8 ms·

The Two Silicon Valleys: One of Haves, One of Have-Nots

37 points by radmuzom 13y ago

tomblomfield 13y ago
"Fewer than half of first-time home buyers in Silicon Valley, including in places like Palo Alto, Calif., can afford to purchase a median-priced home" Half of people purchase homes that are below the median price. Thanks for the insight there, NYT.
- lcfg 13y ago
  This must mean that first-time buyers more often than not can not purchase a median-priced house, (ie. the median-priced housing segment is largely unavailable to first-time buyers because either the median price is too high or the capital of first-time buyers is too low).
  - AlisdairSH 13y ago
    If that's what the author is trying to say, my response is still, "So what?" Is that a problem? If not, why bother reporting it? I would expect a first time buyer to be in the market for a "starter" home - old, not-updated, small, slightly less desirable neighborhood, etc. Or, a condo instead of a single-family unit.
- refurb 13y ago
  I thought America was over the house-horniness of the early 2000s? Why is the inability to buy a home in one of the most expensive areas of the US a danger sign? Do you read articles about not being able to afford homes in Manhattan? It's a given!
  - cylinder 13y ago
    Actually, housing affordability is almost always a policy issue.
- madcaptenor 13y ago
  A couple figures that would help here: - how much is "fewer than half" (49% and 1% are both "fewer than half")? - what is this metric in other places? (In general that's a good idea whenever anybody starts slinging unfamiliar statistics.)
- steveklabnik 13y ago
  First time homebuyer's purchasing power and the price of homes are two different things, they don't have the same median.
- deleted 13y ago
  [deleted]
- ghaspland 13y ago
  I had the same reaction. I actually stopped reading after that. It was clear from that point that the article was pushing an agenda and would twist(probably from a lack of understanding) to support that agenda.
- deleted 13y ago
  [deleted]
- j_baker 13y ago
  You're comparing the price people can afford to the price people are actually paying. For example, practically everyone can afford the median price of a pack of gum, but few car buyers can afford the median price of a Jaguar. Also worth pointing out: the median-price is the price among all homebuyers. It's not necessarily true that half of a subset of those homebuyers can afford the median. For example, 100% of the highest-income homebuyers can afford the median-priced home, but roughly 0% of the lowest-income homebuyers can afford a median-priced home.
- deleted 13y ago
  [deleted]
- gamblor956 13y ago
  According to the study referred to by the NYT article, the Silicon Valley Index, they are actually referring to the mean price and not the median. The caption makes sense with that correction. Still doesn't take away from the improper use of a statistical term, as a journalist should know better (statistics is a required class for most journalism degrees).
saalweachter 13y ago
“We’re losing our middle class in Silicon Valley.” I think the term has been eroded, but historically, white collar was the middle class. Blue collar, white collar, rentiers.
- sosuke 13y ago
  It does feel like articles like this pit the lower class against the middle.
bluedino 13y ago
>> While whites and Asians are making more money, blacks and Latinos are falling further behind. What is the author trying to say? The truth is blacks and Latinos need to step it up. I come from a Mexican-American family, and have ten aunts and uncles. I'm constantly amazed (or is it baffled) with the disparity between each of the grandchildren, even within the same family. My aunts and uncles all have at least 3, and at most 5 children. Some ended up in prison, some ended up pregnant at the age of 14, some dropped out of high school and some went on to finish college. Most are employed at various levels. But when it comes to which ones are 'successful' and don't have the problems the others have, it basically came down to personal choices they made along the way, and continue to make (the oldest is 42 years old, the youngest are just now finishing high school). The worst-off grandchildren generally have parents in equally bad situations. But one family has two convicts, a do-nothing, but then a nurse and a teacher. The biggest 'help' seems to be from the parent marrying someone who's from a better situation, but it's not always the case. Only about 5 of the grandchildren are married. My point is these kids all came from the same schools, same neighborhoods, same families, and some of them managed to make it through while the rest became statistics. Much of the problem is that the majority have all stayed put in this rust-belt city with no jobs and no future.
- Denzel 13y ago
  I know what you're trying to say, and I understand that you believe you have a set of individuals with upbringings that are relatively equal, for all intents and purposes, but as an African-American your comment rubs me the wrong way. Sometimes, even when people come from the same family, you have to realize that each person's situation is unique. Especially when you have such a disparity in age: from 42 years old to 18 years old. Allow me to present some counter anecdotal "evidence." I have two brothers. We're all 6 years apart; I'm 21, the middle is 27, and the oldest is 33. We've ended up in vastly different situations due to a series of personal choices affected and limited by the environment we were given. The environment that one grows up in, even within their family, is such an important factor. The amount of money and mobility my parents had, when my oldest brother was born, was an order of a magnitude less than what they had when I was born. As a result, my oldest brother's only option was public school in an underfunded district for grades 1-12. College was out of the qusetion, even if he could make it! On the other hand, my middle brother had the option to go to private school for grades 1-12, and graduated from University of Miami. For me, it was private school for grades 1-8, and when my parents were faced with the decision of sending me to the same public school my oldest brother went to, they moved instead to send me to one of the best public schools in the state. My oldest brother didn't have that option. So when you see my oldest brother unable to hold down a moderately well-paying blue-collar job, and me working a low six-figure white-collar job, you can't simply say that one of us needs to "step it up." We are largely a product of the totality of our environment.
