From what I see, the spin on this phenomena in this story is incorrect. The real story here isn't the tech companies, its the lack of available housing in the area due to a decades long aversion to building more housing and a huge jobs/housing imbalance amongst almost every city in the SFBA. The real answer is not raising wages to increase competition for a fixed amount of housing, but to increase the amount of housing such that the needs of these workers can be met.
Exactly. High house prices are caused by a scarcity of houses. This scarcity is often due to restrictive local laws to release more land for housing and/or the permission to build up if there isn't sufficient land.
I think you'll find (in general) that the people most opposed to new housing (long time residents) are the ones paying the lowest property taxes, due to Prop 13.
Newer homebuyers who are paying taxes on the actual market-value of their homes tend to spend far less time at Supervisor meetings.
Actually I think you'll find that your guess is completely wrong. Long term residents don't face as much issue with new housing because they already have made the lion share of their gains. Newer homebuyers are the most at risk if higher supply causes their 1.5M house to drop to 1.2M because of higher number of houses in the area.
This is all true of course, but it's not what I said.
While it might be more economically rational for newer homebuyers to be the ones fighting development, it hasn't been my observation that they are. Obviously I could be wrong, I'd love to hear stories of rampant NIMBYism among the newly-landed.
My anecdote counters your anecdote. I find that the newest members of a neighborhood are the ones most likely to fight new development. The older people care but they don't have as much vested interest because they don't lose as much money.
On account of Proposition 13, existing property owners in fact do not form the main tax base. Personal income taxes are in total greater than property taxes in California. If you earn more wages your income taxes increase, but if your property appreciates your property taxes do not increase.
Property owners get to vote and they stand to realize 100% of their capital gains, but they aren't really subject to taxation.
Property owners do not get to vote in the USA, not even in the Bay Area. Citizens get to vote.
Citizens that own property are very motivated to vote against construction and so far have shown extreme solidarity against allowing dense construction even in small zones. Meanwhile renters, who appear to be a slim majority of citizens in the area, are not organized and do not vote reliably.
How much any one group may or may not contribute in taxes has very little to do with political outcomes since taxes don't vote. At most there is an indirect effect as city budgets drive strategies to collect more revenue by officials. Those officials still answer only to voting citizens.
>Meanwhile renters, who appear to be a slim majority of citizens in the area, are not organized and do not vote reliably.
Rent control / stabilization gives them an incentive to not allow construction as perhaps they, like all humans, oppose change but now don't have to face the negative consequences of opposing it.
50% of apartments in NYC are under some form of rent control / stabilization.
Even worse, renters groups and community organizations are divided. I never joined the San Francisco Renters Federation because of its devotion to rent control and its hostility to landlords. Similarly, the Council of Community Housing Organizations is focused on raising money to the detriment of making housing.
When the Bay Area Renters Federation and Grow San Francisco started, I felt some joy. Finally, after all these years, here is a housing movement that I can support.
This is due mainly to CA's very progressive tax rate, it makes the lions share of income based on capital gains and therefore the tax revenue much more variable than in other states.
This is unrelated to property taxes, which go to the city/town not the state.
What they call in Economics - Baptists (environmental objection to sprawl, objections to building higher rise etc) and Bootleggers (people who benefit from selling high priced houses, land tax receivers etc)
Even if the cost of housing dropped 30%, do you think our bus drivers could afford a house/townhouse?
And do you think we can build enough housing to cause, say, a 10% drop, or a 30% drop? (Not saying we shouldn't try... just that it'll have a minor effect.)
You don't need an [overall] "drop" in prices. You need housing prices within a broader range. The other problem is Prop 13, which freezes taxes for the current homeowner, thereby incentivizing the fight against new development. Forget that I mentioned Prop 13 for a second and just imagine cities in the Bay moving mountains (or rather, single-story/use retail) to incentivize the construction of four times as much housing at all price ranges. There is a reason a place like Atlanta is affordable - they build.
How we build is another topic but just focusing on underutilized properties and getting permissions and rights out of the way faster would make a huge difference in the cost - to - build. I come on HN to talk this a lot because I am a developer turned developer and if housing where as easy to build as software...you could drive a bus and not have to sleep in it.
An 80% drop is probably achievable, it's also not going to happen. Housing in the US is a horrable mix of bad incentives resulting in a large drag on the economy.
The indirect costs where a taxi is more expencive because rent is more expencive means homeoners should be better off with a drop in prices. However, everyone acts like their own investment is the only important thing.
Probably not a house or townhouse, but there are many cities in the world where hardly anyone can afford that anyway. We should aspire to create affordable, nice apartments. You can raise a family of four comfortably (not by American standards, but world standards) in a 1000sqft apartment.
I dont know about Palo Alto, but this is a big problem where I live in Brooklyn, and in NYC in general. When there is gray money coming into the market, prices go up. Honest earners get pushed down, and the push-down happens all the way down the chain. See the article below for more details. Of course in the Bay Area, there is an additional dynamic of restrained building which might be the bigger problem.
https://www.nytimes.com/news-event/shell-company-towers-of-s... "From Manhattan condominiums to California mansions to gentrifying neighborhoods in Brooklyn, shell companies are increasingly pervasive in the world of real estate. These articles explore the people behind the opaque deals."
NYC has quite restrained building also, almost comparable to SF. The tall stuff was mostly built long ago, and the newer stuff (E.g. Long Island City) is opposed by local politicians (Van Bramer for instance).
Otherwise why on Vernon Blvd in LIC next to high rises are there 2 story rowhouses?
LES, West Village, parts of Park Slope, LIC have historic districts (I'm forgetting many of them)
Opposed by local politicians or not, new buildings have and are going up on both sides of the east river. NYC could do a lot better, but credit where credit is do. It is doing significantly better on this front than SF.
Is this really the case? Or are there a lot of occupied (as in, rentals) houses owned by overseas investors? Why would it make any sense to leave a property in the bay area empty if you can add rent to the benefits of your investment?
"Why would it make any sense to leave a property in the bay area empty if you can add rent to the benefits of your investment?"
A lot of these people are really rich. They don't think like us poor people.
For many of them, the houses they buy and leave empty aren't investments. They already did their investing and made money. This is a key difference in the thinking; for many poor people, houses are considered an investment. These rich people aren't investing; they're spending or parking some of the money they made elsewhere. Buying a single apartment to rent out as an investment? How quaint. How small.
