7 ms·

$31.71: The hourly pay it now takes to afford Silicon Valley rent

60 points by citizenkeys 12y ago

waterlesscloud 12y ago
For a two bedroom apartment. Which implies at least two residents.
- jacobolus 12y ago
  And at minimum wage, as the article points out, that’s 4 full-time jobs, so such employees had better get used to bunk beds. :(
- ntietz 12y ago
  Two bedrooms does not imply two residents, and certainly not "at least two." Perhaps the title could be improved (by stating "to afford a two-bedroom apartment"). One cool thing about putting it in $/hour like this is that we can easily say what two people would have to make to afford the same apartment. They would each need to make about $16/hour. It's feasible, but there are a lot of careers that don't pay that or that would cut it close.
  - smm2000 12y ago
    The only reason to live in San Francisco on minimum wage is if you want to break into some line of work that only exist in SF and pays minimum wage for entry level position with significant increase expected in near future. In this case you can live 2 person per room and consider it extension of college experience. Really nothing bad about it and minimum wage can pay for it. Otherwise you are insane to continue living in one of the most expensive cities on minimum wage. Complaining about it is like complaining that minimum wage does not pay for black caviar.
    - bmajz 12y ago
      That's true to a degree. That said, I think its fair to recognize that there are factors other than economic opportunity that prevent people from moving e.g. family in the area, networking, school etc. We also need to acknowledge that there will always be a need for a certain number of low-wage jobs and those people have to be somewhere accessible. Finally, there is a reasonable argument for cultural diversity and continuity. For all of those reasons, it does behoove us to think about what can be done to improve the housing situation. It does seem like the market is responding though. Anecdotally, I'm seeing lots of new development in San Jose and they're all high-rise style buildings that should add significantly to the overall housing supply.
    - cdcarter 12y ago
      What's your plan when all the minimum wage workers leave SF, because nobody in their right mind should live there for minimum wage? Who will clean your office building's bathrooms? Who will wash dishes at the restaurants? Seems to get those workers back...you'll have to pay more?
      - klipt 12y ago
        Presumably the free market will find a wage for which those workers will either live in SF, or be happy to commute into SF.
- ars 12y ago
  > Which implies at least two residents. Like parents and children? It doesn't imply 2 working people.
gkoberger 12y ago
San Francisco is insanely expensive, and despite SF having a minimum wage that's $3 higher than the federal minimum, minimum wage isn't meant to pay for a two bedroom apartment in any major city. It never has been, and unfortunately can't ever be. Studio apartments, roommates, spouse, living outside the city limits, living in a smaller apartment, aid (for single/low income parents), etc -- there's a lot of options, and it's disingenuous to frame it like this. Even if we did raise minimum wage to $30 (and for the record, I'm for raising minimum wage to keep pace with inflation.. just not to $30), what does that solve? Techies will just get a raise, too (why be a programmer when you can make the same at a dead end job?), and we'll be back where we started.
- kenrikm 12y ago
  I pay $1750 for a 1br in San Mateo, and I feel like I have a great deal, rent is insane out here. let me frame it like this my mortgage, including taxes and insurance for a 4br house near the beach in Florida is $600/mo.
  - phamilton 12y ago
    Curious.. why don't you live in Florida then? What are the reasons, tangible and intangible for living in San Mateo instead?
    - deleted 12y ago
      [deleted]
    - deleted 12y ago
      [deleted]
    - sliverstorm 12y ago
      He rents and has a mortgage; perhaps his family is in Florida, he works in SF, and his pad in San Mateo is his "home away from home"?
    - Finbarr 12y ago
      It's equidistant from SF and Palo Alto, with rent way cheaper than both. The downtown area is well developed with lots of restaurants. San Mateo also has good transport links with easy freeway access to the 101, 92 and 280, and most of the caltrains stop here.
jw2013 12y ago
