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Tech Workers Can’t Buy Valley Houses

May 23, 2018 By Nick

Tech Workers Can’t Buy Valley Houses

 

Even the next generation of tech superstars, who land prestigious jobs at Google and Apple, are struggling to live in the Bay Area.

 

It’s a random story for this site, but it strikes quite close to home. I could earn well in England, but there never seemed to be any money left over at the end of the month.

 

I snapped. I moved to the Dominican Republic, live on just over $20 a day for the most part and have never been happier. I live a more frugal life, and I’m a much happier person.

 

My office, the swimming pool, is 50 meters from my house and I walk there in shorts and flip-flops.

 

You see it’s all well and good earning a fortune, but if you have to work in Silicon Valley then you want to live somewhere close. That is getting really expensive.

 

A new study by OPen Listings, a Los Angeles-based real estate startup, said that home ownership in the Bay Area might simply be beyond even engineers at Google and Apple.

 

“These highly paid, highly coveted people that are being recruited from all over the country or the world … they’re unable to afford the housing that’s available nearby,” said Open Listings CEO Judd Schoenholtz.

 

Software engineer jobs are well paid and the average engineer at Apple makes $188,0000 a year. But they would still have to pay 33% of their salary every month to buy a median-priced home in Cupertino, which is Apple’s home town.

 

For software engineers at Reddit and Google, the mortgage and tax payments would total 32 percent of their income. Twitter engineers would have to fork over 30 percent, and Facebook engineers 29 percent.

 

Sadly, it’s even more complicated than that. If your mortgage payments go beyond 28% of your income, you will have a harder time getting a loan. You might well need to find a deposit, on top of paying high rent, and it’s starting to become a real issue for even tech wizards to get on the property ladder.

 

Low income housing and dense housing developments near public transport are on the local governor’s agenda. Tech companies, for their part, are applying pressure to make it happen.

 

“The lack of homebuilding in California imperils our ability to hire employees and grow our companies,” the leaders wrote in a joint, open letter . “We recognize that the housing shortage leads to displacement, crushing rent burdens, long commutes and environmental harm, and we want to be part of the solution.”

 

Zillow estimates that the median home price in Cupertino is now $2.2 million, a 20% increase in just one year. That’s an incrediuble profit, if yu have your foot on the ladder. If you don’t, it can simply slip out of reach.

 

Facebook will build 1,500 homes on its Willow Campus in Menlo Park, and Google is backing the development of nearly 10,000 homes as part of its new Mountain View office development

 

Rising prices, though, could force smaller tech companies out of the Bay Area. They will struggle to attract the right staff, and there’s a real possibility that some will simply head to pastures new.

 

That’s what I did, and it’s working out well!

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