For some, this is something they buy to park their money in such a way that it can't be simply taken away (bank accounts can be frozen, gold or other such small items can be confiscated, but it's awfully difficult to simply take someone's house when that house is in a foreign country with strong property laws) and is unlikely to vanish overnight.
Secondly, it's my house, for me to live in if I feel like being in the area for a while. It's just nice to have my own place with my own personal belongings that I can leave there, and drop in or let family and friends use whenever I want. Sometimes, hotels just feel impersonal, and they're more public than I'd like, and I'd have to bring with me everything I needed.
What they are not doing is getting into the landlord business. As a very wealthy person with houses all over the world, I wouldn't want strangers living in my house. I wouldn't be able to keep my things there. I wouldn't be able to just use it or offer it to friends whenever I wanted. I could make a tiny bit of extra income by being a landlord? That extra income is worth less to me than having the house empty, available for me to use or dispose of however and whenever I feel like it.
Sure leaving a SV house on Marina Dr. empty is nice just in case I want to use it, but we ought not condone or enable this self-serving behavior. It's disrespectful. Why do so many in this country still admire these types of wealthy people?
> we ought not condone or enable this self-serving behavior.
so what do you suggest? make it illegal to not live in your house ? Have a city inspector drive by once a week and see if lights are on and cars are parked nearby ? Every homeowner has to show up every 90 days to get their property ownership license stamped ?
sure, having vacant houses is a waste of resources. but having wealthy people actually use their money - even in a wasteful manner - can be a good thing. more money moving through the economy is better than less money moving through the economy.
You say that that like it's a crazy idea, but Vancouver's done just that, and enacted an empty house tax[1]. It took effect at the beginning of this year, and it's not a huge amount (~$7.5k) compared to the price of a house. What's interesting is the penalty for lying - $7.5k/day. How this works out remains to be see though.
did you read the comments yesterday about the traffic-ticket guy ? top comment was someone who was ticketed after he sold the car and SFO absolutely would not accept his indisputable proof of innocence. If SFO can't even apply a rule fairly with a $200 penalty, what do you think would happen if they were entrusted with meting out $7500/day penalties?
I also have huge issues with the government deciding what you can do with your property after you've bought and paid for it. If they can change the terms of your contract, worth 6 and 7 figures, that not only erodes faith in the real estate market but it effectively means you never own it in the first place (inb4 the tax-protester argument of "you never owned it anyway because tax". yes I know that).
It's only your property in so far as the government/society surrounding you says it is, unless you plan on defending it yourself, but that didn't work out so well for a certain group in Waco, TX.
I'd be for 99-year or lifetime leases. Just so that you can own your property for as long as you're alive, but not long enough to establish mini-dynasties where the only people who can own property are extremely wealthy (family becomes wealthy because they inherited a house and have no mortgage, supply of houses goes down, prices go up, gradually the only people who own them are those who inherited them).
I'd suggest applying a tax proportional to the market increase in value on secondary homes. In other words, if you really want that second home, go for it, but you won't be making any money off it. Think a million dollars tax for some years on a pricey home. I'd also be sympathetic to people who would like to take it further and look at the negative externalities, so those could be included into the tax.
All this happens when you go to fill out your taxes and declare your properties and primary residence. I don't want to tell people they can't do it, but they ought to pay the price for disallowing others to enjoy our most beautiful locations.
How about keeping the capital gains tax I suggested on secondary homes, thus keeping out one class of people, those who are actually making handsome profits on this behavior.
Renting out to people during the 6 months of the year is already an incentive, you get a check each month. You might also get to talk to a few people, learn a few things and make some new friends. Not sure if there is renter insurance, but that might be nice in case you get a tenant that damages the place. A service like that might give property owners some peace of mind.
Harsh as it sounds, and without wishing to be personal (but of course, everything is personal to someone) that's good news. It should discourage you from doing more landlording. Maybe even encourage you to stop making this loss.
I also want to discourage anyone else from doing more landlording, and a tax break for you and others like you would work against that.
How do poor people get a roof over their heads if there aren't any landlords? It's ridiculous to expect everyone to have $10,000s in cash to get a mortgage before they're allowed to have a place to live.
I said more landlording. Some landlording is necessary. There comes a point where it's creating a new rentier class and a new permanent underclass. I'm against rich people taking advantage of a very unfree market to get a permanent low-risk income from poor people, while ensuring that prices are so high those poor people will be kept like that forever.
I've rented the same flat myself for ten years and barring any huge changes, it's in my financial interests to do so forever, rather than buy a house. That should be the common state, but it's more expensive in many places at the moment to rent than to buy. Which suggests, to my mind, that something should push that balance back the other way.
I just think it shouldn't be very profitable. There are some things a well run state or region can be very good at (and in a number of places around the world, is very good at); maintaining a rental housing stock or other such housing programme is one of them.
not only that, but buying isn't for everyone. Not everyone plans to stay in one spot for a long time. If you cut out all renting, there aren't many more options than forcing everyone to buy a home every time they move somewhere.
point taken. I bought my house in the wake of the 2008 crises (bought in 2011 when prices were rock-bottom). One point of view is that I did a good thing by buying when the market was at a free-fall (even though I did it strictly for investment purposes, I'm a single guy with no need for a 4bd house). I helped create a bottom, I helped create a demand where there was none.
People have made your argument but with short-selling in the stock market: "short selling should be banned, there shouldn't be incentivized pessimism in the market", but those people overlook the fact that short-sellers are obligated to buy back, and they can create a bottom in the market when there otherwise wouldn't be one. (if XYZ corp just went up in flames, who the hell would want to buy them (thus allowing more people to unload their shares)? Why, short-sellers of course - because they have to )
I don't agree that my argument is akin to wanting to ban short-selling. I don't see the link. You've brought up an argument about creating bottoms in the market, but my argument has nothing to do with those.
the similarity is that you want to ban something ("landlording") that doesn't have a positive, feel-good reputation (poor people getting cheaper houses/rents), but which has positive effects such as creating a bottom and increasing market efficiency.
People have been conditioned to do so. There's no intrinsic reason why property rights should be protected to a greater degree than workers' rights, but libertarianism promotes awareness of one and not the other. It's kind of a circular reasoning, but useful as an observation.
