Most of the bay area employees are divided into 3 categories from anecdotal experience: young rockstars that are willing to live in relative squalor for a chance to prove themselves, vested and moneyed elites (CEO's, presidents, VC funded overlords) who are so out of touch with the average employee its best they not show up to the office that frequently, and H1B visa recipients that endure the soul-crushing San Jose or beyond commute every day because their job represents something more than just the sum of their skills, its a ticket to citizenship and a better life for their family.

Ive turned down more bay jobs than I can count because at some age you begin to accept the fact that SFBay isnt that great. Rising levels of increasingly aggressive homeless, the inability to afford any housing, and the price of food and public transportation in general are just a few factors that led me to say no.

A fourth category: people who have lived here for a long time, and were able to buy property back before it became unaffordable. These are typically the managers or senior employees.

It makes me wonder that as the young rockstars and H1B recipients age, where will they go? They certainly can't afford to buy a house. I imagine as time goes on, companies in the Bay Area will be awash with young junior talent but will struggle to attract more senior folks.

> where will they go

Other tech hubs. Portland, Seattle - even little Bend has plenty of people from California who are attracted by the (for them) low housing prices. They, in turn, put pressure on housing prices for 'ordinary' people here.

California's housing crisis has repercussions all up and down the west coast.

The funny thing is these companies talk about digital connectivity moving to the cloud, editing files in the cloud, video conferencing in the cloud, make social networks in the cloud, buy things online without leaving your house, watch movies online etc. Everything is online, pretty, efficient, and convenient.

Then they turn right around and tell all their employees to move to the area, then to get in their cars, buses, trains and start commuting to a physical location, in one of the busiest, most expensive city every single day. So that these workers can then sit on chairs in a building and do probably the easiest thing to do with a remote connection -- write code, documents, email, monitor servers.

If that's really such a waste then where are all the remote-only companies eating everybody's lunch? Has it not yet been long enough since remote working has reached some workable peak?

> If that's really such a waste then where are all the remote-only companies eating everybody's lunch?

Maybe they are eating it? Facebook, Amazon, and Google just have a very large buffet and it would take a while for them to notice.

Heck, I am taking little bytes (pun intended) every day ;-)

But seriously, I believe that could be the next revolution in the economy. We had the industrial revolution, the technological one (internet and such). Maybe remote work can be the next one. If it starts happening and large employers start to adopt it, it could change how cities and whole regions evolve.

Many players are already moving in the opposite direction. It doesn't mean that remote is not possible, but that remote is more challenging than colocation.

Consider: agile frameworks at their core focus on improving communication, but remote increases the barriers to communication. For humans, online social contact doesn't provide the same benefits as as f2f. It makes depression worse, not better. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4183915/

I know someone at Amazon who gets flown halfway around the world over 4 times a year. They're not remote, but a frugal company like amazon decides it's important enough for them to visit headquarters regularly.

f2f is important greed and there is problem flying someone over 4 times over in year. Heck even more. It's the idea that it has to be the default. I work remotely but when we brainstorm an idea we like to fly to a site and hang around there for a week, white-boarding and socializing afterwards.

Timezones make communications harder as well, etc.

However I'll take these downsides vs the upsides.

Something like that?

    consume_remote_work(<<Byte:8>>) ->
        Do_something(Byte);
    consume_remot_work(<<Byte:8, Rest/binary>>) ->
         do_something(Byte),
         consume_remote_work(Rest).

Exactly! Can even to do it bit by bit if feeling particularly cruel that day.

Maybe they're eating their own lunch. I'd bet if the metric is revenue-per-employee, 37Signals is probably kicking most of the bigger tech companies arses.

37Signals does not have a scale worth comparing to.

Google and Amazon have, instead of going remote, established branch offices all over the US, in every cool city where hip young non-Republicans live.

I would think WordPress is a good example.

>>Then they turn right around and tell all their employees to move to the area

This isn't just a modern phenomenon. Note the whole point of outsourcing was that given how well the world is connected, it barely matters from where you get work done from. But what it is in reality is basically a cost equation.

Early IT departments in most companies were considered a back office expense so remote/outsourcing work used to make sense. These days most tech companies have a lot of money, so the cost thing doesn't make sense.

Good connectivity was never reason for remote/outsourcing work, so it doesn't matter how good it gets.

Seattle is quickly becoming 'bay area'-ish from what I can tell. Housing is certainly becoming difficult at incredible rates. Here in Bellevue, a colleague of mine bought a house for ~400k, it's now worth well over ~500k only a year later. Many houses in that area also sell for at least 700k+ assuming you can even get an offer in before a cash buyer grabs it. Don't even get me started on the traffic. I run as many of my errands before 8am as possible.

I personally know I will never be able to afford housing close to work based on how things are now. Currently I'm just saving my pennies and hoping I can move to another job with a lower cost of living somewhere else in a few years.

Edit: For reference, I am just a just above 'entry level' engineer at Microsoft. I'm paid well, but not well enough for the housing around here.

> I personally know I will never be able to afford housing close to work based on how things are now. Currently I'm just saving my pennies and hoping I can move to another job with a lower cost of living somewhere else in a few years.

This is exactly my situation as well. The neighbor to my left bought his house 3 years ago for 320. The neighbor to my right just bought an equivalent house for 570. No can do.

Unlike SF, however, the balance here does seem "worth it". I looked at the job market were I to return to Virginia right now, and while the land is cheap and plentiful, it took some digging to even find a posted role that felt promising. Tech hub job markets are no joke.

Same in Portland. A house down the street was purchased for 180k 2 years ago and recently sold for 520k. And that isn't some outlier. It seems all anyone wants to talk about is how quickly home prices have inflated.

It's funny that the Fed is still dreaming about having low inflation while the number one expense most people will have experiences rampant inflation.

It's impossible to control skyrocketing house prices in booming tech areas with anything other than a massive amount of new housing developments.

Even if everything you can buy suddenly got 10% cheaper, the houses in those areas would immediately increase back to the old level because the prices is driven by a high demand relative to supply.

Makes sense. To me it just seems they act as if inflation was low but in reality they are creating huge asset inflation with the low interest policy.

Housing is not experiencing rampant inflation when you look at the nation as a whole. We have one currency so the Fed has to try to strike a balance that works for everyone.

That's an interesting thought, does the government have cpi-like numbers for different localities, or just the one number?

Rents are included in cpi, but home prices aren't. Now, of course they are correlated, but that's certainly one of the arguments against using cpi.

edit: answered my own question, the bureau of labor statistics has more numbers than you can shake a stick at.

I want to remark that its not inflation, its just regular demand shock to the market. Specially housing takes time to match the supply to demand.

Inflation is generalized increased of nominal costs, not particular to an asset, nor in 'real terms' which is what is happening here.

Isn't it very localized?

Based on this it's nationwide: https://fred.stlouisfed.org/series/CSUSHPINSA

That says it’s about back to where it was 10 years ago. Mind you there was a fairly big run up to the peak of the bubble but most people here aren’t complaining about prices having risen again to 2007 levels.

Can confirm. I both recently sold my home, and used to be a licensed real estate appraiser before switching to Software Dev.

Our house in the not-super-desirable area of NE Portland was worth ~$265k when we looked at the data in late February/March of this year (strong data supporting that number). When we finally put it on the market in the beginning of May, it sold in 1 day, with multiple offers, for a sales price of $312k.

Yes, that's a $47k increase in value in just over 2 months. When spring hit, real estate prices went bonkers in Portland this year. Also, we bought the house for $160k ~five years ago.

