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The Almighty Buck

The High Cost of Valley Living 289

Small Hairy Troll writes "An ZDTV article (requires Realplayer, Media Player or Quicktime) on how insane housing prices in Silicon Valley have become. An income of $50,000 with a family of four qualifies for government assisted housing. Ties somewhat into the earlier Slashdot thread 'Too Old To Code?': What interesting times we live in. "
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The High Cost of Valley Living

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  • $220K is not a range.
  • Yup, if PHB's had their way, we would all be using punch-clocks. Of course, if we come up with a clever idea in our spare time, they claim they own it, too...
  • Outraged at subsidizing California? Get a real target. Here's some info:

    San Jose (Silicon Valley) exports more goods than New York city or any other metropolitan area in US. California pays more in federal taxes than it receives in federal spending. I believe Kentucky and Viginia were the leaders in the "receiving more than they give" department.

  • I agree, I also moved from Chicago to California, and the housing costs, well, you get used to them. The food isn't that bad, cost-wise. But the Gasoline is fucking absurd, and this is due to stupidly crafted (but well-meaning) environmental laws, that restricts where California can import Gasoline from. Gas dealers tend to take advantage of slightly moderate rises in price as oil fluctuates, and spike the prices mercilessly.

    Also, cable is out of hand, but then again, that's the same all over.

    I just remembered this old Metallica song. . .
  • You make one excellent point. I've lived in a few different neighborhoods at a few different income levels, and this isn't a "hang-the-rich" argument here, but it seems like the higher the average income, the LESS FRIENDLY the people are. In my old neighborhood, people were actual jerks, they wouldn't invite us over for parties, they wouldn't come to our parties. Moved to a more up-and-coming pre-boom-ish neighborhood, where housing prices still had a ways to go, and man, we've had parties every other week where everybody comes. Stuck-up jerks in the expensive neighborhood. I could have bought any one of their houses for cash, and they were still jerks.

    Heh, and SV, everytime I'm up there, it's all anyone talks about, is how expensive the housing is, and how miserable the commutes are, and how it's impossible to find and retain good employees. When are these companies going to move out? Silly goofs.

    I just remembered this old Metallica song. . .
  • yeah, and you can ride your bike like what, 2 months out of the year in Chicago? (I'm talking June and September - the rest of the year it's either too hot or too cold or too rainy).

    Now, I'm not talking recreational riding. Sure, get on your slicks, and hop some mud in the rain. But try biking to work in a suit and tie in August when it's 100 degrees, 99% humidity -it's just not a realistic option for most people. Maybe you don't have to wear a tie to your Baskin-Robbins job, (I don't to my computer job), but a lot of people, most people, still do.

    I just remembered this old Metallica song. . .
  • Well, I'm not telling you where I live.

    3000 sq. ft. house for $450k (not BAD, still pretty steep). California climate, Ten minutes to the ocean, twenty to halfway decent rock climbing or mountain biking. Fifteen minute drive to work through vineyards and horse pastures, almost no traffic, high-tech job @~$70k-ish (plus substantial, very substantial stock options).

    Yes, nowhere NEAR a big city. No, I don't really miss the big-city culture. No, you are NOT welcome to move here.

    I just remembered this old Metallica song. . .
  • Wow. What happened? When I moved to CA two years ago from Chicago, gas was $.20 higher in CA (avg), now I just filled up fo an outrageous $1.79 in CA, and Chicago is $.10 higher?

    I'm telling you, housing is more expensive, income taxes are higher, but CA is WAY better than Chicago. (I'm liking the weather - the only thing I miss are occasional thunderstorms).

    I just remembered this old Metallica song. . .
  • Orlando:

    Big city hassles without all the big city culture.
    yeah, the weather's nice, but not in the Summer.

    Do you enjoy fire-ants?
    Do you enjoy alligators?
    Do you enjoy very large cockroaches that hit you up for protection money?

    Now, in Orlando, you don't have nearly the redneck problem you'd have in Hotlanta. And again, you have a huge gap in property values. Housing is VERY expensive in areas where there are decent schools (for your kids. remember them?), and not only are the houses expensive, but you end up more often than not with high association fees for maintenance for the golf course you live on. If you're into that sort of thing. If you're not, too bad. And in the areas where housing is affordable, not only do the schools suck, but you're facing rather high-crime, so buying a cheap house and sending your kids to private school isn't a great plan either.
    Plus, all the cultural richness that is Disney and disney's parasitic competitors (Universal Studios, etc.).

    No thank you.

    I just remembered this old Metallica song. . .
  • Homer Simpson, on Florida:

    "but, that's America's wang!"

    I just remembered this old Metallica song. . .
  • Sounds all "conspiracy theory"-ish, I know, but if you've ever been to Phoenix, and driven around, and look at the subdivisions, the traffic hassles, the way everything's laid out, you'll see exactly what he's talking about.

    The same exact situation dominates Orlando FL, and the Chicago IL (at least the western suburbs).

    I just remembered this old Metallica song. . .
  • Some do - I have two friends (that's it, no more :( :)

    Anyway, one lives in Athens, GA, and the other lives in MiddleofNowhere, GA, and they both work for a company based out of NY with no local office ( I think).
  • for his own good.

    >5000 sq ft is a grocery store (500 X 100).

    Not quite, do the arithmetic! ;-)
  • So true. A couple things, though... There was a shortage of housing under rent control, but it was a shortage of _expensive_ housing. Those poor, suffering highly paid professionals were unable to get into the Cambridge housing market under rent control because the market couldn't support luxury housing. The end of rent control suddenly changed a lot of run down units into high-rent living spaces.

    We've also contended with the paradox that "creating jobs" in Cambridge has actually made us suffer. New office buildings and businesses have sprouted up creating hundreds, if not thousands of jobs. However, people seem to have forgotten that people who live in the city might want to work there, as well, and lack of new housing development while we've had lots of new office buildings has wreaked a lot of havoc.

    However, generally, things are a bit more affordable here compared to Silicon Valley and San Francisco, unless you want to live alone. You can find living situations with a bunch of roommates in a somewhat dumpy apartment at reasonable prices (eg, $500/per person, per month).

    Also, there are many affordable neighboring cities nearby, whereas in Silicon Valley, you can't find anything affordable for a 50 mile radius.

  • > Either build a bunch of high rise apartments and other high density living and then add some decent public transportation or -- de-populate a little. :)

    I remember hearing somewhere (think it was a tv show on TLC or Discovery about SV) that the height of buildings was restricted by earthquake related building codes...thus no highrises were permitted. True? Sort of true?

  • Why not let market forces drive people elsewhere? Is a Democrat just a Republican who got stuck in traffic?
  • Back in the mid 19th century gold rush to California, some people were able to make quite a bit of money taking extra durable items with them to sell when they reached their destination.

    It's said that, while the '49ers burnt their gold in gambling, whiskey and whores, the people getting rich was Levi Strauss and all the slick suppliers.
  • Ah, I used to live in Waltham. (before moving to the Left Coast)

    In the Boston area, Waltham, Watertown and with some luck West Newton are all pretty good, affordable places to live. Easy to get into the city, though parking is always an issue in Boston. Even when cars are obselete and everyone teleports to work, parking will _still_ be an issue in Boston, for some reason ;)

    Quincy is also pretty good, and somewhat easier to get onto the T at (Red line instead of Green line)
  • Obviously you've never commuted in SV. Average traffic flow is not, in my experience, 60 MPH.
  • And of course the REAL problem is that government regulations prevent an adequate supply of housing from being built. Said government regulations being: zoning, environmental, etc. regulations.

    Zoning regulations are a way for people who already live in a place to screw people who want to move there (and incidentally drive up their own property values). "Free enterprise" and "zoning" are inherently incompatible concepts.


  • is that in Phoenix, AZ, any vehicle built before 1994 is basically undrivable because the air conditioning doesn't work. Cars built before 1994 use the old 'Freon' stuff, which is basically now unobtainable. Upgrading these cars to use the new refrigerant usually costs more than the car is worth. Thus hasn't been done.

    You don't drive a car in Phoenix's 110 degree heat without air conditioning. Unless you work as a day laborer where the stench and crusty salt stains don't matter, or can shower when you get to where you're going :-).


  • In my opinion, the solution isn't to pack people together tightly like cattle in a feedlot (that leads to other problems, like increased crime), I think the only real solution is to simply stop forcing people to go into an office five days a week.

    This would reduce the fuel used by motorists, reduce time wasted in traffic, reduce wear and tear on existing roads, and reduce the need for new roads. Also, it would increase the amount of time people spend in their neighborhoods, and would help rebuild a sense of community in places where commuter neighbors hardly even know their next-door neighbor, resulting, in all likelihood, in a decrease in crime.

    Particularly in the tech industries, there is just no valid reason to have people going into an office every day. People should be telecommuting 1-3 days a week, minimum.

    Until we start doing this, there is not going to be any solution to the massive congestion (and other commuting-related woes) we are seeing in our metropolitan areas.

    Then, we can move on to the rural congestion that is beginning to occur on weekends when the urban masses decide to hit the road. :-/


  • All of your comparisons are bogus. You compare HMOs to Canada's government health care system. But in the U.S., there are other choices. I personally have a PPO; it works well for me, and costs are reasonable. I can go to pretty much any doctor I choose.

