Everyone I know is griping about the cost of living. There is no easy answer, but the only viable solution is building a lot more dense housing and public transit for said urbanism. Housing being this expensive is a choice. The economy and our society would be much healthier if we decided making sure there was ample housing in high demand areas.
We've conflated having a home with a financial asset. We can't have plentiful affordable housing without decoupling this idea. Houses are a poor financial investment once you remove all the incentives involved like mortgage tax credits, fixed mortgage rates, and obstructive zoning rules. Buildings age and not productive assets and can only be a good financial investment if we deem having more of them is wrong. This will be a painful transition given most people's wealth is a single building they live in.
You're right about one thing - housing being expensive is a choice, it's a choice of those who have moved to SF and despite it making no sense for their financial situation just "trying to make things happen" there to stay there. These are the people who drive property costs up. It's not about "just building more", that's literally never the answer. Building more is solving just for one factor and when you build more - guess what's gonna happen? More density, even higher costs of living because guess what - more people moving means more demand on local services, shops, transit, so higher costs. On top of it - folks who buy these newly built properties aren't going to be making minimum wage at a local coffee and avocado toast shop - they're business owners, entrepreneurs, founders, etc. Your cost of living will keep rising with every new property built and every new transplant.
The real answer is taxes, taxing the shit out of these rich transplants and the corporations. You're in California I can't believe you lot aren't more progressive about jacking up the taxes on the rich to pave the way for a healthy society for the rest. But given that every single tech nerd that moves to SF sees themselves as a temporarily embarrassed millionaire or a not-yet-founder - good luck with that, I genuinely do not see even the younger crowd being pro taxing the rich in a city full of tech leeches.
I always find it odd that stories like this focus on non-Eng roles.
I know it’s not universal, but IME it was very common for new CS grads to make much then what is discussed here, and far more after a few years. And this was before COVID and the AI boom.
The idea I see presented that even the highly paid tech workers at the big companies can’t afford SF is not really true.
As an AI startup founder, my impression is that $180k in the Bay Area mostly gets you new grads or relatively junior talent these days.
However, remote work has fundamentally changed the equation. Expanding hiring beyond the Bay Area, or even internationally (for example, hiring remotely from Canada), can dramatically broaden the talent pool while significantly reducing costs.
I suppose a big change over the past 50 years is that we really boosted jobs that must be done in big cities. Wanna earn a lot of money? Take on a lot of debt and become a lawyer/accountant/etc. But we didn't create more cities. There's more people competing for the same small amount of commutable real estate, and the winners are the top earners.
I'm not sure how you fix it. The organic fix ought to be that businesses want to move out of the overpriced cities. But if that's also where their employment pool and investors are, that's tricky.
UK has had the same issue. The salary gap between London and anywhere else is huge. So everyone aspiring for a high salary wants to move to London. So prices are drastically higher. And there's no rebalancing in sight.
Maybe there's space for some government regulation? Tax cuts for companies hiring in lower CoL areas? No idea. But so long as an increasing pool of people is competing for a barely growing pool of housing, it's not going to get better.
be careful what you wish for. eventually we'll have a 'New San Francisco' and a 'New New York City'. Imagine the acronyms for these, NSF and NNYC. what if we just agreed to stop having kids and replace all the missing jobs with AI? then we could avoid these disastrous city names
I don't understand how $180k was enough in San Francisco at any time in the last 15 years -- unless you were partnered with someone with a comparable salary.
> Mr. Woodbury recently moved to Carnelian Bay, on Lake Tahoe, Calif., which is less expensive. Ms. Razniak remains in an apartment in San Francisco’s Haight-Ashbury neighborhood, which she shares with two roommates and for which she pays $1,650 a month. They’re making the long-distance relationship work.
It sounds like the fellow didn't actually want/need to be in SF. Living in Tahoe is pretty much the polar opposite in terms of urban/rural living. There are obviously places that are near SF that are much cheaper, like Oakland/Richmond/etc.
Comparison is the thief of joy. I know plenty of people who live in SF on much lower salaries. Acting like you need AI bucks to survive is out of touch with the reality of the common man.
A household that earns nearly 400k talking about "I'm not completely hopeless" is shameful. Take some lessons from people who earn a lot less and are more happy.
