The $150,000 number is the cost of the mortgage needed to buy a home the size of the one they rented in Palo Alto [1]. The breakdown was that they rented the home with another couple for $6200/mo. If they wanted to buy a similar home, it would cost ~ $2.7M, thus the $12.5k/mo mortgage. They were already renting a place in Palo Alto at ~ $3100/mo. Their problem was that they wanted to start a family and needed more space. Doing so in Palo Alto was prohibitively expensive.

I don't think that she was whining about not being able to live in a neighborhood where multi-millionaire lived. It was about being able to establish roots anywhere in the Palo Alto area. It's all but impossible and it will become harder and harder to run a city where all of the labor force needs to be imported (police, teachers, city gov't, etc).

I know this is already starting to become an issue with some departments at Stanford where it's very difficult to recruit/keep faculty and postdocs due to the cost of living in the immediate area.

[1] https://shift.newco.co/letter-of-resignation-from-the-palo-a...

$2.7M house in PA -> $1.2M house in San Mateo. less than 30 minute commute (it takes me 20 to go from SM to PA on a moderate traffic day).

So, the argument is based on her insisting that she had to buy a house in Palo Alto. But renting a place large enough would have been much cheaper than that $150,000: $5k/month gets you a nice 4 bedroom.

I don't think her math adds up. She's just insisting that she has to buy, and it has to be in Palo Alto. Neither of those are truly requirements for her, so the $150K quote is specious.

EDIT: I acknowledge $5k is not realistic in PA. 6k is, however.

Hey there. I'm Kate Downing. I don't insist on living in Palo Alto at all. See? I'm moving. But what I'm trying to say is that we have a serious problem because people who are integral to our community who SHOULDN'T move can't afford it. You can tell lawyers and engineers to go get lost and they don't HAVE to buy a house in Palo Alto. But are you also going to tell our police, firemen, teachers, city staff, nurses and EMTs to get lost, too? They all make less than we do. What happens when they follow your advice?

I support you Kate but firefighters etc don't deserve a pass on housing costs (I say this as a son of a lifelong firefighter). They all are commuting in to most high cost municipalities anyway and have been doing so for years already.

There is a stack of applications for the Palo Alto dept that is surely a foot high...supply and demand says most of the positions are plenty acceptable to a huge backlog of applicants

As a Palo Alto resident of a little more than a year I completely agree with you.

I understand rents being high because of the cost of housing in general - it costs a great deal of money to pay the property taxes alone.

Let's face it - Palo Alto is a wondrous city. So many great things come out of this area because it's chock full of talent in so many areas - from software developers to financial investors, medical researchers, inventors, lawyers, etc. There's a reason why the cost of housing is high: many people want to live here, and living here affords all kinds of opportunity and inspiration.

But it does need to be managed. Pricing out talented individuals is bad for the future. Families should be able to move into the area to work important jobs at local businesses.

I have several children, and it's a struggle to get by in the area, let alone save for the future. I see so many people that work non-stop in great jobs that are barely making it. The cost of housing is such that it's affordable for people with multiple high incomes and that's just about it.

Many local businesses don't look good, and it's no wonder. How can they possibly bring in workers at retail wages? My neighborhood is full of people sleeping in their cars every day who work at local restaurants. At first I was completely wierded out by the phenomenon, but at this point I understand. They are just trying to get by, and can't drive in during rush hour to prepare for the dinner shift, so they do what they have to do.

The cost of housing in this area is great for some, but it affects the quality of life of many residents and many people who come to the area to work. Palo Alto needs to expand the availability of affordable housing in order to sustain itself.

Other communities have found solutions. In Huntington Beach we had Median Income Housing developed with caps on pricing. There are large facilities in town that look to be unoccupied or sparsely occupied. Surely there is room for high density housing like apartments or condos. Even a hundred units would make a difference and help drive sustainability.

My 2 cents.

My complaint was based on the $150,000 quote, specifically, because it's a specious one. It is not based in fact.

I'm certainly not arguing that Palo Alto or areas around it don't have serious pricing problems caused by policy that restricts growth. I rent in San Mateo (can't afford to buy) and am very frustrated that houses typically cost $1M or more (outside of what I consider affordable, on a dual-professional income, very similar to yours).

Based on your response what I am hearing is that you're angry. That's fine, but you're lashing out. For example, you just attacked me, while I provided a data-driven argument that your $150K argument was simply false. It's based, apparently, on your insistence that you must buy, rather than rent. Renting is currently much more affordable than buying in the Bay Area.