    In Canada, you have no other choice; you're stuck in the system. Simple economics predicts the problems Canada's system is seeing. When you set prices below what the market dictates, supply will outstrip demand. This results in shortages, which is exactly what you're seeing.

    At least in the U.K., you can opt for the private system.

    I can't say that government services appear to me to be at a significantly higher level in Canada. Yet, taxes are considerably higher, as far as I can tell. I don't know about property tax, though. My guess is that is it higher. Here, I pay $2,700/year. Plus, I pay 28% federal income tax (far too high, IMO), 9% state income tax, and no sales tax.

    Up in B.C., they pay a much higher income tax (49.5% + a two-tiered surcharge), 7.5% GST, 7.5% provincial sales tax, higher fuel taxes, and a host of other taxes.

    I like B.C., and the people there, but, really, I believe you'd have to be pretty much insane to keep living there, as they just continue to punish you for making a living.

    Man...I gotta tell you; reading that leftist NDP rubbish on the B.C. govt website is enough to make one physically ill.

    And, most U.S. citizens, like their counterparts in Canada, are in fact hard-working. You want to deny that, I believe, because it is the only way you can possibly justify the confiscatory levels of taxation you apparently prefer.

    And, despite all the taxes in Canada, there are still more panhandlers in Victoria than I've ever seen in an U.S. city.


  • supply will outstrip demand

    Obviously, I meant to say "demand will outstrip supply."

    Dang keyboard! :-)


  • FWIW, I was talking about crime *rates*, which are calculated per capita. As far as I know, *in the U.S.* (strangely, this isn't the case in most European countries), crime *rates* are considerably higher in metropolitan areas than in rural areas.

    Probably, though, there is a certain density above which rates either stablize or drop off.

    But you still have to recognize that many people don't want to live in a dense urban environment. IMO, you have to respect their desire to live as they wish. Believe you me, I despise surburbia as much as most people here (I favor rural/small town living), but that doesn't mean we have the right to outlaw it.

    As far as the urban masses heading out to the rural areas on the weekends, I should have said "metropolitan area residents" to be more accurate. Clinton is going to add two more national monuments here in Oregon, to "protect" them. In reality, they will be trampled all the more by hikers. The ultimate irony: the more environmentalists lobby for protecting areas from development, the more damage is done by the herds from the cities.


  • When I spent three weeks in California last Christmas, I was in shock from the food prices. I'll admit that Fareway (Iowa) has noticably lower prices than even its local competitors, but aside from produce and fish, food prices were 150-200% of what I'm used to. I was in shock. I had trouble putting things in my cart.

    Fortunately, I made it back, and was able to return to excellent pork cuts for well under $2/lb . . .
  • $500/month *per person* is reasonable? Yikes.

    I move to Dubois, PA this weekend. Rental houses are hard to find, but I got one. 400/month for a huge four bedroom with an empty lot next door for the kids. There's also a basement and attic.

    And I'd thought I was going to be forced to shell out $48-50K to buy a five or six bedroom victorian . . . my wife would have been upset if I took one of the run-down ones at $30k . . .
  • If your time is very cheap, then that just might work. If I work 12 hours/day and drive 4 hours/day, then that would give me just enough time to go home and get my 8 hours of sleep. Sleep, get up, repeat.

    That doesn't sound like much fun to me.

    Not to mention the fact that all that driving isn't exactly environment friendly.

    Why not just move somewhere where the cost of living isn't so high? I refuse to ever live anywhere NEAR Silicon Valley.
  • As a Canadian whose lived about half and half on both sides of the border, I welcome you to move here and find out how little of what you think America is like is true. Compare an HMO to Canadian health care. In Canada, you can always get a second opinion and you get the services your doctor demands. In an HMO, you get what the HMO is willing to approve.

    You'll have private health care, but will end up paying a big chuck of your bills anyway, and you'll still shell out a big chunk of your taxes to support medical care, only all that money will go to other people, you won't get anything out of it.

    Now, all that assumes you can get a decent job and keep it. No unions and no guarantees means in Silicon Valley, if you don't code, you're poor, and even if you do code, the start-up you work for may not pay you squat, except in promissary notes due if and when the company IPO's.

    Sales taxes in Santa Clara county, California are 8.5%, and prices over all are much higher than Canada, taxes included, because high rents and high wages have to be factored into every price. Add to that state income tax, and in some places county or city income tax, and the tax situation isn't so much better in the high brackets, and is far worse in the lower ones.

    You'll pay twice what it costs to eat in a restaurant in Canada, and any contact you have with the service industry will be nothing but frustration. Anybody smart enough to run a cash register or wait tables can find a better job. Those homeless heroin addicts you don't want to see will be serving your food, and they'll still be there in the emergency room nearest your home. Hospitals in the US are required by law to treat everyone, even if they can't pay.

    If you feel that US tax dollars are better spent in the USA, you are a fool. I invite you to take a look at the quality of the schools in California, or try to get your green card renewed at the INS building in San Jose. Whatever greater measure of government services you think you'll see in the US is an illusion. Services are being cut all over, and have been for years.

    Canada's duties are small compared with the massive chicanery of importing to the US from Mexico or Chile, or even the far east. Canadian tariffs are lower on most kinds of goods than US ones, and prices for imports are usually lower in Canada. And Canadian customs is a breeze compared to bringing stuff into the US from Mexico.

    Oh yeah, and that "American spirit" is mostly a myth invented by Ronald Reagan. Americans don't try to get rich through hard work, the upper middle class has and the lower class has the lottery. About the same number of people get rich off of each. Entrepreneurship has nothing to do with the IPO culture.

    So please, come to America. I'm going back to Canada and on behalf of my compatriots, we'd be happy to be rid of you. One less lazy bum who expects the government to protect his life and property but expects the government to shaft everyone else so his taxes will be lower - we can do with that.
  • >...the owner of the house enjoys a tax break that helps defer the interest on the mortgage loan, the renter pays exorbitant rental fees. These fees are in no way tax deductible, and we end up with a class of people who can only rent.

    No, we end up with a bunch of individuals that choose to rent, and choose to rent again, and even when presented with the evidence that ownership has advantages over rental they do not change their minds or their behavior and continue to rent.

    >Unfair? yes.

    No. It's simply the reality of a pseudo-free market and a bunch of lazy whiners.

    >So .. what are you going to do about it?

    Why the obvious thing of course. Do what I did:

    Bite the bullet. Don't spend your money on new car payments. Don't eat out. Take your lunch to work with you. Don't make any more kids. Don't waste your bucks on dates. Go to school in the evening(since you are not out chasing babes you've got the time). Do your own laundry. Use a secured credit card to buy stuff THAT YOU CAN AFFORD. Make your payments ON TIME. Pay it off. Save some money. Establish a good credit record. Get another credit card. Use it. Pay it off. All while saving up 10% for a downpayment then go buy a place.

    IOW, get with the program.

    After 2-5 years of honest, focused effort: TaDa! Problem solved. Next question please?
  • I can get them for $80K. They are, generally, coming from two-income families. They want to live and work in the same town, or at least nearby, they don't want to drive to the south bay at any cost.


  • I like El Cerrito, preferrably the hills. Prices get higher closer to Berkeley (only 7 miles away), lower in the Richmond direction but some parts of Richmond qualify as slums.


  • 2 miles from North Berkeley BART. There's a bus.


  • I walked by a real estate office in Berkeley today. One $250K, others around $350K. The $220s are in El Cerrito (7 miles from Berkeley) and the nicer parts of Richmond (stay away from the bad parts, I agree).


  • I saw one for $250 today at a Berkeley real estate office. I'd suggest you check El Cerrito and some of the nicer parts of Richmond. Note also that prices will be taking a dip as there has been a dip in purchases. It seems that the option stock windfalls which were fueling purchases have mostly evaporated.


  • No, Socal price were always just ridiculously high. It's not as inflated as the valley housing market, but some areas are really close. You can still pay $600,000+ for a 2br, 1ba bungalow in Beverly Hills. Hell, I moved to LA from Atlanta and bought a house that cost twice as much that was half the size, if that tells you anything.

  • If this kind of crap keeps up, maybe we'll finally see some companies experiment with allowing coders to telecommute.

    Unfortunately in my profession, technical writing, it's a lot harder to get work done via modem or xDSL. The actual writing is usually the easiest part of the job; it's meeting with SMEs, programmers, and bosses that requires "face time" in meatspace.

    Out here in the Carolinas, few companies are technologically and (the kicker) psychologically ready for routine conducting meetings via headset-and-Webcam. I keep on praying for the future to arrive so I can work off of a laptop in my living room.

  • I must disagree with your characterization of rent control. It's a complex issue, but to summarize: after a few years deeply involved in San Francisco housing issues, I don't believe that housing falls under normal "free market" rules. Nor is it responsible for any housing shortage, although heavy advertising by landlord groups would have you believe otherwise.

    You said it yourself. Landlords will demand whatever they can get. Removing rent control won't build more apartments, it will just make more available to those with a lot of money, and fewer available to those without. It means that you, as someone highly-paid, will still be putting a large percentage of your income toward rent. It means that those who have lived there for years, who have invested much personal energy in the community, and who may even have caused your prosperity, will be kicked out. This includes teachers, social workers, artists, and all those waiters the high-tech lifestyle requires.

