9 ms·

This is a classic case of "Nobody ever comes here anymore; it's too crowded." It is hard to make the argument that people are fleeing silicon valley when real

by Will_Do 11y ago

This is a classic case of "Nobody ever comes here anymore; it's too crowded." It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.

aristus 11y ago
Not quite. Demand is going up faster than supply. Add in rent control and other local oddities, and you get some absurd situations, ike perfectly qualified people leaving the area. My rent is about 40% of the going rate for the identical apartment above mine. This has several consequences. I literally cannot afford to move. For another, it would be difficult to fit another child in the place we have, so we're not having one. And it's more difficult to hire people from outside the area because they can't find affordable places to live.
- drostie 11y ago
  This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability. I just don't have $10k+ in the bank to act as an acceptable safety net for the rent, security deposit, moving fees, tickets, etc. I'd try to do a van-plus-PO-Box-plus-health-club situation but my girlfriend would probably never go for it.
  - dragonwriter 11y ago
    > This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability. There are more affordable places (still expensive, but less so than SF/Silicon Valley) within reasonable commute distance of the core of the Bay Area. If you've got good bay area job prospects, you might consider initially living on the peripheries until you can build up a cushion that lets you move further into the core.
  - sjg007 11y ago
    Find a job that pays relocation. A lot also have corp apartments that you can stay in for a few months as well.
    - deleted 11y ago
      [deleted]
      - dragonwriter 11y ago
        Both relocation payments and corporate apartments are things that are within the bounds of reality. I've know firms that do each, I've know people that have received relocation with new jobs as recently as this year. They may be relatively uncommon. They may not be offered by the companies you are interested in. They may not be things that people you know have received and told you about. But they are definitely not "beyond the bounds of reality".
  - yo-code-sucks 11y ago
    Move to Tracy or Livermore and drive to the Bart station in Dublin to get into the Bay Area.
- malandrew 11y ago
  The "forget having a kid" in San Francisco thing is a serious issue. If you have rent control, great. But if in 5-10 years you want to have a family, it's not like you're going to be able to move to an apartment whose price is equal to: ((current rent under rent control from 10 years ago)/(current number of rooms))(current number of rooms + 1) Instead it's going to be: (current number of rooms + 1)(current rent per room in SF when you decide to move) In other words, if you don't lock in an extra room now and sublet it until you decide to start a family, then you're shit out of luck.
mbreese 11y ago
It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs. One question, that isn't often discussed, is how many homes are bought to live in vs. bought as investments and rented. Either way, monthly mortgage or rent is going up, but I wonder how much of the movement in the market is due to real estate investors vs. home owners.
- drcross 11y ago
  I fail to see how any answer to the question would reveal any insightful information.
  - rob_lh 11y ago
    I imagine the insight would reveal the disparity in the commitment to the area versus the "gold rush" aspects of the Bay Area. It has many implications on the housing market, corporate recruiting, local politics, and infrastructure development. I imagine people would behave much differently if there more space and a strong belief that they could actually raise a family in the area or if it's just a career kickstarter. There are many competing and complicating factors, but it's still very interesting information.
- seanflyon 11y ago
  > bought as investments and rented Or bought as investments and not rented out (I hear a lot of anecdotes about this).
  - malandrew 11y ago
    Yup. Interestingly, my brother works in NYC staging the most expensive apartments in the city in preparation for sale. The last apartment he staged sold for something like $12.5 million. I don't think anyone is going to actually live in in. More and more, NYC, London and SF are the real estate equivalent of buying gold, but way more profitable. The most interesting thing about this property my brother recently staged is that it was on the market for about $5-6 million until just before the 2008 crash. After the crash, it and many many apartments just like it skyrocketed in value as the economy crumbled. Basically lots of very very rich people, often Russian and Chinese, but not exclusively those nationalities, expatriated money to SF, NYC and London to buy real estate as a relatively safe store of value. A good friend of my father (who lives in Brazil) is worth several hundred million and he owns an apartment in NYC worth several million that no one lives in. Between he and his family, they probably use it for at most one month per year. That only counts for part of the problem. Something like 5-10% of the SF housing stock to which rent control laws is applicable is kept off the market because landlords prefer not to deal with the hassle of tenants rights. I forget the exact figure.
michaelochurch 11y ago
The people who have the talent necessary to change the world, and the people who can afford to buy real estate in SF are two sets with a small intersection. Both are small sets on their own, and the correlation of membership is probably pretty close to zero (being talented makes you more of a candidate for material success in some ways, and less of one in others, so the net effect is probably zero) so you'd imagine a tiny intersection. It's not that "nobody goes" because it's too crowded. It's that the people you want don't go because it's too crowded with people you don't.
akgerber 11y ago
People who are less willing/able to pay high Bay Area real estate prices, such as people with modest incomes and children, are fleeing. Other people, who are more willing/able to pay high real estate prices, likely due to high wages and low demand for living space, are moving there. Those of us in tech probably know more of the latter.

