Even Apple and Google Engineers Can't Really Afford To Live Near Their Offices (fastcompany.com) 370
That's according to the Y Combinator-backed real-estate startup Open Listings, which looked at median home sales prices near the headquarters (meaning within a 20-minute commute) of some of the Bay Area's biggest and best-known tech companies. Fast Company: Using public salary data from Paysa, Open Listings then looked at how many software engineers from those companies could actually afford to buy a house close to their office. Here's what it found: Engineers at five major SF-based tech companies would need to spend over the 28% threshold of their income to afford a monthly mortgage near their offices. Apple engineers would have to pay an average of 33% of their monthly income for a mortgage near work. That's the highest percentage of the companies analyzed, and home prices in Cupertino continue to skyrocket. Google wasn't much better at 32%, and living near the Facebook office would cost an engineer 29% of their monthly paycheck.
Huh? (Score:5, Insightful)
So they can't survive with two thirds of a presumably good paycheck? What's the title on about?
Re:Huh? (Score:5, Informative)
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Really, two thirds of the reported average salary of an engineer at Apple is still 100,000 dollars. That's enough to pay the bills I would think. Yeah, 50,000 dollars a year is a lot to pay but real estate is an investment. Usually it sells for more than you paid.
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real estate is an investment
You just put a giant target on your head. Every scammer in the world now knows you're an easy mark.
Real estate isn't an investment unless you're a high-dollar real estate investor. If you're living in it, it's an expense, and a liability. It takes time to pay that loan off, during which you lose money to interest. You have maintenance, which costs money. You pay taxes and insurances. By the time you sell that house you've lived in, you've lost more or less about the cost of renting.
I always assume
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I take the standard deduction for a single-filer. I have always taken the standard deduction for a single-filer. When I paid $3,300 in mortgage interest for the year back in 2012, my total itemized deductions came to $4,500; the standard deduction was bigger.
What's obscene about the tax write-off is people believe they get all that interest back and make a lot of money off the government. In reality, you might get 25% of the interest back (you can't deduct from FICA liability, except for deferred-tax a
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The massive mortgage interest deduction cut the g'parent is referring to is that instead of only being able to deduct interest on the first million dollars of your mortgage, if you buy a new house (so doesn't apply to a home you already owned), you can only deduct the interest on the first $750K of your mortgage.
Suffice it to say, the group of people that change applies to is tiny and those same people all got a bigger tax cut in other ways than this change will ever cost them.
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it's a good investment since the money going to the principal is building equity... aka savings.
You do realize that for about the first 15 years of a 30 year mortgage, most of the monthly payment is going towards interest, not principal? At about 15 years, you have only paid down about 15% of the mortgage, and then the amount increases dramatically from years 15-30.
source [creditkarma.com]
Re:Huh? (Score:4, Insightful)
Depending on the mortgage rate, you may not want to ever pay it off. If you're paying 3.9% in interest, but making 8% in the market, then you should make the smallest mortgage payment you can and invest the rest.
Re:Huh? (Score:5, Insightful)
A house is *not* an investment. It is affordable long term rent control. As time goes on the payments become a smaller percentage of income (you hope). If you are constantly playing monopoly, taking 2nd mortgages and HELOCS you *will* get screwed when the next bubble bursts.
Anyone who tries to tell you a house is an investment is nothing more than a carnival barker trying to sucker in another mark.
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So they can't survive with two thirds of a presumably good paycheck? What's the title on about?
Pretty much. If you're making $30k and paying 1/3rd you got $20k left over for "other stuff", but if you're making $150k and paying 1/3rd you got $100k to go. Besides, how many single people buy a house in the subrubs all to themselves? I got an apartment even though I could very well afford a house, I just wouldn't want all the upkeep. In rural areas I suppose, but there prices aren't that ridiculous either.
Re:Huh? (Score:4, Insightful)
Note that's 28% before taxes. Between State, Local, and Federal, figure they get $150k a year pretax, $100k a year post-tax, but spend $50k a year on their mortgage. That's $50k a year for ALL other expenses, and that number excludes homeowner's insurance, car payments, car insurance, health insurance, property taxes, electricity, water... oh, and food. That's why 28% is so important - you wind up with 30% on Taxes, 30% on Mortgage, 10% on a Car and Related Expenses, 10% on Home Related Expenses... and you just ate 80% of the yearly income.