    "So," you say, "since I can pay more money I deserve to live there more." However, it's a basic human (even animal) social rule that one's right to stay put outweighs another's right to move anywhere they want. If someone can't find housing where they want to move to, they shouldn't move there. They don't have a right to kick someone else out. To think that rich people should have more rights than poor people is analogous to the moral code of "might makes right", which isn't very sophisticated. Unfortunately, our economy doesn't reflect this, but rent control is one attempt to keep communities from falling apart. It's one thing if we're talking about luxuries, but housing is not a luxury. If you don't have housing, you're screwed.

    I don't think rent control should be subject to any "means test". Remember, it's ultimately the residents who improve a neighborhood, not the owners (unless they're also residents). Low crime and booming business is more valuable than fresh paint jobs. So if residents are responsible for the improvements, it's reasonable that they should enjoy them for as long as they live there. The owners will get their profits when they sell.

    Here in San Francisco, do you know how the Internet industry took hold? For most of its history, SF has fostered a creative and tolerant culture, which means that new ideas can be explored. In the early 90's, a few tech-savvy artists started working for themselves doing image manipulation services, etc. They set up shop south of Market because that's where cheap warehouse space was. Soon the area had a critical mass of talent and the SOMA multimedia industry took shape. It was in perfect position when the Web exploded. Now, the very artists and other people who fostered the culture and attitudes in the first place are being kicked out, by people prospering from the industry they helped create. So much for gratitude.

    I'm speaking as someone who's made a good living in Internet tech for a long time, but who's sad to see much of San Francisco's culture and communities fall apart (I've lived here 10 years), not to mention everyone who's losing their home. I don't blame the individual immigrants; it's more of a collective effect coupled with insufficient rent control. We have rent control, but it has loopholes that have been exploited to illegally evict thousands of residents recently, and the DA won't prosecute. If we had no rent control, the problem would be far worse. A housing market driven purely by free market forces doesn't make a fun or interesting place to live, and you can just forget about real community.

    "Simple supply and demand" may be an elegant theoretical system, but it falls apart in many real-life situations. Ignoring those situations and pretending the free market can solve everything has dire consequences. We adopt this economic system because it's supposed to be the best for people, but we need to recognize when it's not. We shouldn't let ourselves be slaves to columns of numbers.

  • It is possible to live well here. There is good Internet service in St. John's. I make the same consulting rates for clients in the valley while sitting in my house here as I would in Santa Cruz.


    I have met people here who are doing significant software and internet work. While I have an advantage in coming here that I already have contacts in the valley, anyone already here can use the same methods as I do to find clients:

    All this may be true, but it is besides the point. You are 4.5 hrs from the valley for phone calls, and flights for face to face meetings (especially to the west coast) take a long time. Further, its going to cost you an arm and a leg to ship things out there. Or to get new and improved services (the market is too small). There are good reasons why companies all tend to glob together. They can get more, better, or specialized services in areas of higher business or population density. All this is going to be troublesome in an area that has maybe two hundred thousand people (most of whom are not that tech savey) is 15 hrs by car (ok, so 6 are by ferry) from civilzation (and even then its just Nova Scotia [ducks for cover] you still have to drive for 2 days to get anywhere) and sticks out like a sore thumb into the North Atlantic. It is however a price you are willing to pay (for now).

    Personally, given the things you list above about working for valey firms from anywhere, I would have moved somewhere warmer. But then I don't have a fiance who wants to move back to The Rock(no pun intended).


  • I'm getting married to a woman from Newfoundland and am staying here for a few months until our wedding. In St. John's we're renting a three bedroom house with a large kitchen, two and a half bathrooms, front and back yard. There's both a large living room and a family room. The rent is US$500 with a US$133 deposit (no last months rent down). In Santa Cruz one of the things contributing to the homelessness that is so common there is that it requires several thousand dollars to move into a place, for first, last, plus a deposit.

    Dude, you forget that St. John's is an econmically depressed area. When, they had a job openning for a clerk at Aunti Crays (sp?, a local specialty foods store) thousands of resumes poured in... people with fscking Ph.D.s applied. More Newfs (Newfoundlanders) live outside the province than in it, and the largest single employer, admited or not, is the government (this is split between the civil servants, and the unemployment office).

    St. John's had its day when being the closest point to europe in North America meant something. If you look at the buildings downtown (that survived the big fire, like the Basilica of St. John the Baptist which rivals in size and grandure any church built anywhere else in North America at the time) you will see that is was once a big city (by the standards of the day). It was probably really fscking expensive too. The point is that you can't compare a place that is considered to be economically viable (anymore) with a place that definately isn't. The valley will be exactly the same.

    You have to make the choice about how much you want to give up to be close to the action. People will keep moving to places where they can make money, gain influence, or what ever is of value to them. As long as they feel they're getting the better part of the deal. In St. John's you're far away from the action, so of course its going to be cheap.

    Congrats, and good luck.


  • Go on - I'm sure you know somewhere reasonably cheap that suits a Linux hacker like myself.
  • The only remaining houses that are not government owned long ago became museums because of how much taxes were.

    The *average* three bedroom apartment sold last year for $1.3 million. Don't even think about a four bedroom.

    $50,000 and government assisted housing? I believe Manhattan had that 20 years ago!

    Remember, Manhattan is the place where someone had the bright idea that you could take an already tiny apartment and rent each room separately. People really do live in converted closets.

    OTOH life expectancy is better because nobody drives. :-P (Any idea how much parking is?)

  • No, it is the number of tech jobs. Tech jobs are the current hot item to spend money on, and since most tech is supposed to be here, people come here looking for tech jobs. The valley can support enough people if tech was balanced, but the flow of money to tech jobs means that only tech career people can get houses here. The climate is the same all the way up and down the coast, but you don't see this happening along the entire coast...
  • Bruce,

    I agree, that the East Bay is alot cheaper, and not anywhere near as bad as the snobbish over here on the Peninsula claim it is (I'm in Mountain View). However, there is one HUGE drawback to living in the East Bay:

    The Bridges.

    If you telecommute all the time, or work over on the eastern side, I'd live over there in a heartbeat. However, the sad fact is that about 80% of all work is located somewhere between San Fran and San Jose, over here on the Peninsula.

    I'm not even going to think about driving across the bridges to get to the peninsula. There are EXACTLY TWO BRIDGES (with a total of 5 lanes of traffic between them (each way)) to get from East Bay to the Peninsula. I work in Foster City, and have a view out my window of the San Mateo Bridge. Let me tell you, it moves at about 10 mph for 2 hours each night, and that bridge is at least 5 miles long.

    Sadly, the East Bay isn't really practical for alot of us who work mid-Peninsula. If you work in San Jose, yes, but not Sunnyvale-Burlingame.


  • Reminds me of that story:

    A guy walks in in Chase Manhattan bank and asks for a $5000 loan, and he offers his Lamborghini as collateral.

    The bank guy is thilled, he takes the car for a spin around the block before heading in the underground parking garage, and then hands the guy a wad of cash.

    A month later, the guy shows up, and pays the $5000 principal along with some $30 of interest.

    The bank guy asked him: "While you were away, we ran a credit check on you, and we found that you're worth $50 million. Why the hell did you need to borrow $5000 for anyway???"

    - That's the only way I could park my car during a month in Manhattan for thirty bucks!!!!

    Here's my mirror []

  • In many areas, high density housing is blocked by zoning ordinances. It is considered to be bad for property values and attracts lower income residents. My county wants a more "upscale" image and is restricting new construction of apartment complexes.
  • Not to mention that Pittsburgh is simply a great city to live in. As a Pittsburgh native who moved to State College PA for a job, I really miss it, but at least I'm close :)

  • yeah, but you have to live in the Midwest

    Better to live in the midwest and make a decent living than be poor in the Bay area... At least that's what I decided and why I moved back.

  • One question I have, is do people have a right to live wherever they want? I mean, if I decide that I have to live in an exclusive suburb which has houses that cost $300k and up (expensive where I live), can I get public housing assistance? Why should people get assistance in CA when they make $50k, when people who make $15k can't get it in other parts of the country?

    I'm not sure I have an answer to any of those questions. What I would like to know is instead of the government paying ridiculous high prices for people to live in overpopulated, overpriced areas, wouldn't it make more sense to pay some of those people to relocate to cheaper areas?

  • I live in a 2bdr apt with garage in a nice section of MTN View for $1300/mo,

    For that you could be making payments on a 2000 sq foot 3br house out here in the midwest. Renting puts money in your landlord's pocket instead of building equity for you.

    DSL at home,

    No big shakes, even out here in the stix you can get DSL or cable modem.

    10 minute drive to work,

    Where I live its no more than 30 minutes from opposite ends of town to another even during the worst part of what passes for rush hour around here. You can commute in from one of the rural 'bedroom communities' that are 15 to 20 miles outside of town in 30 minutes.

    and I gross $70k/year with 2 years experience.

    That isn't much more than people with similar experience are getting out here, maybe 25-30% more at the most.

    What is wrong with the Valley lifestyle???

    Do you know anything else? Have you lived anywhere else? I'm not saying that SV is all bad, but it has its downside as well.

    Am I extremely lucky?

    Compared to a lot of people, yes. A lot of people in your area are doing worse.

    You are paying a premium to have your entertainment, and that is certainly a valid choice for you. You may find that once you are an old, married geek that your priorities may change a little, especially if you have kids and can't get away 27 days a year to snowboard no matter how close it is. Now, I've personally decided never to have children because I don't want to give up that much freedom (or spend that much money), but that is typical of the kinds of compromises that most people have to make.

