East Bay Times: Silicon Valley, East Bay gain wealthy households while middle-income dwindles (Hayward: middle-class, 2015)

[HockeyMac18]

Household gains/losses to SF, Silicon Valley, and the East Bay in 2015.

Article: Silicon Valley, East Bay gain wealthy households while middle-income dwindles


Some details:

• All regions gained a significant amount of new households making $150,000 or more - Silicon Valley ~35,000, East Bay: ~30,000, SF: ~20,000...that's around 85,000 additional households in that income bracket in one single year in the region...astounding.
  
• All regions lost households in $100,000 - $149,999 bracket - down ~10,000 in SV, ~5,000 in the East Bay, and over 5,000 in SF
  
• In the $75,000 - $99,999 bracket, SV lost ~2,500 households, the East Bay gained ~5,000 households (only meaningful gain to the Bay Area outside of the top bracket), and SF lost ~2,500 households
  
• $10,000 - $74,999 was negative in all regions - down ~7,500 households in SV, nearly 15,000 in the East Bay, and ~10,000 in SF
  
• The below $10,000 bracket is weird...some very small gains (~1000? in SF/SV) and a loss of nearly 5,000 in the East Bay...I assume this is mostly made up of students that make little to no money...so it has little meaning to me.

Basically: More households making below $150K are leaving than coming into the Bay Area, and we're seeing a surge in households making more than $150K coming into the region. Not that this is a surprise to anyone...but it's still interesting to see the numbers nonetheless.


Some quotes:

“The Bay Area is becoming like Manhattan West,” said Russell Hancock, chief executive officer of Joint Venture Silicon Valley, which on Monday released the report from its Institute for Regional Studies. “We are seeing many more wealthy people, highly compensated people, living in the Bay Area, and a disappearance of the middle-class segment.”

The economic divide in the Bay Area could imperil the region’s economic health, experts warned.

“Our community is not sustainable if we don’t have a healthy middle class and a healthy economy for middle- and low-income people,” said Emmett Carson, founding chief executive of Silicon Valley Community Foundation.

The shifts appear to be a combination of middle- and low-income residents leaving the region — and being displaced by upper-income households in some cases — and middle-income earners jumping into the upper-income bracket.

Massaro agrees that middle-income families have enjoyed upward mobility. But she maintained that an even bigger factor is that people in middle-income groups became priced out of the expensive Bay Area and migrated to counties that border the region or to outlying areas such as Solano County or eastern Contra Costa County.

“There are people moving farther away from the Bay Area because they can’t afford to live here,” Massaro said. “People may be keeping their jobs and commuting in. That makes traffic a bigger problem.”

“These transformations in the Bay Area are real, and they might be irreversible,” Hancock said. “The Bay Area is minting all sorts of affluent people. But there’s more to this. People are self-selecting themselves to move into a high-priced region. They are replacing people who can’t self-select.”

[phantompilot]

I can't quite grasp the logic behind the claim that the community isn't sustainable without poor people. Of all the things that imperil the success of a community, it's the poor.

The wealthy and middle class aren't the ones burdening otherwise sustainable communities. So I really don't understand the claim.

I think "sustainable" just is being improperly used as a synonym for some other word the speaker meant to convey. Maybe they WANT poor people around, so maybe they meant "desirable". I don't know. Guess you'd have to ask them.

[calicoastal]

This study basically shows that people are making more money than before in the Bay Area. That's a good thing. People are moving up income brackets.

There is nothing in the study indicating displacement or anything like that.

[sav858]

Originally Posted by calicoastal

This study basically shows that people are making more money than before in the Bay Area. That's a good thing. People are moving up income brackets.

There is nothing in the study indicating displacement or anything like that.

You would think then there would be growth in the $100-150K income group as well if that was the case; the lower middle class moving into the middle class.

This is kind of a weird graph. I guess it's good that the lower income brackets aren't growing a lot too but did they just move away as the article suggests?

[HockeyMac18]

Originally Posted by sav858

You would think then there would be growth in the $100-150K income group as well if that was the case; the lower middle class moving into the middle class.

This is kind of a weird graph. I guess it's good that the lower income brackets aren't growing a lot too but did they just move away as the article suggests?

I think most people either left or went to surrounding counties/the Central Valley. But it doesn't really break that down (I'd be interested to see those stats).

[HockeyMac18]

Originally Posted by phantompilot

I can't quite grasp the logic behind the claim that the community isn't sustainable without poor people. Of all the things that imperil the success of a community, it's the poor.

The wealthy and middle class aren't the ones burdening otherwise sustainable communities. So I really don't understand the claim.

I think "sustainable" just is being improperly used as a synonym for some other word the speaker meant to convey. Maybe they WANT poor people around, so maybe they meant "desirable". I don't know. Guess you'd have to ask them.

I think the issue that the person quoted in the article meant to convey is one of "who does this work?" that pays traditional "middle class" wages if these people either don't/can't live here anymore or are forced to make ridiculous commutes into the core of the Bay Area.

The "sustainability" part of that comment isn't in that there won't be people to do the work (people will always "make it work"...at least for a while, until they quit, and someone else steps in)...but rather I think in what this does to the region as a whole. Some examples I can quickly think of that I imagine that person had in mind: increased traffic/pollution as people make longer and longer commutes to find "affordable" housing or decreased quality in the people that do this work (teaching quality is a popular topic in this regard)).

[Perma Bear]

Originally Posted by HockeyMac18

Household gains/losses to SF, Silicon Valley, and the East Bay in 2015.

Article: Silicon Valley, East Bay gain wealthy households while middle-income dwindles


Some details:

• All regions gained a significant amount of new households making $150,000 or more - Silicon Valley ~35,000, East Bay: ~30,000, SF: ~20,000...that's around 85,000 additional households in that income bracket in one single year in the region...astounding.
  
• All regions lost households in $100,000 - $149,999 bracket - down ~10,000 in SV, ~5,000 in the East Bay, and over 5,000 in SF
  
• In the $75,000 - $99,999 bracket, SV lost ~2,500 households, the East Bay gained ~5,000 households (only meaningful gain to the Bay Area outside of the top bracket), and SF lost ~2,500 households
  
• $10,000 - $74,999 was negative in all regions - down ~7,500 households in SV, nearly 15,000 in the East Bay, and ~10,000 in SF
  
• The below $10,000 bracket is weird...some very small gains (~1000? in SF/SV) and a loss of nearly 5,000 in the East Bay...I assume this is mostly made up of students that make little to no money...so it has little meaning to me.

Basically: More households making below $150K are leaving than coming into the Bay Area, and we're seeing a surge in households making more than $150K coming into the region. Not that this is a surprise to anyone...but it's still interesting to see the numbers nonetheless.


Some quotes:

This is kinda a "no ****". When the cheapest area in the east bay (Hayward) costs at minimum 500k for a house in bad shape you usually don't get too many middle class people.

[HockeyMac18]

Originally Posted by Perma Bear

This is kinda a "no ****". When the cheapest area in the east bay (Hayward) costs at minimum 500k for a house in bad shape you usually don't get too many middle class people.

Well, yeah. But it's interesting to see the numbers behind the trend, too.

[Perma Bear]

Originally Posted by HockeyMac18

Well, yeah. But it's interesting to see the numbers behind the trend, too.

This is just the cycle of Bay Area housing. SF and the peninsula becomes crazily expensive, then follows the South Bay and Marin. When those max out the east bay starts rising and after that places like
Tracy and Vallejo. When the outer burbs like Los banos become too overpriced that's when the bubble bursts. Houses stay overpriced but slightly less so.

[TheseGoTo11]

And watch out, the IPO market is coming back.