As for whether the support staff for a city should be able to afford to live in the city they support, that's another argument. I personally do not see any requirement that a city provides affordable housing to its support staff, especially in the form of purchased housing. That would be a major policy change that would have enormous impact.

NO ONE is talking about the city providing anyone with housing. This is not about government subsidized housing. It's just about the city allowing people to build housing on the land that they own. Just permitting people to build.

I can't seem to reply to dekhn, so I'm writing here -- the issue is that the city won't allow people to increase density on their lots, for example by building more apartment buildings, or by adding "mother-in-law apartments" in backyards or over garages.

Agreed but lets not oversimplify too much...in San Jose they increased density in many areas quickly and ignored parking and roads...we should be greenlighting projects but not gutting standards. What residents will usually throw back is SCHOOLS. They are afraid already crowded schools will become moreso, and there is nowhere to put new schools

What do you mean, "allow people to build housing on land that they own". What land? The cost of building housing in PA is marginal to the land costs.

You can only build multifamily housing in 3% of the city. It's illegal everywhere else. You can't build more than 3 stories in most places - it's illegal. The supreme cost of housing here comes partially from the fact that you can only build a tiny number of units on land that could otherwise hold much more. So you split the cost of land among, say, 5 condos, and not 20. If you're paying 1/5 of the cost of the land and not 1/20 of the cost of the land when you buy your condo, it's obviously much more expensive.

I'm fine with increased density housing in the peninsula. But, this is mainly going to help developers (who are already rich). You'd have to build skyscrapers not multifamily units to address this problem (the area is intensely hot).

Again, my only beef is on the $150K quote from your interview (and your requirements for "walkable to downtown" and "kids can bike on the street"). I think your argument would be much stronger if you backed off on that, and cited a more reasonable compromise (living 30 minutes from PA).

Palo Alto traffic is already really, really dense. Building a lot more housing, even if it's close to downtown/transit, is going to increase traffic tremendously. In addition to building this housing, the city would need to improve its road throughput. This probably would have to include removing the various one-way barriers in the city that currently preclude optimal traffic flow.

Multi-tenant buildings are the key here. Cost of land is inversely proportional to the number of units. Building up, shared outdoor space, etc. all lower cost for owners but are often prohibited by local municipal regulations.

Yes, I can rent. I can rent until I die. But how bizarre is it that you are telling me and everyone else who isn't wealth enough to have bought a house yet that we "insist" on buying and we should be happy to rent forever when we spent decades telling the baby boomers the exact opposite? As a country, we recognize the wealth building aspect of home ownership. We recognize the stability it gives people who don't have to worry about rent increases and who don't have to worry about pulling their kids out of their school. We see the value of people leaving their kids with homes after they die, not dusty rent checks. We recognize the value of people putting down roots in their community and investing in it. We gave the baby boomers the mortgage interest rate deduction, Prop 13, and the GI bill and numerous other programs to make sure that everyone in the middle class could have a home to call their own.

Now you're saying that it was fine for the American dream for boomers to involve home ownership but if a Millennial wants the same benefits then they're "entitled" and "insisting"?

The absurd cost of housing in this country and the declining rates of homeownership are directly tied to the massive divergence we're seeing between rich and poor in this country and the shrinking middle class. https://www.washingtonpost.com/news/wonk/wp/2015/03/19/meet-...

Hey, I think you're being unfair here, attributing a wide range of beliefs to me that I never stated, nor do I believe. That's really unfair. I said in another post: I hear that you're angry, but it's not OK to lash out or claim that I'm arguing something I'm not.

Anyway, with regards to home ownership: I'm personally of the belief that home ownership has been massively oversold as a benefit. I've been in the Bay Area for 25 years, from undergrad to staff engineer at an internet firm. Over the various dot-booms and dot-busts, I saw people moving further from the Bay Area and taking on insane commutes due to the desire to own homes. For example, many Stanford employees purchased in Tracy(!), then experienced massive financial failures when that area depreciated.

I'd like to see Prop 13 die in a fire. Unlikely to ever happen.

So, as you say, you're moving out of Palo Alto because the costs to buy there are too high. However, Santa Cruz isn't particularly cheap nor is it significantly cheaper than my own area, San Mateo, which has a 20 minute commute to Palo Alto.