monthly_wage_to_break_even_by_article = $37.62 * work_hours_per_day * weekdays_per_week * weeks_per_month = $37.62 * 9 * 5 * (52 / 12) = $7335.9. Let assume the tax is 35% of wage. monthly_rent_by_article = $7335.9 * (1 - 35%) = $4768.335 Wow... that is prohibiting. So you have to earn $7335.9 * 12 / 2 = $88030.8 / 2 = $44015.4 a year to break even if you are sharing a 2br apartment... Are rent price in some less urban area of SF much cheaper (say 20 minutes drive from Pacific Heights)? Could a solution to rising rent price be some brave enough founders migrating tech startups to a new growing area, say rtp? Just like what Eventbrite did when hot startups were all in valley but Eventbrtie chose SF at then.
- mattdeboard 12y ago
  Pro tip. You can ballpark hourly wage to an annual income by multiplying by 2,000 (or doubling then multiplying by 1000). So $37.62/hr works out roughly to about 75k/year, pre-tax. Not exact, just a rule of thumb. Works out to within a few % usually.
  - thaumasiotes 12y ago
    It's a fairly precise "rule of thumb", on the theory that you work 40 hours a week, 50 weeks a year. Parent comment inflates the salary by assuming 45 hours a week 52 weeks a year.
fasteddie31003 12y ago
Two words. "Build Up". San Francisco needs high rise apartments.
- manojlds 12y ago
  Not when it is in a high risk zone with respect to earthquakes.
  - bluthru 12y ago
    Look up the 1989 earthquake. You'll see lots of photos of stick framed Victorians that failed. The highrises (which are designed to withstand earthquakes) are still here.
  - nickonline 12y ago
    Like... say, Tokyo?
  - rtpg 12y ago
    Tokyo's been doing it for a while
    - usaar333 12y ago
      I've never thought of Tokyo as a tall city. The city-scape is generally max 6 story buildings. The tallest building in Tokyo is shorter than the tallest in San Francisco!
      - rtpg 12y ago
        http://en.wikipedia.org/wiki/List_of_tallest_structures_in_Tokyo http://en.wikipedia.org/wiki/List_of_tallest_structures_in_T... (There are a lot of tall buildings in Tokyo)
      - WildUtah 12y ago
        Tokyo achieves more density than San Francisco because the average street width is about 14 feet. San Francisco's is about 90 feet. That creates a lot more buildable land per block and less traffic. The average building height is also about 3 stories instead of just over two in SF. The majority of housing is single family houses and owner occupied. And Toyko has much, much less parking. The result is a comfortable, walkable city at double the density of SF without high-rises and with less traffic. The key difference is that SF is planned, laid out, regulated, permitted, and platted very badly and Tokyo is planned well. Also, the peninsula cities are required by law to sprawl at low density, constricting SF's ability to spread medium-density growth that would keep housing affordable. Any upzoning, even around transit stops, is blocked and housing supply remains severely limited.
nickonline 12y ago
What's FMR? "Housing wage for two bedroom FMR" Also what does this all mean? What percentage of their income is this representing to afford this house? The article was surprisingly short of this information even though it was 4 pages long.
- dmoy 12y ago
  In this context it is probably referring to Fair Market Rent: http://en.wikipedia.org/wiki/Fair_market_rent http://en.wikipedia.org/wiki/Fair_market_rent
- jacobolus 12y ago
  The linked PDF has a detailed explanation of their definitions in the appendix at the back: http://nlihc.org/sites/default/files/oor/OOR2014.pdf http://nlihc.org/sites/default/files/oor/OOR2014.pdf The number for “fair market rent” in each market is provided by the US Dept of Housing and Urban Development, and: > Out of Reach is consistent with federal housing policy in the assumption that no more than 30% of a household’s gross income should be consumed by gross housing costs. Spending more than 30% of income on housing is considered “unaffordable.”
  - sliverstorm 12y ago
    Which, in this tax bracket, corresponds to roughly 40% of net income
capkutay 12y ago
Actually San Francisco is building up; they will have thousands of new apartments coming out in the next 5-10 years. There's a ton of high rise development going on in SOMA[0] (the business/metropolitan area) along with less commercial areas like hayes valley. The problem is that those units will probably still be ridiculously expensive. The best solution is fixing public transportation between SF and the cheaper suburbs to the south. Right now commuting to San Francisco is a nightmare just because getting in out of the city by car is a huge bottleneck. Also, the train only goes about half a mile into the most southern part of the city.. [1] 0: http://vimeo.com/70447799 http://vimeo.com/70447799 1: https://www.google.com/maps/search/san+francisco+cal+train/@37.7671085,-122.3940995,15z/data=!3m1!4b1 https://www.google.com/maps/search/san+francisco+cal+train/@...
