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Old 05-13-2018, 08:08 PM
 
28 posts, read 71,281 times
Reputation: 34

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it highly depends on when did the middle class family move to SF. If the family arrive on 2012 and have their rent locked at 1800 a month. The family will have no problem survive in bay area until their landlord have other use of their property. Or if the family is lucky enough and win the housing lottery, and acquired a condo at 28% of their monthly income.
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Old 05-13-2018, 08:17 PM
 
4,308 posts, read 6,252,690 times
Reputation: 6102
Many people who have been homeowners here for a long period of time can get by on a much lower salary. This is because they were able to buy a house with a lower mortgage and lock in a lower property tax rate. Prop 13 allows you to have property tax around 1-1.25% of your original assessed value (depending upon community) and it cannot go up more than 2% annually. This means that some people who've been long time homeowners may be paying under $2k/month for a house (mortgage + property tax), while new buyers may be paying many multiples of this. Let that sink in for a while.

But, you are right that many folks have to make sacrifices. People are doing these massive commutes from Tracy, Stockton, Brentwood, etc. to have a Bay Area salary and a somewhat affordable house. Miserable lifestyle, but they do it for various reasons (family obligations, jobs in the Bay Area, overall enjoyment of the area). As you've heard in the media, more and more of these people are moving out of the Bay Area.

Even highly paid engineers at Google, Facebook, etc. often have to make sacrifices. Perhaps they're renting a studio apartment here, where they'd have a mansion elsewhere. Maybe they got lucky and landed several hundred thousand in stock, where they can afford a down payment. They'll be highly leveraged to own a house (good luck in a downturn). Or, they often start their career here due to job opportunities and either transfer internally or change companies to relocate and buy a palace. Many of my friends/colleagues have done just that. It is becoming less and less sustainable.

I read an article that stated in 20 years, the Bay Area will only consist of the wealthy and the elderly. I don't think that's too far from the truth.
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Old 05-13-2018, 08:51 PM
 
Location: In the Redwoods
30,286 posts, read 51,833,691 times
Reputation: 23660
JJJonesIII: I’ll respond to the rest of your post later, but just wanted to clear up a few things. When I referred to the jump from (approx) $1300-2500 on average rents, I was talking about the increases between around 2011-2016... NOT the last four years, in fact I stated there’s been a decrease more recently.

And where did I get my numbers? From being a rental-seeker in 2011 and twice in early vs late 2016, perusing ads and visiting countless vacancies in Santa Clara County. No articles or statistics can be as accurate as actually LOOKING for yourself, and knowing exactly what is legitimately on the (rental) market. I also know that my San Jose apartment was $1385 when I moved there in March 2011, was almost $1900 by the time I left in 2016, and would have gone up to ~$2200 if I’d stayed. These are my personal observations, and many sources will confirm that these years were the worst!

While I really had no choice at the time (due to job-location change), one of my big regrets is having given up my rent-controlled apartment in San Francisco. I was paying $1660 for a 2-bedroom when I moved south in 2011; and since it was a 1940s building, I’d still be paying about that today if I’d kept it. Well, hindsight is 20/20.

Last edited by gizmo980; 05-13-2018 at 09:15 PM..
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Old 05-13-2018, 09:02 PM
 
Location: In the Redwoods
30,286 posts, read 51,833,691 times
Reputation: 23660
Oh, and honestly I don’t know enough about mortgages and homeowner taxes to even debate what you said on that... I can only speak from the renter’s perspective, and a (barely) middle-class one at that. And when the landlords are raising rents by hundreds of dollars per year, while my salary is only increasing 3-4% annually, it’s hard not to feel like something is off balance. Since the OP asked about residents like teachers, it’s relevant for me (a public librarian) to add this perspective. We can’t just ask for a raise like private-sector workers!
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Old 05-13-2018, 09:17 PM
 
15 posts, read 16,713 times
Reputation: 45
Quote:
Originally Posted by ryanthegoldengod View Post
Yes they should make a lot of money. But should there be better rent control? When there is a "charge what the market will bear" laizes faire capitalism approach, price gouging may take place in real estate.

Physicists: they should make a ton of dough. Landlords? I'm not so sure. Physicists contribute to the overall betterment of society. Landlords......I'm sorry but they often seem to have a parasitic relationship to the rest of society.
Capitalism would mean land owners being allowed to build property that the market is demanding. The Bay Area would have a million more homes for people to live in - largely in neighborhoods with the best public transit - and prices would be lower. The increased property and income tax revenues would pay for the increased infrastructure needed, just like it does in other dense cities like NYC. Price gouging is impossible in something like apartment rentals... the notion is ridiculous.

I'm not sure what you think should be different regarding landlords. Should they not exist? Without landlords, any family not wealthy enough to buy their own home would be homeless. Are grocery store owners greedy? Is anybody who works for profit inherently greedy? Are you greedy if you work for a living, instead of volunteering or giving away all your income to charity?

