6 ms·

The rent prices in SF (and around) have baffled me ever since I moved here in 2011. Can anyone explain who is supposed to be able to afford $3k+ for a studio?

• 7Figures2Commas 12y ago
  Tech is always implicated in stories about Bay Area housing and rents, and it does play a role, but too many people forget that the Bay Area has a diverse population and economy. There's a sizable foreign population, and professionals working in industries like finance, law and medicine often make far more than their code-writing peers. For instance, an associate attorney or investment banker with a few years of experience can easily pull in more than $200,000/year. This said, there are also a lot of young people in tech who earn good money but spend most of it (on rent, eating out, traveling, etc.) believing that the current environment will last forever. If they knew that this wasn't the case, they'd probably be less willing to spend a huge chunk of their take home pay on rent.
• dasil003 12y ago
  You can pay $3000 for rent on $100k salary, it's not ideal but it won't automatically put you in extreme hardship either, you just have to be frugal somewhere else. Granted $100k is still a high salary, but there are a lot of people making that in SF. Still not enough to fill up the town probably, but then you have rent controlled apartments diminishing the supply, and also poorer people packing 2,3,4,5 salaries into 1,2,3 bedrooms. With lack of new construction and a lot of good jobs it's easy to see how the situation has gotten to the current point. That's not to say people are living well there—you take a significant lifestyle hit to live in SF compared to the mid-tier American cities even with a 50% pay raise, but it's seen as a desirable place to be so prices just keep getting jacked up.
• ryanSrich 12y ago
  I had an opportunity to take a job in SF directly out of college. I opted to take a job in DC instead, considering the cost of living I'd be making considerably more in DC. I did have friends that moved to SF and SV to take jobs in tech. A few that worked for twitter lived together in a house in the valley where they each paid around $1.5k each. They then car-pooled into SF (which would take hours on some days). Others I know are completely broke. They make ~$90k a year and live with several others in very dilapidated apartments. I will never, ever, understand the draw to living in SF. I've been their and yes it's a lovely city but the cost just makes absolute zero sense. On top of that the pay is really not that much better. I've done extensive research (I've been planning to write up a post about it but just haven't had the time) about wages in the Valley vs. SF vs. other large cities and you're looking at maybe a 10-15% bump, which will in no way cover the difference in the cost of living.
• krigi 12y ago
  I live in SF and I work in tech. I make north of 100k and my rent is 2k. Your situation seems bizarre to me. If you and your girlfriend make north of 100k, then you're pulling in cumulatively 13k-15k/mo after taxes. At $3k/mo your rent is below the commonly cited <33% of take-home income for housing. With at least $10k left over between you, why is it so difficult to save? I could very easily save 20% of my take-home or I could "upgrade" to a $3k/mo apartment. The only major payment I don't have in common with you is a car payment (and auto insurance). I'm also not particularly frugal, but I don't go eat at Saison every night either. You really are doing something wrong. I don't know if you're griping in vain, but you and your girlfriend should review your lifestyle and make some changes.
  • tinbad 12y ago
    We are definitely not living in financial hardship and I didn't mean to come off as someone who did. I definitely consider myself as one of the privileged ones and it helps that I have someone else contributing to the household. It's hard for me to imagine however, how I would be able to survive on my own or try and raise a family in current conditions, let alone being one of the less privileged, meaning not working in tech and having to live off (way) less than 100k in and around SF. Now that I think of it, no-one I work with (with families) live in SF, even my boss and her boss (undoubtedly making north of 200k) all live outside the city (and even outside the peninsula) in places like Castro Valley, Fremont, etc. and most of those places have caught up pretty well with SF prices so I have no idea where to go next. (We bought a house in Tracy, CA that we are renting out, which was the closest place we could afford to buy). I can't even begin to think where the next generation of workers will be living and in what conditions. Seems to me that if the 'middle class' is already being priced out of the city (and most of the bay area in general), in another 20 years or so, the city will either consists of VCs/dotcom/execs or prices will have to fall significantly.
    • runamok 12y ago
      My pet theory (with some anecdotal evidence) is that a lot of external investors are buying up most of the inventory. And a lot of young people making > 100k will spend large amounts of their income to live in the bay area even if they have to have roommates, etc. Cities like SF and NYC do have the advantage that you don't strictly NEED a car at least in some areas (and of course the gas, maintenance and insurance that goes with it) so that frees up a decent chunk of cash too. What generally happens is once people start getting married and having kids they move to other states. I have seen this with several friends.
• hkarthik 12y ago
  To live in the city, you really need a household income of $300K+. Anyone below that is either going across the Bay Bridge or south into the peninsula. Based on your pricing, you're best off heading to the East Bay and commuting in via BART. The peninsula may be a better option but you won't get much relief from the rents and everything is car-based and a bit sleepier for young people.
  • tinbad 12y ago
    You are so right, we live in San Mateo now and the closest place we could afford to buy a house without maxing out our budget was Tracy, CA (Pleasanton/Livermore are is also still quite affordable). Needless to say the commute is terrible from there so we have rented the place out and hopefully we can return there once our jobs are more settled and we have more flexibility to work remotely.
    • hkarthik 12y ago
      In the limited research that I've done about Bay Area real estate, you're best off selling the Tracy home while prices are high, because the schools in Tracy aren't great. There is likely a minor market correction coming but you could see a lot of the homes lose 20-40% of their value in places like Tracy. The homes that will retain most of their value will be the ones with really stellar schools (9+ on greatschools.org or higher) because there's always demand for them. They won't correct much beyond 10-15% at the most. If you're dead set on buying, I would go with Pleasanton if you can afford it. Solid schools, and a somewhat reasonable BART commute into the city. Otherwise just save your cash until you can drop $1 mil into a house.