Does anybody know why the area is not working to alleviate this huge housing problem? Is there a government regulation stopping it? Some type of aesthetic zoning law restricting the ability to build housing units?
This just seems so anti capitalism. I am not familiar with the geography there so I am not sure if they have build able land. Here in Boston, the whole eastern side is water. Manhattan is an island and has the same water problem. SF could be hilly beyond development I guess. But isn’t SV an inland city? So one can build on all sides like Dallas, TX?
Is it the potential for an earthquake that limits buildings to two stories?
To the OP post. I find these types of articles to be annoying. The majority of these people knew full well what the deal was with housing and cost of living before going out there. They all went out there to be a big shot in the tech industry so they could brag to others graduating college that they started at a huge salary. Its the same thing with Manhattan. Finance guys like to brag they work on wall street.
160000 pay
26095 federal income tax (marginal rate 25%, effective rate 16.31%)
9667 FICA (marginal rate 1.45%, effective rate 6.04%
8857 state income tax (marginal rate 9.3%, effective rate 5.54%)
44619 total income and payroll taxes
115381 net pay after income and payroll taxes
36000 rent (3000 per month)
79381 remaining money after income and payroll taxes and rent
In other words, you are significantly overestimating taxes and housing expenses for the example in the article.
On the other things, if Twitter is like most employers, it subsidizes most of the medical insurance costs. And $12,000 for utilities must be extremely wasteful use of water, gas, and electricity (reasonably efficient use should result in yearly bills a fraction of that, despite relatively high water and electricity prices in California).
“But isn’t SV an inland city? So one can build on all sides like Dallas, TX?”
It is a cluster of small cities.
Let me guess. Suburban sprawl is rampant. Land is ridiculously expensive. Roads are already congested. Taxpayers are not willing to put up with new developments… Plus, there is that earthquake stuff that makes high rise construction expensive.
plus the title itself is insulting. “Tech workers feel poor in Silicon Valley’s wealth bubble” something tells me they have never actually been poor, or have never known any actual poor people
a. Natural landscape (i.e. water and mountains) limits places where one can build.
b. Much of the land is already built in lower density housing.
c. Zoning / NIMBY against higher density housing by existing residents (who benefit from their own property values going up when there is less new housing).
Agree (the title comes from The Guardian). But then we have posters coming here on these forums complaining about how they are “too poor” to afford their kids’ college on their $250,000+ incomes, so it is not like such tone-deafness is unique to some people in Silicon Valley. Most people do not realize what the median household income is, or how high a percentage of families qualify for Pell grants or reduced price K-12 school lunches that they see as being only for the poorest people.
I forgot about this, even though my son has mentioned it. The fact that there are no non-compete agreements in California is a big attraction for tech people.
This poor guy is going to learn how expensive college is once his kids start looking and he finds out his FAFSA EFC is about $40K a year. Welcome to reality.
If his wife works, his EFC will be higher than that.
To me, this is the definition of capitalism. Highly desirable location = High cost of living. Like @doschicos said, there are plenty of other high tech jobs out there, and they don’t all end with no other local options. I live in one of those areas. There are plenty of jobs to be had. You’d never get paid $160,000 a year, but then again, if you did, you could live like a king/queen (you’d still have that pesky high EFC though). But the weather’s not nearly as good, the night life, shopping, dining, outdoor activities are lacking, etc. My guess is most of those “barely getting by” in SV would rather keep living that way than move here.
That’s their choice. I just don’t get the complaining.
Amen. Seattle is a low pay hole for the rental prices here. The Chinese money has been flooding the RE market since the BC imposed that tax, and the SF is overpriced…
Seattle’s problems started years ago (really the whole NW) as Californians started to migrate north upon retirement. They drove up the cost of housing and did not drive up the cost of wages at the same time. Given the limited space in Seattle (for those unaware, it is wedged between Puget Sound and the mountains). Lots of family in the area. Sad, really.
This problem will eventually work itself out. Tech jobs will migrate out of California into more cost-effective regions. Every day I drive past Toyota’s new US HQ in Texas. (under construction) The other alternative will be for Californians to make decisions at the ballot box that reduce the costs. More likely will be a Techsodus or will it be Techxit? Either way, the area cannot long maintain the status quo.
The article leaves out details about how exactly “underpaid” and “market value” are defined for this purpose. Perhaps Paysa at https://www.paysa.com/ (from which the article gets its information) may have more detail.
But the list of companies may be of more interest. The list of companies in the most-likely-to-be-underpaid list does include a number of companies considered “desirable” in other ways by employees, who may be willing to take a lower pay level to work there (Glassdoor, Pinterest, Microsoft, Dropbox, Facebook, Airbnb, Uber), although it also includes a major outsourcing company that hires lots of H-1B visa holders (IBM). The least-likely-to-be-underpaid list includes companies that are seen as less “desirable” in other ways, so they may need to offer higher pay to attract employees (Netflix, Walmart, Yahoo).
Some folks in Silicon Valley were born here and are NOT tech workers! Imagine that.
We small business owners and such are subject to the same high costs as everyone else and our equity is held against us in FA calculations.
As a business owner with kids in high school, I can not just move “somewhere cheaper”.
And, equity, of course, is irrelevant unless one moves out of the area.
I guess stereotypes go both ways.
“Insurance/ non-employer based 1230/mo family plan with a $4500 deductible per person -thank you Affordable Care Act
Utilities: gas and electric 250, cell phones (5) 275, water( CA “drought”) 150, cable and internet 175, close enough …”
I live in a state with higher electrical rates than CA in a sizable house and wide temperature swings (both heat and AC needed) and don’t pay that much.
“Insurance/ non-employer based 1230/mo family plan with a $4500 deductible per person -thank you Affordable Care Act”
I thought tech companies had great benefits. Are workers at Twitter and other tech companies really paying $1K per month for insurance? I’m talking about this segment of workers, not the typical California employee.
We’ve since gone solar, well worth it in my opinion… but, before going solar our level pay electric bill was $560 a month in California, Los Angeles area. That does not include our small gas bill. Good sized house on a small lot with a pool. On solar we pay around $180 a month and get a refund from the electric company every year.
@HRSMom Nope. I pay a buttload for heating in the winter but that is made up for by no expense for such in the summer. It evens out. As far as electric, maybe $250ish for a high month or two but nowhere near my average. Plus, mine is for a good sized home. My electric bill included a note that I am using more than my neighbors. It made me feel guilty. I’m blaming it on too much time on CC.
For the example we are talking about, one of the gripes is people living in dinky places. Dinky places mean reduced costs for utilities.
But, regardless, I’m all for maximizing one’s quality of life. If my dollar didn’t stretch very far, I’d move somewhere else even if it meant less income. All that savings can be applied to some great vacations.
The thing I don’t get is that many tech jobs can be done anywhere. There is no need to have all the employees living in SV. Sounds like a business model that can’t last at the rate things are going.