It's a sad cultural phenomenon to me, where so many people that are economically illiterate feel like their views on the subject are valuable enough to influence policy via democracy. You end up with things like rent control... which causes situations like a wealthy person spending far below market rate to keep an apartment they got decades ago while working class people are priced out of the state. Priced out because the housing supply is severely restricted because of rent control. Sorry... I rant because it's painful seeing this housing crisis disrupt millions of peoples lives.
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Old 05-13-2018, 11:39 PM
 
1,203 posts, read 831,627 times
Reputation: 1391
Quote:
Originally Posted by gizmo980 View Post
Oh, and honestly I don’t know enough about mortgages and homeowner taxes to even debate what you said on that... I can only speak from the renter’s perspective, and a (barely) middle-class one at that. And when the landlords are raising rents by hundreds of dollars per year, while my salary is only increasing 3-4% annually, it’s hard not to feel like something is off balance. Since the OP asked about residents like teachers, it’s relevant for me (a public librarian) to add this perspective. We can’t just ask for a raise like private-sector workers!
There really wasn't anything to debate or any research needed. And you are welcome to add whatever perspective you'd like but it's not going to change the points I made.

1) The amount of risk (skin in the game) for a renter is pretty much nil

2) If the landlord was not breaking even on his transaction, there is no renter that I know of that would offer to make him whole (nor should they). And I assure you, no one would be calling them "greedy"

3) Landlords are in the business of making a profit, and that profit is determined by what the market will bear (that's not greed just because you'd prefer to pay less).

4) Renters are not under duress to pay any price (or live in a specific area for that matter) and no price gouging is taking place without a collective agreement among owners

You took a risk when you moved out of a rent controlled apartment and knew what was at stake. Based on your comments, it appears you lost. That's on you and no one else. Your choice of a career and the money it pays is also on you. The Bay Area is an expensive place and I don't see that changing any time soon.
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Old 05-14-2018, 09:05 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,312 posts, read 8,504,387 times
Reputation: 16607
Quote:
Originally Posted by gizmo980 View Post
Oh, and honestly I don’t know enough about mortgages and homeowner taxes to even debate what you said on that... I can only speak from the renter’s perspective, and a (barely) middle-class one at that. And when the landlords are raising rents by hundreds of dollars per year, while my salary is only increasing 3-4% annually, it’s hard not to feel like something is off balance. Since the OP asked about residents like teachers, it’s relevant for me (a public librarian) to add this perspective. We can’t just ask for a raise like private-sector workers!
If you say you "don't know enough about mortgages and homeowner taxes to even debate ... I can only speak from the renter’s perspective", then perhaps you are being unfair calling landlords greedy?

Years ago I bought a house to rent out in Ca. The cost was $600K. I came up with $200K down payment. That in itself is not easy without personal sacrifice. The mortgage was was $2,000 a month and market rent was the same. Out of pocket every year was property taxes of $7,000, insurance, maintenance and repairs, plus any vacancy factor turnover. So I as a "greedy" landlord wasn't breaking even, but was easily at a loss of $10k+ a year. In a sense I was subsidizing the "poor" renter.

I was not rich, just middle class like yourself who scrimped and saved more than my peers did.

Had the market allowed me to raise rent $800 a month I would have done it. Would you have done the same, or would you continue to pay $800 a month out of your pocket.

So I have to ask you. If you yourself sacrificed to save to buy the house, should you eat the loss every month so people won't call you greedy?
I think you started looking for a duplex to buy and rent out, surely you saw how expensive it was to buy and hold?

The years you saw rents jump. did you notice how much real estate cost to buy was jumping along with it?
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Old 05-14-2018, 09:07 AM
 
10,275 posts, read 10,288,031 times
Reputation: 10644
Of course they can survive. Incomes are generally high and plenty of people know how to pinch pennies.

To thrive, however, it would REALLY help if they were long-time residents and existing homeowners.
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Old 05-14-2018, 09:22 AM
 
Location: California
1,424 posts, read 1,633,162 times
Reputation: 3144
No. The other day I saw 83 middle class people being lined up against the wall and machine-gunned down by techies and landlords. They literally can’t survive. Good post.

Out of the 10 million people in the bay area, 5 million are millennials who graduated from ivy leagues, 4 million are illegals, 900k are rich global elites, and the 100k middle class are being systemically put into gulags in Lodi, where they are fed to the homeless.
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Old 05-14-2018, 11:07 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,312 posts, read 8,504,387 times
Reputation: 16607
Quote:
Originally Posted by HappyinCali View Post
No. The other day I saw 83 middle class people being lined up against the wall and machine-gunned down by techies and landlords. They literally can’t survive. Good post.

Out of the 10 million people in the bay area, 5 million are millennials who graduated from ivy leagues, 4 million are illegals, 900k are rich global elites, and the 100k middle class are being systemically put into gulags in Lodi, where they are fed to the homeless.
Sounds like good stuff for a book.
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