That's an overly broad and inaccurate depiction of libertarianism on the issue. A considerable segment of libertarianism advocates such measures as land value taxation, which places it directly at odds with the land owning class.
Often investors in Australia leave houses empty as there are different laws around capital gains taxes for investment properties (rentals) vs primary residence (which you don't have to actually live in all the time). It's often cheaper to not rent a property out and to get the lower CGT rate than to receive rent but have a 30% CGT when it's sold.
Because they are so rich that renting is a hassle. They don't need the extra money. The exact same thing happens in Vancouver, BC and their is a new law that fines people that leave their house empty.
Have you ever been a landlord? It's a huge hassle (it's impossible to do property management remotely, let alone in a foreign country), and if you have the wrong tenants (an easy mistake to make if you aren't experienced enough), things can end up going pretty badly!
Of course, there are property management companies that will market the property, screen tenants, handle rent collection, and perform maintenance for you.
PMs often take 8% (+/- 2%) of the gross rent receipts for their services. In many places, that is about the same amount as the profitability of renting the place out, meaning that if I am financially able to hold the place empty, taking on the risk, time, and aggravation of finding a PM and having them rent it out doesn't leave me meaningfully better off. So, I'd rather leave it empty.
Yes, it's a huge injustice. Foreign nationals should not be allowed to own property in the US, period. They're turning our housing markets into private casinos, to the detriment of American citizens.
No, we should just keep building more housing to sell to them so there's enough to go around.
Not my metaphor but I like it: imagine if there were laws restricting GM from making more than a million cars a year and we sat around complaining the Chinese were buying all the cars and there were none left for Americans. Would you get rid of the stupid law or ban the Chinese from buying our cars?
Whichever is the path of least resistance -- in the case of housing (unlike cars), it's actually the latter, given that you have more people with domestic political power opposed to the former.
The analogy also breaks down in that housing is a bit of an exceptional issue here, unlike cars. You literally need shelter to survive, but you can always take public transit or use Uber. Remember, the article we're commenting about shows service workers without homes because they can't afford to pay rent.
Also, it's worth noting that, unlike some other users, I've never said anything about specific nationalities.
It takes two to tango. Shortage takes both low supply and high demand. The tech industry did create this problem by suddenly attracting a ton of talent to the region. The municipalities passed on their opportunity to avert the housing crisis by embracing the change and their new role as Manhattan's tech counterpart, but it also could have been avoided had we chosen some other place, or a more remote/distributed mode.
It is the responsibility of industry to attract people to a region, so these people can fill the jobs that industry requires; in most other places, this is celebrated.
It is the responsibility of government to ensure a well functioning society.
It appears clear to me that the government is failing its responsibility. The governments could have averted this crises by not zoning their municipalities for 3x, 4x, 5x more jobs than housing units within their borders. Its not like many of these offices have existed forever, they willingly allowed the creating of new offices, with out the requisite housing to support. (See, New Apple Spaceship HQ, Facebook campus, and expansion in Menlo Park, Google's constant expansion, the numerous new office parks that have sprung up in every city on the peninsula in the last 10 years).
Much of this is jobs/housing imbalance is a result from prop 13, which disincentivized housing construction by making the development of commercial property more net tax advantageous (taxes in minus services provided) when compared with housing.
Democratic governments exist to serve the people who vote for them. I'd say they have succeeded in increasing property values for property owners who voted for them. Every single house in SF is owned by someone, and that someone benefits from this situation persisting, so there are quite a lot of winners.
Democratic governments exist to serve the people who vote for them.
Democratic governments should serve everybody, not only the people that voted for them. Of course they'll have some obvious preferences, but neglecting or even crushing a sizeable group of people because they're not their voters is not what democracy is meant to be. It's not even wise.
>The governments could have averted this crises by not zoning their municipalities for 3x, 4x, 5x more jobs than housing units within their borders.
Each municipal government is correctly pursuing a local optimum by doing this. The life of an existing homeowner gets no worse for the presence of a tech company office in their municipality, and the tax revenue from the company can be used to fund better services and/or lower taxes for locals.
Night-time populations, on the other hand, require water and sewer and education and policing, more wear on the roads or staggeringly expensive public transit buildouts, etc.
Each city is pursuing the best interests of its home-owning electorate in signing up for the tax revenue without the responsibility.
Ignoring property values and aesthetics, the first municipality to liberalize housing construction will get to pay all the scaling costs that the whole region should have shared.
But successful companies have a strong influence on government -- keeping taxes low, else threatening the leave.
As Bernie said: govt doesn't regulate business - it's the other way around. Businesses dictate what they want. Blame shareholders, and boards of directors? But I don't expect them to change -- they're having a great run.
The first graph is misleading, as it shows a spike, but what really matters is the YoY % change. As you can see in the second graph, the YoY % change relative to inflation has been above 0 since 1979. You can't have an asset (or cost, if this is rents) that is vital to life increase in price above inflation literally every year since 1979 and expect that the price will be reasonable in 2016.
I have to disagree with you. Can you provide an example of any desirable major metro in the US (besides Detroit) where housing prices have actually gone down YoY in the last 30 years? Even cities like Atalanta and Dallas with virtually unlimited space and new housing-friendly construction policies have had consistently increasing median rents for a long time. Small percentage increases in rent/house prices are normal due to a number of factors. It's the large spikes outstripping the normal increases that make things get crazy.
And you can see this empirically in SF as well. If you were in the city post dotcom crash, housing was easy to find and also reasonably priced for CA. It's only been in the last 10 years or so that everything got out of control due to the new tech boom.
I don't consider either of those a desirable location, though. That's pretty key to this whole argument - SF and cities like it are places people actually want to move to rather than just buy properties there.
> I don't consider either of those a desirable location, though.
Why not? Tampa has nice weather and no state income tax, and Las Vegas is a fun place to live.
Without real, objective measures on "desirable location" you're basically stating a tautology. The only places with rising real estate prices are desirable locations, which are evincing desirability by rising real estate prices.
I've spent quite a bit of time working in both locations and find them far inferior to many other US cities (SF, LA, NYC, Austin, Seattle, Portland, Chicago, Miami, Dallas, etc.) in terms of general quality of life for people under the age of 40. You're the first person I've met who really seems to think otherwise.
