Study Finds The Least-Affordable City for Tech Workers: Silicon Valley's San Jose (thestar.com.my) 63
The Bay Area Newsgroup reports:
Despite high salaries and world-class amenities, San Jose is the least affordable place for tech workers to buy a home. [Alternate URL here] A new analysis by the American Enterprise Institute found the typical tech worker and his or her partner — with two incomes totaling $200,000 — can afford just 12 percent of the homes for sale in the San Jose metro area.
The picture in San Francisco and the East Bay is nearly as bad, with just 21 percent of homes for sale fitting in the budget of an average tech couple. The high-hurdles to home ownership are fueling a Bay Area exodus that has contributed to the state's sluggish population growth in recent years, researchers say. Study author Ed Pinto, director of the AEI Housing Center, said tech workers can afford their pick of homes in almost every other U.S. city. "But in those places like San Jose, San Francisco and Los Angeles," he said, "that is not the case."
The analysis gives another explanation for the Bay Area exodus. And it's not only workers who are leaving. Tech heavyweights HPE and Oracle have announced moves of their headquarters from Silicon Valley to Texas. Pinto believes the spread of remote work will only accelerate migration from the Bay Area. With new workplace flexibilities, tech workers have a choice between high-cost regions near their offices and low-cost regions with bigger houses and remote work. "Work from home is winning," he said.
The picture in San Francisco and the East Bay is nearly as bad, with just 21 percent of homes for sale fitting in the budget of an average tech couple. The high-hurdles to home ownership are fueling a Bay Area exodus that has contributed to the state's sluggish population growth in recent years, researchers say. Study author Ed Pinto, director of the AEI Housing Center, said tech workers can afford their pick of homes in almost every other U.S. city. "But in those places like San Jose, San Francisco and Los Angeles," he said, "that is not the case."
The analysis gives another explanation for the Bay Area exodus. And it's not only workers who are leaving. Tech heavyweights HPE and Oracle have announced moves of their headquarters from Silicon Valley to Texas. Pinto believes the spread of remote work will only accelerate migration from the Bay Area. With new workplace flexibilities, tech workers have a choice between high-cost regions near their offices and low-cost regions with bigger houses and remote work. "Work from home is winning," he said.
Do you know the way to San José? (Score:2, Interesting)
Do you know the way to San José?
I've been away so long
I may go wrong and lose my way
Do you know the way to San José?
I'm going back to find
Some peace of mind in San José
L.A. is a great big freeway
Put a hundred down and buy a car
In a week, maybe two
They'll make you a star
Weeks turn into years, how quck they pass
And all the stars that never were
Are parking cars and pumping gas
You can really breathe in San José
They've got a lot of space
There'll be a place where I can stay
I was born and raise
Re:Do you know the way to San José? (Score:5, Insightful)
In the 1960s, San Jose was mostly orange orchards.
So the song actually made sense when it was written.
Re: (Score:2)
Gotta be a star just to pay the entry fee now.
Tech heavyweights? (Score:1)
Re: Tech heavyweights? (Score:2)
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And if they move to Canada, they'll be able to rename themselves HPEh.
No shit? (Score:1)
Who would have thought! Iâ(TM)m absolutely blown away! It just doesnâ(TM)t make sense. I mean, how can this be?
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I have the best tips (Score:1)
Captain Obvious told me that the cheapest place is a shack in Sticksville.
I hope... (Score:2)
I hope tech workers in the valley don't want their kids to live near them when they grow up because their idiot growth policies that don't let anybody build upwards pretty much kill any chance for most of their kids to settle near them when they move out / graduate college.
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I hope tech workers in the valley don't want their kids to live near them when they grow up because their idiot growth policies that don't let anybody build upwards pretty much kill any chance for most of their kids to settle near them when they move out / graduate college.
LOL, like the kids will ever move out, well maybe to a tiny home, or pool house in the backyard...
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I live in SJ.
When I retire, I plan to sell my house and move somewhere else.
My kids will be settled by then, so I will move to wherever they live.
Re: (Score:3)
So when you retire and all of a sudden have massive amounts of free time you'll move away from all the relationships you built when you were working and move to a place where the only people you'll likely know are your kids who will probably be busy with their own new families?
That's definitely not for me. Having to make all new friends is not how I'd like to spend my mid 60's.
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you'll move away from all the relationships you built
I am way ahead of you. I haven't actually built any relationships.
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And even if you had, what year is it? We have this internet thingy that enables us to communicate with whole groups of people at once who are not sharing our physical location, now.
I'm still in touch with the people I like, despite having moved away.