We bought a small one-bedroom condo in downtown PDX for my brother to live in ~3 years ago b/c it seemed like a better investment than random stocks/ETFs. He lived there for a year, and we rented it part-time for another four months.

Purchase price was $145k. Sale price (after only 16 months) was $190k.

We used to proceeds from that sale to buy a two-bedroom house for my parents move into for their retirement. Paid $250k last October; recent sales in the neighborhood suggest it's worth $310-325k now.

So yeah, agreed re: bonkers Portland housing price inflation.

Not inflation, demand shock.

Inflation is generalized increase in prices. Im sure beers and miso-fries have barely changed prices if at all.

My house is alrfull day worth almost 100k more only 6 months later. It’s crazy. Beaverton and Hillsboro are really seeing pricing skyrocket.

Im sure portland is getting a lot, but 300% market price increase in real estate in 2 years sounds like a lot.

This is actually hopeful since there are so many secondary and tertiary tech cities.

This means: we should all buy houses in the secondary tech hubs that are still affordable so our kids can afford to have families at tech firms when housing becomes unaffordable.

Or perhaps actually trying to fix the root issue rather than scrambling for the "F you, I got mine" route and buying property you don't need now on the speculation that its value will increase over the next decades.

Companies should be incentivized (by us, software developers) to hire remote workers for jobs that don't need to be physically in an office.

Please lay out your plan in more detail.

I just want to see the logic of this. You think I can put downward pressure on property prices by insisting on a remote job?

I don't think hiring companies take joy in making your life difficult. They would hire more remote workers if they felt it could work. I prefer working remotely but find it much harder to manage.

It's super easy. You just tell them my rate to work remote is X. My rate to work on site is 1.75X.

Been remote for 10+ years. Make bay area salary and live in a huge house on the beach.

How did you fix the root issue?

Trust me, it's not different this time. The crazy hot housing markets will eventually falter and go down in price. It always happens and as interest rates start to rise it's going to happen in the not too distant future.

I can't wait. I'm in the NW and housing is to the point that a 'starter family' is incapable of living in a 'starter home'. Studio apartments $1,200+.

Self-driving cars are going to be rewriting the commute paradigm. It's important to factor that in.

So I still won't be able to see my kids awake because of a 1.5 hour commute each way, but I'll be able to read the newspaper on the way to work? No thanks.

You do what you like.

I'll arrive at work at 11 for my first meeting, having gotten a solid 1.5 hours of uninterrupted work done already, and be wrapping up any collaboration in order to return to my mobile cubicle by 4.

Of course, I'll still be available via skype. The morning stand up may happen while everyone is leaving their driveway.

Soon enough this new daily routine is going to be about as disruptive to productivity in the office as taking lunch, since almost everyone with a car will taking advantage of it. The start and ends of business days are going to become 'private', with people keeping their heads down, and interacting via video and chat/mail as the norm, with face-to-face work performed during the middle of the day.

We may even have to do away with lunchtimes as we know them, since they take away from prime face-to-face work time. Or perhaps, with all the other communication going on, daily team-bonding time over food might be one of few on going reasons for direct interactions.

And vehicles are going to start being designed to be really comfortable to work/play in. Every mid-morning, people are going to have to choose between getting up from the work they are stuck into and moving to the desk in their office, or staying focused on the task at hand. Eventually, people are going to start choosing the privacy and comfort of their car over the relative space of a cubicle, and more and more people are going to start working from the parking lot. Companies may even start expecting a portion of their workforce to bring their own vehicles, in the manner of 'bring your own device' and alter/reduce their use of offices.

Of course, things could go the other way: in the city, you'll want to the car to go pick up the groceries and do errands, and then find a in a nice empty shaded spot out of town for the day, and to find a new spot if anyone sketchy shows up.

This is just one tiny, tiny change as we move from a civilizations of vehicles to a civilization of intelligent transport. Cars and buses are about to be replaced by the equivalent of very small mobile homes/buildings.

You seem to think this is inevitable, but everything you described is highly speculative. There is no evidence that working habits will change as you predict. Plus a significant fraction of people find it impossible to work in cars due to motion sickness.

Why do we even need to get into any transportation system, why not work remotely 90% of the time?

Why don't we work remotely 90% of the time already?

There are deep seated biological and cultural reasons why current technologies don't replace physical proximity.

Some of the more important ones, such as networking, remote technologies can't even try to address. It's terrible for job seeking, lateral career changes and building connections.

Maybe VR/AR offices are the future. Certainly they'd present less legislative and social hurdles than self-driving cars.

Now that I think about it, self-driving cars might not be all that useful to me because if I'm not the driver I can only sleep or stare out of the window lest I get horrible motion sickness.

I wonder how many people are like this.

@Walter

Sounds like a terribly inefficient and unsustainable lifestyle. Commuting just for stand up?

Commuting to collaborate with other people face-to-face for half the day.

How is this inefficient, unsustainable?

It provides the combination of private work and group interactions that are parcel of most white collar jobs. The vehicles will be electric, and many will probably spending any idle time at solar farms, to save on energy distribution costs, if they aren't being used as private offices. It is going to allow people to live where the want, and still do they work they want to.

It sounds as if it would make a lot more sense for people to agree on 2 days per week to be in the office and work remotely the other three or something along those lines.

That's what they do at the company I work for (I'm at a remote location so I'm 100% remote for them).

I think it's the kind of setup that works best, for some kinds of software projects.

And get up 1.5 hours earlier, two days a week, and get home 1.5 hours later, to sit in their cars?

Moreover: the cadence of business just won't let this happen, or it would be widespread already.

The chance that is coming is that cars drive themselves. As a consequence, part of the business day is going to be spent working during the commute.

you could videochat with your kids on the way to work, or spend less time in office because you work during commute

This is a good point.

Note only will that time become productive time, but it might reduce traffic on the roads and reduce congestion.

The real estate to purchase right now is vacation homes 8 hours drive from the metropolitan areas.

400k in Bellevue buys you a dilapidated shack at the outskirts. For anything decent you’re talking $1m and up.

At this point I'd be perfectly happy with a dilapidated shack in Bellevue. Anything to cut down on the soul-crushing commute.

Now if only employers embraced remote-work fully, I'd move to Gold Bar or somewhere else in the Cascades and dispense with the city altogether.

I'd give anything to work remote here. My partner and I have discussed buying a small 'ranch' on the other side of the cascades as a 'weekend home' and downsizing to a small studio here on weekdays. We figure the two combined would be about what we pay in rent each month now, if not a little more, but at least we'd be able to escape on weekends. We love pnw, but hate having to live in the most crowded part of it for the sole purpose of making our commute tolerable.

Come to Monroe, commute isn't terrible, drive is nice, town is great. I wouldn't go closer to Seattle now even if I could afford it.

best thing you can do -- buy a town home or home -- try to manage the minimum 10% down payment (if you can manage 20%, thats great) and then rent out the bedrooms to other single folks. I wish i had done that when i was a entry level software engr.

I'm just above entry level, but by no means a recent grad. Not all of us were lucky enough to land a big software gig right out of college ;)

My family probably wouldn't be too happy to suddenly have roommates. Hah. But yes, if you're young and single, that's a solid option I would think.

> California's housing crisis has repercussions all up and down the west coast.

You're looking at it the wrong way. It's not that the situation in California has wider repercussions, it's that there is a wider problem whose symptoms happen to manifest themselves earliest in California because it's one of the nicer places to live: there are simply too many people and not enough space for them all to live in the nice places.

> there are simply too many people and not enough space for them all to live in the nice places.