by Will_Do 11y ago

This is a classic case of "Nobody ever comes here anymore; it's too crowded." It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.

aristus 11y ago

Not quite. Demand is going up faster than supply. Add in rent control and other local oddities, and you get some absurd situations, ike perfectly qualified people leaving the area. My rent is about 40% of the going rate for the identical apartment above mine. This has several consequences. I literally cannot afford to move. For another, it would be difficult to fit another child in the place we have, so we're not having one. And it's more difficult to hire people from outside the area because they can't find affordable places to live.

drostie 11y ago
This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability. I just don't have $10k+ in the bank to act as an acceptable safety net for the rent, security deposit, moving fees, tickets, etc. I'd try to do a van-plus-PO-Box-plus-health-club situation but my girlfriend would probably never go for it.
- dragonwriter 11y ago
  > This is a serious problem for me: I want to move to the Bay Area, but it seems like the up-front moving costs and rent will be too prohibitive even if after a few months they settle down to a net profitability. There are more affordable places (still expensive, but less so than SF/Silicon Valley) within reasonable commute distance of the core of the Bay Area. If you've got good bay area job prospects, you might consider initially living on the peripheries until you can build up a cushion that lets you move further into the core.
- sjg007 11y ago
  Find a job that pays relocation. A lot also have corp apartments that you can stay in for a few months as well.
  - deleted 11y ago
    [deleted]
    - dragonwriter 11y ago
      Both relocation payments and corporate apartments are things that are within the bounds of reality. I've know firms that do each, I've know people that have received relocation with new jobs as recently as this year. They may be relatively uncommon. They may not be offered by the companies you are interested in. They may not be things that people you know have received and told you about. But they are definitely not "beyond the bounds of reality".
- yo-code-sucks 11y ago
  Move to Tracy or Livermore and drive to the Bart station in Dublin to get into the Bay Area.
malandrew 11y ago
The "forget having a kid" in San Francisco thing is a serious issue. If you have rent control, great. But if in 5-10 years you want to have a family, it's not like you're going to be able to move to an apartment whose price is equal to: ((current rent under rent control from 10 years ago)/(current number of rooms))(current number of rooms + 1) Instead it's going to be: (current number of rooms + 1)(current rent per room in SF when you decide to move) In other words, if you don't lock in an extra room now and sublet it until you decide to start a family, then you're shit out of luck.

mbreese 11y ago

It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs. One question, that isn't often discussed, is how many homes are bought to live in vs. bought as investments and rented. Either way, monthly mortgage or rent is going up, but I wonder how much of the movement in the market is due to real estate investors vs. home owners.

drcross 11y ago
I fail to see how any answer to the question would reveal any insightful information.
- rob_lh 11y ago
  I imagine the insight would reveal the disparity in the commitment to the area versus the "gold rush" aspects of the Bay Area. It has many implications on the housing market, corporate recruiting, local politics, and infrastructure development. I imagine people would behave much differently if there more space and a strong belief that they could actually raise a family in the area or if it's just a career kickstarter. There are many competing and complicating factors, but it's still very interesting information.
seanflyon 11y ago
> bought as investments and rented Or bought as investments and not rented out (I hear a lot of anecdotes about this).
- malandrew 11y ago
  Yup. Interestingly, my brother works in NYC staging the most expensive apartments in the city in preparation for sale. The last apartment he staged sold for something like $12.5 million. I don't think anyone is going to actually live in in. More and more, NYC, London and SF are the real estate equivalent of buying gold, but way more profitable. The most interesting thing about this property my brother recently staged is that it was on the market for about $5-6 million until just before the 2008 crash. After the crash, it and many many apartments just like it skyrocketed in value as the economy crumbled. Basically lots of very very rich people, often Russian and Chinese, but not exclusively those nationalities, expatriated money to SF, NYC and London to buy real estate as a relatively safe store of value. A good friend of my father (who lives in Brazil) is worth several hundred million and he owns an apartment in NYC worth several million that no one lives in. Between he and his family, they probably use it for at most one month per year. That only counts for part of the problem. Something like 5-10% of the SF housing stock to which rent control laws is applicable is kept off the market because landlords prefer not to deal with the hassle of tenants rights. I forget the exact figure.

michaelochurch 11y ago

The people who have the talent necessary to change the world, and the people who can afford to buy real estate in SF are two sets with a small intersection. Both are small sets on their own, and the correlation of membership is probably pretty close to zero (being talented makes you more of a candidate for material success in some ways, and less of one in others, so the net effect is probably zero) so you'd imagine a tiny intersection. It's not that "nobody goes" because it's too crowded. It's that the people you want don't go because it's too crowded with people you don't.

akgerber 11y ago

People who are less willing/able to pay high Bay Area real estate prices, such as people with modest incomes and children, are fleeing. Other people, who are more willing/able to pay high real estate prices, likely due to high wages and low demand for living space, are moving there. Those of us in tech probably know more of the latter.