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Online communication is hardly a substitute for real life interaction in the context of human relationships. I still keep up with friends who have left my area but the relationships certainly aren't as close and typically fall off after some time
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Relationships? I’ve moved so many times in 64 years, I gave up on any long term friends when I was 12.
Our plan is to sell our expensive house and move to a lower cost of living area in a few years. And then make new acquaintances.
[John]
Re: I hope... (Score:2)
You think you'll retire before your mid-60s. Cute.
Re: (Score:2)
Well I said I'd retire in my mid 60's, not before and I think that is a very obtainable goal as my home is just about paid off and I still have 25 years to go before retirement.
Re: I hope... (Score:2)
The retirement age to be able to liquidate a pension is currently 67 in most countries, including the USA.
It will most likely increase to 70 by the time people born in the 80s get to retire.
Now you could say you don't care about pension funds if you have other sources of income, but that is quite suboptimal financially.
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The retirement age to be able to liquidate a pension is currently 67 in most countries, including the USA.
No it isn't. Not in the US anyway. In the US it's 65 for most pensions, and many will allow you to start drawing funds younger than that. You can get Social Security retirement benefits as early as age 62.
Now you could say you don't care about pension funds if you have other sources of income, but that is quite suboptimal financially.
LOL, it's financially suboptimal to ever retire.
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I would certainly call 67 "mid 60's" as it is well within a middle range. As for the age going up, I doubt it. While there are certainly solvency issues with social security in this country raising the age of retirement would be political suicide for the party that does so.
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The critical factor for many people in the USA, and also the factor that I think many younger Americans have not considered, is the cost of medical insurance before you hit 65 (when Medicare kicks in).
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Among the families I know, the kids all make more than their parents and are helping to pay off their parents mortgages in addition to their own.
Good riddance (Score:1)
Tech heavyweights HPE and Oracle have announced moves of their headquarters from Silicon Valley to Texas.
I'm sorry Texas, but California is better off losing these beasts.
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Yes, Austin is taking a total fucking pounding, to the point that frankly it was already at least as bad as the silicon valley when I was there over twenty years ago. During commute times, the freeway is at a standstill, and every parallel route is choked as well. Texans are allergic to those evil "socialist" infrastructure projects, so the situation has simply gotten worse since I was there. I lived across the parking lot from the office in the nearest apartments so I didn't have any commute (I just walked
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Yes, Austin is taking a total fucking pounding, to the point that frankly it was already at least as bad as the silicon valley when I was there over twenty years ago. During commute times, the freeway is at a standstill, and every parallel route is choked as well. Texans are allergic to those evil "socialist" infrastructure projects, so the situation has simply gotten worse since I was there. I lived across the parking lot from the office in the nearest apartments so I didn't have any commute (I just walked unless I planned to drive somewhere after work, and even then usually) so it was just basically bearable, but I hear the traffic stays bad for hours now.
Commute times in Austin are lower than LA, [bestplaces.net] lower than San Francisco, [bestplaces.net] Lower than San Jose, [bestplaces.net] lower than Oakland, [bestplaces.net] lower than Sacramento, [bestplaces.net] etc, etc, etc. - all while growing at a faster rate than any of those CA cities.
Texans are NOT allergic to those evil "socialist" infrastructure projects, especially when it comes to roads and freeways. California [usatoday.com] is among [usnews.com] the worst states [businessinsider.com] in the nation [forbes.com] for road and freeway [reason.org] infrastructure, ranking significantly below Texas in almost every measure. Texas spends 40% more per [taxpolicycenter.org]
Re: Good riddance (Score:2)
"Your personal experience of Austin over twenty years ago where you didn't even have a work commute says nothing about Austin right now,"
No, the reports of people I know who still live there telling me it's even worse now do that.
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SMH. Sorry, unless you have thousands of friends scattered about Austin who are systematically logging their commute times and reporting them to you year after year, anecdotes from your friends don't say much about the average Austin commute.
Here is the data [stlouisfed.org] on the reality of Austin commutes compared with major metros in California for the last decade. If you want to deny the facts and live in an alternate reality supported by your cherry picked anecdotes, more power to you I guess.
2 tech incomes = 200k? (Score:1)
Not a chance. Maybe if you are two hr employees working at tech firms.
My guess they only looked at tech salaries, but total income is much higher. When you include stock, itâ(TM)s more like 300k-400k for a typical 2 tech income family.