Cali's actual total tax rate is a little higher than that, but you get the point I think - 28% isn't an arbitratry number, it's more like a 'this is a good margin of error' factor.
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The fact that property tax and homeowners' insurance are based on property value makes it even more painful. When you're talking about a $1.5 million home, the property taxes will cost you $15,000 per year. And insurance averages out to about $3.50 for every thousand dollars of home. So that's another five grand. That means that in the hypothetical example above, property tax and insurance add up to 40% of your net income after income taxes and house payments.
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Well theres 40% in taxes to consider.
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So they can't survive with two thirds of a presumably good paycheck? What's the title on about?
Minus federal tax, state tax, property tax, 9% sales tax, mortgage insurance, etc. No thanks, I'll rent.
Somebody will say "but properties appreciate in value!" Yes, and the interest payments for a 4.5% 30-year mortgage (if you can scrape enough afford it) are about $800k. Unless you're rich enough to buy without financing it just seems like a great investment for the mortgage company. Compare the $800k of interest payments (not including PMI etc) to the returns your $200k downpayment would see invested in t
Re:Huh? (Score:5, Informative)
There's a financial guideline about only paying a third of your income for rent or mortgage. That's based on HUD's guidelines about how much of your income should be rent or mortgage when on assistance, not on any sort of sound financial advice.
Mind you, higher liabilities means bigger risk. My mortgage is about 12% of my after-tax income, so I don't have to worry about money ever getting too tight. A Congressional salary would be $100k more than I make now, which is cool, but I'm not about to argue that Congressmen maybe need to get paid more--not on the east coast, anyway. On the other hand, the legislators in my state make less than some struggling families I've met; I would argue they should be paid better, despite legislature being in session only 4 months of the year, because they shouldn't be distracted seeking some kind of supplemental income for those other 8 months when they should be speaking with us about what we want done in Annapolis.
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Re:Yo! Taxes, fool! (Score:5, Informative)
I live in Silicon Valley. The nominal tax rate for the top bracket was 52% in California, not sure what it is with the new tax bill. Last year, my effective tax rate was about 38% excluding sales and property taxes, which would bump me up to an effective tax rate of about 43-45%.
The hardest part is the down payment and the lack of inventory. Every time you put in an offer, you're competing against a lot of people with fresh RSUs and no contingencies, so unless you have 25% to go down (usually 200-400K), you're not likely to get a place you want. A lot of people are paying almost 50% of their after tax income to mortgages.
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And yet, people don't see the problem. Oh, and the Republicans aren't any better than the Democrats at spending.
Re:Yo! Taxes, fool! (Score:4, Informative)
And yet, people don't see the problem.
That's because they're not hallucinating.
Once I decide that civilisation is not prefereable compared to paying more taxes, I'l move to the Libertarian Paradise of the Congo. Until that time, I'll enjoy a stable civilisation and be happy to pay for it.
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If I had a penny for every fool who confused Libertarianism with Anarchy, I would have already bought myself a private island.
Move to North Korea, I hear they like government regulations and taxes over there.
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You know it's possible to have government regulations and taxes, and not be a globally shunned despotic autocratic wasteland, right?
See: Europe
Re:Yo! Taxes, fool! (Score:5, Insightful)
In a place like California, between paying local, state and federal income taxes, plus social security and medicare taxes, the government is probably letting you have only HALF of your paycheck. Perhaps 60% of you're lucky. So of the 50-60% you're allowed to keep, spending 28-30% of it on a place to live is going to give you maybe 20-30% for ALL other expenses. I certainly wouldn't want to live that way.
In a place like England too. I am certainly happy to live this way and I even advocte for people of my income level paying more tax.
Civilisation is paid for with taxes.
Re:Yo! Taxes, fool! (Score:5, Insightful)
In a place like England too. I am certainly happy to live this way and I even advocte for people of my income level paying more tax.
Civilisation is paid for with taxes.
You have a somewhat sane healthcare system, so you don't have to spend yet another 10-20% on healthcare for your family.
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Civilisation is paid for with taxes.
That's possibly the dumbest thing I've ever heard. No, government is paid for with taxes. To confuse government with civilization is sad. really sad.
Civilization happens in spite of government, not because of it.