- paulbaumgart 12y ago
  FWIW, more supply, even of expensive units, will drive down prices so long as they get occupied.
- usaar333 12y ago
  1. The population of reasonably close southern suburbs (let's say the entire San Mateo County) is actually less than that of San Francisco proper by ~100k people. 2. Caltrain is linked to Muni metro at 4th/King as well as many bus lines. It isn't that hard to get in. 3. Bart goes straight into downtown and offers stations closer than Caltrain for at least a third of San Mateo County's people. 4. The southern and western parts of San Francisco are just as cheap, if not cheaper, than San Mateo county's average. (indeed if you check padmapper, you can see that there is more "cheap housing" available in SF than in San Mateo County. 5. The density of much of San Francisco, especially the outer Western and Southern areas remains low. (somewhere between San Mateo County suburban cities and Brooklyn)
  - capkutay 12y ago
    "2. Caltrain is linked to Muni metro at 4th/King as well as many bus lines. It isn't that hard to get in" I've never heard anyone defend Bay Area public transportation before. I'd say the amount of busses going from SF to silicon valley/the peninsula are evidence that going in and out of san francisco is NOT easy. I've lived in both the peninsula and SF for years and the consensus is that you're better off living in SF if you work in SF and living in the peninsula if you work in the peninsula (unless you work for a company that busses their employees). I myself drive from SF to the Peninsula. I don't recommend it. Public transportation is not an option for most people purely because of the lack of geographical coverage they offer. For instance, I can't use caltrain or bart because I don't live downtown and it takes 40-50 minutes to get to the train by bus. The fact that caltrain is situated at the most southern point of the city doesn't make it any better when a 2-3 mile muni metro line goes along the most western point of the city where few people live.
D9u 12y ago
Hawaii resident here... In 1996 I was making $27.95 per hour. I'm not going to say what I earn now, but it's not that great.
goombastic 12y ago
Rent seekers are sucking every last spendable dollar out of people. This situation is the same in almost every large IT hub. I wonder what stops companies from allowing distributed working environments and just bypass these guys altogether. I'd rather pay for a couple of days hotel charges for face2face time than pay these extortionate rents. It's time to re-evaluate our work style.
- toomuchtodo 12y ago
  > I wonder what stops companies from allowing distributed working environments and just bypass these guys altogether. Poor management.
yetanotherphd 12y ago
Nerds were cute when they started getting big paychecks. Now they are using their money to buy things that other people want. That's not fair!
- thaumasiotes 12y ago
  My mother will every so often remark to me how people seem to think rich people should be kept from unfairly buying things with their money. It's all right for them to have money as long as it's never used for any purpose, I guess.
64mb 12y ago
Silicon Valley seems cheap compared to London
- rdl 12y ago
  London's affordability problems seem primarily due to rich people from non-UK buying property there (due to stability and ~zero property tax, tiny fixed council tax) to park assets, potentially of dubious origin. They often are left vacant. That's fairly distinct from SF's problem (lots of people wanting to live there, but artificially constrained supply, both construction limits and rent control)
  - martinald 12y ago
    Aryuably so but the equivalent of entire San Francisco has moved/is moving into London in a decade. It's a very rapidly growing city. While I'm sure a ridiculous proportion of the v high wealth areas are laying vacant, in areas like Hackney (which are the fastest growing) I very much doubt that is the case. These flats don't make up much of the London housing stock, %age wise.
  - klipt 12y ago
    > rich people from non-UK buying property there I.e. property speculators. There's plenty of speculation in the Bay Area too. > artificially constrained supply Thanks to lobbying from people who benefit from constrained supply ... e.g. NIMBYists and speculators.