Which means a frugal couple can bank 100k a year, and easily have a down payment for a million dollar home in a few years. And if your stock appreciated well while your saving, you may be in an even better position. Thatâ(TM)s whatâ(TM)s driving the housing mark
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A tech worker and partner...I'd guess in most cases the partner is not a tech worker.
Re: 2 tech incomes = 200k? (Score:1)
Ah yes. I read that wrong. That makes much more sense. Yes. A single average tech income salary is getting hard to afford a house here, but can still easily buy a condo. Maybe just not as close to work as you want.
If CA didnâ(TM)t have prop 13 and didnâ(TM)t have so many NIMBYs, both the Bay and SoCal would have urbanized long ago, but as result prices would be cheaper. Now weâ(TM)re in a situation weâ(TM)re the owners are afraid change, because they still donâ(TM)t want the area to
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If CA didnâ(TM)t have prop 13 and didnâ(TM)t have so many NIMBYs, both the Bay and SoCal would have urbanized long ago, but as result prices would be cheaper. Now weâ(TM)re in a situation weâ(TM)re the owners are afraid change, because they still donâ(TM)t want the area to urbanize and they donâ(TM)t want their prop values to drop.
I don't know if that's better. I live in a shoebox-sized apartment in the Bay Area and it sucks. As a result I live a minimalist lifestyle and that sucks too.
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Tech worker != developer or engineer. There's plenty of business folks and pencil pushers working at tech companies.
Learn about NOI (Score:2)
NOI (net operating income) is income minus expenses. NOI, what is left of your income after expenses, is the number that determines how you live, based on the local prices of housing, goods, and services.
High income can be easily decimated by high expenses.
What’s The Appeal? (Score:3)
I’m a Seattle Tech Whore, and I’ve only been to San Jose once. I remember I kept looking for it, and someone finally said “we’re here”.
“We’re where?”
“San Jose”.
“Really? This is San Jose? It looks like Burbank. Or Glendale. Or San Bernardino. Or Rancho Cucamongo where my cousin Day-Day lives. See, once me and Day-Day decided to rob our neighbors of ... it’s not important. Okay, seriously, where’s San Jose?”
San Jose is like the 8th largest city in the USA, and there’s no THERE there. It looks like any of a thousand California suburbs. Yeah,I get that’s where a ton of tech companies are, I just don’t understand why. The must have really wanted no distractions for the workers.
You have to pay through the nose to live in arguably the most generic place on earth. Okay, I obviously don’t know the place. Maybe it’s a hotbed of entertaining awesomeness and I’m not in the know. Maybe they have ‘Free Blowjob from a Supermodel Wednesdays” or something.
Aside from the nearby employers, I don’t personally get the appeal, though.
Doesn’t mean there’s not one. I just haven’t seen it. Maybe they just really don’t want me to move there and keep the fun out of sight when I visit.
Who would blame them?
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Probably because you were in the suburb part? I don't understand the utter hatred and contempt some people have for suburbs, like it's so much worse than the dank urban core that some people prefer. I'm from a tiny rural town, and suburbs still seem like big city to me.
Also, just go to downtown San Jose, most of the tech isn't there, but it looks more like a city there. Skyscrapers aren't massive, but so what? Tech is outside of downtown because... why be downtown? More space elsewhere, easier commute
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IME you are 100% correct. I was fortunate enough to be born in Santa Cruz prior to the '89 Quake so I know what a town with personality actually looks like. For us, San Jose (and the valley in general) was a place to shop. We'd go "over the hill" (on CA Hwy. 17) to go to Fry's or Virtual World or whatever. Then we'd fuck off outta there before it got too hot.
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Not wrong, yet the article is ridiculous.
San Jose is not a city with a proper appeal. You live in San Jose to be in the Bay Area. It's not like you'll go to San Jose city center for a walk.
San Jose is actually the cheapest place in the south bay and you can afford a house there with an average tech worker salary. Not everywhere in San Jose, but there are definitely cheap places and even places where you might not want to live.
I'm not sure what the 12% means. Like, 200k is 12% of the house price ? That ha
Averages are the wrong number (Score:2)
"can afford just 12 percent of the homes for sale in the San Jose metro area." I'd argue that's that wrong number to look at. To me, it's obvious that homes in San Jose are by far the most affordable in the South Bay. Yes, there are plenty of expensive homes in San Jose, but more importantly, most of the "affordable" homes are in San Jose. The "affordable" homes in San Jose are east of CA-87 and away from the hills. San Jose is so large that it also includes the very expensive west San Jose area near C
Meanwhile in London... (Score:2)
With 200k USD yearly income (145k GBP) you can probably acquire a two-bedroom apartment at best.