The Pittsburgh Apartment Rent Bubble (Washington, Lawrenceville: sale, rental, health insurance)

[Aqua Teen Carl]

Originally Posted by gortonator

You'll have to be specific with your tech companies/huge corps comparison. Google salaries on Glassdoor aren't too shabby. Not massive, but not too shabby, and there's perks ...

I don't want to expose them, but believe me if you're at CMU you know them well.

Obviously you'll disagree with this from where you sit but I spoke with peers from 3 different companies and we all said this: go to Glassdoor and look at a national average for a job (any field), subtract $20k, then you'll have what people will want to pay you in Pittsburgh.

I get PM's and rep comments every time I post about stuff like this so there are quite a few people who have experienced the same thing.

[SteelCityRising]

A couple earning mediocre salaries here can almost comfortably afford an entry-level studio or 1-BR unit in all of these new apartment buildings coming onto the market these days in the city. For example, my partner's salary is $26,000. My annual income fluctuates but is generally speaking around $40,000 for a combined household income of ~$65,000. If we weren't burdened with student loan debt, credit card debt, and car payments, we'd be able to afford a 1-BR unit in a place like the Cork Factory.

As for me individually I don't foresee either median rents OR median housing prices plateauing in the city anytime soon as long as Pittsburgh is the "in" city on the national radar, as we've now become, while demand for rentals continues to outpace the existing supply. As such I've made it a firm resolution for the new year to save 10% of my tip dollars and HALF of each paycheck into my savings account. So far this has amounted to around $800. If all goes well (i.e. not hitting another $700 pothole like January 2014) I'll have $10,000 in that account by year's end---roughly enough for me to buy my first fixer starter home in Spring 2016, assuming an FHA mortgage with 3.5% down; the seller contributing towards closing costs; and a small nest egg left over to cover any near-immediate repairs.

Unlike "doom and gloomers" I'm very bullish about this city's future. I just hope I'm able to buy my first home here before I'm priced out. Even then there's always McKeesport.

[SteelCityRising]

Originally Posted by Aqua Teen Carl

I get PM's and rep comments every time I post about stuff like this so there are quite a few people who have experienced the same thing.

During my tenure at PNC Financial Services I was making $10/hr. to balance a six-figure vault down to the penny; open accounts; make mortgage referrals; make investment referrals; process credit card applications; endure profanity-lace tirades from ghetto people about why "I" stole their money via an overdraft fee (because THEY were too stupid to not spend more than they made); be pressured by upper management to "migrate" elderly people who didn't own cell phones to use mobile deposits to save the bank money while the elderly people would become irate with me; hit unrealistic sales quotas given the demographic mix of our location; etc. That was roughly the same wage they had been paying my predecessors in that same position for numerous years, despite the local cost-of-living going through the roof during that timeframe. It was also what they paid personal bankers working on the front lines in rural Fayette County, with a fraction of the stress or quota expectations.

Needless to say I don't have a very good impression of PNC after working for them, especially when a human resources manager argued with me on the phone and said PNC's wages were "very competitive for the industry". That's the problem. Why would PNC, which is by far the busiest bank in the region, be expected to pay employees the same as an independent bank in Freeport with a fraction of the business volume?

Coupled with horror stories I've heard from UPMC employees (save for GeneW who seems to have a good job with them) and from you, Carl, about the tech industry, I'm also wondering if there ARE truly enough of these "good high-paying jobs" in this city to sustain thousands more of these $1,500+/month apartments? We very well MAY hit a market saturation point for higher-end rentals soon enough here if employers like PNC and UPMC are going to continue to think $10/hr. is "a good living".

[PghYinzer]

Originally Posted by SteelCityRising

During my tenure at PNC Financial Services I was making $10/hr. to balance a six-figure vault down to the penny; open accounts; make mortgage referrals; make investment referrals; process credit card applications; endure profanity-lace tirades from ghetto people about why "I" stole their money via an overdraft fee (because THEY were too stupid to not spend more than they made); be pressured by upper management to "migrate" elderly people who didn't own cell phones to use mobile deposits to save the bank money while the elderly people would become irate with me; hit unrealistic sales quotas given the demographic mix of our location; etc. That was roughly the same wage they had been paying my predecessors in that same position for numerous years, despite the local cost-of-living going through the roof during that timeframe. It was also what they paid personal bankers working on the front lines in rural Fayette County, with a fraction of the stress or quota expectations.

