What's a well paying job?

[Saul Good]

Originally Posted by BCD

Not in SF, where a 1000 sq ft apartment can cost you 600k.

The median family income is $81,136 per year in SF. That's the entire family, so the average person makes significantly less than that.

[CrazyPhuD]

Originally Posted by Saul Good

The median family income is $81,136 per year in SF. That's the entire family, so the average person makes significantly less than that.

See let me explain to you how the system works out here. There are two factors in play, first is a good fraction of people rent because they could never afford to buy. Additional if the apartment that you live in was built before 1979(most were), then that apartment is subject to a form of rent control. This form of rent control allows for a landlord to only raise rent a maximum percentage, based upon inflation, per year. For instance for 2011 the maximum rent increase was 0.1%. This rent control only applies when you have been living in a place. If an apartment is empty a landlord can set the price to market rates. So in effect you will have a large number of people that if they have lived in a location for say 10+ years, they will not be able to afford to move any place else because they could not afford the rent increase. You have people that may be paying a couple hundred dollars a month in rent in the same building as people who are paying 2-3K per month for a similar apartment. Rent control sounds nice because it prevents people from being evicted for being unable to pay market rates. BUT it also traps people in their current apartments and reduces available supply driving up the rates for what ever is left.

A similar issue happens in the housing market. In CA when you buy a place you are assessed property tax based upon the sales price + a maximum increase per year of 1-2% in assessed value. The intent is to prevent the little old lady from being forced to sell her house based upon being unable to pay the property taxes because the value of her property has appreciated too much. Again you will have people who are living in houses that are assessed at 100-200K that are actually worth 1million+. If they were to sell those houses they likely could not afford to buy a nearby house even with the proceeds because they could not afford the property taxes. Again you trap people(and families, because a house can be passed to a family member without triggering a reassessment) in their houses. Again all this does is remove potential housing inventory from the market and raises prices for what it left since supply is reduced.

Look these plans are great things if you already live their or already own property because you will pay below market rates for what you have. However if you are a recent transplant you are going to subsidize all of those old residents because you have to pay more for your housing because of artificially reduced supply. All of these policies really punish new residents which is part of the reason that housing/pricing is so high and yes if you are new you need every bit of that 'huge' income to be on an equal footing as someone who's been here 20+ years.