grecy 12y ago
> 2014, the NLIHC pegged the average two-bedroom rent in Santa Clara County at $1,649 $1,649 / 4 = $413/wk $413 / 40 = $10.30/hr of your income going to rent. So they're saying you need to make $31.71, which means they're saying you spend $20/hr of your income on things other than rent. Absurd does not cover it. Obviously I'm not accounting for tax, but I'm also not counting that a two bedroom apartment means two people paying rent. If you only have one person, then rent a one bedroom apartment. It's 2014, not 1964.
- gamblor956 12y ago
  Tax is pretty important--even at the 15% bracket it's still $3000 a year, not including FICA withholding or state (or for the Bay Area, local) taxes which are easily another $1-2000 more. For someone making $100k a year, that's not much. For someone making $20,000 a year (rounded up) it's a big bite and it definitely changes the affordability calculation.
  - grecy 12y ago
    So let's say tax is 35% - $413 / 40 = $10.30/hr + 35% = $14/hr of your pre-tax income going to rent. That's still an absurd amount of money being spent elsewhere if you're earning $31/hr (pre-tax) or approx $20/hr post 35% tax.
  - encoderer 12y ago
    "For someone making $100k a year, that's not much. For someone making $20,000 a year (rounded up) it's a big bite and it definitely changes the affordability calculation." Taxes don't work like that of course. The $100k a year person is paying a higher percentage than the low income person. That $20k earner you mention will probably have a very low nominal tax rate after calculating down to their AGI.
- x0x0 12y ago
  tax knocks $31.71/hour to roughly $23/hour in CA, and the majority of people we're discussing don't make nearly $70k/year (31.715240 = 65,956) if you make, say, $20/hour you'll struggle to afford $1k/mo rent plus a reliable car. 20 * 52 * 40 = $41,600/year gross that gets you 2,856.56 / month (no ca tax yet) [1] 2,856.56 * 12 = $34,278/year you pay 1,360.28 + 8% of anything over $39,384 [2], so 1,360.28 + 0.08 * (41600 - 39384) = 1537 so (34278 - 1537)/12 = $2,728/mo You really oughtn't pay more than 1/3 of your income for housing, but since that gets you nothing around here, not even in epa, you're looking at maybe being able to afford $1100/mo in rent. $2200 gets you a pretty basic 2 bed/2 bath in a safe neighborhood in the peninsula (source: I manage an apartment building). Knock off $450 for a dirt cheap car (car + insurance + a bit of savings for maintenance + gas). So $2728 less rent less transportation and you're down to roughly $1178. And our hypothetical employee hasn't eaten, saved money, gone on a date, paid a medical bill, purchased clothes or glasses, or even gotten internet access or a phone. So yeah, pretty much just scraping by. I'd be pretty impressed if someone had $500 left after the above list. [1] http://www.calculator.net/take-home-pay-calculator.html?cannualincome=41600&cpayfrequency=Monthly&cfilestatus=Single&callowance=2&cdeduction=0&cstatetax=0&ccitytax=0&cadditionat1=no&printit=0&x=0&y=0 http://www.calculator.net/take-home-pay-calculator.html?cann... [2] https://www.ftb.ca.gov/forms/2013_california_tax_rates_and_exemptions.shtml https://www.ftb.ca.gov/forms/2013_california_tax_rates_and_e...
mmasashi 12y ago
In Cupertino I have seen the minimum wage which is actually $8/hour for the part time job like a cacher in the store. The the rent average is $2,000 for one bedroom apartment there. It's totally unfair to low income people. They sacrifice the time to stay with their family and have to work even weekend for bills.
conanbatt 12y ago
The collective delusion on this problem is not only that the rent is expensive, its that the housing you get is of low quality. For all the "High salaries" in tech, it's insane to see people in their 30's sharing apartments like if it were a college dorm.
hydralist 12y ago
honestly if you cant afford it, get the fuck on the bart and live farther out. coming from a city with no subway, everyone here should be thankful for the bart and how far it reaches. its a tiny 7x7 grid, this isn't some shelter, you pay to stay. take it as motivation to make more money
aaron695 12y ago
Two bed rooms for one person down town in a major city else it's an outrage. WTF is wrong with western society. Most of the world lives multiple people to a room.
emeidi 12y ago
I find the article lacking the most important piece of information: Is this calculation based on a 4, 20, 40 or 60 hour work week?