  • Very interesting anecdotes about Canadian healthcare. I've been skeptical that the socialized medicine proposals down here in the US would end up giving us a system as screwed up as what it sounds like you have to put up with. And for all the whining of the 'liberals' around here, we already have county hospitals where the indigent can go for care. Sure, they aren't as nice as the private hospitals, but they are better than most 3rd world (or 2nd world (eastern bloc)) hospitals.

    You should come on down here to the midwestern US. Relatively cheap gas (I filled up the other day with 90 octane mid-grade and it was $1.49 a gallon). No emission checks or inspections in the state I live in, registration is done by mail. Chances are your classic Mopar would cost what my '72 Chevelle does to register, under $20 a year. Insurance is fairly cheap too. My Chevelle would never pass CA emissions -- it doesn't even have a PCV valve, let alone any other emissions devices as the carb (Holley 4010 750cfm double pumper) I am running doesn't have vacuum hookups for any of them. Registration is no problem, just send in the money, and they send you plates. You wouldn't have any trouble finding parts for your car down here either...

    As for taxes, the top rate for state taxes here is 9% I believe, and federal taxes are deductable (meaning the actual rate is more like 6 to 8%). Federal income tax of course can set you back 35% if you are in the highest bracket -- but most of us out here aren't. I believe I actually bring home around 65% of my gross pay. Sales tax here is either 5 or 6% depending on whether there is a municipal local option tax or not.

  • consider the Minneapolis area (or across the river in Madison, WI if you want to avoid the MN taxes),

    I was just in Wisconsin over the weekend, and one bad thing I noticed when I was there. Gas prices were outrageous. I had to pay about $1.70 a gallon to get mid-grade gas. I pay about $1.49 a gallon where I live, and the twin cities prices tend to be pretty similar (I make it there on a fairly regular basis). Wisconsin is still a fairly high tax state, as is Illinois. South Dakota, Nebraska, Iowa and Misouri are all significantly cheaper on taxes.

    Finding techie hires can be a challenge, but not an insurmountable one.

  • That's mainly only true for people who buy a home.

    Uh, the rent prices are much higher out there than they are here. A studio or 1br in SV costs $1200-$1500 a month, and usually in a not-so great neighborhood. You can get a nice 2br out here in a decent area for $600 or a 3br for $700.

    For renters, the cost of living is a bit lower.

    That is shortsighted thinking, as renters in the long run do nothing but enrich their landlords. In the long run, homeowners usually get at least get some return on their investment, and home interest is tax deductable. Plus renters get less space, often have bad parking (or pay extra for parking) and have to deal with sharing hallways, walls and possibly ceilings/floors with others.

    Additionally, if you make twice as much in an area that costs twice as much, you usually come out ahead since there are many fixed costs which aren't twice as high, and you don't spend all of your income on cost-of-living expenses.

    But the problem is most people only make 25-30% more in SV than they would out here in the midwest, and the cost of living, no matter how you look at it is going to be a lot more than that different.

    Gas is about 30% more expensive in CA. That comes out to about $150 more per year for me. Not a big deal.

    Its just one more thing.

    Smog checks are done once every two years for older cars (once they get beyond four? years old). That's a whole $40 every two years.

    Plus the time it takes to do it, plus either what it costs to bribe the checker or pay to get your car fixed or 'tuned' to make it pass. Plus what it costs that CA residents usually have to buy new cars more often than out here. Not to mention that the vehicle registration costs themselves are higher in CA. My truck costs me a flat $65 a year. My '72 Chevelle costs me $18.50 (registration costs go down based on age). I think m wife's car (a '99 model) is under $250, and it will go down each year for quite a while.

    In return we get cleaner air,

    Cleaner than out here? I don't think so. We don't have smog checks for a reason. No need.

    and get older smoking vehicles fixed or off the road.

    It is basically a myth that getting older cars off the road is a big win for the environment. It is far more damaging to the environment to build a new car than it is to keep an old one running, even if the steel used in the new car is recycled. There is still a lot of energy put into that process as well as the manufacturing process, not to mention all of the non-recyclable parts of cars (glass, fiberglass, plastic, rubber, etc).

    Most of the older cars (especially hobby cars like hot-rods and classic cars) are operated a tiny fraction of the number of miles per year that most new cars are.

    Your average lawnmower, snowblower or gas weedeater generates more emissions in a couple hours than your typical older car does in a year. Not to mention the amount of emissions that the average bar-b-q grille or fireplace generate in a couple of hours...

  • Big city hassles without all the big city culture.

    I didn't find all that much hassle when I was there, and maybe I'm not very cultured, but what is missing?

    yeah, the weather's nice, but not in the Summer.

    That is a matter of opinion. I happen to like hot weather... And as far as humidity goes, I've been to central Florida in the summer, and its not much worse than where I live now.

    Do you enjoy fire-ants?

    Like they don't have bugs everywhere?


    We've got those aplenty where I live now. Couldn't be much worse.

    Do you enjoy alligators?

    In Orlando? Outside a petting zoo? Its not like we are talking southern Florida here. They may have a few gators around, but not huge quantities.

    Do you enjoy very large cockroaches that hit you up for protection money?

    Who does, but there are bugs just about everywhere, especially in warm climates. I saw some pretty huge roaches when I lived in San Francisco (I lived in a bad neighborhood).

    Now, in Orlando, you don't have nearly the redneck problem you'd have in Hotlanta. And again, you have a huge gap in property values. Housing is VERY expensive in areas where there are decent schools (for your kids. remember them?),

    I've priced housing in the Orlando area, and it is comparable to where I live now. As for schools, I have no kids, and never plan on having any, so that isn't a consideration. If it was, I'd stay where I live now.

    and not only are the houses expensive, but you end up more often than not with high association fees for maintenance for the golf course you live on.

    I'm not in the market for that kind of upscale housing or a townhouse or condo.

    If you're into that sort of thing. If you're not, too bad. And in the areas where housing is affordable, not only do the schools suck, but you're facing rather high-crime, so buying a cheap house and sending your kids to private school isn't a great plan either.

    Then again, I could easily get a concealed carry permit in Florida (virtually impossible where I live now unless you are a political crony).

    Plus, all the cultural richness that is Disney and disney's parasitic competitors (Universal Studios, etc.).

    That stuff isn't a huge draw for me either, but my wife loves that sort of touristy crap.

    No thank you.

    I'm sure Orlando isn't for everyone, but then again, neither is the Bay area, and for that matter, neither is the midwest... There are ups and downs to everything.

  • Florida is probably the LASt place on Earth I'd live. Mumbai or Bangladesh is slightly more appealing.

    With your uppity attitude, I'm sure they'd welcome you with open arms.


    In Orlando? Its way inland... Not really any worse than Tornados where I live now or earthquakes in the SF Bay area. If mother nature is going to get you, it doesn't matter where you are.


    Can anyone say California or New Mexico? I don't think Florida has as much problem with fires as the southwest does.

    Strip malls up the ass.

    What the heck is wrong with strip malls? Like anything, they have their place. And do you really think that I believe that Florida has more of them than say, southern California? Or for that matter, San Mateo county?

    Lots of bimbos with implants and bad American cars.

    Uh... Sounding more like a description of southern California to me... And what do you have against American cars? Bimbos in cheezy import tinboxes would be better somehow? Go visit Beverly Hills and you will find lots of bimbos with implants driving BMWs and Lexuses.

    LOTS of older people (who shouldn't be on the road, but they are...).

    You are thinking of the Miami area now, I think. Not that it is any worse than say, Phoenix or parts of Texas which are also overburdened with an excess of the elderly.

    I think the white trash ratio in Florida is higher than anywhere else.

    I dunno, I've been a lot of places, and I can't say that, for example, LA or a lot of the more northerly east coast (Georgia, the Carolinas, etc) is much better.

    One can only pray for a monstrous tsunami to wipe out that state.

    No more likely than a monstrous earthquake will make California slide into the ocean I guess. What a hideously nasty attitude.

  • So, Bruce, does that mean you would be willing to pay a UNIX/TCP/IP sysadmin $150k/yr? That's what I calculate as the appropriate salary for living and working where you describe, which is still nearly double that of where I live (Dallas, Texas).

    I still get calls from employers in SV (none from EB yet) wanting, often desperately (like the one guy last week that didn't understand what "no" meant about 10 times in a row), to bring people in from elsewhere in the country. I guess instead of saying "no" (which doesn't seem to phase them) I need to say "$440k" (my calculated amount required to have a chance at getting a mortgage on a house in SV).

  • Living off Davis Drive, then? While it may be that prices for houses have gone up around here in the recent past, the average 3 bedroom home in Wake Co. is still under $200k. That's a FAR cry from SV... $55k/year will actually buy you a home and keep you out of the Moore St. shelter ;)

    Eric (who occasionally drives right by your house!)
  • Same thing in Toronto. With an average availablity rate of 0.5%, our Tory premier decided that rent control was a Bad Thing and got rid of it.
    Now I live in a one bedroom basement thats C$850, whereas 2 years ago it was $600. All because I'm in Little Italy which is now the hot place to live.
    Trying to find a one bedroom above ground downtown is next to impossible, and I'm unwilling to fork over $1200/month rent since I currently make only $40K.