It's not really a tautology when we could take a simple poll of our target population and find out which cities they would and would not want to move to. I'd be willing to bet that neither LV nor Tampa would be very far up that list. I wish there was better data on median rent prices over time per city so we could do a comparative analysis with real price info.
Any other place doesn't have the literal geographic barriers to construction that the Bay Area does, or Prop 13 distorting housing incentives. For instance, Atlanta can absorb tons of new people moving in (which they are!) and there's infinite space to build out in all directions in the suburbs there.
Of course everyone will still end up stuck in traffic.
Hence why building suburban sprawl is unsustainable, and is actually a major economic problem for the Bay Area & most of the US. Eventually you end up like Detroit, since suburban sprawl is very expensive to maintain.
Urban areas need to densify rapidly if we hope to avoid financial catastrophe in the US, and many areas need to be returned to agricultural use instead of suburban sprawl, as with sprawl we have essentially covered our most fertile land in low density, high maintenance housing & support infrastructure.
http://www.strongtowns.org/journal/2017/1/9/the-real-reason-...
You missed the point. The trend towards contract workers with fewer benefits and lower wages. Wages are actually going down at the same time housing is going up. Yes they fucking need better wages and benefits.
So if we pay these workers more, and they compete more effectively for housing, then we will get a sob story about how industry XYZ is underpaying their workers and now their workers are unable to afford housing in the SFBA and net number of people who's lives have improved is 0 (well, maybe the landlords).
I agree that its awful that their wages have gone down. This is a huge issue, but the issue should be looked at in isolation from the lack of secure housing within a reasonable commute distance for pretty much everyone in SFBA that makes less than ~80k. That issue is much larger than the unfortunate story of these service workers, and in my opinion is, by far, the largest social justice issue that the SFBA faces.
But raising their wages won't increase the number of houses in the region, will it? The pigeonhole principle will still cause exactly as many problems as it is now.
Even on an absolutely selfish level: because someone who had a good night's sleep is a lot less likely to crash the bus into a wall.
Experimenting with pushing a human being to their very limits just because you can tends to have blowback, eventually. If I found out my company shuttle underpaid its drivers like this I'd be disgusted, but I'd also be worried for my own safety.
Because on of those working homeless is going to bring a gun to the head office someday.
On a related note, holy hell California was the most gun-obsessed place I've ever visited. Weapons stores everywhere! Shut some of that down before someone gets hurt.
Until the tech industry is willing to show some true solidarity with the class of workers who serve it, this is a distinction without a difference. I guarantee that if the collective influence of some of the world's most powerful companies wanted there to be more affordable housing, either out of some noblesse oblige like you see in NYC, or because their employees really turned the screws on them, it would get built.
You seem very sure by offering a guarantee, but how exactly would these companies go about bypassing city councils, regional authorities and current long term residents, many of whom seem quite hostile to the idea of density and housing?
Sure, Google/FB/Apple have plenty of money and power, but I don't think they have so much power that they could simply build whatever they wanted without approval.
By the same kind of organized political resistance that affects changes of a much larger scale all over the country. It amazes me that in a year where a coalition of white working class voters were able to propel someone like Trump to the highest office in the land, that people of far greater means see much smaller political change as impossible.
The coalition impeding affordablity now thrives precisely because tech industry workers refuse to align themselves with the lower classes suffering the brunt of the damage under these circumstances. The ownership class then gets to paint themselves as trying to defend against all these encroaching barbarians that are making things tough for the little folks, all the while profiting from the exploding housing costs. They consolidate power around keeping out the "other," and then turn around and use it to soak tech workers (and by extension their companies) with higher rents. The play the bottom and the middle against each other and stay on top.
The hostility is a ruse, just like it is in politics on the national level, and it has to first be shown for the lie that it is. As an example, what if wide swathes of tech workers held rent strikes until more affordable housing is built for low income residents? Suddenly the narrative that sustains the ownership class becomes less and less coherent, and space is opened up for actual reform.
"people of far greater means" drastically supported Clinton over Trump and look what happened. Money does not equal political power. This really isn't the tech industry's fault.
Forgive my saying, but I don't think it's that frustrating. I really do expect rich people to vote for a ham sandwich if that ham sandwich runs as a Republican. Unless they're unusually far-sighted rich people who really care about ecological and sociological stability for maintaining their wealth, a lot of those tax plans must just sound too damned appetizing to pass up.
Voting, though important, is not the only form of political redress. Immigrants in this country have successfully lobbied for all kinds of beneficial political reforms through protest and financial support of groups representing their interests.
Well, easiest way is to collect enough signatures for proposition and then to vote for it. The problem is is that people don't vote. Also Trump hijacked the republican infrastructure which through gerrymandering and the fact that a lot of people don't vote gave him the votes he needed to win.
I guarantee that if the collective influence of some of the world's most powerful companies wanted there to be more affordable housing, either out of some noblesse oblige like you see in NYC, or because their employees really turned the screws on them, it would get built.
Tested and disproven.
Google tried to develop thousands of new units of housing in 2015 and was rejected by the Mountain View city council.
If you see my comment up-thread, this can only be successful when it's premised on a broader coalition with clearly stated values that oppose the ownership class. Mountain View can shutdown Google because they can just paint this as tech industry villains trying to screw over "the little guys." The only way to get redress for affordability is to first pursue it for the most disadvantaged and rob the ownership class of the narrative that undergirds their political support.
But their wages have gone down. They get passed to crappier and crappier staffing companies who find people who will work for less. Their wages are being cut at the same time housing is unavailable. You cannot separate the complexities of this situation, and there are a lot.
So if we pay these workers more, and they compete more effectively for housing, then we will get a sob story about how industry XYZ is underpaying their workers and now their workers are unable to afford housing in the SFBA and net number of people who's lives have improved is 0 (well, maybe the landlords).
I agree that its awful that their wages have gone down. This is a huge issue, but the issue should be looked at in isolation from the lack of secure housing within a reasonable commute distance for pretty much everyone in SFBA that makes less than ~80k. That issue is much larger than the unfortunate story of these service workers, and in my opinion is, by far, the largest social justice issue that the SFBA faces.