manishsharan 13y ago
Can someone explain why we do not see the "us vs. them " in NY/NJ/CT. I used to live in LI , where a lot successful Wall Street Bankers lived and never once did I hear about this kind of resentment. I am just puzzled .
- rkuykendall-com 13y ago
  > why we do not see the "us vs. them " in NY... You must not be watching NYC politics. Watch all of yesterday's episode of The Daily Show [1] with Mayor DeBlasio. Don't worry, you won't need to read into any subtext, it's the whole focus of the episode. [1] Free online: http://www.thedailyshow.com/full-episodes/mon-february-3-2014-bill-de-blasio http://www.thedailyshow.com/full-episodes/mon-february-3-201...
- Johnie 13y ago
  I lived in NYC for 12 years prior to moving to Silicon Valley and spent 8 of those years in the finance industry. NYC government created a symbiotic relationship with the finance industry. NYC used the tax revenue from the high income earners to build up local infrastructure and make the city a better place. In the 12 years that I was there and the many more that I've been there in the region, the city had improved drastically. This was to the betterment of everyone. Part of what made NYC great was its transportation infrastructure. It moved millions of people around the city at all times of the day. There was no class structure in the Subways; the 1% rode the subways alongside the service workers. People got a sense that everyone benefited from the increase in income and tax revenue. This was dramatically different on the west coast. In the Bay Area, the local government create policies (limiting housing specifically) that don't benefit the long term future of the region. Compared to NYC, SF governance is pretty dysfunctional. When I first moved out here, I was shocked by how lacking the transportation infrastructure was. I always had the vision that Silicon Valley and SF was high tech and that the public transportation infrastructure must be better than NYC. This was not the case. This lead to the high income earners to create a separate transportation system that benefit them (Uber, corporate shuttles, etc). This leads to a lot of friction between the haves and have not.
  - 13y ago
benihana 13y ago
I have a hard time taking these kinds of articles seriously, because the main premise seems to be "you should feel some sort of moral guilt because you're not solving problems that are important to the author."
anovikov 13y ago
Why worry? Every boomtown in history had the same things happening, pricing out its original population (if one existed). At least they enjoy the ability to sell their homes for many times the price they paid for it, and buy way better ones elsewhere (especially now when home prices nationwide are quite low on average), this way ripping a great lot of boom's benefits (i'd even say, more than a median techie-newcomer will ever get from it).
tobiasnn 13y ago
I am a HN reader, so I have to criticize this article that criticizes Silicon Valley: Oh, this article is so inaccurate! What cheap journalism! I am so outraged.
- radmuzom 13y ago
  I guess that was sarcasm.
  - tobiasnn 13y ago
    It wasn't. HN readers have no idea what is going on in the world.
altero 13y ago
> While whites and Asians are making more money, blacks and Latinos are falling further behind. In London it is kind of oposite. You can only live in central london if you are filthy rich, or non-white and get social housing.
- staunch 13y ago
  White people are excluded from social housing in central London?
  - altero 13y ago
    Theoretically no, practically yes.
j_baker 13y ago
> Otherwise, the only people left will be the entrepreneurs and engineers. > “The bar is so steep, the only people who can locate here are the high-income earners,” Mr. Hancock said. “We’re losing our middle class in Silicon Valley.” I don't get it. Does being a engineer automatically make me upper-class? Because I'm an engineer and I certainly make a middle-class income (albeit likely being an upper middle-class income). I'd be willing to bet the average engineer living in Silicon Valley does as well.
- gaius 13y ago
  If you will ever have a mortgage, you are middle class. The lower class don't qualify and the upper class inherit the family estate.
sabbatic13 13y ago
The main problem with the article, I think, is that it tries to align the oppositions between native-born and new comer, tech and non-tech, rich and poor, educated and not, advantaged ethnic groups and disadvantaged. They don't really align very well, though they do some, and each deserves its own discussion, if one is really going to talk about social problems.
GeneralMayhem 13y ago
>rents are increasing faster than incomes, especially for the middle class. This bothers me constantly. The middle class is the "Haves." It would be really useful if more people were aware of and honest about where they actually stand in society, but poor people don't want to be called poor and rich people don't want to be called rich.
tlogan 13y ago
I'm not sure why but somehow it hard for non-white to succeed in white society... It is vicious circle. But I want to point out that belief of newly rich white libertarians that market will solve this in peaceful way is a very dangerous dream. Trotsky said "not believing in force is like not believing in gravity".
base698 13y ago
>> Fewer than half of first-time home buyers can afford to purchase a median-priced home, and rents are increasing faster than incomes, especially for the middle class. Dafuq? Isn't that the definition of the median?
ajju 13y ago
"The public opposes most new construction, not realizing that it’s the key to keeping jobs"
joesmo 13y ago
“We have to be intentional as a community about addressing inequality." Whenever I read someone making a statement like this or an article about "inequality" I wonder if the author of the statement or article actually believes the bullshit that he's spewing out. People pay so much lip service to the idea of inequality that one would think it appears on some political agenda or another. I suppose it's the expected topic of conversation, even as nothing is done about it. Ever. Call me cynical, but I have yet to see any action to remedy this and I simply do not believe that action on economic equality is anything but lip service.