    Freedom is Slavery! Ignorance is Strength! Monopolies offer Choice!
  • Check your numbers... 5000 sq ft. for a 4-bedroom house is waaaaaaaaay too much. I just bought a 1500 sq ft house with 4 bedrooms, and it's damn big.

    5000 sq ft is a grocery store (500 X 100).

    Obviously, you shouldn't be counting the basement as living area. If that were the case, my 1500 sq. ft. home == 3000 sq ft, which makes your story evel less credible.
  • The end of college, what's the first thing everyone does? Follows where their friends went! Half my friends went out to California (most to Cobalt []) because there are hot jobs and hot stock options! If you're the next geewhiz kid, they want you! yeah, you can make a salary that makes your dad turn white and be a millionare on paper, but the living situation is less than ideal.

    Me, I took the easy route and started doing consulting gigs in the Chicago area. I make great money, I enjoy my work, 30 minute drive to work, and have a first class living situation. you can't beat living in the 'burbs in a house for 450 a month. `8r) and wow, I can concurrently save money, buy lots of toys, and go out all the damn time.

    I have no regrets about not following the boom in CA, dispite the urging of all my friends. Besides, I remotely adminster a Linux box out there, isn't it enough to have your web page based there? `8r) (since there were no other midwest people chiming in... I figure i'd put my stake in about the dust bowl.)

    Gonzo Granzeau

  • Just to let you know, it's not all of California which is like this. Southern California (the Los Angeles/San Diego area) has not been affected to the same extent. And the area where I grew up (Fresno) has it's cost of living drop through the floor in recent years.

    The place to be is not California. The place to be is in the southern San Francisco/San Jose/Silicon Valley area. By living in Los Angeles, I'm considered to be "out of touch". And God knows no-one wants to live in Fresno...

    California is a big state. 2 1/2 hours outside of San Francisco is still California...
  • While I applaud this, there are a few things here that don't make sense.

    1) The cost of living in Silicon Valley should be similar to the cost of living in Sacramento for someone who owns a house. That is, the cost of gas, groceries, and entertainment should be similar (movie tickets never really vary from a low of $6 to a high of $10 per person), and utilities should be comprable as well. (The cost difference between Fresno and Los Angeles is greater, yet my utilities is only $100-$150 month more than my parents in Fresno, because I pay for water and they don't.)

    The only thing that should vary is property taxes--and with the passage of Prop 13 many years ago, property taxes should only be assessed at the price you paid for your house (plus a couple of percent), and not at the price your house is potentially worth. That is, the cost to stay in your house should not have gone up more than perhaps 10% or so, and not doubled in cost.

    2) My parents build houses in the Sacramento area. I know for a fact that the price you quoted for a house (approximately $45/sq ft) is way low--either the price you paid is misquoted or the finished square footage is misquoted. (I suspect the latter.) Now perhaps you are adding in basement square footage--which for an older Sacramento house would make some degree of sense. (That is, for an older Sacramento house, closer to 2500 sq ft of finished footage would make sense given the prices of housing in Sacramento.)

    From what I know, house prices in Sacramento vary around $70-$110/, depending on the house, the area, and the condition of the house. Prices in Sacramento are not what they are in Silicon Valley, but they aren't what they are in Fresno, either.

    My personal advice to anyone who owns a home in Silicon Valley is to stay put, rather than move. First, because job opportunities permit you to make a lot more than you can elsewhere, and second, because skyrocketing housing costs allow you to bank more equity. That's what I'm doing right now in Los Angeles, which is undergoing a similar (though less pronounced) boom--my house has gone up about $120K in equity in the last four years, and if trends continue, I hope to bank some or all of that when my wife and I retire. House equity is the only relatively secure investment you can purchase on margin, and you get to live there as well. (Meaning in the last four years I've gained about $120K equity on a $70K down payment, with monthly payments comprable after taxes to what my wife and I was paying in rent.)

  • Location, location, location.

    My point was that California != Silicon Valley.

    Of course you can pay $600K for a 2br bungalow in Beverly Hills. However, if you are willing to have a zip code that doesn't read "90210", cut that price immediately by about 30%. And some areas cost significantly less than others: in Northridge, you can expect to pay closer to $200K/$250K for the same bungalow. (The LA Times price survey is giving prices from around $100/sqft to around $300/sqft, depending on size, location and condition. The house I'm in right now is going for ~$200/sqft in the Verdugo Hills area of Glendale.)

    Compared to the rest of the country, Southern California prices have always been high. (My parents were amazed to see 2000sqft houses in Tennessee listing in the $50/60K range a few years back--being builders, my parents couldn't figure out how you could keep the cost of materials for building a house to code under $60K.) However, compared to Silicon Valley, even Brentwood (which is *the* place right now) is cheap.
  • Here's [] a whole big list of cost of living comparators.
  • California in general has higher prices than most of the nation on everything from real estate to gasoline. I used to think this was strange until I realized that it has always been that way.

    Back in the mid 19th century gold rush to California, some people were able to make quite a bit of money taking extra durable items with them to sell when they reached their destination. This was true to some degree of other locations too; if you've ever played a frontier game such as Oregon Trail you find that each more distant output charges more for basic supplies, sometimes 400-500% more.

    In a sense, I guess California has always been seen as the land of opportunity (and good weather). This natural attraction, as well as its relative distance from sources of basic supplies has contributed to above average prices. For the present generation the attraction has the added edge of technology, the perceived panacea for all our troubles.
  • I wouldn't take a job with a company that didn't provide an option to work from home at least some of the time.

    Good luck. Telecommuting is still extremely rare, unless you're a salesperson or someone else who does most of the work outside the office anyway.
  • It's like that in all the major high-tech industry areas, at least in the united states, prolly the world eh?

    No. Silicon Valley is bad. Seattle is bad, but not so much as the first. Dallas is fairly inexpensive, and it's chock full of high-tech companies (lots of telecom, for example). If you compare house prices on the web you can get a good feel for the general priciness of an area.

  • Same deal in every place where the demand is high. In London £200,000 ($320,000) will get you a two bedroomed flat. In certain desirable places a 4 bed hous will hit 1 million pounds ($1.6million).

    It sucks everywhere, people in Hong Kong and Tokyo are gasping at how cheap the Valley is.
    • The exact same thing is true for software development, probably any sort of development.

    I dunno. I sometimes get really ticked when someone shows up in my office who wants to discuss something complex and technical. Typically, they plop down a bunch of documents and ask a lot of questions that require lots of thought and care, but because they took the trouble to show up in person, they expect immediate attention.

    Same thing for meetings to hash technical details out. Same thing for phone calls. If you really really need to meet with me in person, set up a meeting with an email that explains, in as complete detail as you can, what the issues are and what you hope to gain from the meeting. Never, NEVER, read information to me over the phone that's not also in email. I can't cut-and-paste a phone conversation and you can't deny you said it if it was in email.

    Sometimes, meatspace meetings are necessary to get concensus, to have a give and take, but often people who call such meetings are the type who CAN call a meeting that a bunch of people are required to attend and are more interested in showing off the fact that they can get everybody to do it their way.

    Ultimately, a lot of technical give and take can be done with good collaboration tools, email and 'Knowledge Base'/collaboration systems. I've found that meatspace meetings can actually get in the way of progress. A good technical person who makes very clear dispositions in documents may be poor in a personal setting. So, bad technical decisions get made because some hard-driving dynamic personality is pushing people around in meetings.

    The necessity to have meatspace meetings are often because someone is just not interested in your project or concern enough to bring it to the top of their pile to review. This is a management (or lack of management) problem. If your boss puts it on your plate, you'll do it. If your boss tells you to do a revision to a document or review a design, you'll do it. If your boss sends a mixed message "don't let those people over in the GUI development slow down your database design", but then allows the GUI people to camp out in your office, well, you get the point. People are generally too polite to kick someone out of their office and if they do, well, they get it back in spades when they need something.

    -Jordan Henderson

  • Why did your cost of living go up if you already owned your house? Other costs may have increased, but not by as much as housing. Also, feeling poor on $110,000 in the valley is just your perception. At that salary, you can have a quite luxurious life in SV, except for housing. Stve
  • This is the one I have bookmarked. []

    According to it, I'd have to go from 50K to 106K to live the same lifestyle.

  • It is possible to live well here. There is good Internet service in St. John's. I make the same consulting rates for clients in the valley while sitting in my house here as I would in Santa Cruz.

    I miss the nice weather and the vibrant art and music scene of Santa Cruz (but I don't consider Silicon Valley a nice place to live at all; Santa Cruz is separated from it by a range of mountains).

    I have met people here who are doing significant software and internet work. While I have an advantage in coming here that I already have contacts in the valley, anyone already here can use the same methods as I do to find clients:

    Market Yourself - Tips for High Tech Consultants []

    BTW - If you get a phone number from Linx Communications [] it can be a local number anywhere in the US and ring you at home or the office anywhere in the US or Canada (voice mail and fax store and forward too). My business number is in Santa Cruz but rings my home phone in Saint John's.


    Tilting at Windmills for a Better Tomorrow
  • I'll tell you what I'm doing about it -- moving. And quiting my job to do it, and unfortunately shafting the understaffed company I work for in the process.