Good government is the result of civilization, not the cause.
Re:Yo! Taxes, fool! (Score:5, Insightful)
Civilization happens in spite of government
Not to any significant extent. Otherwise I would just kill you and take all your stuff.
It's a positive feedback loop. A small amount of civilization comes together, and it starts to grow. At a certain size, a small amount of government is needed to organize the civilization. The small government allows the civilization to grow a bit more, which requires a bit more organization and thus a slightly larger government. The feedback loop continues for as long as the value of being organized is greater than the cost of the government.
Re:Yo! Taxes, fool! (Score:5, Informative)
Civilization happens in spite of government, not because of it. Good government is the result of civilization, not the cause.
What are you talking about? There has never been a civilization in history without some form of governance. Property rights, dispute resolution, mutual defense, etc. are but a few of the many things which are universally necessary for anything that resembles civilization. All are functions of government, no matter what each civilization calls it.
Re:Yo! Taxes, fool! (Score:5, Insightful)
There are a lot of places on Earth that have no functioning government (and therefore have no taxes). One would think that the the "taxation is theft" crowd would be flocking to these places en masse, but for some reason they are not. Interesting, that.
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That's possibly the dumbest thing I've ever heard.
Well, on the plus side, you just heard something dumber [slashdot.org].
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The government organizes your sewage.
Re:Yo! Taxes, fool! (Score:5, Insightful)
Taxation is systemic theft
FFS, this is even worse than the copyright=theft meme. Taxation is a levy. It's a portion of personal (household/business) wealth paid to a governing body to fund public works. It's no more 'theft' than membership fees that cover costs of an organisation.
an institutional framework of extracting wealth from people
That's better, even with your use of scare-word 'extracting'
through the threat of violence
... and then you're back to ranting
a perfect example of terrorism
Hot tip; in english, words have meanings and 'terrorism' doesn't mean 'bad thing I don't like'.
A society that admits the practice is, by definition, uncivilised.
Only if we use the ... irregular definitions that you've used.
I presume you favour a low-to-zero tax system. You'll happily ignore the enormous benefits that come from living in a country and civilisation that's been built from the wealth that so many other citizens, past and present, have pooled and concentrate on the limitations that expecting you to make a similar contribution places on you, and/or the inefficiencies (and even corruption) of those we've arranged to spend this wealth.
While I'm sure that you're quite capable of re-inventing civilisation on your own with nothing more than a small set of nail clippers, most of the rest of humanity have consistently, across history and culture, seen the benefit of pooling resources and co-operating. So would you mind very much setting aside the keyboard that taxes have helped build and stop posting on the internet that exists only because of taxation and find some lonely place to beat your manly chest and declare loudly about how much of a rugged individualist you are? Or is Poe's Law biting me in the ass?
Re:Yo! Taxes, fool! (Score:4, Informative)
So is waste, fraud, and abuse
All systems have inefficiencies and in human systems, waste, fraud and abuse are just that. You cannot eliminate them, although they can be reduced. So long as the benefit of co-operation outweigh the costs of organising same, including inefficiencies, then societies will keep forming and some kind of pooling of resources will happen.
Using the existence of waste, fraud or abuse as the (only) reasons for abandoning a system is simplistic. Can the system be improved? Is the cost of trying to improve the system likely to return more than is spent?
Perfection is a direction, not a destination.
If you want to give the government all of your money and have "smarter" people than you decide how to waste it
It has nothing to do with 'smarter' people spending 'your money'. If you want to participate in and benefit from the advantages of society and civilisation, you need to contribute. If you want to be the one with your hand on the wheel and more control over the purse strings, stand for office. Personally, I don't. This argument is a straw man.
Or maybe move someplace with a communist system and not have any money of your own to begin with.
Believe it or not, there are political and economic systems that lie between the extremes you offer. Some of them have considerably higher standards of living for more people than either 'pure' communist or 'pure' libertarianism (or whatever tax-free system you seem enamoured of).
But you're probably not interested. You've used the word 'communist' as an epithet while using a service and system made possible only because of the taxes paid by generations before you. You live in a place and period of peace unknown in history due in no small part because of the sacrifices made by people who were paid by taxes. The life you lead and the wonderfully narcissistic position you are allowed to hold is all because better people than you have realised that co-operation works and who have been (relatively) happy to keep their end of the bargain.