60 points by citizenkeys 12y ago

waterlesscloud 12y ago

For a two bedroom apartment. Which implies at least two residents.

jacobolus 12y ago
And at minimum wage, as the article points out, that’s 4 full-time jobs, so such employees had better get used to bunk beds. :(
ntietz 12y ago
Two bedrooms does not imply two residents, and certainly not "at least two." Perhaps the title could be improved (by stating "to afford a two-bedroom apartment"). One cool thing about putting it in $/hour like this is that we can easily say what two people would have to make to afford the same apartment. They would each need to make about $16/hour. It's feasible, but there are a lot of careers that don't pay that or that would cut it close.
- smm2000 12y ago
  The only reason to live in San Francisco on minimum wage is if you want to break into some line of work that only exist in SF and pays minimum wage for entry level position with significant increase expected in near future. In this case you can live 2 person per room and consider it extension of college experience. Really nothing bad about it and minimum wage can pay for it. Otherwise you are insane to continue living in one of the most expensive cities on minimum wage. Complaining about it is like complaining that minimum wage does not pay for black caviar.
  - bmajz 12y ago
    That's true to a degree. That said, I think its fair to recognize that there are factors other than economic opportunity that prevent people from moving e.g. family in the area, networking, school etc. We also need to acknowledge that there will always be a need for a certain number of low-wage jobs and those people have to be somewhere accessible. Finally, there is a reasonable argument for cultural diversity and continuity. For all of those reasons, it does behoove us to think about what can be done to improve the housing situation. It does seem like the market is responding though. Anecdotally, I'm seeing lots of new development in San Jose and they're all high-rise style buildings that should add significantly to the overall housing supply.
  - cdcarter 12y ago
    What's your plan when all the minimum wage workers leave SF, because nobody in their right mind should live there for minimum wage? Who will clean your office building's bathrooms? Who will wash dishes at the restaurants? Seems to get those workers back...you'll have to pay more?
    - klipt 12y ago
      Presumably the free market will find a wage for which those workers will either live in SF, or be happy to commute into SF.
ars 12y ago
> Which implies at least two residents. Like parents and children? It doesn't imply 2 working people.

gkoberger 12y ago

San Francisco is insanely expensive, and despite SF having a minimum wage that's $3 higher than the federal minimum, minimum wage isn't meant to pay for a two bedroom apartment in any major city. It never has been, and unfortunately can't ever be. Studio apartments, roommates, spouse, living outside the city limits, living in a smaller apartment, aid (for single/low income parents), etc -- there's a lot of options, and it's disingenuous to frame it like this. Even if we did raise minimum wage to $30 (and for the record, I'm for raising minimum wage to keep pace with inflation.. just not to $30), what does that solve? Techies will just get a raise, too (why be a programmer when you can make the same at a dead end job?), and we'll be back where we started.

kenrikm 12y ago
I pay $1750 for a 1br in San Mateo, and I feel like I have a great deal, rent is insane out here. let me frame it like this my mortgage, including taxes and insurance for a 4br house near the beach in Florida is $600/mo.
- phamilton 12y ago
  Curious.. why don't you live in Florida then? What are the reasons, tangible and intangible for living in San Mateo instead?
  - deleted 12y ago
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  - deleted 12y ago
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  - sliverstorm 12y ago
    He rents and has a mortgage; perhaps his family is in Florida, he works in SF, and his pad in San Mateo is his "home away from home"?
  - Finbarr 12y ago
    It's equidistant from SF and Palo Alto, with rent way cheaper than both. The downtown area is well developed with lots of restaurants. San Mateo also has good transport links with easy freeway access to the 101, 92 and 280, and most of the caltrains stop here.