Tokyo added more housing than the entire state of California:

https://www.vox.com/2016/8/8/12390048/san-francisco-housing-...

And as someone who lived in Europe for a while, I think we've had the technology to house a fair number of people in desirable area for several hundred years. It's the political will that's lacking.

Japan also has somewhat adverse housing regulations that waste a lot of construction. They are likely kept in place to stimulate economic activity - but it's not a particularly friendly environment for home ownership or environmental concerns.

https://www.theguardian.com/sustainable-business/disposable-...

Americans think government is evil and all that. So there's no government rescue plan to build more housing because that's commie talk. So everyone's waiting for the market to fix it.

The market would absolutely produce more housing in a lot of places were there not a ton of regulations in place to stop it from doing so.

And I don't write that as a fingers-in-ears, market-will-solve-all-problems libertarian, but as a fairly left-wing guy.

There has to be an incentive for real estate developers.

There's a project at my former company that will redevelop a part of downtown SF. There was a massive back and forth and iterations that had to be done because the numbers guy at the real estate development company wanted to cut out all residential since commercial would be more profitable.

Those are the people you have to incentivize to make it work.

What SF probably needs is not huge projects downtown, but more incremental growth further out. In Europe, in a city that size, you'd see a lot more 4/5/6 story development, rather than the huge skyscrapers downtown and then 1/2/3 story in a lot of residential areas.

I agree. Same in LA. I was merely pointing out things I heard directly from people working with a major real estate developer there. I know from the design side that there was a major fight to try and get in some sort of affordable residential vs what the developer was hearing from their number crunchers.

Yeah, stuff in SF is complex. Could be that, yeah, if they decided to add some residential, they got more NIMBY pushback, or some kind of requirement to add N% 'affordable' that made it pencil out as less profitable.

It's possible but honestly I don't think that's a factor only that commercial real estate in downtown SF is going to get them more bang for their buck right now. Their timeline is looking 5-10 years out so they have their shit together (as well as experience) to deal with SF stuff.

You really think the problem of refusing to build more housing in San Francisco would be solved if only you could get rid of the right-wingers who have run the place for years? Oh if only leftists had a chance to run the government for a change, they'd build plenty of housing, but the right-wingers who have made all their policies for years call that "commie talk"....

> Tokyo added more housing than the entire state of California:

And anyone who wants to live in a 250 square foot apartment and get stuffed (literally!) into a subway every day to get to work is free to move there. But the people who find SV desirable move there in no small measure because it's not like Tokyo.

Plenty of space, too many NIMBYs.

Just heard a lady in my neighborhood in L.A. complaining about the development of a parking lot and crackhouse into a modern apartment building. Didn’t even bother to argue, sometimes the divide is too great.

As long as enough high-rise apartments actually get built somewhere, this is fine. The problem is, the NIMBYs are broadly distributed, and tend to fight such construction everywhere.

NIMBYism is fine, as long as it is applied to businesses as well as housing. Way too many towns and cities want to maintain their low density small town & suburban characters while attracting employers.

Was talking about East Hollywood, at the center of a 10 million plus megalopolis. If nimbys want to live in the sticks, by all means.

That's kind of funny. East Hollywood is already pretty dense (not height-wise though) compared to surrounding areas. I can see from a parking standing point what the complaint would be but...I don't know, any new building in E Hollywood is an improvement.

Indeed, some folks prefer to live in a third world shit hole with skyrocketing rents.

Yup.

Then again, my assumption is this some old lady that has been in the neighborhood for a while. Her kids won't give a shit about the growth when they can live in or sell her house for a shit ton of money.

Soviet-style central planning is not "the market." Euclidean zoning is Soviet-style central planning.

That's ridiculous. Soviet-style central planning is not what is happening in the Bay area. The zoning there is being done by democratically elected governments and the land being developed is privately owned and can be freely bought and sold. The resulting high prices are absolutely the result of market forces.

Why are democratically elected governments and Soviet-style planning mutually exclusive? Democratically elected governments do all sorts of horrible and unjust things. For modern examples see Erdogan and Duterte.

The land itself is privately owned, sure, but undeveloped land is not very useful.

> undeveloped land is not very useful

I love hiking in redwood forests. I love peace and quiet. I love not having to deal with traffic. So I think undeveloped land is very useful.

Nobody has recommended this straw man of a proposal. This is an example of an argument made in bad faith.

The topic is development of single-story housing into apartments. The Bay Area is rife with short houses around transit terminals.

You would have less traffic in the Valley if there were more apartments, so employees could bike and walk to work. They now commute from neighboring cities.

> You would have less traffic in the Valley if there were more apartments, so employees could bike and walk to work.

This assumes that all of the houses vacated by currently commuting employees moving into apartments near transit (and thus becoming non-commuters) would be replaced by people who don't commute. But that's extremely unlikely to be the case.

Furthermore, all of the people living near transit would still drive on occasion, so traffic would almost certainly get worse.

Most would use the transit option, especially since the proximity to transit would be included in the price.

Other potential nudges would be to waive parking requirements for such development, thus denying parking places for the residents.

Traffic on the weekend? Sure, but that is distributed aside from the typical choke points on 101 and 880.

You are free to buy the redwood forests, pay a yearly land value tax on them (which goes up as demand increases, unlike Prop 13) and then restrict access as you wish.

But redwood forests are a distraction. The main problem is SFH which can and would be replaced with duplexes and fourplexes if the market were allowed to work.

I don't have a moral objection to SFH. If people like they can keep paying for their SFH via increased property taxes. But Prop 13 breaks that feedback loop.

Immigration is not a problem. It is an opportunity.

N people live in a place. K people want to move there. You can either find ways to accommodate N+K people, or you can choose not to and have the richest people drive out the poorest (or the middle class if you start building affordable housing). Only one of those two options is classist and xenophobic. Take your pick.

NIMBY is such a tired criticism. I live in an exurban/rural town on the East Coast. My town pretty consistently votes against major developments. We like the apple orchards and forest land like it is. We don’t want suburban style developments that increase traffic and taxes or industrial development outside of the light industry on the north side of town near the highway. If you want to call it NIMBY go ahead. As far as I’m concerned it’s just voting for how the local community should be.

I feel like if you want to control what gets built on a certain parcel of land, you should own it. If you want to keep those apple orchards around, make a better offer when a developer tries to buy them out.

As a practical matter that means no one except the very richest could live anywhere and have any control over arbitrary construction happening next door or their neighborhood as a whole. There’s plenty of precedent throughout history of groups taking collective actions based on the will of the majority.

Why should a person have any control over arbitrary construction happening in their neighborhood?

If you want to keep wild lands, the best way to do so is to increase density where people already live.

And the best way to do that is probably via a market-based, incremental approach: not everyone is going to sell out and turn their SFH into flats right away - it'd be gradual.

Seems like a forced dichotomy. Hong Kong is 70% green space. That's vastly higher than San Francisco at ~13% and has a more reasonable commute.

If you drive 30 minutes any direction from San Francisco, you will see plenty of vast empty fields covered with wild grasses.

I don't argue that we should cover all the land available with houses, I like wild grass, but I just point out that if we really hadn't enough space -- we would have settled it already.

I've never heard the now popular "Earth is overpopulated" rant from anyone who lives outside major metro. Going by train in Russia or Japan (yes, Japan) and watching empty fertile lands for hours is a really useful educational experience.

Also, 1. Americans love to live in private houses. And that takes up way more space, and energy to maintain than condos/flats. Yes, some people in other countries just cannot afford private house, but I've noticed often they just feel anything bad about living in a condo.

