$31.71: The hourly pay it now takes to afford Silicon Valley rent(bizjournals.com) |
$31.71: The hourly pay it now takes to afford Silicon Valley rent(bizjournals.com) |
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.
I do not think it's a disingenuous way to frame the challenge facing people who live in the area. Two-bedroom apartments should not be the privilege of those in a certain stratum of society and above. They should be something that is within reach of nearly everyone. Nor should housing in the San Jose area become the domain of a privileged minority.
You unfortunately have to find a balance between location and luxury.
Either buildings can go up, or prices. They're not making any more land.
Edit: In retrospect, I made a critical error; I can't tell if the downvoters understood I was loosely referencing Lake Wobegon, or if they thought I was just dumb
But all I ever read around here on gushing webpages are smugsters talking about how they can't believe they get paid for doing it and how they're doing what they love. :)
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]
1: https://www.google.com/maps/search/san+francisco+cal+train/@...
The buildings they are putting up there, however, have foundations drilled down so deep, they are well in to the bedrock below. They aren't going to come down.
I don't know how I feel about being on the street if that happens, though.
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.
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.
Like parents and children? It doesn't imply 2 working people.
It's time to re-evaluate our work style.
Poor management.
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.
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.
"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.
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.”
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)
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.
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.
WTF is wrong with western society.
Most of the world lives multiple people to a room.
its a tiny 7x7 grid, this isn't some shelter, you pay to stay. take it as motivation to make more money
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.
$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.
Construction expenses aren't a major part of the equation here, zoning permission and transportation are balanced against a demand that is the highest in the country. Rent, and for that matter land prices, are expressions of those factors.
It is ridiculous that the national economic engine of our times for the last generation looks like this: https://www.google.com/search?q=population+of+san+francisco
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)
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.
But as you said, all these units look like they will be in the $2.5k+ range for a 1br, if not more.
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.
$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.
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?cann...
[2] https://www.ftb.ca.gov/forms/2013_california_tax_rates_and_e...
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.
Where do the people working in that Walmart live?
As to your first point, 5th Ave is smaller, but also more expensive. SF is bigger, but relatively cheaper. It's a sliding scale; both driven by scarcity of land compared to desirability.
New York has a working mass transit system, though. For poor people this makes the world of a difference. I remember that, when I lived in Madrid a few years back, I was impressed by how fast you could go _everywhere_ in that city with the subway alone. A cross-town morning commute in that 3Mil Juggernaut took about as long as the cross-town car-commute in a less developed 130K city I had lived in before.
And actually there are more affordable rooms in commuting distance (BART or car) than it appears from popular opinion online.
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.
Why is that? To protect people's vacation homes on the beach?
(There are a lot of tall buildings in Tokyo)
It's ironic to hear the ones who just made that same lifestyle decision complaining about the high prices. If you just moved to SF for the city life in spite of the rents when you could have worked in Texas, you're kind of part of the problem.
(And then everybody else fusses about how it isn't fair they can't afford a flat on Wall Street or a 2br house on the beach in Kauai)
The price of a house in SV has quadrupled (or more) in the last 25 years. Wages have increased,but not nearly as much. Newcomers have it disproportionately harder than the longtimers here.
That said, I agree with your comment.
I don't live in a mansion by the beach, I'm 22 miles inland, downhill from one of the world's most effusive volcanoes. Where I can afford to live.