Re:Yo! Taxes, fool! (Score:4, Interesting)
Maybe you've heard of taxes? In a place like California, between paying local, state and federal income taxes, plus social security and medicare taxes, the government is probably letting you have only HALF of your paycheck. Perhaps 60% of you're lucky. So of the 50-60% you're allowed to keep, spending 28-30% of it on a place to live is going to give you maybe 20-30% for ALL other expenses. I certainly wouldn't want to live that way.
I'm in CA and I lose nearly half of my paycheck before it gets to me due to federal taxes, state taxes, health insurance, etc.
If I want to spend any of my money, the sales tax takes it over the 50% mark.
This state is broken.
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California isn't simply broken, it's beyond hope at this point.
Why do you stay?
I may not stay much longer.
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I live nowhere near California, and I'm currently paying ~20% of my gross. When I first moved in I was paying over 1/3rd of my gross. What they are describing here is not that abnormal outside of Silicon Valley. I think the sticker shock factor comes from the fa
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Most prices are 20-30% greater than other regions in the country because of the cost of a store lease is very high, and you have to pay at least $10/hour, usually more, for minimum wage labor.
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Most prices are 20-30% greater than other regions in the country because of the cost of a store lease is very high, and you have to pay at least $10/hour, usually more, for minimum wage labor.
Correct, prices are only 20-30% greater than other regions of the country. Not 200-300% greater like housing is.
Re:Smallest Violin (Score:5, Insightful)
But they want that CA lifestyle I guess.
What is this CA lifestyle thing? Got to love living in poverty making $100+K/year. But hey, the sunset ocean view from the refrigerator box is stunning every evening it's not raining and the neighborhood isn't on fire...
Re:Smallest Violin (Score:5, Interesting)
What is this CA lifestyle thing?
How many Californians does it take to screw in a light bulb?
Californians don't screw in light bulbs; they screw in hot tubs.
Long-distance view from Maryland. Some artistic license applied.
Got to love living in poverty making $100+K/year
Eh, there are plenty of places you can live in California for less; they're just not places you'd want to live. From what I've been able to determine, all slums across the continental United States reflect about the same standard-of-living at the same income level. I've lived in the lowest income areas around Baltimore for nearly a decade now, and I've prodded at data around the country to see if I could live on the same minimum budget. I found several neighborhoods outside Seattle and down in California with comparable rent (about $1/sqft in 2014 for an apartment) and food prices (pretty much identical, sometimes a few pennies off).
I imagine such places are drug- and crime-ridden ganglands filled with rats and broken-down housing. That's okay: the majority of people in this rotting ghetto are good people, and the high crime rate is perpetrated by a few individuals who of course are constantly active and so cause a lot of trouble. It's probably the same out there.
I should get out more and see the city for what it is. These may very well be the last few years we get to see classic American poverty. I wonder what the next generation will think when we try to explain it to them...
Re:Smallest Violin (Score:5, Informative)
Oh, this really isn't poverty... I've seen poverty, this isn't it.
You want to see poverty? Try some of the third world countries I've been to... It makes "poverty" here in the USA look like a walk in the park..
I've also seen some of the poorest people in the USA too, it's just not as bad here. Take a trip on the back roads in and around the poor parts of North Carolina, South Carolina, Virginia, West Virginia, and surrounding areas. There are some seriously poor (for the USA) people living there.
I don't consider having to spend 30% of your income on housing to be poor, especially when someone is making more than $100K/year.
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Isn't this exactly what you would expect from something pleasant and rare? If you just want to make an area more affordable, you should make it less pleasant.
make it less pleasant
This is Silicon Valley. We're all out of pleasant.
Taxes! (Score:4, Insightful)
They forgot to deduct all the California and local taxes before you ever see that amount.
California has the highest US taxes on everything.
Re:Taxes! (Score:4, Insightful)
They'll all really be sucking wind in April 2019 when they can't deduct the outrageous CA property and income taxes
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California! Fuck you! Give us all your^H^H^H^OUR money!
Re:Taxes! (Score:5, Informative)
Except property taxes [taxfoundation.org]!
The reason California taxes everything else so high is partly because of its social and environmental protections, partly because it has such a low property tax and must make up the difference, and partly because it and other blue states subsidize most of the red states [redstatesocialism.org].