2. Americans like their cars. And parking/highways take a lot of space, obviously.

Yes, I fly into Santa Clara every week and live in the Portland, OR area (actually across the river in Vancouver). When I fly in it seems far from dense ... there is room for a lot more housing w/o becoming super dense.

I think people in the Bay Area got their's and don't want others moving in... they love the high prices... it suits them just fine.

> I like wild grass

And that is the problem. You're not the only one. Yes, if we turned the San Francisco Bay area into a clone of Manhattan or Hong Kong or Tokyo we could accommodate a lot more people. But a lot of people would not consider that a good outcome. People who like that kind of lifestyle can have it in any of the dozens of dense cities on the planet.

The SFBay area is desirable precisely because it is not (yet) dense. People move here because they like yards and redwood trees and vineyards and hiking trails. Manifestly there are more people who want these things than there is space to accommodate all of them. That is the problem.

> People move here because they like yards and redwood trees and vineyards and hiking trail

no, they want jobs. you can get outdoors anywhere in the US, but only a few places in the US actually have a super vibrant economy.

and NOTHING precludes turning SF into a stack of 120-story high-density towers apartments for all family types and leaving the redwoods and grassy fields alone.

nothing but the unwillingness to go density, thus ensuring the grassy fields will slowly be turned into cookie cutter suburbs

Going to be fun getting around those 120 story towers given the rest of San Francisco’s infrastructure including mass transit. There’s always the cable car I guess. But it shouldn’t take more than a few decades to expand that further as well.

> rest of San Francisco’s infrastructure including mass transit

The moment Proposition 13 gets repealed that will no longer be a problem.

This is a red herring argument. There is no need to raze the redwoods or pave Golden Gate Park.

Changing the single-family zoning to just allow 2 or 3 story housing on 1 out of 10 blocks would be enough to alleviate the shortage, provided developers had few enough regulatory obstacles.

It boggles my mind that the Palo Alto Caltrain abuts single family homes with 5000 sq ft yards. Their quality of life is low due to the noise and traffic. That area really should be apartments.

Going to Paris, Amsterdam, Stockholm, or any other similar city will show you that a little density in the right places can accommodate many people.

Paris isn’t a sci-fi dystopia. It’s still pleasant, and has more than 2x density as SF.

>The SFBay area is desirable precisely because it is not (yet) dense.

False. San Francisco has an entire quadrant of non-walkable non-mixed use areas that need to be rezoned and connected to its light rail transit network (Richmond). Density does not preclude green spaces. All residents have a park within a 10 minute walk[0].

http://hoodline.com/2017/05/san-francisco-is-nation-s-first-...

> But a lot of people would not consider that a good outcome.

If they didn't consider that a good outcome, they would stop paying money to move there, or move out, and cause housing prices to drop, thus solving the problem.

personal incentives don't "solve" social problems. People compete themselves into subsistence -- not motivated to improve a situation until it's too miserable to bear, and then back off just to the edge. This is the "tragedy of the commons" coordinate problem

Except what the SF Bay Area is facing isn't the Tragedy of the Commons--it's the Tragedy of the Anticommons, where the owners of resources underutilize them.

Vineyards and redwood trees are not found in suburban neighborhoods, and an apartment building next door does not threaten your yard. Nobody want to expand into nature areas, we want to build taller and denser where there are already buildings and transit stations.

> Vineyards and redwood trees are not found in suburban neighborhoods

They are around here. I have three redwood trees in my own yard, and I'm a half hour bike ride from multiple redwood groves. There are even a couple of vineyards around here.

> an apartment building next door does not threaten your yard

You haven't seen my yard.

Parking lots for the nearby hiking trails are already overflowing on weekends and holidays. Squeezing in more people has a very direct negative impact on quality of life.

Exactly my point -- if we were really overpopulated, then those desires would have stepped aside for the dire need of housing.

Concerns about global overpopulation are not usually about housing, but how much of the total energy in the system can be safely diverted to our uses. I think it is reasonable to be concerned when one species controls a large fraction of the energy in an ecosystem.

On average, moving one person from a small town in the midwest to SF reduces resource consumption, so from that point of view construction in SF should be encouraged. Tearing down abandoned houses in small midwestern towns and converting them to wildland should also be encouraged.

A big reason for that is those communities are ultra nimby. If you want to buy land, it needs to be a large plot. This makes it inaccessible cost wise to most people even if they want to be pioneering.

This is what people tell themselves in order to make their suffering tolerable. But the best places to live even just in California are amazingly underpopulated.

The best places to live are the best in no small measure because they are underpopulated. The SF peninsula is one of the most desirable (and expensive) areas in the greater bay area in no small measure because very few people live there, so we have less traffic, hiking trails, horse properties, peace and quiet.

> The best places to live are the best in no small measure because they are underpopulated.

I don't really get that. Where I lived in Italy had about 300,000 people in roughly the same size area as Bend (less than 100K), and I thought it was a pretty nice place in a lot of ways. We didn't have a yard for the kids, so we went down to the local park with them, where they saw their friends and we'd get to chat with parents. Because most people live in towns, they're able to protect some natural areas close to the town that I could ride my bike to.

I get that some people really want the 'country' experience, but then you shouldn't live in the middle of millions of people (the bay area). There are shit-tons of small towns with lots of cheap-ish land outside them that are nice in their own way.

By letting cities be cities, we get to protect more land, which I think many of us support.

I don’t disagree with you. I wonder at which point is it unethical to build more office space if the Bay Area has determined it prefers peace and quiet. Jobs can then relocate to places that want growth.

If you want to advocate for a state law that requires all new commercial development be accompanied by corresponding residential development close enough that workers can commute by transit or bicycle, I would totally support that. I think it would be a hard sell, but might be doable.

Looking at Redfin, I see similarly-prices places in Presidio Heights, Marina, and near Dolores Park in Mission, all with much smaller lot sizes.

Sure, Peninsula is expensive, but its proximity to jobs is the major driver of its housing costs.

You can have all that and more in Salinas or San Luis Obispo, but you’ll find that the lack of jobs makes property values far lower.

You don’t have to tear down parkland or pave the horse trails to allow a few more large apartment complexes next to the already noise-polluting Caltrain line.

Salinas has a serious gang problem. Thus most people who can afford it don't want to move there due to safety concerns.

They aren't good places to live, because they are too far from the jobs that can pay for them.

That could not be further from the truth. There are lots of cheap places to live in the US that are still very nice, you just don't want to live there.

Those places have trade-offs, just like anywhere else. For example, the Midwest is a very nice place to live, but the winters here are absolutely awful and we also tend to have at least a month in the summer where it's also extremely hot. The job market for tech is decent, but it's not nearly as lucrative as the coastal markets, although the low cost of living does make up for that to a degree. These things matter a lot for some people, even if not so much for you.

As much as a lot of non-SV folks, myself included, enjoy ragging on California, the nice weather and good job prospects make it a very desirable place to live, and as such makes people far more tolerant of the hilariously awful housing situation and political climate.

I'm not sure what part of that contradicts what I said. The OP said there are too many people and no places to live. That's not the same as "the weather isn't as nice in the cheaper places, I'm painted in to a corner"

> If lots of people wanted to live in these supposed cheap...

It doesn't have to be "lots of people", just the executives that build and lease office buildings and set remote work policies.

Most people could be ambivalent-to-averse to living in the Bay Area but if the high paying and attractive (1) jobs are there, they'll end up moving there anyway.

(1) That is, jobs working for companies who consider technology a competitive advantage, not an expense.

