for more than a decade. On one side you have those who have owned property for this entire time who are sitting on huge windfalls (eg a house you could buy for $85,000 in 2001 cost $350,000 by 2005). Now you won't find a house cheaper than $250,000 in the Perth metropolitan area which stretches for 100 miles of coast and 50 miles inland (at peak; it's in between a triangle and a semicircle). To view this is a positive is ultimately shortsighted. You see, it's incredibly difficult for new people entering the market. And I'm not just talking about purchasing. It flows on to renting. Those rents are inputs into all other costs and this all adds up to an inflation bomb just waiting to explode. The "haves" in Australia are those associated with mining and construction (since mining demands a lot of infrastructure). The "have nots" are everyone else. The have nots are, at best, asset rich and cash poor. At some point the economy simply ceases to function. Office space is incredibly expensive in Perth such that, for example, there are fewer and fewer software engineering jobs as companies relocate or centralize to Sydney and Melbourne (exacerbating a natural trend), which incidentally is one of the reasons I moved a couple of years ago. Honestly I think it's cheaper for me to live in Manhattan than anywhere central in Perth now. Manhattan. Rents are more expensive here but not by much. Everything else is cheaper. I can walk into a large number of eateries and have appetizers for <$5 and entres for <$10, just as one data point. Utilities in Perth are super-expensive. I know people with $1500 electricity bills... for two months. Now Perth isn't land-contrained like San Francisco (or Manhattan) for that matter but the socialist bent in SF is ultimately a problem. Rent control is a huge problem in SF. This has been covered here previously. Some estimates run at 1 in 8 rentable units being left permanently vacant, arguably due to rent control. The city's building restrictions mean new units simply aren't entering the market. NYC has several things going for it here: 1. It did away with rent control in 1973. It provided a smooth landing with rent stabilization, which is now rapidly disappearing from Manhattan; 2. Manhattan has excellent transport links, probably the best in the country. The fact is if you work in Manhattan, you can live in the five boroughs, New Jersey, upstate New York, Long Island or even further afield without having to drive into the city. Compare this to the woeful transport situation (in comparison) in the Bay area. Caltrain is barely serviceable and at best runs once or twice an hour. 3. New York allows new construction, at least in some areas. Financial district, Battery Park, Midtown West, etc; 4. The surrounding areas of NYC are more densely populated. Compare this to, say, Menlo Park, which reserves almost all land for single-family residences on large blocks and like much of the rest of the Valley, virtually prohibits high-rise construction. This low density is ultimately shortsighted as it comes at the expensive of amenities and will at some point impact the ability for employers to stay in the area as the rising property prices make commercial activity increasingly untenable. 5. The geography doesn't help SF. Whereas New York, London and other densely populated urban centers can expand in multiple directions, SF is more constricted. Facebook really wanted to stay in Palo Alto. Zoning restrictions made it difficult. They had split offices and eventually had to move. Twitter for some reason is sticking to SoMA but as the seedier areas gentrify and go up in cost, this is going to become increasingly difficult. At some point it's simply going to make more sense to relocate out of these kinds of areas. What happens to SF when large numbers of jobs move out of the city? The whole rent control and construction limits is going to have to end. The longer it goes on, the worse the correction will be (IMHO).

jboggan 14y ago

I think the increase in rental prices is going to continue for quite awhile. My recent experience moving to SF and trying to find a place was incredible. I was just looking for sublets, but most people that I got to personally meet told me their email rate for a CL ad was 150-300 emails a day. I quickly learned that unless I was discovering the ad within 2 hours of posting there was no point to even replying. I was only able to get an apartment after (1) enlisting my mother on the East Coast to spend all her spare time on CL forwarding me appropriate listings, (2) calling an ad's phone number 22 minutes after it was posted, (3) making sure I was the very first person that was personally screened, and (4) forcing a check for two months' rent into their hand unsolicited with the message that if they found anyone better I'd just stop payment. It's a rough market and it is still getting crazier. I think someone on a previous HN comment thread mentioned the city gained only 270 new housing units last year.

bearmf 14y ago
Sounds crazy. Are there any real estate brokers who can do this job for you?
- potatolicious 14y ago
  This tickles my funny bone. Of all the New York-isms to import to the west coast! So now instead of signing away your firstborn for a studio at a stabby corner of the Mission, it's now your firstborn and 2 months rent for the privilege!
  - bearmf 14y ago
    Skipping the above process is clearly worth something! Though two months is too much, even in Manhattan.