    And I consider only $6,000 a year to be too much -- roughly 1/10 my pre-tax dollars. (I live in the Boston area; I've lived outside of town in Woburn, and in Cambridge proper close to MIT, and in Somerville near Inman Sq., but I always found a place I could pack with sometimes annoying housemates.) I'm planning to move in with my brother in Austin, TX, but even there rents are exploding. I think I'll try to find a trailer park that has DSL or cable modem access.

    In the long term, I'm afraid I will end up living in Houston. I hate the air there, and by that I mean the humidity and heat even before the pollution is mixed in. But as the largest city in the world with no zoning laws, I think it has more promise as a flexible place where people like me can always move into the slum of the decade. I plan to be starting a company, and I want to be able to rent space very cheaply in some trashed strip mall or deserted industrial park.

    It's unfortunate I suppose, but huge, unplanned, car dependent, sprawling type of city just offers more flexibility and opportunity. Places like Boston just fall into this old-world mode of limited resources controlled by older conservative classes, and it is just too constricting, no matter how cool you think the brownstones of the north end or whatever are. The only thing I fear is lack of access to smart people; I think you just have to plan in a lot of extra costs in recruiting trips and etc to keep pulling in the cutting edge from MIT, CMU, etc. I think Austin is close to having the best of both worlds, cheap and large universities, but they are sliding towards the high rent mode. Everytime I hear those shiny-faced "dialog-builders" and "concerned about the community" types talking about how Austin needs to control it's growth, I visualize $2,000 rents and write the place off mentally.

    Maybe someone living in Houston can comment on the situation there ? What about other more mid-western places -- Des Moines, Kansas City, etc ? I'd prefer to be more north, even North Dakota, but I'm afraid I would never be able to hire anyone who would move up there.
  • What games have you made? I haven't heard of you before... Oh crap. Did I just get trolled? Doh!

    So Linus, what are we doing tonight?

  • Unfortunately in my profession, technical writing, it's a lot harder to get work done via modem or xDSL. The actual writing is usually the easiest part of the job; it's meeting with SMEs, programmers, and bosses that requires "face time" in meatspace.

    The exact same thing is true for software development, probably any sort of development. And that's why there still are localized "technology hotspots". It may change once the internet is fast enough to allow real video teleconferencing, but until then, "telecommuting" is not really viable.

  • However, compared to Silicon Valley, even Brentwood (which is *the* place right now) is cheap.

    Is that Brentwood, California, or Brentwood, Tennessee? If Nashville has become *the* place right now, I'd move back in a second without even sending my resumé ahead of me...

  • Having recently moved back to (Metro)Boston from Sillicon Valley, I can attest to the outrageous housing prices out there. Some teachers of mine claimed that part of the higher expense was related to the more stable land that SV is built on (i.e. less vulnerable to earthquakes). Living outside the city is cheaper, but you pay the price with less solid foundations. Living in Boulder Creek is cheaper, but a mudslide could send you straight into the Pacific Ocean. Plus, it's at least a 45 minute drive into Palo Alto WITHOUT traffic. I knew folks where the closest housing to SV they could afford was in Tracy, 120 miles away.

    Being a poor student out there, there were two separate classes that I could see. You either owned a high priced home somewhere in the valley, or you lived in a tiny apartment paying high rent (and your neighbors work at Taco Bell, not 3Com or Novell.

    My opinion? Take the currently closed Moffett Field Naval Air Station and turn it into affordable housing!

  • You think we have it bad? Try being a teacher, city employee or police officer in these areas.

    I have had friends who have taken jobs in SV for large sums of money, only to end up living in a dumpy one bedroom apartment an hour away from work.

    Here is the solution: Thanks, but no thanks. There are other high-tech concentrated areas (Boston, Austin, Virginia, etc) with more reasonable living conditions. Tell SV and the rest of Kalifornia to take a flying leap. When the market dries up, they will be forced to change.
  • I'm with you on this whole midwest thing.

    I live in the Twin Cities, where we actually have a decent number of high-tech companies out in the western suburbs (jokingly called the "Silicon Prairie), and a lot of financial companies downtown.

    I live close to the city (5 miles) in a house that costs about $150k.

    My brother lives in one of the finge suburbs, but is still only a half-hour drive from work. He got his 5-bedroom, 3-story, 2-year-old house at the end of a cul-de-sac for about 200 grand.

    SV is a pretty area, but a house like mine would cost a fortune there, even if I lived an hour or more from work. That high cost of living translates to a high cost of doing business, so I don't really even consider it the ideal place for a start-up venture.

  • Actually, the figure of $.50 per mile is about right for a typical car that's less than 5 years old.

    For the first few years of a car's life, every mile takes a little bit off the resale value. You need to calculate that in.

    You can save on maintenece by changing your own oil & stuff, but then you should count your labor time (at whatever you make per hour) if you are going to be honest about the real costs.

    Of course, the longer you keep a car, the cheaper it becomes to drive it. I bought my Mazda pickup (new) in '91, and intend to drive it until it falls apart, so my costs are about the same as your old Honda.

    For people who buy a new car every 2 or 3 years, the costs of driving are quite a bit higher.

  • Not too shabby... You've got the best of both worlds in Rochester. It feels like a small farm town, but has most of the conveniences of a city.

    Better still, if you really want urban entertainment, you can get to Twin Cities in about an hour, and are just a few hours' drive from Chicago.

    As long as the Mayo Clinic is there, the med-tech industry alone will keep the economy booming in that area.

  • Minnesota is good, because the cost of living is very reasonable, and the schools here provide some pretty good fodder for new hires. The downside with MN is the taxes, we are a very liberal state in that regard.

    Most of the upper midwest is well suited to tech companies. Gateway computers is located out in the sticks in South Dakota, and its a big part of why they are able to keep their labor costs down so far. Lots of small-town folks were willing to work in their warehouse for far less then people in the city would consider, because the live in big houses that cost them about $20k. Fairfield, Iowa is another town that used to be a blank spot on a lot of maps that has boomed because of a couple telecommunication startups.

    If you are starting a new venture, and your VC sources don't balk at you being a non-Valley business, then the midwest is a great place to start a company right now. If you are afraid of not being able to recruit new techie hires, consider the Minneapolis area (or across the river in Madison, WI if you want to avoid the MN taxes), there are more geeks up here than you would think.

  • Bite the bullet. Don't spend your money on...

    Or, if you really want to get out of the apartment, take the hit on a no-cost loan. You get shafted on the interest, but housing interest is tax-deductable. After a couple years of improving your financial situation, you can re-finance with a better loan or move to a nicer house. It's not as good of a deal as you would get if you already had 10% to put down, but it is a better deal than paying rent (which builds no equity and is not a write-off), and you get to live in a house right away, instead of waiting 2-5 years.

  • by Eric Green ( 627 ) on Wednesday May 31, 2000 @05:08AM (#1037065) Homepage
    Even here in Phoenix, where "free enterprise" is a religion, a city councilman actually sent out letters boasting about how he'd defeated proposals to build apartments because they would "cause traffic hassles".

    Of course, the reason they would cause traffic hassles is because there is no mass transit. And the reason there is no mass transit is because the housing density is too low to make it cost effective. Classic catch 22.

    Don't get me started about how the rich developers here defeat all proposals to relax zoning ordinances in "blighted" areas to allow manufactured housing. We could demolish all the substandard housing in Phoenix and replace it with brand-new manufactured housing (at $20K apiece), which would be far cheaper than subsidizing rent or building new housing complexes for the poor (since land is still relatively cheap in the Phoenix area), but the developers who run Phoenix don't want that. They're hoping that, once the blighted areas run down far enough, they can pick up the land for cheap, demolish the crumbled remains of the substandard housing, and build luxury apartments and golf course resorts. They've already started doing that in the area just north of South Mountain.

    Since the government in the Phoenix area is run by developers, they also make sure that zoning and development ordinances are used to effectively red-line areas that developers wish to redevelop. For example, one area south of the downtown area is being eyed by developers for luxury apartment complexes. The city has red-lined this area by re-zoning it as commercial/industrial, meaning that homeowners can't get permits to expand or remodel their homes and basically can't sell their homes (which are on too small of lots for commercial/industrial use). Thus homeowners end up moving out, and renting their former homes to whoever will pay, and the area becomes more and more blighted. And whenever the developers want, they can re-zone the land for multi-family dwelling (apartment), due to the fact that they own the city councel and thus can over-ride the zoning board any time they wish. The individual homeowners, of course, cannot do so, since they don't have enough money to buy city counsellors. Thus the developers who run Phoenix ensure their profits with the power of government at the expense of homeowners.


  • by Jonathan ( 5011 ) on Wednesday May 31, 2000 @03:54AM (#1037066) Homepage
    Personally, I'm seeing coalescing trends like this also in Canada - in Ottawa, they are predicting that the city could double in size due to high tech growth.

    Yes, I'd imagine that a Tim Hortons based [] could really take off in Ottawa. The truly frightening thing is I just checked that URL, and it is owned by a squatter firm. Somebody is taking my idea seriously!
  • by A nonymous Coward ( 7548 ) on Wednesday May 31, 2000 @05:07AM (#1037067)
    The problem is more demand than supply. It has to be rationed somehow. If not by price, how? Govt boards? Roll of the dice?

    Right. Do you really think money wouldn't talk somehow? I knew of many people in rent controlled cities who paid cash under the table to get "cheap" over the table rents.