37 points by radmuzom 13y ago

"Fewer than half of first-time home buyers in Silicon Valley, including in places like Palo Alto, Calif., can afford to purchase a median-priced home" Half of people purchase homes that are below the median price. Thanks for the insight there, NYT.

lcfg 13y ago
This must mean that first-time buyers more often than not can not purchase a median-priced house, (ie. the median-priced housing segment is largely unavailable to first-time buyers because either the median price is too high or the capital of first-time buyers is too low).
- AlisdairSH 13y ago
  If that's what the author is trying to say, my response is still, "So what?" Is that a problem? If not, why bother reporting it? I would expect a first time buyer to be in the market for a "starter" home - old, not-updated, small, slightly less desirable neighborhood, etc. Or, a condo instead of a single-family unit.
refurb 13y ago
I thought America was over the house-horniness of the early 2000s? Why is the inability to buy a home in one of the most expensive areas of the US a danger sign? Do you read articles about not being able to afford homes in Manhattan? It's a given!
- cylinder 13y ago
  Actually, housing affordability is almost always a policy issue.
madcaptenor 13y ago
A couple figures that would help here: - how much is "fewer than half" (49% and 1% are both "fewer than half")? - what is this metric in other places? (In general that's a good idea whenever anybody starts slinging unfamiliar statistics.)
steveklabnik 13y ago
First time homebuyer's purchasing power and the price of homes are two different things, they don't have the same median.
deleted 13y ago
[deleted]
ghaspland 13y ago
I had the same reaction. I actually stopped reading after that. It was clear from that point that the article was pushing an agenda and would twist(probably from a lack of understanding) to support that agenda.
deleted 13y ago
[deleted]
j_baker 13y ago
You're comparing the price people can afford to the price people are actually paying. For example, practically everyone can afford the median price of a pack of gum, but few car buyers can afford the median price of a Jaguar. Also worth pointing out: the median-price is the price among all homebuyers. It's not necessarily true that half of a subset of those homebuyers can afford the median. For example, 100% of the highest-income homebuyers can afford the median-priced home, but roughly 0% of the lowest-income homebuyers can afford a median-priced home.
deleted 13y ago
[deleted]
gamblor956 13y ago
According to the study referred to by the NYT article, the Silicon Valley Index, they are actually referring to the mean price and not the median. The caption makes sense with that correction. Still doesn't take away from the improper use of a statistical term, as a journalist should know better (statistics is a required class for most journalism degrees).