Absolutely this. The fix is not to build more luxury houses (which is the only way to profitably build here because of building and permitting costs) but to build more regular houses. Less Ferraris, more Honda Civics.
More of everything. If there are 10 people looking to buy a car (one from each decile of income in the US), and there is only one car for sale, a Honda Civic, the Civic is going to be sold to the richest person of the 10, at a price slightly more than the second richest person can afford.
Well, and the tech industry loves to locate in "hip" high-density areas, when they know that nearby housing and traffic are problematic. And who can argue -- it's good for their business to be in "hip" areas... it attracts talent.
At some point, as prices skyrocket, it will slowly make sense to locate a business in less congested areas: Livermore, Tracey, Gilroy, or Merced.
1 in 10 Cal State university students are homeless [0]. Anecdotally, I know of people with mega commutes (2.5 hrs from central valley), my phd student friends at Stanford live in garages. There is a housing crises in the entire state of California. The article seems to direct the blame for the insecure state of these drivers living situations at tech companies, that is a red herring. The tech companies might be able to help the situation by paying more, but the "blame" should assigned to the ~200 municipalities in the SFBA that have produce more office space than housing over the past 30 years.
This low slung, suburban sprawl is strangling growth in California, and eventually towns like Vista won't be able to afford the maintenance costs on their aging infrastructure, at which point Vista ends up like Detroit.
We should be building centrally located, high density developments that are transit oriented, instead of light rail and commuter rail stations being surrounded by 1 to 2 story office slums, they should be surrounded by 6+ story mixed use buildings, with retail, office space & residential appropriately intermingled.
Even with land prices in SoCal & the Bay Area, safe & comfortable housing can be affordably built without government subsidies, we only have to lower the barriers to allow this to happen. Additionally, it will put our towns on a solid financial footing with lower taxes to boot.
>The real story here isn't the tech companies, its the lack of available housing in the area due to a decades long aversion to building more housing and a huge jobs/housing imbalance amongst almost every city in the SFBA.
Don't you think, say, Mark Zuckerberg buying and bulldozing neighbouring homes for privacy is the epitome of the tech world's affect on this? Tech workers aren't that concerned, are they?
Everyone has a responsibility. The city but also the tech companies. It can't be that those people, with best jobs, best money don't have to be care or are not responsible because the city should have done something and some time.
Typical HN response. If an area is basically built out (which most of Silicon Valley is), how do you build more housing?
And no, the answer is not change zoning laws and build apartment towers -- places like Mountain View, Palo Alto, Cupertino, Saratoga, even San Jose -- aren't going to suddenly build dense housing on residential lots.
The concept of zoning laws are less than 100 years old, and their spread was mostly due to racist exclusionary policies in the 50s/60s. San Francisco just wrapped up changing the zoning of western SOMA. Mountain View has 28k new apartments in the pipeline, increasing the population of the city by 50% [0]. There are plans at the state level to remove local control of housing development from municipalities that fail to build enough housing [1].
"Zoning Laws" are not a static, immutable fact of life.
Why is the answer to not change zoning laws? Why is the answer not to remove local say over what gets built and whats not? Why should the area's property laws remain frozen to an arbitrary point in time?
Silicon valley is not "built out". Single family homes in what happens to be a big congregation point for workers in a high growth area like tech is just not the right idea. We dont have to go full Manhattan. Even if most Bay area cities developed like Barcelona or Paris(4ish stories) we would dramatically change the housing affordability.
Source: a number of years in Europe. And no, we're not talking skyscrapers, but more 2/3 story developments, perhaps with some businesses on the bottom floor on more frequented streets.
I've lived in Europe. I've lived in the east bay when the whole Fremont to Walnut Creek 680 corridor was orchards and fields. I lived in Almaden Valley when it was orchards.
My definition of built out is simple -- municipalities planned for X, implemented X, and we have X. Getting a community to go to Y, yeah, no.
Thought experiment - enforce denser building (maybe use eminent domain) in Atherton. What do you think will happen? (Extreme example). Apply that to Saratoga, Cupertino, etc. in the more rural residential areas, not the commercial areas. Commercial is building as they can and that won't be enough.
This is nonsense. You can't claim that municipalities are static, when you preface your comment about how the orchards went away. They aren't static. They never were.
I have never seen a claim from anyone who wants to block new housing that actually stood up to the slightest scrutiny. There is only ever one reason why people take this position: homeowners in California are hopelessly hooked on the Free Money™ from ever-increasing home prices. It's like a drug. Get your hands on a house and you're all set. With Prop 13, any risk is almost totally externalized. We see the result in action when cities allow additional office space to be built but not additional housing to go with it. The message is crystal clear: keep those home prices going up; keep the money flowing in. Screw anybody who hasn't bought yet.
When anyone proposes additional housing, all manner of excuses (and ugly accusations) come up: history, neighborhood character, the environment, claims that there are no more places to build, racism, classism, you name it. It's always a smoke screen. They are always lying. Always. None of the people blocking housing care at all about any of those things. It has always been about one and only one thing: the Free Money™. Anyone who says differently is lying.
...claims that there are no more places to build, racism, classism, you name it. It's always a smoke screen. They are always lying. Always. None of the people blocking housing care at all about any of those things.
Are you an aspiring mind reader or do you just enjoy making blanket statements?
I lived in a small 50,000 population Southern Ca. beach town that approved a massive 9000 resident master planned tract home/apartment community in 1999.
Character? It absolutely changed. We went from having essentially no big box stores to a Walmart, which beget more strip mall chains. Previous housing developments weren't on this scale, so yeah I'd argue thousands of semi-generic "tuscan villa" styled homes do change the aesthetics of a town.
Traffic? Went up significantly, as the whole community was built east of the existing city (and beach), meaning the main arteries were now quite full.
Classism/Racism? Doubtful. The town wasn't pristine to begin with. The majority of these new homes were more expensive than the existing housing stock complete with golf courses and swim clubs.
So now what?
More roads got built to alleviate traffic, a new outlet mall, new construction alongside the new roads. It's not helpful to act like these concerns are fake. California is a gorgeous state.
Not everyone wants to carve up every last canyon in the sake of making a miniature Irvine (or any strip mall, master planned lookalike community).
Of course some of these concerns are real. But your last statement could also be phrased "not everyone wants to change anything, in order to give people places to live".