If you had just said, "$90K/year in an area 30 minute commute to PA", I wouldn't have complained at all. The problem here is insisting on living directly in PA weakens the argument (it's specious) because there is no specific reason for a person to have to live in PA. There are more affordable communities around within 30 minutes commute. I feel like you're insisting that people who support a community must live (and own) in that city. I don't think that's a rational requiment.

Again, none of my argument is based on the systemic issues in the Bay Area (or anywhere with a booming economy and a large number of well-capitalized buyers), which I freely admit is a problem.

I think you're missing the forest for the trees. Yes, I personally can go live 30 minutes away. So how far away should the teachers live, then? The police? Because if I can afford San Mateo, then that means they largely can't. So where are they going? Is it acceptable for them to be coming up to PA from Gilroy? Tracy? Stockton? At what point do we say that we've created a ridiculous system in which people are needlessly spending years of their lives in traffic and throwing rent money in the toilet all because we can't build some more apartment building next to our jobs centers? I'm not insisting that city work live or own in PA, I'm highlighting that they can't own anywhere near PA, since, as you state, even 30 minutes out of PA is where two-income professionals can afford, not them.

101 to Gilroy will often be faster and saner than 17 to Santa Cruz... sorry but you are in for some serious commute pain. Even people who only need to go as far as Summit Road eventually crack. 17 was never designed for commute traffic

Simply put, in your situation I would head to Texas. Sucks, but Santa Cruz is also gentrifying and you are already too late to catch a break there. You fought the good fight, there are other great places to live.

I would be on suicide watch if I had to take 17 every day. It is beyond awful and every day there is some lane-closing accident etc. The State will discourage more coastal development: 17 will never be improved...to do so would mean more development in precisely the areas the State wants to protect....coast and redwood forests

$5k / month definitely does not get you a nice 4 bedroom in Palo Alto. Maybe in East Palo Alto, but that is a very different place in terms of quality of life, safety, and schools.

Edit: I decided to check, and there is one place in Palo Alto right now with 4 bedrooms at that price https://sfbay.craigslist.org/search/pen/apa?nh=83&max_price=...

From personal experience, as someone who was priced out of Palo Alto this year, it is rare to see a place at that price point in Palo Alto proper, and they tend to be quite run down. The one place available right now is actually in a good location and doesn't look too bad inside, so that's not a bad deal for the location.

On the other hand, you can get a great place in Seattle with views for over $1000 cheaper: https://seattle.craigslist.org/see/apa/5723972635.html

I see plenty of units for rent in Palo Alto in this price range. Not East Palo Alto, Palo Alto. Also, don't just check Craigslist- that only includes a very limited number of rentals in that price range; other rental searches show a lot more examples.

[EDIT: I had incorrectly filtered my search. The price break is at $6K for a 4 bedroom (at least 4 units) not $5K. However, that is still well under half of the quoted value of $150K for a house purchase).

I have looked for a year and a half at 4 bedrooms in Palo Alto for under $5k / month - the caveat being that I have pets.

I have yet to see anything pop up other than where I currently live. It was available for all of three hours.

The upside is that if I were to leave the area, I would be able to provide my landlord with acceptable tenants quickly.

For those who aren't familiar with the Bay Area: East Palo Alto is a high-crime city. It is not the eastern part of the city of Palo Alto -- it is not even in the same county. It has such a high rate of crime that there were no grocery stores there for many years, because the shoplifting put them out of business. There are frequent gang-related shootings. And yet, it still costs more to live there than it does in most of the United States. That's pretty good evidence that we need more housing.

Fun fact: Antarctica got its first ATM before East Palo Alto did. (Both in 1998)

I've been told that the huge Ikea-Home Depot shopping center in East Palo Alto was built on top of the most dangerous neighborhood in the city. Apparently it was contested gang territory, and the city used eminent domain to solve the problem by demolishing it and converting it to retail.

East Palo Alto's crime rate has dropped significantly in recent years and is rapidly gentrifying.

http://www.paloaltoonline.com/news/2015/10/12/report-violent...

> Whining about not being able to afford to live in a neighborhood where multi-millionaires want to live is not very productive.

You make it seem like solely a demand-driven problem, but supply is being artificially restricted, which is a form of protectionism that is unbecoming of the otherwise highly capitalist homeowners of Palo Alto.

The point has been made well here: http://marginalrevolution.com/marginalrevolution/2016/08/col...