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Property tax in California is not a source of much revenue to speak of for the state, and hasn't been for over 80 years. Since 1933, the only property tax directly levied, collected, and retained by the state has been the tax on privately owned railroad cars (source [uscommonsense.org]).
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Except property taxes [taxfoundation.org]!
The reason California taxes everything else so high is partly because of its social and environmental protections, partly because it has such a low property tax and must make up the difference, and partly because it and other blue states subsidize most of the red states [redstatesocialism.org].
California's property tax structure is effectively bimodal, i.e., both really expensive and cheap. It all depends on when you bought your home. I pay $12k/year, while my neighbor pays $500/year, even though we have basically the same house. I just happened to buy my house 55 years after he did.
This bimodal property structure also contributes to the housing problem. Senior folks with $500/year property taxes and no mortgage have a big incentive to not sell their homes, thus exacerbating a low-supply mark
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The reason California taxes everything else so high is....because it and other blue states subsidize most of the red states [redstatesocialism.org].
California - and Californians, and other Blue States and their residents, are BIG BELIEVERS in those with money providing subsidies to those without money. So what's the problem here?
A feature, not a bug. (Score:5, Interesting)
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Why do they need to work at the office when they have Internet access at home?
Not commuting to the office should save an hour or two each day. Then there's the productivity boost of not having to deal with the noise pollution that comes with an open floor plan layout.
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Rurual East Coast job 24% (Score:2)
I am making half as much, however I have a larger home, and it is only 24% of my income.
That said, other expenses are not proportional to the areas. So my 76% of my income will need to go more into other expenses.
So the difference between a 18k car vs a 25k car is a big deal to my budgeting.
driverless campers and RVs (Score:5, Funny)
I think there is an idea for a start-up. Autonomous campers which just drive around all night or find cheap parking someplace. Your camper could drive up to 4 hours away from work while you slept and get you back in time for work.
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I think there is an idea for a start-up. Autonomous campers which just drive around all night or find cheap parking someplace. Your camper could drive up to 4 hours away from work while you slept and get you back in time for work.
I've read that issue of Judge Dread!
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You could probably get away with that on southbound highway 85. My the time you moved far enough to need to turn the wheel, you'd be sober again.
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Err... "By the time". Stupid typos.
I can't afford it either.. (Score:2)
20-minute commute in Silicon Valley (Score:3)
What is that, 4-5 miles?
I can get about 15 miles away where I live, and commute even further. I like it that way, because it means that I only rarely bump into coworkers (or bosses or employees) when I'm not actually trying to work.
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I can get about 15 miles away where I live, and commute even further.
How long does that take you on the bus? Or how sweaty do you end up on a bicycle?
who to blame? (Score:3)
It's the inability of government to handle these problems (and the lack of leadership to tell citizens they're going to have to experience change) that you're seeing companies step in to take the role of transportation, education, social welfare for their employees. Where governments let their infrastructure and civic fabric fall apart because of complacent old people, companies have taken on the responsibility.
All the people who protest these giant companies causing traffic, gentrification, etc... Companies are providing jobs and skills and livelihoods to people, things that everyone wants. You should thank them and their employees for keeping our economy going. And criticize the people who refuse to admit change in their neighborhoods, saying that "we don't want displacement" or "we need to preserve the character of our neighborhood". Well, fuck that. Things change, and no one ever promised you that the place you moved into you'd never have to move out.
Everyone reflexively jumps on the bandwagon of displaced elderly or gentrified neighborhoods, because they're easy to see. But who advocates for the thousands of young people who come here and have to pay $2000 just for a single room? Your kids, your classmates, who come here in search of having the American dream too? Sorry if I don't have sympathy for the "locals". The lives of the young professionals who come here are far more impacted by the cost of living and lack of housing than anyone who's already been here for 20 years and got theirs (and pulled up the ladder behind them).
Figure out whose side you're really on.
Obviously they need to upzone to 65 ft MFH zoning (Score:2)
It seems obvious that they need to upzone all arterial blocks to 65 foot Multi Family Home zoning. This won't force any rich executives to sell their single family homes, but will allow condos to be built for families with 2 bedrooms. If they make the parking optional and not required, this will increase transit and bike use (or electric scooters) and eventually stabilize prices. I'd recommend they rezone any SFH citywide, just to be on the safe side, and not subject to design review.
