According to an article by the Observer’s [1] Sissi Cao, prime-age workers (those in their mid-30s) are retreating from Silicon Valley due to the lack of affordable housing.
“A typical software engineer at the highest-paying tech companies in the area now needs to spare a third of his or her income to afford a home near work, which runs around $1.2 million,” Cao reported.
In an attempt to alleviate this problem, Trulia [2] found that the Golden Gate City built more new homes than any other city in 2017. Last year the city approved 94.6 percent more homes than its average between 1980-2016. The total number of permits in 2017 was 6,270.
Although San Francisco’s affordability crisis has been waging for more than a decade, it seems to be reaching epic proportions. A recent Black Knight [3] report found that San Francisco hit a new peak in home appreciation, as prices rose by more than 11 percent year-over-year in December 2017.
One way tech companies are reacting to the affordability problem is by building branches outside of San Francisco to retain employees, as conveyed by Lux Capital co-founder Josh Wolfe, who spoke to Cao. However, for residents who don’t want to move out of the city, unorthodox living arrangements may be the solution. New York Times writer Nellie Bowles recently delved into this problem, finding that some professionals are moving back into dorms when priced out of the single-family housing market.
“Everybody told me housing in San Francisco was really expensive, but I was like, ‘I live in New York, how much more expensive can it be? … I was a bit cocky,” Katherine McKim, 37, told Bowles.