The article frames the cost of living issue mainly in terms of demand (...because of OpenAI and Anthropic...), which is an important factor, but has very little to say about supply. San Francisco is a major metropolis that looks like a mining town: there's very few high-rise buildings compared to other major cities. It's due to many factors including strict zoning, growth caps, seismic risks (compared to say Tokyo?) and landlords that don't have much incentive to decrease the value of their skyrocketing assets.
Also some recent setbacks like our leaning Millennium Tower.
It might take a political earthquake to change the status quo given how ossified everything is unfortunately.
What's frustrating is that an estimated 10-15% of SF housing is empty, due to rent control. We'll see how the supreme court case about rent control goes.
If you'd like to type out your priors and why believe yourself you be right, I'd love to hear them.
It's a complex topic and rent control's second order effect is that housing is going empty. People are living in tents when there are vacant apartments. That's a system's failure.
Thing is, social media discussions on the subject are completely pointless. No one ever changes their mind and nothing gets resolved. But I'll give my spiel anyway:
I live in rent-controlled housing in SF. When I was apartment hunting circa 2023, it was fairly easy to find rent-controlled listings if you were diligent. In objective terms, my rent is high, but it's also locked in. Rent can only increase a few percentage points a year.
In the past year, a bunch of wealthy AI workers moved into the city, increasing rents catastrophically. You could find people in the SF subreddit complaining with disturbing regularity about 50% rent spikes and similar. We had new tenants move in to the upstairs apartment recently and they're literally paying $2000/m more than us for the same floor plan. If we had to pay the same amount — if our rent increased arbitrarily due to circumstances outside our control — I think we'd be kicked out of the city. It's just not possible to build a stable, adult life unless you have some security around your housing expenses (or you're filthy rich).
Rent control detractors suggest that eliminating rent control will lead to lower housing costs eventually. That does not help me in the present. Why would I support a policy that will kick me out of my house today, replace everyone in my historically working class neighborhood with millionaires, and then maybe, many years down the line, lead to lower rents? (With a giant "citation needed" on that argument to boot.) It's a non-starter.
Fortunately, building more housing does not require eliminating rent control. We can have both. And if enough housing gets built, rent goes down anyway and rent control largely becomes a moot point.
I regularly hear about acquaintances getting kicked out of their apartments elsewhere in the country due to sudden rent spikes and thank my lucky stars we're not subject to that horror.
> “I thought when I’d make $200k I would be able to basically not worry about money at all,” she said, adding that she and her friends stopped going out to restaurants last year and shifted to potlucks and reality-TV nights.
$200k is a lot of money, but I'm glad that when I started making money like that I continued to live my prior life for several years. The savings accumulated during that period has had a huge impact on my later financial condition, and enabled me to do many things (career-wise and otherwise) that I would not have been able to do had I shifted into "stop worrying about money, eat out all the time" mode. Many people I knew did that, and most of them are fine. But golden handcuffs can really lock you into a career/track that you might not want to be on long term.
Remote work or satellite offices would permit working where housing was more affordable and it would encourage 2 professional families. It would also encourage families as spare resources might be available for munchkins.
But this seems to be the opposite of what the money wants. Edit: and nobody talks about climate or commuting costs.
Any discussion of the cost of housing in CA has to include this. Want to know why the property market there is so distorted?
It's Prop 13.
TLDR: Property taxes only increase 2%/yr (sorta, its complicated) and reset upon sale of the property. So current owners are highly incentivized to stay in place and not move. Supply is held down, so prices rise.
They put all the good jobs in a city surrounded on three sides by a mile or more of water, IDK how this doesn't get mentioned every time a "San Francisco has gotten too expensive to live in" article gets posted since the late 90s.
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[ 2.6 ms ] story [ 52.9 ms ] threadWe've conflated having a home with a financial asset. We can't have plentiful affordable housing without decoupling this idea. Houses are a poor financial investment once you remove all the incentives involved like mortgage tax credits, fixed mortgage rates, and obstructive zoning rules. Buildings age and not productive assets and can only be a good financial investment if we deem having more of them is wrong. This will be a painful transition given most people's wealth is a single building they live in.
The real answer is taxes, taxing the shit out of these rich transplants and the corporations. You're in California I can't believe you lot aren't more progressive about jacking up the taxes on the rich to pave the way for a healthy society for the rest. But given that every single tech nerd that moves to SF sees themselves as a temporarily embarrassed millionaire or a not-yet-founder - good luck with that, I genuinely do not see even the younger crowd being pro taxing the rich in a city full of tech leeches.