No amount of money is worth living in CA (etc.) (Score:2)
My wife and I do OK. Between the two of us, we make a good chunk of change. We also live in Pittsburgh. Now, while I grant you, Pittsburgh IS a shit hole, we're also only paying 6% of our (pre-tax) monthly income for our house payment (loan, property taxes, insurance). SIX PERCENT!! That leaves an awful lot left over for other things. There is NO WAY I would want to live someplace where we were paying 28% for a place to live - let alone 33% or whatever. That's just insane. There is NO amount of money
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Well, you are also a two income household where the study is indicating a single income household. So, given a spouse that makes as much money, they'd be looking at 11-16%. Your 6% is good. I doubt others near you have an equally great deal as that is typically far below the historical average, and I'm guessing you got a really good deal or are living below your means (lower than other people of similar pay anyway). Actually, the deals for the high tech workers isn't bad and is near past historical (middle
Re:No amount of money is worth living in CA (etc.) (Score:5, Interesting)
Well, you are also a two income household where the study is indicating a single income household. So, given a spouse that makes as much money, they'd be looking at 11-16%. Your 6% is good. I doubt others near you have an equally great deal as that is typically far below the historical average, and I'm guessing you got a really good deal or are living below your means (lower than other people of similar pay anyway). Actually, the deals for the high tech workers isn't bad and is near past historical (middle class) averages where housing now (and has been for decades) the largest household expense as the past largest (33-50%), food, has dropped drastically along with clothing.
Yeah - I was going to mention the whole two vs one income thing. And you're right. And yes, she makes basically the same money I do. So even as SINGLE people, either one of us would basically be paying only 11% or so on our house. Of course, as single people, we would buy less house and be paying even less. Probably more in the 9-10% range. But you hit on another point. The real key is living below your means. We didn't get any great deal on our house (we probably paid a little too much), but we did buy MUCH (MUCH MUCH!) less house than we could have. We also drive old and/or crappy cars. The people in our neighborhood would be totally shocked if they knew how much money we make. Food and clothing...our food budget is about the same as our house payment (we're a family of 3). Clothing? Shit. Not even a blip on the radar. At the end of the day, the key to having money to buy shit is to STOP BUYING SHIT - including houses you can't afford.
Re:No amount of money is worth living in CA (etc.) (Score:5, Funny)
You sir are part of the problem. You displaced a middle income family from living at that house and it's happening more and more across the country.
You sir, are insane. I didn't buy the only shitty house in this city. There are plenty of other shitty houses for people to choose from. There's certainly no shortage. This PARTICULAR shitty house was for sale for six months before we bought it. If someone else wanted it, they had ample opportunity to buy it before we did.
Aside from that - I'm supposed to buy as much house as I can possibly afford, so that I TOO can be only one job loss or other bad break away from losing my house and/or going into bankruptcy? What the fuck kind of logic is that? It's the very same logic that puts many people in the exact shitty situation that they find themselves in.
Maybe I could stretch myself even more buy hiring a lawn guy, a house cleaner and a home repair guy - since that would provide jobs for people! Fuck - I didn't realize I am so evil until now. Thanks for helping clue me in!
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FYI, New York is a state, not just a city.
Yes, yes it is.
Here in western NY you can easily buy a three-bedroom house in a nice suburban neighborhood for less than $200k.
Yes, yes you can. And you'd still be living in New York. No thank you.
Engineers don't decide on office location (Score:3)
CEOs do. And they can afford to live in the swankest areas.
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That's why the workers need to seize control of the means of production... right?
Or are you one of those delusional people who think they're going to be on the handle side of those pitchforks?
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moving (Score:2)
If you think that's bad (Score:2)
Which brings up a important caveat to these type of stories. These home price to income ratios are assuming you just got a job there and need to move and buy a home in the area. If you've been living there for a while, you bought your home when the price was much lower, so it still makes sense for you to live and work there.
Nothing new (Score:2)
In the 80's I worked in the south bay area of LA (Manhattan, Redondo, Hermosa) and spent around 30% of my take home on rent so I could live in the area. I imagine NYC is also crazy expensive.
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Agree big diff between gross/net. Although in high tax states (well was then in CA) a mortgage unlike rent was deductible at both fed and state level.
