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Grex > Agora35 > #159: You know you have a cost of living problem when... | |
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gull
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You know you have a cost of living problem when...
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Nov 15 19:52 UTC 2000 |
...your own mayor can't afford to live in your city anymore.
Mayor ditches pricey town
SAN CARLOS, Calif. (AP) - Mayor David Buckmaster is
quitting his post and leaving this Silicon Valley town
in search of cheaper digs.
Buckmaster, 28, said Monday that he was making his
plight public to illustrate the crisis working stiffs
face trying to find an address in the land of six-figure
incomes between San Francisco and San Jose.
"Even if we had over $100,000 incomes there's no way we
could afford to live here," Buckmaster said.
He and his wife, Kim, a first-grade teacher, rent a
condo for $1,200 a month. They say they can't afford to
buy a house in San Carlos, where the median home price
is $780,000. Buckmaster makes his living as a manager at
InsWeb Corp. The Internet insurance company is opening a
new office near Sacramento, where the Buckmasters are
looking for a $300,000 half-acre pad. The mayor guessed
the same place in San Carlos would cost more than $1
million.
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| 32 responses total. |
scg
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response 1 of 32:
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Nov 15 22:59 UTC 2000 |
Yes, buying a half acre in the Bay Area, especially on the Peninsula, is going
to be expensive. Same goes for places like Manhattan, although the news media
seems to think it's normal there. There are plenty of places around here
where a medium sized house on a much smaller piece of land wouldn't be nearly
that expensive. Actually, his $1,200 per month condo sounds downright cheap.
I'm certainly not saying there isn't a housing shortage here, but the prices
are a result of the problem, not the problem itself.
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danr
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response 2 of 32:
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Nov 15 23:48 UTC 2000 |
It's supply and demand. It's as simple as that.
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gull
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response 3 of 32:
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Nov 16 00:22 UTC 2000 |
The problem largely seems to be that there's a certain class of people who
are required, either legally or effectively, to live in those areas for
their jobs. However, society does not see fit to pay these people enough
money to live in those areas.
I predict a major problem hiring police, firemen, teachers, and service
workers in many of these towns. I also predict that it will take a long
time before the people making the big bucks come out of their programming
trances and realize that this problem will impact them personally.
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ric
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response 4 of 32:
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Nov 16 01:01 UTC 2000 |
My neighbor's house (only 1200 sq ft) is renting for around $1300/month I
think...
to say that $1200/month is cheap or expensive for "a condo" is totally
meaningless... is it a nice condo? Perhaps it's a 4 bedroom condo with a
basement and it's 1700 square feet....
Adrienne and I checked out some condo's on the north side of Ann Arbor that
were designed by some student of Frank Lloyd Wright.. they were very cool,
and only cost $300,000. We thought that was pretty expensive.
Looking back, I'd say that they weren't overpriced when compared to some of
the more expensive condos around this area, and they were a hell of a lot
nicer than some of the $250,000 condo's I've seen around here.
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polygon
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response 5 of 32:
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Nov 16 03:04 UTC 2000 |
When rents are weirdly low compared to the value of the same kind of
house -- wait for the inevitable crash before buying.
Rents are the market value of living in (or otherwise occupying) a
particular space. The value of that property is the capitalized rent plus
the value of expectations of increased value. When the two numbers get
way out of whack, it's the rent that represents reality.
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mdw
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response 6 of 32:
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Nov 16 04:00 UTC 2000 |
Unless you've got rent control...
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scg
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response 7 of 32:
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Nov 16 04:07 UTC 2000 |
In many parts of the Bay Area, $1200 per month would be a great deal on a
small rundown room.
When more people want to live in an area than there is housing or available
land, prices go up. I'm not sure what you want those making big bucks to come
out of their programming trances and realize. That we should be homeless to
provide homes for other people? In this case, this guy, who worked for a
company with "web" in its name, seems to be doing something equivalent --
moving to somewhere where land is cheap, and removing himself from the demand
side of the equation.
No solution of housing subsidies is going to solve the shortage without
increasing the supply of housing. The more people are paid to be able to
afford housing, the more the housing will cost, and at the end, there will
still be some percentage of the people wanting housing here for whom housing
isn't available (or who will have to live way out at the ends of the BART
lines). Really, to avoid some poeple being frozen out, the supply of housing
has to be increased. That's not likely to happen as long as every new
development is opposed on the grounds that it will encourage people to want
to live there, and drive prices up.
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mary
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response 8 of 32:
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Nov 16 11:48 UTC 2000 |
ric, are you maybe talking about Northbury Condominiums, designed
by Hobbs and Black?
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ric
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response 9 of 32:
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Nov 16 18:13 UTC 2000 |
mary - not sure. They were white, and all in a row.. not multi-story or
anything.. inside they looked much like you might expect an art gallery in
beverly hills to look like.
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gull
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response 10 of 32:
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Nov 16 20:35 UTC 2000 |
Re #7: What I'm suggesting it'll take people a while to realize is that all
those working class people they aren't worried about because they're
"beneath" them provide services they need and want. Unless they want to
start hauling their own garbage to the dump.
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danr
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response 11 of 32:
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Nov 17 04:27 UTC 2000 |
And when that happens, they're going to have to pay the workers more. It's
still supply and demand. In this case, it's the workers that are going to be in
demand.
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polygon
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response 12 of 32:
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Nov 17 06:59 UTC 2000 |
Re 7, no, no, I was making a general observation. The example I had in
mind was the Palo Alto area in the 1980s. House prices were
stratospheric, but rents were weirdly low (rent control apparently was not
a factor). And there was indeed a crash of house values there after a
while.