"The people who bought their homes a long time ago lucked into a windfall and they resentfully lash out at anyone trying to cut in on that windfall. But notice how un-American these claims are. The current residents want to protect their gains by telling other people how they can use their property. When a new restaurant starts to take patrons from an old restaurant we generally don’t think that the old restaurant–the long-term resident–has the right to prevent the new restaurant from opening. The same is true, by and large, for new technologies and ways of doing business. Yet when it comes to residential land we give the old residents a veto on the new."

"They can move elsewhere" is not a reason to not build more housing - it is reasonable (and desirable) for people to live in the city that they work in. If your argument is that they can pay 3,000 a month for the privilege of living 50 (!) miles away from work in Gilroy then that still doesn't do anything for the "teachers, police officers, and other working and middle class people" - you know, the people who actually keep the city running.

The teachers, police and fire fighters all moved out a long time ago.

Isn't it a very unhealthy thing for a "community" to be protected and serviced by people who do no longer live there? Who get pushed out further and further from it?

A city, where you have separate classes of homeowners and all the service personal commuting in sounds pretty dystopian to me.

The problem is that they continue to be pushed out further and further from their jobs every year because cities like Palo Alto keep adding thousands of jobs and almost no housing. That means professionals like me get pushed out of PA, move somewhere cheaper, and end up pushing out people that make less. All of these things are tied together and at the end of the domino what you get is homelessness which we've seen spike in the last 5 years.

Or move the jobs out of ridiculously high COL areas?

An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

Industries are successful when they cluster. It's why you see entertainment in LA, insurance in Chicago, biotech in North Carolina, banks in NY, and think tanks and defense contractors in DC. As we move away from manufacturing and into a knowledge economy, being able to quickly exchange and improve on ideas with other people becomes more and more valuable. It's why the entire world is seeing a massive movement toward urbanization. We are not going to see high tech companies set up in places with few potential employees, no research universities, no investors, and no potential partners. It's simply not going to happen even if it looks like the easy way out. If you consider your own fortunes and you consider joining a young up and coming company that is risky because it has a high chance of failure, I think you'll find you are much more comfortable with that risk if your town has hundreds of other employers for you to go to afterwards, rather than just a small handful. The Internet does not and cannot replace the connections you form by accidentally meeting people at coffee shops or parties. Knowing and seeing people on the street in real life has more value and builds more trust than a text message. Do you think that calling your mom is the same thing as visiting her in person? Do you think you could be a good parent via Skype? Of course not. So why do you think that business relationships are any different?

> Do you think that calling your mom is the same thing as visiting her in person? Do you think you could be a good parent via Skype? Of course not. So why do you think that business relationships are any different?

Because familial relationships are not transactional in the same way that business relationships are?

Business relationships are also relationships. The first people a small company hires are the people they're friends with or friendly with. The people who invest in you are more likely to be your social acquaintances or friends. You won't even get a meeting with an investor in many cases unless you have a common connection. Partnerships are formed all the time between people who also are on the same soccer team, etc. People in business also have people they like and that they don't like and that they're friends with outside of work. I have coworkers, but I also go to their BBQs and their birthday parties - they're still human beings. When people are entrusting each other with the fates of their companies, their employees, and their own personal wealth, they need a high degree of trust.

You sound like someone who has never actually had to work in a multinational company before or with remote team members. Anyone who has can tell you that things are much easier when co-workers know each other personally and become friendly with each other than when they're just strangers to you on the other end of the email. It changes how you respond to them.How likely you are to misunderstand them. How likely you are to respond with kindness or terseness. And it changes how you feel about your job in general. When you go into work and you like the people you work with and you consider yourself their friend, you're far more likely to like your job overall and stay there. If you treat your entire work life as a "transaction" then you're far less likely to be happy with your work life.

> Why fight it when you can simply move work elsewhere?

You can't really do that. You underestimate the powerful network effect Silicon Valley has on the tech industry. Almost all of the investors are here, and many of the world's best software engineers choose to live here and will not move elsewhere for work. There are only a few other cities that have a lot of software jobs and also a large pool of software talent, and they also have a high cost of living -- NYC, Boston, and Seattle come to mind.

Go remote. High quality engineers, project managers, designers, etc can be had all around the world, and if you're seeing a drop in team or employee performance from working remotely, you're not managing properly.

Your argument about investors and quality developers only being in SFBA is a strawman. There are successful startups all over the world. Unicorns? Probably not, but that's a perception issue, not a quality issue (current unrealistic valuations will continue to come back down to Earth)

The number of orgs supporting remote, even fully remote, grows all the time: https://github.com/lukasz-madon/awesome-remote-job#companies... ; if an employee chooses to expose themselves to outrageous housing expenses due to the employer's ability to externalize this cost to the employee (with no penalty to the employer, because "that's just the way it is"), this will never change.