saalweachter 13y ago

“We’re losing our middle class in Silicon Valley.” I think the term has been eroded, but historically, white collar was the middle class. Blue collar, white collar, rentiers.

sosuke 13y ago
It does feel like articles like this pit the lower class against the middle.

bluedino 13y ago

>> While whites and Asians are making more money, blacks and Latinos are falling further behind. What is the author trying to say? The truth is blacks and Latinos need to step it up. I come from a Mexican-American family, and have ten aunts and uncles. I'm constantly amazed (or is it baffled) with the disparity between each of the grandchildren, even within the same family. My aunts and uncles all have at least 3, and at most 5 children. Some ended up in prison, some ended up pregnant at the age of 14, some dropped out of high school and some went on to finish college. Most are employed at various levels. But when it comes to which ones are 'successful' and don't have the problems the others have, it basically came down to personal choices they made along the way, and continue to make (the oldest is 42 years old, the youngest are just now finishing high school). The worst-off grandchildren generally have parents in equally bad situations. But one family has two convicts, a do-nothing, but then a nurse and a teacher. The biggest 'help' seems to be from the parent marrying someone who's from a better situation, but it's not always the case. Only about 5 of the grandchildren are married. My point is these kids all came from the same schools, same neighborhoods, same families, and some of them managed to make it through while the rest became statistics. Much of the problem is that the majority have all stayed put in this rust-belt city with no jobs and no future.

Denzel 13y ago
I know what you're trying to say, and I understand that you believe you have a set of individuals with upbringings that are relatively equal, for all intents and purposes, but as an African-American your comment rubs me the wrong way. Sometimes, even when people come from the same family, you have to realize that each person's situation is unique. Especially when you have such a disparity in age: from 42 years old to 18 years old. Allow me to present some counter anecdotal "evidence." I have two brothers. We're all 6 years apart; I'm 21, the middle is 27, and the oldest is 33. We've ended up in vastly different situations due to a series of personal choices affected and limited by the environment we were given. The environment that one grows up in, even within their family, is such an important factor. The amount of money and mobility my parents had, when my oldest brother was born, was an order of a magnitude less than what they had when I was born. As a result, my oldest brother's only option was public school in an underfunded district for grades 1-12. College was out of the qusetion, even if he could make it! On the other hand, my middle brother had the option to go to private school for grades 1-12, and graduated from University of Miami. For me, it was private school for grades 1-8, and when my parents were faced with the decision of sending me to the same public school my oldest brother went to, they moved instead to send me to one of the best public schools in the state. My oldest brother didn't have that option. So when you see my oldest brother unable to hold down a moderately well-paying blue-collar job, and me working a low six-figure white-collar job, you can't simply say that one of us needs to "step it up." We are largely a product of the totality of our environment.

manishsharan 13y ago

Can someone explain why we do not see the "us vs. them " in NY/NJ/CT. I used to live in LI , where a lot successful Wall Street Bankers lived and never once did I hear about this kind of resentment. I am just puzzled .