> If lots of people wanted to live in these supposed cheap, nice places they'd all be moving there instead of norcal.

There are over 300 million people in the US. What is this generalization supposed to mean? Try to look past extrapolating the 20 mile radius you live in to the entire country.

There are nice, cheap places all over NorCal, but the expensive part is where the jobs are. Fort Bragg and Redding are absolutely gorgeous but they do not have a dense tech job market.

Fort Bragg and Redding are cold and foggy much of the time. Silicon Valley is in an ideal location. There are low-lying hills that keep the fog away, but it still gets enough ocean influence that it doesn't get too hot.

> Fort Bragg and Redding are cold and foggy much of the time

Fort Bragg is on the coast, and Redding is inland - they have wildly different climates. Redding is pretty damn hot, actually, and supposedly very sunny:

https://en.wikipedia.org/wiki/Redding,_California#Climate

The politics are probably not something most SF people would like, though (nor I, really).

There are a ton of beautiful places around there, though, and in southern Oregon as well. The oak/madrone/pine forests in that area are extremely beautiful in my opinion.

Sorry, I somehow got Redding confused with Eureka.

Yes, Redding is uncomfortably hot.

In fact, that's generally true: everything inland is hot, and everything on the coast is cold. In between there's a narrow strip that is "just right". SV just happens to be in this sweet spot.

We've created our own problems with low density zoning which makes it difficult to scale out housing in geographically constrained areas with strong economic growth like the Bay Area and Seattle.

There have been many threads recently which blame Amazon and other tech companies for creating Seattle's problems, yet other communities all over the US and beyond are clamoring for the exact same problem.

Seattle has gone a long way to accommodate the growth, but it still isn't enough. Too much of the city is zoned for single family residences. And the Bay Area suffers from the same issues.

Exactly, money can move places faster than housing markets can respond. Some areas are unwilling to increase density, and some areas will be willing. I suspect that there is a practical physical and economic limit to the increase of density that many cities will be willing or able to scale to - and some may scale to destroy that quality that made them desirable places to live in the first place. There is a reason that not all cities make it to New York City level density.

The runup in real estate prices is fundamentally driven by the huge amounts of money printing by the Fed earlier this decade. The Bay Area has just been the canary in the coal mine on this because the strong job growth and self-injurious housing policies caused the price pressures to show up earlier than elsewhere, but it will become an undeniably nationwide phenomenon soon enough.

High real estate prices & rents are the price we're all paying for keeping JPMorgan & Goldman Sachs solvent during the financial crisis.

Why do you need this indirect theory when much simpler numbers like the disparity between increase of population and lack of increase in housing units are available?

This would explain a lot, but wouldn't explain the general great performance of assets all around, nor seems enough to explain that this effect is global.

There is a consensus that 'everything is overpriced', its just doesnt look like it will have a hard correction.

Because there's not the same dynamic at work in other metro areas, like those cited, where real estate prices are also ramping higher.

Are you sure? Have you looked at population growth vs. housing growth in those areas, or how restrictive the zoning is?

Absolutely. Take a look at Sacramento's real estate / rental prices.

And the percent housing unit growth versus percent population growth is..?

And I'm pretty sure low density zoning is in effect in every city in CA.

Yes, Sac’s a great example of a city that is largely in line with housing costs versus median salary increases.

What's indirect about the link between money supply and prices?

It can't explain shortages.

If the price of one thing increases relative to the price of everything else (including the price of labor, i.e., how much you get paid) that cannot directly be explained by a money supply change. A shortage being caused by something else is a much simpler explanation.

True, shortages can be caused by a number of circumstances, including housing supply vs. demand. That said, approximately 2 Trillion of the 3 Trillion increase in the Fed's balance sheet over the last decade went to purchases of Mortgage Backed Securities (MBS). This had multiple effects, including: 1) boosting real estate prices by putting the Fed's fresh capital in competition with wage earners for real estate, and 2) supplying banks with 2T in capital that they could use for other purposes, for example VC investments in Silicon Valley. It's not just that the money supply increased; it's that the increase was targeted at house prices.

A shortage is supply vs. demand by definition.

Shouldn't real estate developers be able to make even more money on top of this by increasing the housing supply? Wouldn't the "banks" have cheap loans for real estate developers? This can't explain a shortage.

> A shortage is supply vs. demand by definition.

Capital dollars (from VC's) are easier to come by in SV than wage dollars. You prefer to think of the shortage as one of houses. I ask you to consider the idea that it is a shortage of wage dollars.

What do you call shortages in this context?

Simple shock to demand can create shortages if supply is inelastic(which it is on RE in general due to the length to put a unit on the market, and it is so in San Francisco with its constrained supply)

Because that theory allows the person promoting it to cling to an assertion that markets are perfect and never produce a bad result, and anything bad that does happen must be the fault of a government which got in the way of the perfection of the market.

Yes, if there are two things that have been driven solely by laissez faire market dynamics in this country, they're mortgage credit extension and the construction of new housing in the Bay Area.

I know this is not reddit, but I smell the charcoal from over here.

This is a lazy response. One can criticize a specific governmental policy without being an anarcho-capitalist.

Bingo. I do wonder why people insist on seeing house price inflation as being solely caused by rising value of houses - due to increasing demand, constrained supply ... kitchen renos? - without acknowledging the role of the falling value of money - increased supply via deregulated debt creation, artificially low interest rates and QE.

The capital gain on housing then becomes a self-reinforcing loop as capital seeks yield in a low interest rate environment, and investment flows towards these unproductive assets instead of creating productive capacity. Regular buy-to-inhabit buyers are dragged along in the cycle as long as they can obtain sufficient credit.

In a system like ours (the world's that is - I'm not American) where money is created when banks write loans, debt increases more quickly than the money supply (because debt has interest, money doesn't, and in a housing boom relatively little new real value is being created). So the debt can never all be repayed, and at some point there must be a financial crisis.

Unless this time is different?

I buy into the increased supply by the fed, but i falter to understand what the prediction on that model is.

As someone that worked in RE, housing has been sensibly overpriced based on wages since at least a few years ago and globally. But its also not clear it would crash, because housing has met genuine demand.

It's been 10 years since the housing bubble burst! (Except in constrained markets where it never burst. It's been 20 years of Fed printing money and pumping up housing prices.

I'm not necessarily pro-big banks, but JP Morgan and GS were two of the banks LEAST in need of a bailout. GS was short MBS at the time, so your description is .

Those MBS shorts that Goldman Sachs held were with counterparties who couldn't have paid up had they not been bailed out. The same goes for JPM and their monstrous derivatives book, which would have lost enough value to make them insolvent many times over in the absence of a bailout.

The idea that these banks were perfectly healthy is a lie propagated by bailout apologists.

This is a common complaint in Texas as well. Dallas and Austin growth has been crazy and California companies keep relocating. Great for those of us already with houses, terrible for those who don't and don't want to live in remote suburbia.

There are definitely a ton of Californians here in Austin. It seems like every third person I meet is from SF/LA.

How is it terrible for minorities?

I'm also wondering about this. Texas is a majority-minority state.

https://en.wikipedia.org/wiki/Demographics_of_Texas

wouldn't it be more accurate to say poor people then? It's not just poor minorities who can't live in these areas.. poor whites, poor elderly, etc aren't living there either.

And I'm sure Satya Nadella doesn't have a problem paying for a house anywhere, even though he's a minority.

Agree. It's a poor person problem, not a minority problem. The effort some people will put into pushing identity politics is astounding.

While you aren’t wrong about it being a poor problem, it would be extremely naive to believe past policies in the US haven’t contributed to some minority groups being more likely to be poor.