jw2013 12y ago

monthly_wage_to_break_even_by_article = $37.62 * work_hours_per_day * weekdays_per_week * weeks_per_month = $37.62 * 9 * 5 * (52 / 12) = $7335.9. Let assume the tax is 35% of wage. monthly_rent_by_article = $7335.9 * (1 - 35%) = $4768.335 Wow... that is prohibiting. So you have to earn $7335.9 * 12 / 2 = $88030.8 / 2 = $44015.4 a year to break even if you are sharing a 2br apartment... Are rent price in some less urban area of SF much cheaper (say 20 minutes drive from Pacific Heights)? Could a solution to rising rent price be some brave enough founders migrating tech startups to a new growing area, say rtp? Just like what Eventbrite did when hot startups were all in valley but Eventbrtie chose SF at then.

mattdeboard 12y ago
Pro tip. You can ballpark hourly wage to an annual income by multiplying by 2,000 (or doubling then multiplying by 1000). So $37.62/hr works out roughly to about 75k/year, pre-tax. Not exact, just a rule of thumb. Works out to within a few % usually.
- thaumasiotes 12y ago
  It's a fairly precise "rule of thumb", on the theory that you work 40 hours a week, 50 weeks a year. Parent comment inflates the salary by assuming 45 hours a week 52 weeks a year.

fasteddie31003 12y ago

Two words. "Build Up". San Francisco needs high rise apartments.

manojlds 12y ago
Not when it is in a high risk zone with respect to earthquakes.
- bluthru 12y ago
  Look up the 1989 earthquake. You'll see lots of photos of stick framed Victorians that failed. The highrises (which are designed to withstand earthquakes) are still here.
- nickonline 12y ago
  Like... say, Tokyo?
- rtpg 12y ago
  Tokyo's been doing it for a while
  - usaar333 12y ago
    I've never thought of Tokyo as a tall city. The city-scape is generally max 6 story buildings. The tallest building in Tokyo is shorter than the tallest in San Francisco!
    - rtpg 12y ago
      http://en.wikipedia.org/wiki/List_of_tallest_structures_in_Tokyo http://en.wikipedia.org/wiki/List_of_tallest_structures_in_T... (There are a lot of tall buildings in Tokyo)
    - WildUtah 12y ago
      Tokyo achieves more density than San Francisco because the average street width is about 14 feet. San Francisco's is about 90 feet. That creates a lot more buildable land per block and less traffic. The average building height is also about 3 stories instead of just over two in SF. The majority of housing is single family houses and owner occupied. And Toyko has much, much less parking. The result is a comfortable, walkable city at double the density of SF without high-rises and with less traffic. The key difference is that SF is planned, laid out, regulated, permitted, and platted very badly and Tokyo is planned well. Also, the peninsula cities are required by law to sprawl at low density, constricting SF's ability to spread medium-density growth that would keep housing affordable. Any upzoning, even around transit stops, is blocked and housing supply remains severely limited.

nickonline 12y ago

What's FMR? "Housing wage for two bedroom FMR" Also what does this all mean? What percentage of their income is this representing to afford this house? The article was surprisingly short of this information even though it was 4 pages long.

dmoy 12y ago
In this context it is probably referring to Fair Market Rent: http://en.wikipedia.org/wiki/Fair_market_rent http://en.wikipedia.org/wiki/Fair_market_rent
jacobolus 12y ago
The linked PDF has a detailed explanation of their definitions in the appendix at the back: http://nlihc.org/sites/default/files/oor/OOR2014.pdf http://nlihc.org/sites/default/files/oor/OOR2014.pdf The number for “fair market rent” in each market is provided by the US Dept of Housing and Urban Development, and: > Out of Reach is consistent with federal housing policy in the assumption that no more than 30% of a household’s gross income should be consumed by gross housing costs. Spending more than 30% of income on housing is considered “unaffordable.”
- sliverstorm 12y ago
  Which, in this tax bracket, corresponds to roughly 40% of net income

capkutay 12y ago

Actually San Francisco is building up; they will have thousands of new apartments coming out in the next 5-10 years. There's a ton of high rise development going on in SOMA[0] (the business/metropolitan area) along with less commercial areas like hayes valley. The problem is that those units will probably still be ridiculously expensive. The best solution is fixing public transportation between SF and the cheaper suburbs to the south. Right now commuting to San Francisco is a nightmare just because getting in out of the city by car is a huge bottleneck. Also, the train only goes about half a mile into the most southern part of the city.. [1] 0: http://vimeo.com/70447799 http://vimeo.com/70447799 1: https://www.google.com/maps/search/san+francisco+cal+train/@37.7671085,-122.3940995,15z/data=!3m1!4b1 https://www.google.com/maps/search/san+francisco+cal+train/@...