I'm a real estate agent (Score:2)
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28% threshold is a dumb metric (Score:2)
A household needs to make at least $250k/year (Score:2)
Welcome to most of America... (Score:2)
SEE: http://www.pewresearch.org/ft_... [pewresearch.org]
So expensive it's ridiculous (Score:2)
Welcome to the real world (Score:2)
Apple engineers would have to pay an average of 33% of their monthly income for a mortgage
Most workers in most cities would consider that an absolute bargain - some of the most affordable rates there are.
For a short time during the early 1990's when mortgage rates doubled over 2-3 years, to nearly 15%, I was paying nearly 75% of my monthly take-home pay.
30%? That's cheap for Australia (Score:3)
At least slow wage growth drops that % down a smidgeon each year.
Re:Why do companies insist on expensive cities? (Score:5, Insightful)
Those cities are expensive because the tech companies are there. Mountain View, Cupertino and Sunnyvale were orchards and farms with dirt-cheap housing before the rise of Google, Apple, Facebook, Intel, etc.
Anywhere the tech moves; high prices will follow. Just look at Portland and Seattle.
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Before Google and Facebook, there was Ebay, Oracle, HP, Cisco, Sun, AOL, nVidia etc. (90's tech boom). Before them there was Intel, Fairchild, TI, Maxim, Analog Devices, etc.
Apple has always been there. Along with a bunch of others that are still around.
This area has had behemoth tech companies for a good 40 years now and each decade grows even more.
As to why they don't spread out? That's like asking why Wall Street traders don't spread out. Because information sharing and collaboration leads to much better
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And the sad part is a lot of the area actually does not even look upscale or expensive. If you look at a photo of a neighborhood with a $2M house in it for the Mountain View / Sunnyvale area, and stripped off the address, you'd probably assume it was a $200k (or less) place in a boring part of the country.
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That's absurd. (Score:3)
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To some extent, it's a fire that feeds itself. A company starts doing well, starts attracting more and more talent. The talent wants a decent life, so they buy up houses close to work. Company continues to do well, more talent wants to live there. Nobody is building new houses, and no way in hell the people already there want more traffic, denser housing, etc. So the cost of living goes up. But also, the area starts going upscale since you have all this well paid talent in the area. After some time, you end
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... but why do tech companies insist on building their work places in super expensive cities? How much money could these companies save by building in a nearby suburb where their employees could actually afford to live?
Many of the employees, especially younger people, want to live in or near a large city that has an active social life. Some engineers are perfectly happy to go straight home from work and sit in front of their computer for most of the other 100+ hours in the week. Other people, including many engineers, want to be able to go see an evening show on occasion.
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If your a direct consumer related business, like a branch of a bank, or even a sport stadium, I get why you want your location to be "in the thick of it," but why do tech companies insist on building their work places in super expensive cities? How much money could these companies save by building in a nearby suburb where their employees could actually afford to live?
First, I think the point is that these cities are super expensive because these businesses are here. This isn't downtown SF after all, these are/were the subrubs and if they weren't hiring people, there wouldn't be this huge demand for property. Second, the businesses have to go someplace the skilled workers they are trying to hire actually want to live. I bet if Amazon's second HQ got put in Boise, Idaho, they'd have a pretty hard time staffing it with the people they want. Third, if things are the way the
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I live in a van, and I kept my job. Works for me!
Is your job has "bear" as part of the title, and does your van has "Free Candy" written on its side?
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I live in a van, and I kept my job. Works for me!
Apple and Google engineers should all be given shovels . . . dig your own Hobbit Hole!
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You have the "personal choice" to make less money, just as you did in 1950. If you want a 1950s standard of living, by all means go have one.
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Unfortunately, the only way anything new gets built is by tearing down older stuff. There really isn't any unused space for brand new residential housing development.
(Of course we could build denser/upwards, but I think everyone is aware of the push-back problem that always gets out here.)
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The governments valuation has nothing at all to do with house value on the market. That's just government greed.
The price of real estate is determined by what someone is willing to pay for it. Period.
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Real estate is driven a lot by government policy. Zoning laws establish how likely the neighborhood is to change. The Fed setting interest rates drives prices pretty directly. Property tax rules encourage or discourage turnover. Tax incentives drive how likely people are to buy a house. etc. etc. etc.