Needless to say I don't have a very good impression of PNC after working for them, especially when a human resources manager argued with me on the phone and said PNC's wages were "very competitive for the industry". That's the problem. Why would PNC, which is by far the busiest bank in the region, be expected to pay employees the same as an independent bank in Freeport with a fraction of the business volume?

Coupled with horror stories I've heard from UPMC employees (save for GeneW who seems to have a good job with them) and from you, Carl, about the tech industry, I'm also wondering if there ARE truly enough of these "good high-paying jobs" in this city to sustain thousands more of these $1,500+/month apartments? We very well MAY hit a market saturation point for higher-end rentals soon enough here if employers like PNC and UPMC are going to continue to think $10/hr. is "a good living".

Well you don't HAVE to rent a $1500 a month apartment in the hottest area of the city. If you earn $10/hr and think you can swing that rent you have way bigger issues. There is demand by people who CAN afford these apartments. People that earn $10/hr are not the target audience for these apartments.

Again, I may be the minority in this case, but I know of very few people that are struggling to find good paying jobs in Pittsburgh. Maybe we are older than some, maybe we picked the right careers, stuck it out with one company long enough to advance, or maybe we have been fortunate enough to not encounter the hardships other have....I don't know.

[Aqua Teen Carl]

It's not just tech. Two of my friends graduated from a private college with a Masters degree and they make low 40's in marketing and buyer jobs. Another friend has a senior financial blah blah job for a large corporation and she had to fight hard to get $60k when Glassdoor says the Pittsburgh average is 80 something.

Long story short, companies are still paying out "Pittsburgh Rich" salaries when the concept of "Pittsburgh Rich" dies more year after year. If I made low 40's in 2005 I'd be happy as a clam, but there ain't 2005 rents around here anymore.

[Lobick]

From elsewhere:

The portion of households in the City that had $75,000+ in income as per the annual American Community Survey. Some quick notes: this first set is the 1-year estimates, so there is more sampling error. I also believe this is not adjusted for inflation. Finally, the total number of households in the City is relatively flat.

Anyway, it looks like this:

2005 16.4%
2006 16.4%
2007 19.5%
2008 21.1%
2009 22.1%
2010 20.8%
2011 21.1%
2012 25.5%
2013 26.3%

You can see what looks like a recessionary effect in 2009-2011, but otherwise that is a pretty powerful upward trend. Again, that sort of thing helps explain what is going on in the City's housing market these days.

[theta_sigma]

Me and my husband both make low (very low) 40s with Masters degrees--he's in the private sector tech-ish and I'm in higher ed also tech-ish (meaning, we both work heavily with technology but we're not engineers). When I started at CMU in research support (somewhat specialized research support for which I needed and used my Masters degree), I was making mid-20s (pause for laughter) and topped out at 30k (pause for more laughter).

Thank the lord for the FHA loand program and Stanton Heights, without which I would not be living in this promised land known as the East End.

(I have a friend who worked--note the past tense--at UPMC central administration and they are slave drivers as far as I can tell.)

[I_Like_Spam]

Originally Posted by SteelCityRising

A couple earning mediocre salaries here can almost comfortably afford an entry-level studio or 1-BR unit in all of these new apartment buildings coming onto the market these days in the city.

The brand new apartments aren't been built for people with mediocre salaries.

If the rent is $2000 a month, you should be hauling in a minimum of $8000 to afford to live there. Pulling out my pencil and paper, that's $96000 a year and that isn't that mediocre.


Fortunately for you, there are plenty of places in the city and nearby in the suburbs that have more affordable options.

And you could probably reach your goals in politics a lot quicker as well. Its easy to get elected as a Stowe commissioner or a Munhall borough councilman than it is to be elected to a similar position in the City of Pittsburgh.

[_Buster]

For someone with no other significant debt, they should be able to afford to rent a place that is one third of their income. Renting is a lot less risky than a lender providing a mortgage, which they routinely do at the 28 - 30% of income level.

[Der Schwabe]

1/3 of the income is the guide. The trend for what people spend on rent is pushing upward toward 50% (with Washington DC being a notable example). These increases have picked up recently here but the trend is far from isolated. We're just playing catch up.