paulbaumgart 12y ago
FWIW, more supply, even of expensive units, will drive down prices so long as they get occupied.
usaar333 12y ago
1. The population of reasonably close southern suburbs (let's say the entire San Mateo County) is actually less than that of San Francisco proper by ~100k people. 2. Caltrain is linked to Muni metro at 4th/King as well as many bus lines. It isn't that hard to get in. 3. Bart goes straight into downtown and offers stations closer than Caltrain for at least a third of San Mateo County's people. 4. The southern and western parts of San Francisco are just as cheap, if not cheaper, than San Mateo county's average. (indeed if you check padmapper, you can see that there is more "cheap housing" available in SF than in San Mateo County. 5. The density of much of San Francisco, especially the outer Western and Southern areas remains low. (somewhere between San Mateo County suburban cities and Brooklyn)
- capkutay 12y ago
  "2. Caltrain is linked to Muni metro at 4th/King as well as many bus lines. It isn't that hard to get in" I've never heard anyone defend Bay Area public transportation before. I'd say the amount of busses going from SF to silicon valley/the peninsula are evidence that going in and out of san francisco is NOT easy. I've lived in both the peninsula and SF for years and the consensus is that you're better off living in SF if you work in SF and living in the peninsula if you work in the peninsula (unless you work for a company that busses their employees). I myself drive from SF to the Peninsula. I don't recommend it. Public transportation is not an option for most people purely because of the lack of geographical coverage they offer. For instance, I can't use caltrain or bart because I don't live downtown and it takes 40-50 minutes to get to the train by bus. The fact that caltrain is situated at the most southern point of the city doesn't make it any better when a 2-3 mile muni metro line goes along the most western point of the city where few people live.

D9u 12y ago

Hawaii resident here... In 1996 I was making $27.95 per hour. I'm not going to say what I earn now, but it's not that great.

goombastic 12y ago

Rent seekers are sucking every last spendable dollar out of people. This situation is the same in almost every large IT hub. I wonder what stops companies from allowing distributed working environments and just bypass these guys altogether. I'd rather pay for a couple of days hotel charges for face2face time than pay these extortionate rents. It's time to re-evaluate our work style.

toomuchtodo 12y ago
> I wonder what stops companies from allowing distributed working environments and just bypass these guys altogether. Poor management.

yetanotherphd 12y ago

Nerds were cute when they started getting big paychecks. Now they are using their money to buy things that other people want. That's not fair!

thaumasiotes 12y ago
My mother will every so often remark to me how people seem to think rich people should be kept from unfairly buying things with their money. It's all right for them to have money as long as it's never used for any purpose, I guess.

64mb 12y ago

Silicon Valley seems cheap compared to London

rdl 12y ago
London's affordability problems seem primarily due to rich people from non-UK buying property there (due to stability and ~zero property tax, tiny fixed council tax) to park assets, potentially of dubious origin. They often are left vacant. That's fairly distinct from SF's problem (lots of people wanting to live there, but artificially constrained supply, both construction limits and rent control)
- martinald 12y ago
  Aryuably so but the equivalent of entire San Francisco has moved/is moving into London in a decade. It's a very rapidly growing city. While I'm sure a ridiculous proportion of the v high wealth areas are laying vacant, in areas like Hackney (which are the fastest growing) I very much doubt that is the case. These flats don't make up much of the London housing stock, %age wise.
- klipt 12y ago
  > rich people from non-UK buying property there I.e. property speculators. There's plenty of speculation in the Bay Area too. > artificially constrained supply Thanks to lobbying from people who benefit from constrained supply ... e.g. NIMBYists and speculators.

