I pulled a little mid-course correction with this blog. I was initially going to write about a certain tweet that was posted several weeks ago by an individual—who will remain nameless because I don’t want him getting any more press than he deserves. The tweet was in regards to how women shouldn’t wear high-heels if they want to be taken seriously in the entrepreneurial world.
There was something else that caught my eye this week and hit a little closer to home, literally. There have been multiple articles talking about how San Francisco has become (once again) the most expensive city in the US when it comes to housing. Take your pick of headlines and articles on the topic:
- Rents Soaring in San Francisco
- Housing Costs Driving out Families
- Housing Chasm
- Evictions Surging
- Highest Rents in San Francisco
There’s another story underlying this surge in housing prices in San Francisco. It’s a story about how techies are causing this inflation and ruining the Bay Area. VentureBeat did an article entitled“$4 Toast”—which, even they admitted, was a little tongue-in-cheek, but worth reading. The New York Times just wrote an article with a bit more background as to why this housing trend is happening and how the “Tech-invasion” is changing the face of San Francisco. To paint a picture of how ridiculous prices are for what you get, take a look at this stunner for a mere $750,000.
An astonishing statistic is that the Twitter IPO unleashed 1,600 new millionaires. Where do you think those 1,600 millionaires will live?
Unlike Chicago or New York, San Francisco is geographically confined. New York residents migrate to Connecticut, New Jersey or other outlying, less-expensive areas.
San Franciscans can migrate to the Peninsula, but housing prices are even worse there because of Silicon Valley (aka Google, Facebook, LinkedIn). Here’s a lovely abode in the heart of Silicon Valley that’s a mere $1.7 million dollars. Then there’s Marin—with no BART service—where you have Sausalito (average home price of $2.0 million); Tiburon (average home price of $4.0 million); or more reasonable Mill Valley (average home price of $1.6 million).
Last but not least, you have the East Bay, which is by far the most reasonable with Berkeley (average home price of $950,000); Oakland (average home price of $523,000); and Alameda (average home price of $724,000). But even these housing prices—not to mention rental prices—are by no means a deal.
Arguably, you could move farther outside of these surrounding areas, but then you end up with the commute problem that my fellow bloggers lamented on: “There is No Such Thing as a Reverse Commute” and “Long Commutes are Normal Here, Right?”.
So where does that leave me and others like me who may not have the $1 million in cash to drop on a house? Or the $3,500 a month in rent?
Admittedly, we were lucky enough to move during what was the lowest San Francisco rental market in the last five years. We also have rent control, which means we don’t have to worry about our rent skyrocketing because I have no doubt that our apartment should be 50-75% more than it is right now.
However, it’s a terrible feeling to be stuck. With my husband working in the city and my job in the Peninsula, finding a location that’s convenient for both of us is fairly limiting.
To be honest, I’m all for doing away with rent control. While I haven’t crunched the numbers myself, I actually think it would do a lot to normalize the market—at least rental prices. Anyone have thoughts on this one way or the other?
I don’t see the housing trend dissipating any time soon, especially given the continued success of Twitter, LinkedIn, Google and others. The Bay Area will continue to be a tech haven for the foreseeable future. Other than sticking it out in whatever their current digs are, I don’t believe SFers who aren’t millionaires have any other options. . .other than hoping that whatever tech bubble we may be in bursts. . .or at least starts to dissolve just a little bit. Ponder that over your $4 toast.