Well then municipalities will have to plan for X rising to Y and plan for and implement Y. Civic planning doesn't have to get frozen in time and population.
You get them to conform by passing laws at the state level to take power away from the local residents. I know they wont comply, we have already seen the problems that giving local control creates in this scenario, so the solution is to make a decision for the larger and long term good.
Well sure they will fight, but thats not a good enough reason to not do something. Hopefully the state government has enough political capital to deal with the fight that the relatively small population of homeowners will put up.
There's a spacious middle ground between single family ranch-style houses, and "apartment towers". A handful of four-story buildings would make Mountain View a much nicer place. If there's a multi-story dwelling anywhere in Mountain View, I haven't seen it.
As for "built out", most of Silicon Valley consists of parking lots and freeway interchanges.
100 Moffett, Mariposa Heights, and 1101 West are all four-story of greater condo complexes. There are probably others that I'm not aware of (I work in Mountain View but don't live there).
1101 West isn't even built yet, and nobody has been living at 100 Moffett for more than a month. These seem like odd choices for your examples. But yes, these are better than what we had. Within 1000 feet of the train station there are chiefly 1-story buildings and parking lots. Replacing just that zone with dwellings over retail would transform Mountain View into a place worth visiting.
"multi-story" => "two stories tall maximum, and half of ground space is parking lot"
Places like Paris are entirely (or nearly entirely) 4-5 stories tall, with no parking lots. This allows incredible density simultaneously with great livability (especially for pedestrians). (See [1])
So technically the gp was incorrect, but I would posit there are few (any?) places in Mountain View, or even most of the bay, with a floor area ratio (FAR) > 1.0.
The only reason people move to Paris is because the country is hyper-centralised and 'all' the jobs are in Paris. That's also the only reason that limits the rate at which people are moving away from Paris. Housing in Paris is unaffordable for low wages. People who can get rid of their job move to smaller cities across the country, people who cannot move to suburbs and undergo more and more commuting.
Concentration of jobs in the same place, unaffordable housing, does this ring a bell? :-)
Why not? Seattle is built out, but apartment buildings are going up regardless. In West Seattle, they are going up near commercial areas and will spread out from there.
(I'm not particularly happy that so many people are flooding into the city at an unsustainable rate, but it's not like the city wants to clamp down on Amazon for increasing their tax base.)
For history sake, before everything from Almaden up to Page Mill was basically built out, Highway 85 between 17 opened up (realistically) around 1994. Within about a month of it opening, if you were driving from the south on 17, it was faster to go 17->280 instead of 17->85->280.
Then if you want o talk 87/101 down near Almaden Valley... the addition of 87 and 85 turned upper middle class neighborhoods (with good schools) into way less desirable neighborhoods and the track records of the schools dropped significantly. (I lived down there pre-85/87).
Sigh. I'll stop but the "we should do X" without thinking about reality around certain situations on here really reminds me that we can be wicked smart and successful in an area and completely clueless in another.
Exactly. And people keep forgetting about more common things like parking and traffic. If you increase the number of people in the area, then traffic is going to suffer exponentially without a proper mass transit system. But the Bay Area doesn't have even a half-way competent MTS. BART is basically end of life, and it doesn't connect effectively with Caltrain. It requires multi-billion dollar investments in MTS, but there has been none since BART in the 60s, which is inadequate and run down now.
It is true that traffic problems could suffer temporarity as density increases and the infrastructure does not keep up. However, if it can be anticipated, and in SV it is, that the demand will be continue to be high, the municipalities can plan for increased public transportation with better service schedule for everyone. This includes larger investments like roads and subways in the long run.
In particular, increased tax base from new homeowners and commercial properties can be earmarked to support mass transit infrastructure and schools.
This is a bit of chicken and egg. There is very little appetite for building mass transit until there is density and thus cost effectiveness, but your point is how can you increase density without first building out mass transit. So they would have to go hand in hand, where you build up and increase mass transit at the same time. Obviously mass transit is going to take longer to build than housing, so there is going to be short term pain.
I'm assuming by "short term" you're talking geological time, because in the 20+ years I've lived in Silicon Valley, I've seen almost zero improvements to the Mass Transit. I've seen some minor upgrades, but it's still generally terrible. So unless concerted effort and a lot of taxpayer money is dumped into Mass Transit, I don't think anything is going to happen. The simple fact that BART still doesn't go down to San Jose yet, or extend out to Tracy is embarrassing, but it's been talked about for decades.
Down vote with no comment on reality of Bay Area housing dynamics? I'm a native, lived from the east bay down to Santa Cruz.
The answer to every housing problem is not build more density. Sorry, the valley was built as a suburban sprawl and you have generations of families on parcels as well as recently purchased.
Newly constructed housing in Morgan Hill, an hour+ commute to Silicon Valley during peak rush hour is still $1M plus.
> The answer to every housing problem is not build more density. Sorry, the valley was built as a suburban sprawl and you have generations of families on parcels as well as recently purchased.
Sorry the answer to every housing crisis is build more housing your attitude is the exact reason why housing is so expensive in the bay area. I mean you could try to reduce demand but good luck with that, and if you can't reduce demand you have to increase supply.
Your perspective as a native and long-term resident is of some interest, but it doesn't mean you automatically understand the economics of the situation.
I don't think anyone imagines that the needed changes are going to be politically easy. But as long as more and more people want to live here -- a trend that shows no sign of slowing down -- our only choices are to bulid more housing or tolerate ever-higher housing costs. There is no third option.
I'm a native of San Francisco, a lifelong resident. But I'm also a millennial raised with both a conservative concern for the long term and an optimism for the future via science. And the big story is that the suburbs are unsustainable in every way.
Preserving neighborhood character feels nice, but life is change. Preventing old houses from being torn down does not prevent old residents from leaving. You want preservation, then you better be prepared to pay for it. But the middle class suburbs, all those miles of pipes and miles of roads and miles of wires, are fundamentally insolvent. Even before you consider Proposition 13.
Its been going on since late 90's. I used to work as a security guard in 2002 and 2003. Guardsmark, a security guard contracting co, then used to provide good health insurance to its employees; so, they had to charge more for their services. Then, other contracting companies were like: we can provide the same service with less money. I worked for the latter companies as well: no health insurance. In the end, the companies who get services from these contracting companies, see how much they save by selecting the lowest bidder.