> Your argument about investors and quality developers only being in SFBA is a strawman.

That was not my argument. I said most, or "almost all," not all. And that's true! Even the NYC startups have to come to the Bay Area to meet with VCs.

Having a founder fly out every week is still cheaper than building a startup in the Bay Area as soon as you leave the 3 people in one room stage.

The reason why it happens is the same reason why VC have historicly had negative returns; VC's as an industry make most of their money by convincing investors to part with there money not from actual returns. As such they like having a dog and pony show in the area while they try and fleece more people.

This sets up boom and bust cycles and many market distortions. As VC's still want positive returns it's just not their #1 goal.

The weather man. You get to 'live' almost twice as many hours because of the weather. Add top companies, upcoming companies, jobs, schools, colleges, city stuff, nature stuff, Sports and you just can't beat it. After all you only live once.

Huh? When I lived in SF all daylight hours were spent in the office...

This is the real answer.

The problem is that the large global companies like Facebook and Google are extracting an unnatural amount of money and that's flowing into the Bay Area, and translating into high-paying engineer jobs. The problem is all of the great jobs are landing in the Bay Area, and in the age of the Internet that just doesn't make any sense anymore.

These large global companies need to spread that around the US and move jobs around to other areas, so that young people can get exciting jobs in lower cost areas. This will take off the burden off the Bay Area, and ease the pressure of housing prices.

Indeed. but it's also unreasonable to expect that homeowners in a city should not be able to decide how much building they want to allow in their city. I mean, it's a Bay wide problem, why can't all the building be done right outside Palo Alto? why does Palo Alto have to shoulder the solution to this problem? I don't have a dog in this fight, but I certainly can understand current homeowners. They want to keep their city a certain way. Why can't they ?

> Indeed. but it's also unreasonable to expect that homeowners in a city should not be able to decide how much building they want to allow in their city

How far away does said land need to be before you think current homeowners shouldn't have a say anymore? Should someone who lives on the border of Palo Alto and another city be able to prevent housing being built in that other city, or just in Palo Alto? It's pretty arbitrary.

The people who are trying to prevent housing being built today are the same people who benefited from lots of new housing being built during the 1960s-1980s. Why should they have the right to prevent other people from doing what they themselves did? Should the Palo Alto residents in the 1960s-1980s have been able to prevent the newcomers at that time? I suspect very few current residents would agree with that, which is hypocritical.

I think there is a much simpler way to deal with this -- if land is zoned for housing, allow housing to be built. If some rich guy in Palo Alto wanted to control what happened on that land, he should have bought it. Why should anyone be able to veto the development of housing on land they don't own, if it is zoned for housing?

so, should a town be allowed to decide what kind of zoning it wants to have, or should it be decided by a decree from Federal government? So, suppose people in a town decided they want their town to be a town of 2 story single family homes. Should they be allowed to make that decision or not? Suppose all of New York decides to move to Palo Alto within the next 5 years. Should current homeowners in Palo Alto have the ability to decide how much housing and what kind of housing should be built to accommodate that demand?

It is unreasonable for the government to limit housing. It directly causes economic segregation. Only the wealthiest get the homes allowed by law while everyone else gets pushed further out. The market does not do this. Our segregation laws do.

If it were legal to build fourplexes anywhere in Palo Alto, merely wealthy families would be able to outbid some of the insanely wealthy with their four rent payments combined. For the most part, single family homeowners can't actually afford single family homes in such desirable locations, but our laws make it illegal for middle class families to outbid the wealthy the way they always have: using less land.

This is an obvious injustice, and the people who insist on laws that exclude others will soon find themselves in our history books. Stop letting Dixiecrats call themselves progressives.

"It is unreasonable for the government to limit housing" for which government? federal, state, local? Is it really that unreasonable for homeowners in a town to exercise some measure of control over their own town?

> I mean, it's a Bay wide problem, why can't all the building be done right outside Palo Alto?

I mean, climate change is a worldwide problem, why can't all the cutting of greenhouse gas emissions be done outside the US?

so you think that a town should have no say whatsoever in deciding what should be built in its borders? By this analogy ?

Multi-millionaires? ProfessorVille has numerous Billionaires on a single block.

Agree on the sentiment though...arguing for affordability in PAMPA is a lost cause