Wouldn’t it also follow then that the same policies have contributed to other minority groups being more likely to be rich (thinking mostly of Indians and Asians)? And if that’s the case, then maybe looking at this through a racial lens is largely irrelevant?

Most of the data I can find deals with black and white, occasionally Latino, and almost never mentions Asians. So, I don't know if your suggestion is true.

Anyways, I agree that viewing poverty solely through a racial lens is not productive. But, race does play a part. At the very minimum, blacks are more likely to be poor than whites. They are more likely to experience downward economic mobility. And more likely to experience multi-generational poverty.

Yeah, I wish more would come to Phoenix and drive up our real estate prices more.

I left California right before the last housing bubble burst to take advantage of the real estate arbitrage.

I'd love to do it again.

There are no hard rules, but very few of my non-white friends are OK with Phoenix or most other red states. AZ especially given the papers-please laws employed 'randomly' on brown people.

Besides jobs, California offers open minds and much a much friendlier atmosphere for brown people.

Anecdotally, as one of the "brown people" that is okay with Arizona, I've never been hit by "your papers, please".

Ironically, I feel that California offers much less in terms of "open minds" - I am strongly liberal on social matters and advocated for homosexual marriage rights in AZ. Here I feel legitimately scared to mention that I have conservative views on business affairs without fear of potentially losing a job given how quickly people are to lambaste anyone they can for any opinion that doesn't conform to the acceptable limits of non-conformity.

I'm just keeping my head down and doing my job until I can go back to a more sensible location.

Yeah, I'm also one of those "brown people". Based on affordable housing and acceptance of diversity of thought, it's much friendlier in Arizona than California.

As far as the political views you highlighted, my guess is you're part of the vast majority of the electorate that's socially liberal and financially conservative.

Question is, can that vast majority ever organize?

> ...vast majority of the electorate that's socially liberal and financially conservative...

There isn't a vast majority on controversial social issues or they wouldn't be so controversial.

This sounds more like it, but most Bay/LA Area Californians would never believe it's possible to e.g. have civil liberties, be spiritual/religious, and be socially liberal all at the same time.

James Damore

That seems like more of a social issue than "business affairs" to me. But I don't really know what seangrogg is referring to with that phrase.

LGBT people, too.

I'm a trans lesbian, born and still live in Texas. When I move out of state, it's going to be a state with trans-inclusive protections at the state level.

Spending this entire year worrying about Dan Patrick shoving transphobic legislation down our throats was emotionally harrowing, and I don't want to go through it again. I hope to be out of the state by the time the 2019 session begins. And Patrick promised to do this long before the legislative session ended, so I spent all of 2016 worrying too.

Finding a place to move to has been like solving a puzzle. A red state is out of the question. I don't want to risk another bathroom bill. And statewide LGBT protections are needed even if a local government has its own protections because a) being protected in one city is worthless when none of its suburbs have protections, and b) the state can revoke local government's ability to protect minorities at any time (look at Arkansas or North Carolina).

I also love southwestern-style suburbs and I'm fairly conservative in a lot of areas that don't involve LGBT rights (namely that I love suburbs, I utterly despise hipsters, I'm a very proud neoliberal globalist Jew, and I'm an establishment Democrat that despises the Bernie wing), so that's making it hard to find a place that's exactly like what I want. I'm looking for a conservative, sprawling suburb that isn't riddled with hipsters and is located in a blue state. I also insist on a place where AC is universal, and for food-related reasons, I want to live somewhere there's a lot of Asian people.

I've basically narrowed it down to parts of the LA and Vegas areas (OC and Torrance in LA, Spring Valley in Vegas).

> I utterly despise hipsters, I'm a very proud neoliberal globalist Jew, and I'm an establishment Democrat that despises the Bernie wing), so that's making it hard to find a place that's exactly like what I want. I'm looking for a conservative, sprawling suburb that isn't riddled with hipsters and is located in a blue state. I also insist on a place where AC is universal, and for food-related reasons, I want to live somewhere there's a lot of Asian people.

You're describing Westchester or Long Island, down to a T.

I have family in Westchester, so I'm somewhat familiar with the area.

I dislike how old the houses are, and the way it's laid out, the residential areas feel like they're out in the country. And central AC isn't universal there: the house in Bronxville my aunt and uncle lived in when I was a kid didn't have it, though they installed it shortly before they sold it in 2003 (and like most New York Jews, moved to Florida). Not sure about the house in Harrison my cousin just bought; I'll have to ask her.

I'm also not a fan of how the suburbs of NYC all orbit around the city. All of the good shopping is in the city. All of the jobs are in the city. When my aunt came to visit me for my college graduation, she was shocked at the massive amount of restaurants and shopping in the suburbs of Dallas, because where she comes from, the suburbs are just bedroom communities and all the businesses are in the city. I'm also used to working in the suburbs; in Dallas right now, I live in the burbs and commute farther out in the burbs. You can't do that in New York.

And the suburbs there are laid out like shit too: Dallas suburbs are all built on an arterial grid, where the suburbs contain endless six-lane divided arterial roads placed one mile apart from each other both north-south and east-west. On the other hand, major thoroughfares in Westchester are two-lane roads, and nothing is laid out with any rhyme or reason.

My ultimate fantasy is for somebody to dig Plano, TX out of the ground and transplant it into a blue state. I want to live somewhere that's exactly like where I live now, except in a state with state-level LGBT protections and a 0% chance of electing a government that will reverse them.

To give you an idea of what I'm looking for, here are some Street View shots of residential neighborhoods in Plano. I'm looking for some place that looks identical:

https://goo.gl/maps/d9shDtPFxZ62

https://goo.gl/maps/6pLpYCtpW2R2

https://goo.gl/maps/QWRw3rVfMPr

On the other hand, here are some Street View shots of the Westchester I'm used to. I'm not a fan at all of how this looks:

https://goo.gl/maps/KKk9JrbsJ3N2

https://goo.gl/maps/Z45RMzKMcwk

https://goo.gl/maps/9DDrupuPYy92

That's a mighty broad brush you're painting all your brown friends with.

Which of course perpetuates increasing problems on a national level much like the clustering of jobs seen as the way to get ahead does.

Lotta immigrant communities in a lot of "red states" that've largely been making progress on their own just like everywhere else, and now we're helping hang them out to dry.

If I move I want it to be to such a place for just that reason. You don't win over anyone, or win any battles, by retreating.

I lived in Phoenix for 3 years. Didn't like it at all. Joe Arpaio, crazy governor, 127 degrees heat, bros in Scottsdale. Oh God.

California is large. Drawing people "from California" is about as precise as drawing people "from the East Coast and Appalachia" and says nothing about Bay Area flight, apart from the broader trend of expensive real estate in CA. I applaud your persistent Bend boosting, but there's practically no software industry there, and it seems to have given up any illusion of being a startup hub. There are no tech jobs. You're right about Bend attracting people with its low housing costs. It mostly attracts retirees.

D/FW, Austin

:(

Facebook recently opened a datacenter in Fort Worth. [0]

I heard something like 100k people are moving into the DFW metroplex a month? I haven't verified that but the real estate market is definitely crushing right now.

It's only a matter of time.

[0] https://code.facebook.com/posts/1014459531921764/facebook-in...

The typical data center has fewer than about 50 people on-site.

All I'm saying is that big silicon companies have their eyes on this place. There are a lot of corporate offices out here.

It starts with an S and ends with an O, it's likely where tech talent will go!

Sacramento!