rkuykendall-com 13y ago
> why we do not see the "us vs. them " in NY... You must not be watching NYC politics. Watch all of yesterday's episode of The Daily Show [1] with Mayor DeBlasio. Don't worry, you won't need to read into any subtext, it's the whole focus of the episode. [1] Free online: http://www.thedailyshow.com/full-episodes/mon-february-3-2014-bill-de-blasio http://www.thedailyshow.com/full-episodes/mon-february-3-201...
Johnie 13y ago
I lived in NYC for 12 years prior to moving to Silicon Valley and spent 8 of those years in the finance industry. NYC government created a symbiotic relationship with the finance industry. NYC used the tax revenue from the high income earners to build up local infrastructure and make the city a better place. In the 12 years that I was there and the many more that I've been there in the region, the city had improved drastically. This was to the betterment of everyone. Part of what made NYC great was its transportation infrastructure. It moved millions of people around the city at all times of the day. There was no class structure in the Subways; the 1% rode the subways alongside the service workers. People got a sense that everyone benefited from the increase in income and tax revenue. This was dramatically different on the west coast. In the Bay Area, the local government create policies (limiting housing specifically) that don't benefit the long term future of the region. Compared to NYC, SF governance is pretty dysfunctional. When I first moved out here, I was shocked by how lacking the transportation infrastructure was. I always had the vision that Silicon Valley and SF was high tech and that the public transportation infrastructure must be better than NYC. This was not the case. This lead to the high income earners to create a separate transportation system that benefit them (Uber, corporate shuttles, etc). This leads to a lot of friction between the haves and have not.
- 13y ago

benihana 13y ago

I have a hard time taking these kinds of articles seriously, because the main premise seems to be "you should feel some sort of moral guilt because you're not solving problems that are important to the author."

anovikov 13y ago

Why worry? Every boomtown in history had the same things happening, pricing out its original population (if one existed). At least they enjoy the ability to sell their homes for many times the price they paid for it, and buy way better ones elsewhere (especially now when home prices nationwide are quite low on average), this way ripping a great lot of boom's benefits (i'd even say, more than a median techie-newcomer will ever get from it).

tobiasnn 13y ago

I am a HN reader, so I have to criticize this article that criticizes Silicon Valley: Oh, this article is so inaccurate! What cheap journalism! I am so outraged.

radmuzom 13y ago
I guess that was sarcasm.
- tobiasnn 13y ago
  It wasn't. HN readers have no idea what is going on in the world.

altero 13y ago

> While whites and Asians are making more money, blacks and Latinos are falling further behind. In London it is kind of oposite. You can only live in central london if you are filthy rich, or non-white and get social housing.

staunch 13y ago
White people are excluded from social housing in central London?
- altero 13y ago
  Theoretically no, practically yes.

j_baker 13y ago

> Otherwise, the only people left will be the entrepreneurs and engineers. > “The bar is so steep, the only people who can locate here are the high-income earners,” Mr. Hancock said. “We’re losing our middle class in Silicon Valley.” I don't get it. Does being a engineer automatically make me upper-class? Because I'm an engineer and I certainly make a middle-class income (albeit likely being an upper middle-class income). I'd be willing to bet the average engineer living in Silicon Valley does as well.

gaius 13y ago
If you will ever have a mortgage, you are middle class. The lower class don't qualify and the upper class inherit the family estate.

sabbatic13 13y ago

The main problem with the article, I think, is that it tries to align the oppositions between native-born and new comer, tech and non-tech, rich and poor, educated and not, advantaged ethnic groups and disadvantaged. They don't really align very well, though they do some, and each deserves its own discussion, if one is really going to talk about social problems.

GeneralMayhem 13y ago

>rents are increasing faster than incomes, especially for the middle class. This bothers me constantly. The middle class is the "Haves." It would be really useful if more people were aware of and honest about where they actually stand in society, but poor people don't want to be called poor and rich people don't want to be called rich.

tlogan 13y ago

I'm not sure why but somehow it hard for non-white to succeed in white society... It is vicious circle. But I want to point out that belief of newly rich white libertarians that market will solve this in peaceful way is a very dangerous dream. Trotsky said "not believing in force is like not believing in gravity".

base698 13y ago

>> Fewer than half of first-time home buyers can afford to purchase a median-priced home, and rents are increasing faster than incomes, especially for the middle class. Dafuq? Isn't that the definition of the median?

ajju 13y ago

"The public opposes most new construction, not realizing that it’s the key to keeping jobs"

joesmo 13y ago

“We have to be intentional as a community about addressing inequality." Whenever I read someone making a statement like this or an article about "inequality" I wonder if the author of the statement or article actually believes the bullshit that he's spewing out. People pay so much lip service to the idea of inequality that one would think it appears on some political agenda or another. I suppose it's the expected topic of conversation, even as nothing is done about it. Ever. Call me cynical, but I have yet to see any action to remedy this and I simply do not believe that action on economic equality is anything but lip service.