  • by SoftwareJanitor ( 15983 ) on Wednesday May 31, 2000 @04:48AM (#1037068)
    This is hardly anything new. I lived for a while in the Bay area in the late 80's and ended up moving back to the midwest because I couldn't make a decent living out there. The salaries out there seem to only be about 1/2 again as much as what they are around here, but the cost of living is roughly double. Mostly it is housing costs that are insane out there (you can buy a decent house around here for under $100k, and you can buy a very nice house for $100-$200k), as noted above.

    Car related expenses are also sky high in the Bay area... Gas is more expensive -- I can buy the 90 octane mid grade here for $1.49 a gallon. Insurance is double or triple that in the midwest. Cars themselves are more expensive because they have to have 'California Emissions'. Getting your car smogged all the time is not only expensive, it is a pain in the ass. Out here we never have to do that, or even have cars inspected -- if there is a place to screw a license plate onto it, its street legal. Registration is done entirely by mail.

    Food costs are closer to reality in the Bay area, and some things are actually marginally cheaper (seafood and fresh fruits and vegetables often are), but boxed and canned goods , meat and dairy products are generally more expensive.

    Taxes out there are also higher. I don't know what the sales tax is in the Bay area these days, but it was over 7% when I lived there 10 years ago. The sales tax here now is either 5 or 6% now depending on the local option tax (and that is too high). Sales taxes disproportionately burden people on the lower end of the economy. The fact that salaries are higher in the Bay area usually means that you pay more in federal income taxes too. Although many midwestern states have higher state income tax and property tax rates than California, the fact that most incomes and houses are lower in the midwest means that the actual amount of taxes paid is lower.

    And if you think the midwest is the cheapest, it isn't. I'm thinking about moving to Florida... Like Tampa or Orlando No state income tax, and generally cheaper cost of living -- AND nice weather. In general the southeast is probably about the cheapest place to live, if you can stand all the rednecks... :-)

  • by Pope ( 17780 ) on Wednesday May 31, 2000 @05:14AM (#1037069)
    No way man! We gotta go to Timmies in person to get the hockey scores from the counter girls!


    Freedom is Slavery! Ignorance is Strength! Monopolies offer Choice!
  • by kiatoa ( 66945 ) on Wednesday May 31, 2000 @03:29AM (#1037070) Homepage
    Either build a bunch of high rise apartments and other high density living and then add some decent public transportation or -- de-populate a little. :)

    How many thousands of acres of top quality land in the Valley is tied up in freeways and roads? Stop subsidizing the usage of the automobile - tax the land used up by highways and freeways and pay for it with gasoline and other auto related taxes.
    (see for some related ideas on this subject).

    Exactly which government is paying the housing subsidy, the feds or the state? If its the feds then as a non-californian US taxpayer I'm outraged to be subsidizing stupid Californian socio-political choices.

    Its those unintended consequences again...

  • I lived in Santa Cruz, over the hill from Silicon Valley, until about a month and a half ago.

    I paid $1275 a month for a two bedroom one bath house (half a duplex). It wasn't a very nice place, had no back yard and only a tiny front yard. One car garage and tiny kitchen.

    I'm getting married to a woman from Newfoundland and am staying here for a few months until our wedding. In St. John's we're renting a three bedroom house with a large kitchen, two and a half bathrooms, front and back yard. There's both a large living room and a family room.

    The rent is US$500 with a US$133 deposit (no last months rent down). In Santa Cruz one of the things contributing to the homelessness that is so common there is that it requires several thousand dollars to move into a place, for first, last, plus a deposit.

    But what was getting me about Santa Cruz wasn't the expense. It was the crowding. You couldn't drive across town at 5pm.

    I thought that by becoming a consultant I'd get away from those insane Valley freeways, and although I didn't have to commute anymore sometimes I'd want to go downtown to the store or a cafe or something and it would really be a drag.

    Housing is so tight that UC Santa Cruz [] houses students at the old Fort Ord Army base and Monterey and transports them in on buses, an hour's ride.

    I used to live in LA and hated it there. I stayed in Santa Cruz because of the rural atmosphere and tight-knit community feel. That's not really there anymore.

    We'll be heading back to the states after the wedding but for sure we won't go anywhere near Silicon Valley.

    I'm very adamant, and have been for a long time that I will only accept work I can do "from my own office" - which means my home office. You can do this too. Screw the cubes at the valley, stop working for the pointy-haired boss. Throw away your flip tie!

    Read how I do it at Market Yourself - Tips for High Tech Consultants []

    You don't have to move to Newfoundland but you'd have the choice to at least not drive on the freeway anymore if you stay in the valley, or at least move somewhere reasonable that you can afford.


    Tilting at Windmills for a Better Tomorrow
  • by Wellspring ( 111524 ) on Wednesday May 31, 2000 @05:26AM (#1037072)

    The same thing is true here in Atlanta. You can make $70K-$80K and have a standard of living as if you were making $90K-$100K. Reasons? Well, everyone is already saying them, but:

    Lower taxes (this means that the cost of living is lower, too, because businesses don't pass those extra costs to their customers).

    Low Prices (due to above): $800-$900 per month rent on a nice apartment (even one in the city!), $10 for an ok restaurant tab, cheap groceries. $1.36 for a gallon of gas (and this is unusually high right now).

    Plenty of growth. Atlanta is growing ridiculously fast. There is plenty of room, land is cheap, and everything is brand-new.

    None of this is anything that any amateur economist wouldn't notice, but people hear how red-hot California is. Then you hear about enormous salaries and don't think about cost of living. A friend recently worked out the numbers for $100K california vs $80K georgia, and realized that he'd keep more of what he earns down here.

    Plus, we have Georgia Tech producing engineers and programmers, Emory producing marketting people, and both giving us managment/money people. And the venture capital is more plentiful and available on better terms.

  • Until recently, I have lived in the Silicon Valley my whole life. The ridiculously high cost of living in the Bay Area is only limited to some rather exclusive areas, which are near good commute paths or ones that have prestige.

    I used to live in Santa Cruz, a short 30 minute drive across HWY17 through the beautiful Santa Cruz mountains. The cost of living in Santa Cruz is very comparable to that of the communities around Boston, MA. Living in communities such as Millbrae, San Mateo, San Carlos, and others while owning a home is not only possible.. but affordable and attainable.

    There will always be exclusive or expensive areas, no matter where you live. Commonwealth Ave, Back Bay in Boston. All of Manhattan is terribly expensive. Lets not even discuss West 57th. Beverly Hills, Sun Valley, Austin TX near One Infinite Loop... you name it.

    I think it is a shame that housing in some parts of California has become so expensive for quite another different reason :


    Renters have few rights, and very little in the way of protections. While the owner of the house enjoys a tax break that helps defer the interest on the mortgage loan, the renter pays exorbitant rental fees. These fees are in no way tax deductible, and we end up with a class of people who can only rent.

    The money poured into rent in California, and other tech zones, is incredibly high. In the Bay Area, some studio apartments rent for $1500 and up in the NON-exclusive or desirable zones.

    $18,000 a year ... wasted. Just thrown away for a roof. Usually power, water, and garbage are -not- thrown in as services. A comparable mortgage for 30 years would allow a person to buy a $300,000 home. Imagine. If you used that rent to buy a car you could pay off that Porche 911 in THREE years. Five years would get you a car worth $90,000 or so, if you qualify for one of those %1.9 financing loans.

    Unfair? yes.

    So .. what are you going to do about it?

    Reach out, extend to, and embrace the universe.
    Embrace, extend, and engulf the universe.

  • by theinfobox ( 188897 ) on Wednesday May 31, 2000 @05:40AM (#1037074) Homepage Journal
    This is just media hype! Yes it is expensive to live in Silicon Valley. And the past couple of years have been really bad. But just think for a minute. There are a lot of families that live out here that work as teachers, janitors, sales clerks, etc. Everything you hear about Silicon Valley expenses are true... to an extent. Housing is expensive in MOST areas. Sometimes you have to commute a FEW miles to find affordable housing.

    Right now I live in Hayward, CA, and work in San Mateo, CA. Both are on the fringes of Silicon Valley. What makes me laugh is the number of people who say they "can't" afford to buy a home here... but blow money on all sorts of ridiculous stuff and have maxed out their credit cards. My wife and I decided we wanted to buy a house and saved up money so we could do that. Now I have a good job and a nice house. My wife has chosen to not work for a couple of years so she can stay at home with our toddler. A lot of the problem is that individuals need to plan better.

    However, I am not taking the blame off of the companies and civic leaders. There is definitely too much of a rush for businesses to be built when the companies and government know there isn't adequate housing or transportation. If you go for a drive in Santa Clasra county you will see countless businesses being built. At the same time, the government is complaining about the lack of space to build housing! Another problem that many areas face is that the people who already live there will always fight AGAINST new housing development. By limiting new houses, they drive their property values through the roof. I have seen this everywhere I have lived... England, Sacramento, North Carolina... it is all the same.

    ------------- []
    Another techie hangout... please visit so I can say I've been slashdotted!

  • by trims ( 10010 ) on Wednesday May 31, 2000 @09:32AM (#1037075) Homepage

    OK, I've been living out here in Silicon Valley for about 20 months now, and I've previously lived over large sections of both Boston MA, Pittsburgh PA, and Washington, DC.