Fixes problem: sky high housing

Leaves problems: very high housing costs, overly legislated lives, high taxes, traffic, etc.

>>> A fourth category: people who have lived here for a long time, and were able to buy property back before it became unaffordable.

Very well said. So often, some (usually older) person will tell me, "well I know this [choose your civil servant profession] and they get by fine in SF on a 60k salary, so stop your whining."

Yep, I'd get by fine with 60k and a TIME MACHINE.

Yes, they don't understand that the house they bought for 80k in '86 Is now acting as a defacto million dollar savings account.

It is quite easy to get along on 60k when you've already banked a megabuck.

To be fair whether your house is worth $100k or $10MM doesn't mean much unless you sell it, especially in SF where your taxes don't change with the increased value. Yes, you can spend more of your earned income if you plan on leaving as soon as you retire. But it doesn't mean $60k is easy to live on.

Isn't the largest contributor of COL recurring living expenses. I imagine 60k is probably what someone making a 100k has left over after paying their rent. Not to mention the peace of mind that comes from knowing that you can always sell off your home and move somewhere cheaper to live like a king.

>> But it doesn't mean $60k is easy to live on.

It is much easier getting along on 60k when you're on a 1995 mortgage of $700/mo with frozen property taxes. Doesnt matter if you sell -- you are living in a million dollar house without paying for it. You get the space now. You get the easy commute now. You get it all for a tenth of current costs.

Well to be fair the largest expense with a house is without a doubt the mortgage, and that's not going to change even if property taxes are reassessed every year. Their mortgage would be $700/mo no matter what (as it should be). Is anyone here arguing that you should have $2,000/mo in property taxes for a $700/mo mortgage?

I could live on $60k very easily if I didn't have a mortgage.

There may be a 5th category, young families with dual income/no kids working in professions other than tech. My wife works in winemaking and I work as a Civil Engineer in the North Bay. Even with two career-type jobs we just barely were able to jump into the housing market in 2014. As house prices increase and housing stock goes down (especially after these fires) I think there will be a shortage of workers not just in the service industry but even in these professions. We had a senior level engineer move out here from Utah making ~150k a year move back within a year because he couldn't take living in a relatively small apartment and having his kids go to schools that were not up to the standard of where he moved from.

Wine industry is similar, my wife gets a lot of interns from out of the country through an Ag exchange program. Between the lower pay and higher cost of living here, recent grads who are able to save up money working in Australia, NZ, ZA, or Argentina in the Southern Hemisphere harvest actually end up losing money just living up here for the Northern Hemisphere harvest. A lot of them are looking into ways to work for a more extended period of time in other countries as they are able to live much better in very similar regions climatically.

I'm fairly early in my career at a company (< 30 years old). I'm currently able to afford a house in the bay area. Its not as crazy as it sounds.

80-10-10 mortgage on a 1mil home is only 100k down. And the monthly payments split by 2 people (aka a couple) is ~2k / person / month. That's 4k/month all in once you include the tax rebates.

Jesus, 2k / person a month is insane. This is what people are talking about. This is not acceptable or normal. I pay $900 / person a month for a large house in Seattle that's a 15 minute commute from downtown. Even with the bay's high salaries you're not doing very well. Throw in bills and other expenses and you're looking at ~40% of your monthly income, assuming a salary of 130k. That's ~50k per person, per year, in addition to 100k down.

I'm good on that, thanks.

It's also hyperbole. It's closer to ~5K per month for a $1M mortgage with insurance and taxes in the bay today.

By the rule of thirds, that's $60K/yr meaning $180K+/yr salary is necessary. This is for suburban living in a remodeled 70's ranch home, not in an urban area.

But a $180k gross income is not particularly unusual in the Bay. I mean, that's still in junior engineer territory at one of the BigCos (Apple, Google, Facebook, etc.).

For a techie who's in the top 10% of earners, sure, but we're talking about averages. $180k gross is ridiculous for the average job, even in the bay.

What about regular people? Is everyone expected to be some high paid unicorn/big 4 engineer? Society is more than just rich techies.

"Regular people" in big populated urban areas can't expect to own a detached home, they can live in condos/apartments like they do in Asian cities, NYC and other densely populated cities.

The bay area isn't urban - we're talking about large stretches of suburbia. The area also isn't converting to urban despite the demand, which is part of what the article is talking about.

That's a good point. It is a bit unique situation where there are small suburban homes for $2M+.

None of that exists in the bay. There's nothing in terms of affordable housing. That's the entire point of the article. No one can afford to live there except for highly paid engineers. A condo will run you 700k easily in any decent place.

That's why they tore down all the single family houses in Sunset & Richmond to make way for 5 story apartment blocks. Oh wait...

> they can live in condos/apartments

How much do those cost in the Bay Area?

No, that's not junior engineer territory, even at the BigCos.

Yes, it is. $170-200k in comp per year is the baseline at a company like FB or Google. It’s typically broken down into something like 105-115k base, 40-50k liquid stock vesting per year, 10-15% yearly bonus, and some kind of one time signing bonus given as a lump sum on the start date.

That’s for someone fresh out of a top school who hasn’t even negotiated at all. There are many new grads in the bay area that recieve this kind of comp.

That's what all the college grads I knew at Google 2016-2017 were making, probably closer to $200k unless they started trimming the RSU grants because of $GOOG appreciation.

It is not that insane. IMO it is not sustainable (which is why I think I would not buy into SF real estate even if I worked there), but SF salaries are often significantly higher than elsewhere, so renting is a perfectly viable option.

Assuming 40% tax bracket, a 30k salary difference gives you 1500/month extra after taxes that you can spend on your apartment. If you consider a couple with in demand tech skills they may be significantly better off financially moving to SF, where they are likely to both find very competitive salaries. In many other areas they may have to contend with one person getting into his best career path and the other choosing from limited options to be nearby.

I am not advocating SF living, e.g. this is not my kettle of fish simply due to the quality of life choices, but from a purely financial viewpoint it is not that hopeless (yet?).

I don't think everyone is paid as highly as everyone claims. Sure, top engineers make enough to make it work but many only get marginal pay increases. I really don't think it balances out for most.

> Throw in bills and other expenses and you're looking at ~40% of your monthly income, assuming a salary of 130k.

That's not a very good assumption. $130k is on the low end for anyone with enough experience to be looking at a home purchase.

I don't know why an absolute value is ever considered "insane." If salaries support it, it's not insane.

Even with the high housing prices (caused mostly by regressive zoning policies), senior engineers at a big tech company or late-stage startups should be able to afford a home.

Other than NYC that's close to 50% more than what you can expect in any large American city. That is not reasonable in any sense of the word. 4k / month mortgage is around a $1 mil home value.

So you're now moving the goalposts from 2k / month up to 4k / month? Nice.

Absolutely insane. Going to buy a house with a 15 minute commute by train downtown. I’m looking to spend less than ~350k for a house with around 1500sq feet and fenced in yard.

I will be spending less than $2k total a month. West coast is crazy.

2k/month is fine. The guy I responded to is now moving the goalposts up to 4k/month, which is significantly more.

I just paid 290k for a 3500sq-ft home with a big yard in a great school district. Indy aint so bad.

Where are you buying?

Atlanta and in an area that has exploded in the past 5 years. Comparable to Austin, Houston and maybe Portland. Maybe not so comparable for Portland anymore.

Bankrate calculator says it’s $700k more expensive for the same house in SF.

Yeah, ATL is adding a number of tech jobs (hopefully Amazon too). Cost of living is increasing, but relative to everywhere else it is cheap to live in the city center. Developments of apartments and condos has exploded, which is making for a nice urban feel.

