People are leaving San Francisco in droves as the cost of living reaches a new high.
A recent report from real-estate site Redfin revealed that San Francisco lost more residents than any other US city in the last quarter of 2017. The great migration is far from over. Last month, 49% of Bay Area residents said they would consider leaving California because of the cost of living, according to a survey of 500 residents by public-relations firm Edelman.
Here are all the crazy things happening because of the Bay Area’s insane housing prices:
This is how people outside the area imagine living in San Francisco.
And this is the reality.
The median-priced home in San Francisco sells for $US1.5 million, according to Paragon. It’s not uncommon for buyers to bid hundreds of thousands above asking and pay in all cash.
A million doesn’t get you much. In the ritzy Pacific Heights neighbourhood, you could buy a 697-square-foot home, and in the affordable Sunset District, you get 1,115 square feet.
A person who wants to buy property in the city needs a household income of $US303,000 to afford the 20% down payment on a $US1.5 million home, according to Paragon.
Source: Business Insider
Only about 12% of households in San Francisco can afford the median-priced home.
In Silicon Valley, a recent survey showed that people who earn up to $US399,999 a year in income consider themselves middle class because they still can’t afford to buy homes.
People are going to extreme lengths in order to afford living in San Francisco.
When Misa Gidding-Chatfield and Mike Kraft decided to move in together, they had two options: Buy a home for half a million dollars in the outskirts of the Bay Area (which would leave them with an hours-long commute into San Francisco) or live in the Bay on a boat.
Ten years after making the decision to live on a boat, the couple plans to reside at sea for the rest of their lives. The couple’s monthly expenses include payment on the boat’s mortgage (they have about $US150,000 left on their balance) and a $US900 slip fee to live aboard the boat.
In 2014, Heather Stewart and Luke Iseman were spending $US2,200 a month on rent in San Francisco when they decided to downsize and live out of a tiny house of their own making.
The couple bought a shipping container online for $US2,300, had it delivered to a vacant parking lot in the East Bay that they leased, and converted it into a tiny house.
Stewart and Iseman makes a living as the pseudo-landlords of Boxouse, a maker space where amateur builders and hobbyists can construct the tiny homes of their dreams.
Peter Berkowitz, an illustrator, spent $US400 a month to live in a homemade wooden crate in a friend’s San Francisco apartment. He described it as “cosy” in a 2016 interview.
His pod contained a drop-leaf desk, a slanted backboard, and string lights. He was later evicted when San Francisco’s chief housing inspector deemed living in boxes illegal.
People are spending over $US1 million on the “earthquake shacks” built as temporary housing for the homeless after the 1906 fires.
This earthquake shack in the Outer Mission was in desperate need of TLC when it sold 17% above asking price for $US408,000 in 2015. It received four all-cash offers in 10 days.
The new owners remodeled and flipped the home for $US622,000 two years later.
The most expensive known earthquake shack is a Cole Valley home with a cosy 640 square feet of living space. It sold nearly $US100,000 over asking for the price of $US1.4 million in 2016.
The Bay Area’s insane housing prices have caused people to flood the rental markets. San Francisco’s median two-bedroom rent of $US3,040 is above the national average of $US1,160.
Source: Apartment List
In an upscale San Francisco neighbourhood, 31 millennials squeeze into a 10-bedroom French Victorian mansion called Chateau Ubuntu. Rent starts at $US650 for a bunk bed.
In January, city officials issued a violation notice because the community, considered a three-family dwelling by the Planning Department, has too many tenants and is operating illegally.
Tenants live by a set of Burning Man-like values that prioritise living with intention and embracing community. According to the site, the group shares 1,330 hugs a week.
An increasing number of middle-class workers and millennials are squeezing into apartments and homes with large numbers of people. This is called “co-living.”
Co-living is often more affordable than traditional rentals because it comes with perks, like free internet, maid service, and new friends. Startups are capitalising on the trend.
HubHaus puts millennials up in multimillion-dollar mansions near Silicon Valley tech companies. Members pay on average $US1,275 a month for a room at the homes.
WeWork, a startup that rents out shared workspaces, branched into co-living in 2016. Their “dorms for grown-ups” are intended for people moving to a city and looking for fast friends.
The company, which has a $US20 billion valuation, has two locations: one in New York and one in Crystal City, Virginia, outside DC. The average apartment is just 450 square feet.
Private bedrooms at WeLive start at $US1,200 a month. There’s also a $US125 amenities fee, which includes a monthly cleaning service, cable, internet, utilities, and laundry.
Some take home wherever they go. “Van life” is an increasingly popular lifestyle choice among tech workers and urban dwellers who want to avoid shelling out for rent.
Brandon, who asked to withhold his last name to maintain his privacy, moved into a 2006 Ford truck the same month he became a software engineer at Google in 2015.
Jason Roesslein, an engineer at Tesla, told us he paid off $US14,000 of student loans by living in a Dodge Sprinter van he bought off eBay for five months. He showered at Tesla’s gym.
Other desperate renters are leaving for more affordable housing markets. San Francisco is experiencing a shortage of U-Haul moving vans, which has inflated the cost to rent one.
It costs $US2,000 to rent a truck going from Silicon Valley’s San Jose to Las Vegas, but it costs only $US100 the other way around, according to a report from the San Francisco Chronicle.
Some people move away but keep their high-paying jobs in the Bay Area.
Tom Fowkes, a nurse living in Pennsylvania, told the San Francisco Chronicle that he commutes 2,600 miles to work in Oakland. Fowkes flies home about every two weeks.
Source: San Francisco Chronicle
The town of Bend, Oregon, is becoming a commuter town for a select few people, according to CNBC. Some people make the 10-hour drive, while others opt for the 70-minute flight.
San Francisco’s housing crisis has created a dire homelessness situation. There are about 7,500 people living on the street, and many more find shelter with friends and family.
Source: San Francisco Chronicle