This is happening in IT contracting too. Not every one who works in IT is a rock star programmer. So, companies contract out to contracting companies (like offshore Infosys, TCS, etc; onsite ones like Robert Half, etc). You see, how wages of non-rockstar IT workers have diminished since 2000. Who is making the killing? Of course, the contracting companies like Infosys, Robert Half. The recruiters don't make much; the workers get less.
I do love the "we contract to a third party" line used by multiple companies. It's pretty much the H1B body shop contracting applied to service jobs. Just because you hired someone else shouldn't mean you are off the hook for what you are well aware is going on.
I still think split shifts should be illegal unless compensated.
It also allows the company to talk about how "all of its employees" get X, Y, and Z, without bearing the costs of providing those perks to everyone who works for them.
Imagine if Google had to provide their legendary perks to all of their 'contractors'... The scale of buildout that would be required.
At least some contractors get some of the perks. I've seen kitchen workers, security, maintenance workers eating in the cafes. This article says bus drivers have access to the cafes and gym:
There's only so much that companies can do to provide non-salary compensation (like perks) to contractors and vendors without getting in trouble legally. Blame 80's Microsoft for screwing things up for everybody by abusing their contractors.
My inclination was less that tech companies should abuse their contractors, but that tech companies should actually directly employ people that pretty much solely work for them.
Not implying at all that tech companies are deliberately abusing their contractors. My point was that because Microsoft did do so back in the 80's (and got slammed by the courts for it), now everybody is scared to even appear to treat contractors the same as FTEs.
I don't know all the ins and outs of FTE vs contractor vs vendor (I'm a geek, not an HR person), but presumably there are business reasons for choosing one over the other. "One's cheaper" is an obvious one, but there are probably others (taxes? liability? who knows. me write code).
There are definitely cases where job functions at major tech companies have been converted from vendor/contractor to FTE (Google physical security officers is one I personally know of. Presumably there are others).
Likewise; but one thing I've noticed is that most of the people in these videos support families. The reality is, the new lower middle class cannot support families with a single provider anymore.
Sure. Hillsborough, Atherton, Woodside, Portola Valley, Menlo Park, parts of Palo Alto like Crescent Park, Los Altos Hills, North Los Altos, Saratoga towards the hills, Los Gatos.
Non-American here so I may not fully understand mindset causing this. Simplistic question but why stay in that area then? Why not move somewhere where house can be afforded and which doesn't require 'three hours of sleep'.
Nobody can work on three hours per day sleep pattern so this story can't be entirely true.
If I am working 18 hours per day, no matter how much money I make (enough or not) having no life at all makes it all irrelevant.
This is what I did. I lived in the Bay Area (Mountain View) and thought the cost of living there long-term was unaffordable. So I moved to Chicago and now I'm debt free and have a 3-minute-walk commute to work. I wish more people seriously considered this option. Yes, the winters are cold, but no place is perfect. A thick winter coat, gloves, and a hat are a lot cheaper than a Mountain View rent or mortgage. (This is a very privileged opinion though, and I wish everyone had the option of being able to leave if they wanted to.)
It sounds like the bus company believes employees can magically be available only at certain hours, and in between they need neither pay nor facilities nor respect. Can anyone really work a split shift and actually use the time between for anything constructive?
This is a stain on our industry, and I hope the drivers continue to unionize. The buses are the only reason that the big South Bay tech companies can attract significant quantities of engineers from SF and the East Bay. I think you'd see a significant exodus if SF-based employees suddenly had to deal with 101 and 280 on a daily basis.
I have a suggestion: When you get off the bus, once you've made sure that it's safe to exit, turn your head towards the driver, raise your hand, and say in a loud, clear voice, "Thanks very much!" If exiting from the front door, raising your hand isn't necessary, and you don't have to be loud, but you must still thank your driver.
You have just put your life (or at least, your current physical condition) in the hands of someone who probably makes less than you do in wages. It is important that you provide proper respect and thanks, and simply ignoring them as you exit does not meet that requirement.
This is something I routinely do as I exit the VTA and Marguerite busses I ride; it's interesting how, once I do that, the other behind me start to as well.
Note: I'm not just referring to any specific kind of bus, I'm referring to all kinds of busses here.
Acceptance is a basic human need, much like nourishment. If anything, the author is making a very valid point about the lack of etiquette in the Bay Area.
Coming from the midwest, I am continually shocked by peoples' aloofness and lack of civility here. That stuff would never fly where I came from.
I already thank absolutely everyone who helps me or provides me a service. I just don't pat myself on the back or act like I'm a fucking genius saint for something so mundane and trivial.
I would say 80% of bus riders in Austin will thank their driver upon debarking. It may be a Southern thing, but it cuts across the social strata of the riders.
No, I'm saying that being nice and fixing systemic problems are different things that can often work not just orthogonally but oppositionally. It's not enough of an effect that it'd even cross my radar for being nice to bus drivers, waiters, store clerks, etc. It is enough that I ignore panhandlers, particularly aggressive ones.
I just don't see how you can draw that comparison though. It's one thing to act with some decency toward service workers you interact with during your everyday life while they are serving you, it's another thing to pander to an aggressive panhandler. :(
It's also possible (even likely) that the seed of camaraderie was planted in the minds of some of the following passengers who gave thanks. That may not seem like much, but these things linger in the mind more than we realize. When I reflect on the more helpful projects I've undertaken, most sprouted (I think) from some seemingly insignificant thing long before.
I like how working from home reduces waste transition time. If any companies can make remote work effective, its Silicon Valley companies. Save the environment, and the health of your team by not forcing them to play the road rage lottery every week day.
If anything, communication technology is making things worse. Used to be that doing tech meant needing to buy and run computers. Now only a small number of companies actually house the computers, and everybody else uploads to them. So everybody is free to move where they have the most access to other techies and venture capital resources, in particular, the San Francisco Bay Area.
Another problem is that the law prevents tech companies from hiring workers that live closer to their office. There are plenty of people in East Palo Alto who would love a job driving a bus at nearby Facebook. However, Facebook is not legally allowed to discriminate based on prospective employee's home address.