How much land and house does that $1M buy you? In New Hampshire where I live, $1M buys you quite a bit: several thousand square feet of house, several acres of land, an excellent local public school system, great views... Heck, I even imagine that in the greater Boston metro area you'll get a similar bang for your buck.

Your normal family property (approx 1500 - 2000 ft/sq, ~1 acre land) goes for $200k - $250k. Still expensive, but doable, especially if both parents are making decent money (>= $50k/year is what I count as decent money). Less than $30k down payment brings your monthly expenses to less than $2k/mo. Exactly half price for what I'd imagine to be similar living conditions in SF Bay (albeit Bay Area public schools are probably better than NH's, though New England has very good schools).

It's clear that you're making a lot more money than I am for similar experience -- I too am less than 30 years old -- but I wonder the difference in percentage our savable income is, given the difference in costs we both pay for housing. I too wonder for others in our age and job demographic what they're able to save when living in SF Bay vs. elsewhere.

The cost of living there doesn't seem worth it to me. Heck, NE I think is too expensive! Been looking to move down to Raleigh, NC after I get married, but that's neither here nor there.

I don't live in the Bay area, but I live in DC and still pay a lot for housing by national standards, and at least for me, looking at it in terms of land and square footage misses the point. Obviously people optimizing for those things won't live in SF or DC (or Manhattan or Boston, etc.). Those things will clearly be more cheaply attainable in places where land is plentiful. You pay to live in a dense urban area because you value the amenities of the city, the economic opportunities it affords, the walkable or bikable lifestyle it facilitates, etc.

My commute is ten minutes on a bike, I live alone so I don't need a big house, and I have no use for a lawn. Your values are clearly different, so New Hampshire is the right call for you (or NC, or whatever). But they're not apples-to-apples comparisons.

I'm in suburban DC (Reston/Dulles area). $200k gets you a 1-bedroom condo in an older building. $400-$500 buys a nice older town-home. It'll be smaller (1500sqft with small bedrooms). For a small single-family, $500+. For a modern single-family home, you'll need $700k or more.

If you want to live inside the Beltway, add 20%-50% to those figures, depending on neighborhood.

All those will be in livable, reasonably safe neighborhoods with decent public schools. I'm sure there are options that cost less if you look hard enough.

FWIW, I chose "nice, older town-home" for a bit under $500k. That's on two mid-career, white-collar salaries. We have enough left over to max our 401ks, take vacations, etc. The loss of one income wouldn't drive us to homelessness, but it would hurt. I walk to work, bike to grocery store, and my spouse has a 7 mile commute (it's also bike-able, which she does occasionally).

In Sunnyvale, a two bedroom townhouse with two car garage, and a 30 foot by 12 foot back patio, in a complex that I was very, very happy to get out of (for various reasons) 16 years ago, is listed for $1.1M, but I would expect it to go over by $100-200K because supply is so tight right now.

Yeah, I'm catagory #4. Been here long enough to get on the escalator when it was possible, living in a modest house in a neighborhood I could never buy back into. And I understand what the money would do elsewhere, I moved here from Minneapolis/St. Paul area, and would be shopping for lakeshore if I moved back there.

Housing is broken. Sunnyvale is at least building new high-density housing, but not at a fast enough rate. Units are sold before the dirt has been scraped clean to start construction.

I grew up in New Hampshire, incredibly boring. I would never move back after moving to an exciting city. Good places to live are expensive for a reason.

$1M doesn't buy you the time of day where I live in northern Brooklyn. And it's $1250 minimum per person in a rental share, often more.

You kidding right? 100k down? 2K mortgage? These are insane numbers that very few people can afford even in the tech community.

He's not even talking about a 2K mortgage. He's talking about a 2K/PERSON/mo, and him and his partner paying somewhere north of $4K to 5K a month in payments, PMI etc.

No Pmi needed. And it’s 4-4.5k total all in.

Nearly all software engineers in San Francisco will be able to afford $2k a month, even if it's tight. They'll be doing close to that anyway in rent. I'm not arguing it's not insane rent/mortgage in absolute terms, but relative to software engineer salaries, it's doable.

They all do have 100K up front? Most software engineers I know have this much in student debt.

Of course most would need to save for at least several years, but I think that’s the case for most people.

A $2,000 mortgage is not insane. A lot of people in the US can in fact afford a $2k mortgage.

The median full-time job in the US pays near $45,000. The median household income is near $60,000 today.

There are 127 million full-time employees in the US.

Or put another way, approximately 39% of all people in the labor force (~161 million) are earning at least $45,000 per year.

If you're in the top 1/3 of all full-time earners (40+ million people), you can afford a $2,000 mortgage by yourself. If 40+ million people in the US can afford something, it's not insane.

Two people with a full-time job, earning only the median, can very safely afford that $2,000 mortgage. The typical full-time median income person in the US will commonly not even have a four year degree, so this isn't a stretch premise in terms of requirements. If you want to hit $4k per month (the parent's scenario), the top 1/3 of households can manage that (tens of millions of people fall under that umbrella).

If you want to get into insane mortgage territory as it pertains to the median income, you're talking much higher. $8k-$10k+ style mortgages.

The problem isn't that a $1 million home is insane (or not). Or, even a $2000/month mortgage. Yes, a well compensated professional can afford those numbers.

The problem in the Bay, and increasingly in other popular areas, is there are few options for less. Especially in places like the south bay, where it isn't really urban - it's a giant suburb that lacks dense, affordable housing options.

An average employee shouldn't have to live hours away from their job. Or spend 50% of their income on housing.

I’ve heard housing should ideally not cost more than 1/3 of your income to live comfortably. That would mean you’d have to make 72k after taxes a year to afford such a mortgage.

I think it is crazy that two high earning people would be spending possibly 50% or more of what they make on housing.

No, these aren't insane. However, they are much lower than reality.

$2k mortgage per month is nothing. Renting a studio or a decent 1 bedroom alone will cost that much in SF.

You honestly think that paying 100k out of pocket in addition to a recurring 4k a month (48k a year!) just on housing is reasonable?

I lived through the 2000 tech implosion and in 1999, people though things like this were reasonable.

Amongst people who think this is reasonable are probably

- Dual earners hoping to bite the bullet before it gets crazier

- Those with <8yrs experience who have never seen a downturn or jobs go dry

- Lawyers, VCs, etc to whom this is nothing.

As a former lawyer, I can say that prices these days are high for lawyers and other service providers. Associates/employees are paid hourly so there's limited upside. You can buy a house on a single legal salary, but you won't have much cushion.

Law firm partners are in a much better position, but you can't make equity partner (not just "income partner", which is basically a glorified title they give so you can go get more clients) until you're about 40. And nobody wants to wait that long to buy a home.

Basically, "law firm partners" can be clumped together with VCs, since they both hold stakes in (hopefully) profitable businesses. But most lawyers are not partners.

The SF area is a desirable part of the country because of weather and cultural reasons (for some). So people who live here are basically buying access to good climate and desirable activities/amenities.

It's also worth noting that these figures are for a mortgage, which is in part an investment. When the trend of SF area real estate is factored in, it doesn't look as crazy. If you purchase in very popular areas (Palo/Menlo/north MV, on the Peninsula), you're pretty well insulated from downside market risk. Even during the '08 recession, things mostly just flattened out for a couple years (and have since gone on a tear). People used to joke about million-dollar-fixer-uppers. Now even the fixer-uppers are well over a million...

Reasonable? Absolutely not. Reality? Yes, unfortunately.