THE WHOLE STORY ABOUT HOUSING COSTS IN AMERICA

…State Rental Wage Requirements.

 

These hourly wage requirements are only the tip of the iceberg.

 

The cost of housing in the US is getting totally out of control.

 

We, who live here in Silicon Valley, since Apple Corp. began construction on their “Space Ship” shaped headquarters building that will be larger than the US Pentagon, and since Google, Facebook, and LinkedIn began building their monster facilities, the local housing prices and rental fees have skyrocketed.  To avoid the commute, everyone wants to live close to their work.

 

The unemployment rate in this area is less than 2% and new , luxury buses that make daily runs in the area and up the peninsula to San Francisco are as thick as fleas.  These busses are for bringing well paid employees back and forth to these high-tech companies.  If you haven’t seen one of these high-tech mobile office buildings, they have First Class seating w/ power sockets, WiFi, and many even have a rest room.  The Apple and Google busses stop at 5-6 different locations for picking up employees in San Francisco alone. 

 

To give you an idea of the SF rental costs, a one bedroom or studio apartment in San Francisco will cost over $3000. 

 

But down even here in the valley, the single family homes within 3 miles of the new Apple and Google complexes have increased in sales value by ~20-40%, just since the first shovels broke ground.

 

At a new apartment complex near us, a friend’s son who had just graduated college went looking for a one bedroom apartment.  In attempting to get on the list for being considered to rent, he was informed that his annual household income must exceed $100,000.  Since he’s single and had just graduated, his generous starting income was still not large enough to allow him to be added to the list of potential renters.

 

In a report from the Northern California Realtors Association, to qualify for purchasing a median priced home in San Francisco, the annual household income must meet or exceed $245,000.  Here in Silicon Valley, that same house still requires a household income of ~$135,000.

 

In doing some follow-up on what is going on at a national level, the National Low Income Housing Coalition has published its annual housing report.  Once again it shows the dramatic divide between average housing prices and income in the United States.

In order to afford a modest, two-bedroom apartment in the US, renters need to earn an average wage of $19.35 per hour. In 13 states and the District of Columbia they need to earn more than $20 per hour. The Housing Wage for a two-bedroom unit is more than two and a half times the federal minimum wage of $7.25, and $4 more than the estimated average wage of $15.16 earned by renters nationwide.

 

As noted in the above map, unfortunately the numbers shown for each state’s average rental wage requirement do not show the various regional numbers.  As an example, California and New York’s wages in the $25/$26 dollar per hour range, do not come close to what is required in San Francisco, Silicon Valley or for New York’s Manhattan island area.  Even the $31.61 average shown for Hawaii doesn’t really apply to the greater Honolulu area.

 

New housing here in Silicon Valley is being built on every available location.  Many older buildings are being bulldozed and replaced with high-rise apartments with underground or separate parking garages.  The lack of a comprehensive public transportation system within the valley is seriously showing the city, county and state’s lack of forethought.  Traffic has already gotten so bad that to go anywhere during the commute hours is like attempting suicide.  And what’s going to happen when the Google “Driverless” cars start hitting the road?

 

The future here does not look good for those of us that came to this valley when this was an agricultural area known as “The Valley of Heart’s Delight”.

 

Nuff said.

 

Copyright G.Ater  2016.