The fact that people who lived in Palo Alto insisted to me that house
prices could only move up, never down, was a symptom of a bubble in
progress. Certainly many things, like land prices and the stock market,
are generally rising across time, but when people become convinced that
the value can't ever go down, the psychology is right for a crash.
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senna
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response 13 of 32:
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Nov 17 08:25 UTC 2000 |
I'm still waiting.
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nephi
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response 14 of 32:
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Nov 17 18:13 UTC 2000 |
I think that prices will go down in that area when people stop moving
there. I don't see that happening until the "new economy" hype passes.
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danr
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response 15 of 32:
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Nov 18 14:47 UTC 2000 |
Actually, I don't see it happening at all, unless there's some horrendous
natural disaster. I moved there 23 years ago, and it was pretty bad then.
People immigrate there from all over the world, not just here in the U.S.
Despite the high cost of real estate, it's a pleasant place to live.
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richard
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response 16 of 32:
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Nov 19 03:50 UTC 2000 |
the saddest part of #0 is that this mayor of san carlos, california
is forced to quit his job because he cant live on his salary. This
is a huge problem in national politics, because many of themost
qualified candidates for public office these days can't run because of
the jobs not paying enough to support their families. It is doubly hard
if you are a congressman or senator, because you make maybe $125K a year
but you have to have two houses, one in D.C. and one in your home
district (its illegal to represent a district if you dont live in it)
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gelinas
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response 17 of 32:
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Nov 19 04:03 UTC 2000 |
I was under the impression that our Senators and Representatives received
a housing allowance, in addition to their salary. I also thought they got
a travel allowance, to cover the expenses of attending sessions of their
House.
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scg
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response 18 of 32:
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Nov 19 04:15 UTC 2000 |
The sallary this guy "couldn't live on" wasn't the sallary he got from being
mayor (towns the size of San Carlos rarely have anywhere near a full time
mayor), but from being a manager at a dot com. The need to boost the pay of
dot com management is an argument I haven't heard yet, even from the not
usually very rational Bay Area housing activists.
According to the article, the sort of house this guy is looking for includes
a half acre lot. Yes, that's going to be very expensive anywhere on the
Peninsula. Imagine somebody inisisting on having a house on a half acre lot
in Manhattan.
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bdh3
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response 19 of 32:
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Nov 19 04:45 UTC 2000 |
Imagine what happens to house values when the .com's out there realize
that they can pay less for qualified employees who live almost anywhere
in the world and 'cybercommute'. The cost of housing anywhere out there
is idiotic. Their customers don't live there, and their employees
shouldn't have to either.
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mcnally
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response 20 of 32:
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Nov 19 05:35 UTC 2000 |
Some troubled "dot coms" are already doing that. PlanetRx, for example
moved its headquarters to Tennessee (Memphis, I think..)
I've never figured out the geographic attraction of Silicon Valley for
new businesses, but quite clearly the businesspeople think that's the
best place to be..
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gull
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response 21 of 32:
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Nov 19 06:50 UTC 2000 |
I imagine the proximity to Mae West (the network hub, not the actress) made
sense at some time. And the climate is agreeable.
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nephi
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response 22 of 32:
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Nov 19 07:58 UTC 2000 |
While I found the San Francisco bay area to be a fine place, I would
have to make at least $130k per year in order to pay the rent out there
and maintain my current lifestyle. Even then, I doubt that I would be
able to afford an apartment similar to the one I have in a neighborhood
similar to the one in which I currently live. Even at $130k per year, I
would have to sacrifice in order to live and work in the San Francisco
bay area.
Unfortunately, many investors still have this love affair with anything
"silicon valley," whether or not the company has a viable business plan.
These investors are sending money from their own neighborhoods around
the contry to places like "luckysurf.com," "alladvantage.com," and
"pets.com" when they could be investing that money on companies with
actual business plans in their own neighbhorhoods.
The result of this is that millions of people around the country are
sacrificing their lifesystles to chase after the jobs that followed
investment dollars to silicon valley, where they now must compete for
scarce resources like real estate, and where they are consigned to sit
in traffic for hours a day commuting to and from work, because they
can't afford real estate anywhere near the silicon valley companies for
which they work.
This sounds strikingly like the disinvestment in the cities that started
to happen a few decades ago.
I really do hope that this "new economy" thing passes quickly, and that
investors get back to investing in companies with sensible business
plans all around the country. Technology is a good thing to use, but
investors should remember that technology is simply a tool -- not the
endpoint. While the use of technology can dramatically impact the
productivity and viability of a business, it is not the business itself,
even for technology companies.
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scg
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response 23 of 32:
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Nov 19 08:40 UTC 2000 |
It's expensive here, Mike, but not *that* expensive.
I suppose there are a bunch of reasons why companies choose to locate in the
Bay Area. Proximity to Stanford and UC Berkeley has a lot to do with it.
Being a nice place to live has something to do with it too. And then there's
venture capital, which there's a lot of here. The venture capitalists
apparrently like to keep the companies they're investing in close enough taht
they can keep an eye on them.
I also don't see disinvestment in cities going on here, really. While the
populations in many American big cities are fleeing for the suburbs, San
Francisco remains the really expensive part of the Bay Area.
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polygon
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response 24 of 32:
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Nov 19 08:52 UTC 2000 |
Re 14-15. If it really is so desireable to live in a place, the rents
will be high, and the high rents will sustain high property values.
When the rents fall, or are stagnant for a period of time, because the
demand for housing in that area is weak, while property values still
shoot upward as if nothing had changed, that is when a crash is brewing.
Re 16. Salaries of elected officials are always lower than comparable
non-elected positions in the public or private sector. That's because
elected official salaries are extremely visible.
Re 17. You assume wrong. As I understand Lynn Rivers' comments on
the matter, there is no "housing allowance," and the travel allowance
is a pittance compared to the actual travel which is necessary.
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