I know it’s not universal, but IME it was very common for new CS grads to make much then what is discussed here, and far more after a few years. And this was before COVID and the AI boom.
The idea I see presented that even the highly paid tech workers at the big companies can’t afford SF is not really true.
https://www.craigslist.org/search/subarea/sfc?cat=apa&max_pr...
However, remote work has fundamentally changed the equation. Expanding hiring beyond the Bay Area, or even internationally (for example, hiring remotely from Canada), can dramatically broaden the talent pool while significantly reducing costs.
I'm not sure how you fix it. The organic fix ought to be that businesses want to move out of the overpriced cities. But if that's also where their employment pool and investors are, that's tricky.
UK has had the same issue. The salary gap between London and anywhere else is huge. So everyone aspiring for a high salary wants to move to London. So prices are drastically higher. And there's no rebalancing in sight.
Maybe there's space for some government regulation? Tax cuts for companies hiring in lower CoL areas? No idea. But so long as an increasing pool of people is competing for a barely growing pool of housing, it's not going to get better.
be careful what you wish for. eventually we'll have a 'New San Francisco' and a 'New New York City'. Imagine the acronyms for these, NSF and NNYC. what if we just agreed to stop having kids and replace all the missing jobs with AI? then we could avoid these disastrous city names
It sounds like the fellow didn't actually want/need to be in SF. Living in Tahoe is pretty much the polar opposite in terms of urban/rural living. There are obviously places that are near SF that are much cheaper, like Oakland/Richmond/etc.
A household that earns nearly 400k talking about "I'm not completely hopeless" is shameful. Take some lessons from people who earn a lot less and are more happy.
Also some recent setbacks like our leaning Millennium Tower.
It might take a political earthquake to change the status quo given how ossified everything is unfortunately.
It's a complex topic and rent control's second order effect is that housing is going empty. People are living in tents when there are vacant apartments. That's a system's failure.
I live in rent-controlled housing in SF. When I was apartment hunting circa 2023, it was fairly easy to find rent-controlled listings if you were diligent. In objective terms, my rent is high, but it's also locked in. Rent can only increase a few percentage points a year.
In the past year, a bunch of wealthy AI workers moved into the city, increasing rents catastrophically. You could find people in the SF subreddit complaining with disturbing regularity about 50% rent spikes and similar. We had new tenants move in to the upstairs apartment recently and they're literally paying $2000/m more than us for the same floor plan. If we had to pay the same amount — if our rent increased arbitrarily due to circumstances outside our control — I think we'd be kicked out of the city. It's just not possible to build a stable, adult life unless you have some security around your housing expenses (or you're filthy rich).
Rent control detractors suggest that eliminating rent control will lead to lower housing costs eventually. That does not help me in the present. Why would I support a policy that will kick me out of my house today, replace everyone in my historically working class neighborhood with millionaires, and then maybe, many years down the line, lead to lower rents? (With a giant "citation needed" on that argument to boot.) It's a non-starter.
Fortunately, building more housing does not require eliminating rent control. We can have both. And if enough housing gets built, rent goes down anyway and rent control largely becomes a moot point.
I regularly hear about acquaintances getting kicked out of their apartments elsewhere in the country due to sudden rent spikes and thank my lucky stars we're not subject to that horror.
$200k is a lot of money, but I'm glad that when I started making money like that I continued to live my prior life for several years. The savings accumulated during that period has had a huge impact on my later financial condition, and enabled me to do many things (career-wise and otherwise) that I would not have been able to do had I shifted into "stop worrying about money, eat out all the time" mode. Many people I knew did that, and most of them are fine. But golden handcuffs can really lock you into a career/track that you might not want to be on long term.
But this seems to be the opposite of what the money wants. Edit: and nobody talks about climate or commuting costs.
https://en.wikipedia.org/wiki/1978_California_Proposition_13
Any discussion of the cost of housing in CA has to include this. Want to know why the property market there is so distorted?
It's Prop 13.
TLDR: Property taxes only increase 2%/yr (sorta, its complicated) and reset upon sale of the property. So current owners are highly incentivized to stay in place and not move. Supply is held down, so prices rise.
Probably a $250k tech salary won't be enough.