briandear 14y ago

"Rent control protects tennants from higher prices.." That's bullshit. What rent control does is distorts the market so you have people hanging onto apartments when they may not need them. As a result, it creates shortages. When some dude in Soho NYC is paying $600 for a nice two bedroom, and his next door neighbor is paying $4500, then there's a big problem with that system.

daveman 14y ago
Absolutely correct. When prices go up, newer tentants end up subsidizing squatters who are paying below-market rates. If rent prices were variable then the market would be more liquid and the total supply would be higher, and thus new rentals would be lower. I guess it's nice not having your landlord jack up your rent each year (and landlords can't price little grannies out of their homes). But you also get stuck in one apartment because the cost of moving keeps getting higher.

andrewfelix 14y ago

This is nothing compared to Sydney. We were paying $4k AUD for a run down 3 bed apartment in Newtown. This has been the norm for quite some time, and is probably down to the fact that Sydney has 1% vacancy. I've since moved to a town called Newcastle and pay $1700.

briandear 14y ago

San Francisco is a nice enough place, but I fail to see the attraction: high taxes, fees for everything you do, a fascist city council, homeless people pretty much do whatever they want and people that love to berate you for not driving a Prius. The geography of San Fran is nice but it's like living in an Al Gore version of Animal Farm. Aside from the weather, Texas is a far more logical place to be. In Austin, $3500 per month would buy a palace compared to San Fran.

rayiner 14y ago
The Texas cities (Houston, Dallas) have some of the most pollution this side of NJ. They're like LA without the culture.
- xradionut 14y ago
  > "The Texas cities (Houston, Dallas) have some of the most pollution this side of NJ. They're like LA without the culture." Much of the pollution in North Texas, (from traffic, cement and power production), is due to the influx of people from the surrounding states, the coasts and overseas by the looser regulations attracting businesses. Eventually I will probably move elsewhere. The pollution and the allergy environment is wreaking my health. Traffic is a crazy mix of over aggressive yuppies, over careful illegals and commercial trucks. The water system is stressed and the deregulated power system is over priced and in decay to increase profits.
gsibble 14y ago
I live in SF and the other option I actively consider is Austin. Fairly accurate statement (but as the other comment said, Dallas and Houston are miserable). Honestly, the income and opportunity in SF is still larger, so I stay.
spaghetti 14y ago
I also fail to see the attraction of SF. It's foggy, cold, filthy, crowded and expensive. Sure there's perks like great food and awesome beers on tap that are hard to find elsewhere. But is it really worth it?

mixonic 14y ago

Finally, something New Yorkers are happy to be #2 at.

vinayan3 14y ago

:( I've been living with roommates for a few years in SF. I want to move to a 1BR place I guess it won't happen till the bust happens.

steve8918 14y ago

We got lucky. 1.5 years ago, we rented a house in SF for $2700, and the rent was frozen at $2700 for up to 3 years. A friend of ours moved into our neighborhood and is paying $3300/month for a comparable place. I'm not sure what we're going to do once the lease is up in 1.5 years, hopefully the rent prices will stabilize. I know my friend in SOMA who bought his 2 br condo for $580k can now sell it for probably $800k, and charge at least $4k/month for it. It's absolutely crazy how much rents have gone up, it's as bad as during the dotcom boom, where my rent went up $500/month after the 1st year lease. (I moved out to a worse neighborhood instead of renewing the lease).

ajays 14y ago

Let's not forget: AirBnB isn't helping either. No, not the AirBnB employees; but the loads of people renting out their spare rooms, when earlier they would have taken in a roommate. I just checked, and 2300 listings came up for San Francisco. Plus, SF Tenants Union is very powerful. Once you are a renter, you can basically do anything and the landlord can't kick you out. Consider this example from today's paper: http://www.sfgate.com/bayarea/article/Landlord-nightmare-in-eviction-attempt-3849250.php http://www.sfgate.com/bayarea/article/Landlord-nightmare-in-... . As a result, some people are leery of renting. In other words: while the demand has gone up, the supply seems to have come down.

mmagin 14y ago
There's even a (1990) film, _Pacific Heights_, about the nightmare of being a landlord.
patio11 14y ago
Once you are a renter, you can basically do anything and the landlord can't kick you out. People seem to think that this is entirely independent from the evil tech firm seducing naive owners into believing 40% utilization of a room non-regulated beats 90% utilization regulated.

ronaldj 14y ago

My friend and I always talk about how, given our salaries, we could have both bought houses by now if we weren't living in the Bay Area. A tempting idea is just to save as much as possible for a few years and then move someplace cheaper.