This is unfortunately as companies like Facebook aren't able to help the local communities around it's office. And when bus drivers who live hours away get hired, they complain about the long commute.
From the article, the big complaint the bus drivers have is that their commute is very long and they cannot go home between shifts. This wouldn't be an issue if people who lived locally were chosen for these jobs.
I'm not sure if you're familiar with east palo alto (and east menlo park), but it is a far different place from the rest of palo alto. Due to a long history of racial segregation, east palo alto hasn't had the success and wealth of the rest of silicon valley.
I think we both agree that there is a "line" between the haves and have-nots. However, the line also exists inside of silicon valley. Giving jobs to the poorer and forgotten residents of silicon valley shouldn't be viewed as discrimination against other unemployed people living elsewhere.
In the case of silicon beach, it is the tech companies that sparked this. They moved in to Santa monice and nearby areas. In a matter of 5 years or so price of detached houses in near by cities (with decent commute meaning no driving on 405 freeway) jumped up 100%. When google and other tech companied moved in,'investors' saw the sign and started gobbling up houses to raze or remodel to flip. And you also have Chinese from China following the trend.
Some higher density condo/apartment were built nearby but I really don't see a sign they are even half occupied.
It is definitely the tech companies that sparked it. Not their fault necessarily.
Sorry, but that's just not the case. I grew up in Santa Monica / Venice. My family moved there in 98 or 99. Houses were 300k. That area has been consistently rising since then. You'd be hard pressed to find a house in Santa Monica for less than 1 million five years ago. Well before Snapchat showed up. There has been so much wealth in that area for a long time.
I see people on FB complaining about rental prices then turning around and complaining about the parking structure and high density housing being built around them. It's one of the most plesant (climate) places on the planet. Tech didn't drive the demand.
I agree Santa Monica, Manhattan Beach, and other cities directly bordering Pacific beach were already expensive and rising steadily. But the cities I was talking are places like Westchester, El Segundo, and Culver City.
Detached house price in Culver City definitely doubled in 5 years.
Tech didn't drive the demand for all of Southern California but for local markets that I mentioned, it definitely did.
Across all the other charts for other cities (outside Detroit) you can see variations of the pattern of things just skyrocketing in the late 90s. There was a dip when in '08 but things are getting back to the way they in the mid-aughts.
I don't think it's all tech thought that might have had a greater effect in certain areas (such as the changes in Venice). Median income for the city is still around 28k yet house and rental prices are insane. We're in the middle of a building boom but it hasn't really added "value" apartments - the rates are still top of the market.
Now we have anti-development measures hitting elections right and left.
I really don't get it. If was able to buy a home in 80s, and I still had had steady employment throughout, raised kids, etc. and saw the value of my house skyrocket, what does it matter if someone builds more apartments or condos and the value goes down a little? I don't get dividends from owning that house. And I'll most likely die in it.
The whole fight seems to not be about home values when the value really only matters if you plan on moving, which, as others have stated, can be pretty rare due to family and other ties to communities.
This might also beg another questions: When looking at places like the anti-gentrification efforts in Boyle Heights, is it about being priced out of the neighborhood (because of Prop 13, your tax rate is set right?) or something more than that?
I debate every day whether it's worth staying in this city and I have it much better than other folks that might not have a choice.
It was happening well before the tech boom. Venice was the last stretch of cheap sand in 200 miles, it was going to gentrify with or without Google or snap or any particular industry.
The retail explosion of Abbot Kinney, for example, predates any tech presence. Venice became cool (and safe) and then the tech companies moved in, along with everyone else.
For those in the Bay who want improved conditions for the cooks/drivers/cleaners that keep their companies rolling, it's worth going along to a meeting of the Tech Workers Coalition[0] (IRL or hangouts).
The reality of owning in the Bay Area, the history, and the current state of affairs is apparently so far from what the utopia HN would propose... you aren't suddenly turning a 30yo Ranch development into a source for housing...
The innocence and lack of experience in the market is ... cute
This is how capitalism is supposed to work. The market is saying the value of driving a bus as a job is effectively zero, something I agree with and very much look forward to the day of robot buses.
Cue the shaming comments of how every company has a moral responsibility to make sure everyone working for them has a good life.
At least they are paying these workers something. Where is your contribution to their well being? I mean besides writing some smarmy comment steeped in indignation thay no one will take seriously.
I'm doing my part. I'm leaving Seattle. I see how bad it is here and what tech companies have done to housing prices and it's terrible. I hate it here.
I realize I'm just one worker. I'm not going to make a hill of difference in leaving. But it's all that I can do.
People I know in non-tech jobs struggle just to survive here. It's not right.
As a former Bay Area resident who could probably not afford to live there with the current housing prices, I'm curious why you lay the blame at the tech companies? Is it because they offer high compensation, relative to other industries? If they lowered compensation across the board, would you view them in better light?
Wouldn't it make more sense to lay at least some of the blame at the hands of current and past residents, most of whom probably don't or didn't work in tech, but were the ones voting for restrictive housing and zoning, often times because they were in favor of discriminatory and exclusionary housing policies?
Tech companies haven't done anything to housing prices. It's people who are convinced that housing is an investment instead of a highly leveraged depreciating asset that block new construction, changing of existing zoning laws, and drive housing prices up.
People in any sort of jobs struggle to survive everywhere. What's your point?
> It's people who are convinced that housing is an investment
Our society is structed such that it is a convincing argument. If tech companies aren't at fault, how are citizens who are doing what they can to get by in this cut-throat world at fault?
People all over the world struggle to survive. What's sad is that people only care when it becomes visible to them. Plenty of people have awful lives but live out in the country and no one cares.
At least they are paying these workers something? That's the standard we're defending? And who is in a better position to help the worker...us, or, I don't know, their employer? I think we'd get much farther shaming companies for their treatment of employees than hacker news commenters for not doing their "fair share". And for that matter, this a forum: what we do here is talk. It's silly to suggest people shouldn't speak their mind because it's not a "contribution".
I think the problem is the duo of valuing labor using free market capitalism, and requiring people earn quite a bit of money just to survive, let alone thrive.
Finding alternatives won't be easy, but the continuing reduction in demand for human labor due to increased productivity in technology gives us little alternative.
Also: San Francisco is built on a fault line. Most other places, it's cheaper to build a safe high rise.