grecy 12y ago

> 2014, the NLIHC pegged the average two-bedroom rent in Santa Clara County at $1,649 $1,649 / 4 = $413/wk $413 / 40 = $10.30/hr of your income going to rent. So they're saying you need to make $31.71, which means they're saying you spend $20/hr of your income on things other than rent. Absurd does not cover it. Obviously I'm not accounting for tax, but I'm also not counting that a two bedroom apartment means two people paying rent. If you only have one person, then rent a one bedroom apartment. It's 2014, not 1964.

gamblor956 12y ago
Tax is pretty important--even at the 15% bracket it's still $3000 a year, not including FICA withholding or state (or for the Bay Area, local) taxes which are easily another $1-2000 more. For someone making $100k a year, that's not much. For someone making $20,000 a year (rounded up) it's a big bite and it definitely changes the affordability calculation.
- grecy 12y ago
  So let's say tax is 35% - $413 / 40 = $10.30/hr + 35% = $14/hr of your pre-tax income going to rent. That's still an absurd amount of money being spent elsewhere if you're earning $31/hr (pre-tax) or approx $20/hr post 35% tax.
- encoderer 12y ago
  "For someone making $100k a year, that's not much. For someone making $20,000 a year (rounded up) it's a big bite and it definitely changes the affordability calculation." Taxes don't work like that of course. The $100k a year person is paying a higher percentage than the low income person. That $20k earner you mention will probably have a very low nominal tax rate after calculating down to their AGI.
x0x0 12y ago
tax knocks $31.71/hour to roughly $23/hour in CA, and the majority of people we're discussing don't make nearly $70k/year (31.715240 = 65,956) if you make, say, $20/hour you'll struggle to afford $1k/mo rent plus a reliable car. 20 * 52 * 40 = $41,600/year gross that gets you 2,856.56 / month (no ca tax yet) [1] 2,856.56 * 12 = $34,278/year you pay 1,360.28 + 8% of anything over $39,384 [2], so 1,360.28 + 0.08 * (41600 - 39384) = 1537 so (34278 - 1537)/12 = $2,728/mo You really oughtn't pay more than 1/3 of your income for housing, but since that gets you nothing around here, not even in epa, you're looking at maybe being able to afford $1100/mo in rent. $2200 gets you a pretty basic 2 bed/2 bath in a safe neighborhood in the peninsula (source: I manage an apartment building). Knock off $450 for a dirt cheap car (car + insurance + a bit of savings for maintenance + gas). So $2728 less rent less transportation and you're down to roughly $1178. And our hypothetical employee hasn't eaten, saved money, gone on a date, paid a medical bill, purchased clothes or glasses, or even gotten internet access or a phone. So yeah, pretty much just scraping by. I'd be pretty impressed if someone had $500 left after the above list. [1] http://www.calculator.net/take-home-pay-calculator.html?cannualincome=41600&cpayfrequency=Monthly&cfilestatus=Single&callowance=2&cdeduction=0&cstatetax=0&ccitytax=0&cadditionat1=no&printit=0&x=0&y=0 http://www.calculator.net/take-home-pay-calculator.html?cann... [2] https://www.ftb.ca.gov/forms/2013_california_tax_rates_and_exemptions.shtml https://www.ftb.ca.gov/forms/2013_california_tax_rates_and_e...

mmasashi 12y ago

In Cupertino I have seen the minimum wage which is actually $8/hour for the part time job like a cacher in the store. The the rent average is $2,000 for one bedroom apartment there. It's totally unfair to low income people. They sacrifice the time to stay with their family and have to work even weekend for bills.

conanbatt 12y ago

The collective delusion on this problem is not only that the rent is expensive, its that the housing you get is of low quality. For all the "High salaries" in tech, it's insane to see people in their 30's sharing apartments like if it were a college dorm.

hydralist 12y ago

honestly if you cant afford it, get the fuck on the bart and live farther out. coming from a city with no subway, everyone here should be thankful for the bart and how far it reaches. its a tiny 7x7 grid, this isn't some shelter, you pay to stay. take it as motivation to make more money

aaron695 12y ago

Two bed rooms for one person down town in a major city else it's an outrage. WTF is wrong with western society. Most of the world lives multiple people to a room.

emeidi 12y ago

I find the article lacking the most important piece of information: Is this calculation based on a 4, 20, 40 or 60 hour work week?