notyouravgdoge
I don't own a home and I've spent a nontrivial amount of my net worth paying rent in HCOL areas, including the Bay Area. Renters want prices to go down. Homeowners want prices to go up. And the world is round.
Perhaps some legislation and removal of zoning restrictions would help.
- Either you don't plan on moving or you can cover a substantial amount of your mortgage from rental income if you do move.
- You're not overleveraged. If you lose your job or take a pay cut due to a recession, you can still continue making mortgage payments on your house without risk of foreclosure.
Caveat: There are probably some areas where housing prices never fully recovered after the 2008 financial crisis. But there also areas like the SF Bay Area, where the housing market is doing well even in the midst of wildfires, a pandemic, and tech employees fleeing the area in U-Haul trucks. As with all investments, nothing is guaranteed. For what it's worth, your run of the mill index fund would have taken a huge hit in 2008 as well. It wasn't just the housing market.
Compensation Trajectory: Sure, I can relocate from [HCOL city] to [LCOL city] and come out ahead today after factoring taxes, home prices, etc. What happens in the long term? Will I have a harder time getting promoted because of lower visibility? Will my annual raises and stock refreshes be lower than my counterparts who did not relocate? In tech-dense areas like the Bay Area, I can switch jobs and negotiate a substantial salary increase. Will LCOL areas allow me to substantially increase my salary when I switch jobs?
Home Prices: Folks often cite cheaper housing as a reason for leaving HCOL areas. I generally agree with that. But housing is an investment, not necessarily an expense. You might be paying seven figures for a small townhouse in the Bay Area. However, you'll get your money back when you sell your home in the future (assuming a sufficiently long time horizon and the ability to wait out dips in the housing market). Like any other investment, there are risks associated and ROI is not guaranteed, but my point is that spending $1M on a house is not the same as spending $1M on a luxury car.
Purchasing Power: Earning more money in a HCOL city (relative to earning less in a LCOL city) goes a long way once you leave your local economy. Want to send your kids to a private university? Most tech employees won't qualify for financial aid regardless of where they live. In that case, tuition for [private university] is the same regardless of whether you live in San Francisco or rural Oklahoma.
Your "family" could be covered by a great health insurance plan through your employer, but you wouldn't get any financial assistance on the $6,300 a month that the author of the article is paying for his elderly mother.
If the author meant 2+ hours round trip: Lots of tech employees making 200k+ do this regularly. For example, driving from your house to the Fremont BART station and taking the train into downtown San Francisco can easily take 1 hour and 15 minutes one way.
If the author meant 2+ hours one way: There are affordable areas outside of San Francisco's borders that have a reasonable commute. This is especially true if you're willing to have roommates, although that would be more difficult if you have four children like one of the employees mentioned in the article. Oakland comes to mind - you can take the BART from Oakland to the Mission (where the restaurant in the article is located) in ~35 minutes.
While I do think that there is a housing issue in the Bay Area, I don't think the lines you quoted from the article are fair.
There are small businesses that have been created around this. I found a business that would purchase, deliver, and assemble items from Ikea. All I had to do was send them a copy of my Ikea shopping list.
In my particular case, they purchased items at the Elizabeth, NJ location, which has a 3.3% sales tax [1]. If I didn't use their service, I would have had to shop at Ikea Brooklyn, which has an 8.8% sales tax [2].
[1] http://www.sale-tax.com/ElizabethNJ [2] https://www1.nyc.gov/site/finance/taxes/business-nys-sales-t...
Does the species have a name? I'd like to read more about this spider but I don't know what to search for.
I'm in my mid-20s and just a few years ago I would memorize grocery prices and track the value of the items I had in my shopping cart. Chicken breast at $2.99 per pound compared to beef flank at $8.99 per pound...I guess I'm eating chicken. Yellow onions for 79 cents each...since the store isn't charging by the pound, I'll dig through the onions and find the largest one.
These days I can spend the occasional $15 on a cocktail or $40 on a meal without thinking twice. I believe growing up in a lower income family gives me a greater appreciation for what I have now. Happy Thanksgiving!
Edit: Most importantly, I'm grateful for my (immigrant) parents' hard work and the sacrifices they made to provide me with the opportunities I have today.
I'm curious if those who attended public universities in California felt that their education was less "holistic" in any way due to Prop 209.
[1] https://en.wikipedia.org/wiki/California_Proposition_209
This binary search bug took two decades to be discovered: https://research.googleblog.com/2006/06/extra-extra-read-all...