    A couple of things people need to realize about the Bay Area: physically, there are six generally distinct regions out here (San Francisio proper, Marin County (north of SF), Oakland/Berkeley, the East Bay, the Peninsula, and San Jose). I'm going to be making general statements that don't completely categorize the entire areas, but are mostly true.

    • Jobs are concentrated in San Jose and the Peninsula. About 75% of all tech jobs are in these places. San Francisco has about 10%, and the East Bay has about 10%. There are relatively few jobs in Marin or Oakland/Berkeley.
    • Commuting from Marin County to anything other than San Francisco or Oakland is ludicrous. There are major traffic choke points that simply won't go away, and you can't get around. Commuting from Oakland or SanFran to San Jose is nasty (IMHO not doable), and commuting from East Bay (or further east, like Walnut Creek) to the Peninsula is really harsh.
    • Rent is quite high on the Peninsula and San Fran. It usually runs $1200-1500 for a 1br, and around $2000 for a 2br. These are prices for decent places. Rent in San Jose is less, as is East Bay (up to 25% less, as a rule) for about the same thing.
    • Housing on the Peninsula is atrocious. Don't let anyone else tell you otherwise. 30-year-old, not-well-maintained houses go for not less than $300k and up to $700k. None of these would be in "exclusive" neighborhoods - this is middle-class housing in average places. A nice house in a good neighborhood (say a chunk of San Mateo) runs $1.2million easy.

      Housing in San Francisco is impossible. 1000sq ft lofts run $400k. Forget anything else. Condos start in the $600k-range.

      East Bay still has decent housing prices, depending on where you look. Middle-class housing runs $200-400k.

      Marin has a variety of housing, depending on where you live. It can be cheap ($150k) to very expensive ($1.5m) for the same house, depending on which community you live in.

      Berkeley is still a college town, and you compete with the students for housing. My advice is: don't. Oakland and San Jose are still industrialized, with suburbs. The suburbs of San Jose generally have housing similar to the Peninsula.

    • Commuting can be really harsh, since there are several large choke points that most traffic must pass through to get from one of the areas to another. Commuting within your area is pretty decent.
    • Public transporation is really only usable within urban San Jose, and within/between SanFran/Oakland (due to BART). Public transportaion in the other areas is a joke.

    Gas is the most expensive in the US (running $1.70 nowdays), but the rest of the cost of living is about the same as other major cities.

    Zoning laws are preventing high-density buildings, and lower-income (ie, those without a tech job) people are starting to flee. Public transportation isn't going to get any better, and there is no more room for roads. Unless something changes drastically, Silicon Valley will choke to death in about 5-10 years.

    Fundamentally, the only real reason to live here anymore is that you can hope to cash in on an IPO. Moving out here to work in a regular tech job is not a good decision - you should look elsewhere.

    This is not meant to be a compete downer. I love my friends here, and there are major perks. But this is a hard-core Boom Town. Adjust accordingly.


  • by CMU_Nort ( 73700 ) on Wednesday May 31, 2000 @04:20AM (#1037076) Homepage
    This is part of the same reason that, when I graduated from college, I decided to stay in the Pittsburgh area. All of my friends were like, "Why? You could have a great job in the valley which pays twice as much!" But the cost of living in Pittsburgh is microscopic in comparison. At $60k a year, I'm sitting pretty. And the tech environment out here is much more astounding then you would expect, with the entire breadth of the industry represented.

  • Boston's housing market is also especially tight, esp. in the Cambridge area. Cambridge didn't get rid of rent control for 20 years causing an artificial deficit in the number of available apartments on the open market. (According to one study, only 30% of the people living in rent controlled housing would've qualified for it had there been any means test. Abuses were rampant.)

    During the 1990's this was made worse by letting people sell off apartments as condos. So, you had a siazable fraction of the apartments cut off from the populace, which inflated the market price considerably. When rent control was (finally) lifted, all the rents went up to meet what market was left (since the condos remained condos). Since all the rent control apartments were already occupied, demand stayed high and supply stayed low.

    The vacancy rate is almost zero, and has been that way for several years. Attempts to fix that (i.e., building more housing) have failed because the people who have places to live refuse to allow any large-scale housing to be built (favorite quote: "housing destroys our urban landscape").

    I live one town over, which used to be the "unfashionable" (read: affordable) place to live, but I've seen rents double in five years (fortunately, not mine - yet). To rent a 2-bdrm apartment at what's supposed to be the "right" fraction of your income, you'd have to make at least $45-50K.

    Because Boston is such a college town, landlords can ask for anything and get it. They'll just squeeze more people into an apartment. It's very common to have every room converted into a bedroom save the kitchen and bathroom (although even that's not a certainty; an ex-BF of my sister slept in a de-commissioned 2nd bathroom!). I have also seen ads around Cambridge asking for (literally) a closet to sleep in for $100/month (the ad gave dimension requirements and everything).

    As always, it's simple supply and demand. Unfortunately, there's no clear solution for increasing the supply.

  • Over here in the East Bay, Berkeley area, I see lots of nice homes in the $220K range. Really good office space runs $2 per square foot, and I'm paying less because I found a sub-let. I'm at most 1.5 hours from any valley destination with traffic, but I can live in a nice place and work in the same town, and spend 10 minutes on the commute. There is every sort of culture and entertainment right here, and S.F. is a 20-minute train ride away. Outsiders think the food prices are high, but the fact is we eat better than many parts of the country because the standards for groceries are higher, and in my experience the food prices aren't any worse than the East Coast even though the quality is much better here. Gasoline does cost more because higher pollution standards mean we can't use the same gas as the rest of the country - it has to be refined differently, and we can't import cheap gas from elsewhere because it won't burn as cleanly.

    I can see those expensive South Bay towns from the top of the hill I live on. Yet it costs much less to live here. Sure, it's even less expensive as you get away from the bay, but it's possible to find a happy medium.

    What burns me is that some people think they can't afford to live where I am, because they confuse it with "Silicon Valley".


    Bruce Perens

  • by BrianH ( 13460 ) on Wednesday May 31, 2000 @03:49AM (#1037079)
    When I first went to work in the Silicon Valley in the early 90's the cost of living wasn't nearly as bad. I had a $65,000 a year job and lived pretty damned well on that. I owned 3 bedroom house in Mountain View that I'd paid $190,000 for and thought I was on top of the world. Then the 'boom' began and everything changed for the worse. In the period of only a couple years I became the poorest person on my block. I thought I'd hit easy street when a job change catapulted me into a $110,000 a year position coding backend web apps (C) but even at that salary I quickly found myself stetching to make my paychecks last due to the increased cost of living. Couple this with the fact that the serious increase in traffic and increasing time at the office were keeping me away from my home for more than 15 hours a day and you can probably see why I began to get burned out on the whole 'Silicon Valley' mystique.

    Like many people in this business I had always assumed that all of the 'good' jobs were located in the Silicon Valley, and that the rest of the country was a technological waste of time. Doing quick salary comparisons seemed to confirm this when I found that no other area of the US offered competitive salaries to the SV companies for someone with my skills and experience. Also, since I'm a Nothern California native, I wasn't exactly eager to move far :) Two years ago however, I decided that enough was enough. I sold my home for $600,000 and moved to Elk Grove. I found a job with a Sacramento based application development company that pays $70,000 a year in TWO DAYS.

    I know all of you Silicon Valley residents are probably saying "$70k? That sucks!", but you cannot forget the lower cost of living and the intangibles that go with living out here. $70k in the Sacramento Valley probably lasts as long as $200k in the Silicon Valley once cost of living adjustments are made (I paid $225,000 for a 5000sq foot 4 bedroom home with a REAL YARD!). When you factor in things like a commute of less than 20 minutes, actual friendly neighbors, lower gas and utility prices, and weekend entertainment that wont break the bank, the move becomes TOTALLY worth it.

    The point? All of you Silicon Valley techies that are complaining about the high cost of living over there should MOVE. Contrary to popular belief, there are good jobs elsewhere that you guys could be taking. I realize that I will probably never get rich on stock options from the latest startup, but I'm happy now...and enjoying your life is the only thing that really matters in the end.
  • by Madd_Matt ( 153453 ) on Wednesday May 31, 2000 @03:41AM (#1037080) Homepage
    It's an interesting phenomenon, call it 'Gold Rush Fever' or 'capturing the face to face synergy'. Why are prices high? Because everyone wants to live there. Why does everyone want to live there? Lots of reasons I suspect. Reasons like:

    a) If you want to be perceived as a hot mover and shaker, you have to live in California
    (Note: Real movers and shakers can live anywhere they want ;-)
    b) The people I want to work for/with are all there
    c) I can't be a .com without a california mailing address.
    d) What I really want to find is a California Girl ;-)
    e) If I don't have a job, I go to where there are lots of jobs and look there.

    Personally, I'm seeing coalescing trends like this also in Canada - in Ottawa, they are predicting that the city could double in size due to high tech growth []. I don't think that the popularity of these 'hot spots' means that distributed collaboration doesn't work - just that there are other reasons to be in close proximity.

    However, I have to say that I think there will be a self-limiting feedback involved. As the cost of living spirals upward, more companies will choose spots like Reston VA, Rockville MD or Ottawa ON.
    Of course, the mob mind may rule, and in the land of illusions (California) perception is King.

Given its constituency, the only thing I expect to be "open" about [the Open Software Foundation] is its mouth. -- John Gilmore