Apple Looks Beyond Silicon Valley to Improve Recruitment and Retention

[bradl]

There’s never going to be an oversupply of housing in an area like the Bay Area, let alone an oversupply at a time when anyone with a pulse can get a mortgage at near record-low rates. The whole idea is a pipe dream.

References:

Bay Area: San Francisco, Oakland, Fremont, Milpitas, San Jose, Cupertino, Stanford, Redwood City, Sunnyvale, Hayward, Livermore, Dublin, Mountain View, Palo Alto, Berkeley, Emeryville, etc.
North Bay Area: Mill Valley, Richmond, Marin, San Rafael, Novato.
Central Valley: Stockton, Modesto, Galt, Lodi, Tracy, Manteca, Ripon, Sacramento Area

Never going to be an oversupply of housing in the Bay Area? You're being wishful. They need to have a SUPPLY before they can have an oversupply! 😛

Besides, even up to 15 years ago, the writing was on the wall for the Bay Area. See, I get calls for job offers in the Bay Area roughly every day, and each one I turn down. Why, people ask, especially when that money is good? Well first, if you're looking at paying almost $2000/month in rent for a 600sq ft. apartment, you're looking at 3000-4000/month in rent for a house (and not even a decent size one for a single family), and worse for something with room to grow. Then factor in the mandatory earthquake insurance, and it isn't worth it.

Everyone in the Bay Area sees this, to the point where they would rather live outside the Bay Area or North Bay area, and make the drive in every day. So they'll buy a house in Stockton, Manteca, Tracy, or even the Elk Grove area in the south part of Sacramento, and make the commute every morning. Our traffic reports start at 3am, because that is the most convenient time for those who work in the Bay area to drive in without any major problems, accidents, or jams.

That's a 2.5 hour drive. So they'll start out at 4 or no later than 4:30am, and if traffic is good, they'll make it to the office around 7:30 at the latest. If not, they're not getting in until 8:30 or 9. If they don't get out by 2:30, they're going to catch the same traffic on the way back during the evening rush, pushing them not wanting to leave until 7. They get home by 9:30 or 10 to just go to bed and do the same thing in the morning.

No time with family, no time to rest, no kids activities, nothing.. except for a cheaper house in which the difference in price is mostly eaten up by the gas money for the commute. That tradeoff is why we are seeing housing prices in the North Bay area and Central Valley skyrocket, while those in the Bay area are trying to hold on to what they have, and if they are selling, they are still getting multiple cash offers, placing everyone that could use that house because of where they work, family, etc., out of the picture.

So taking that $3000-4000/month in rent for a house comes out to a good $48000/year, which is a good down payment on a 3500sq ft. house in Council Bluffs IA, putting you 15 minutes at the most on a horrible commuting day from 2 data centers, the entire business/financial district of Omaha, the airport, and 25 minutes from those other aforementioned data centers.

Call me a stickler on this from being from the midwest, but I've always subscribed to the thought of "If you can not get from one end of town to the other in 30 minutes or less, the town is too big". That is applicable everywhere I've lived: Omaha, Oklahoma City, Sacramento, Portland/Vancouver, and Las Vegas. Hell, out of all of them, Vegas has had the most growth: I moved there in 1998 when they had no more than 650,000 people, and left when they were topping 5 million. I could still get from the Summerlin area in NW Las Vegas to Boulder City in 25 minutes.

Bay Area? Nice place to visit, but no way would I move there.

BL.

 

[steve333]

I don't understand how you can possibly think rent control, which has been tried (and failed) many times in the past, will somehow magically work now...

Done right it can work, it was too restrictive before.
What I don't understand us why you think rents swill magically go down by adding a few new apartments. The population is continually increasing with no end in sight and there is massive collusion within the industry. Rents will only go down if they are forced down and since housing is even more of a life necessity than insurance it is unconscionable that they haven't been forced down by now.

 

[jk73]

Rents will only go down if they are forced down and since housing is even more of a life necessity than insurance it is unconscionable that they haven't been forced down by now.

There’s no God-given right to live in the Bay Area. Is it ”unconscionable” that rent prices in Malibu haven’t been “forced down”?

 

[bradl]

There’s no God-given right to live in the Bay Area. Is it ”unconscionable” that rent prices in Malibu haven’t been “forced down”?

If there was a God-given right, then I will probably be one of the many biggest sinners in the world, because that is one place I refuse to live. That, and the LA Basin. Having to drive an hour just to get to the edge of the city is too much city.

BL.

 

[steve333]

There’s no God-given right to live in the Bay Area. Is it ”unconscionable” that rent prices in Malibu haven’t been “forced down”?

They should be forced down everywhere. Some form of rent control should have been enacted in around the year 2000 when rents started going up by huge amounts. It's not acceptable to force people out of housing by increasing the rents by $200-300/month

 

[jk73]

They should be forced down everywhere. Some form of rent control should have been enacted in around the year 2000 when rents started going up by huge amounts. It's not acceptable to force people out of housing by increasing the rents by $200-300/month

And why did rents start “going up by huge amounts”?

 

[bradl]

And why did rents start “going up by huge amounts”?

Cost of living goes up roughly 10% every 10 years. Add into that the manipulation by the banks and investors with credit default swaps, sub-prime mortgages with a $0 down payment that people wouldn't be able to pay off, then the low supply of houses/apartments compared to the demand of the amount of people living in the area, and there's your recipe as to why the rent and mortgages started to go up by huge amounts.

And that isn't even getting into the cost of required insurance, especially earthquake insurance being required there.

Even living out of the Bay Area poses risk. The Sacramento area is supposed to be seismographically stable, so we aren't required to carry earthquake insurance here (some places, however are required to carry flood insurance, as downtown Sacramento has the intersection of 2 rivers that do tend to flood if enough rain comes in the winter) yet we felt all 8 earthquakes that occurred yesterday: a 3.2 between Vallejo and the Bay Area, one 4.8 miles west of Stockton, and a 6.2 with 4-5 aftershocks of 3.2 or lower about an hour west of Sacramento and 30 minutes south of Carson City. We run the risk because if we have damage from it, our insurance won't cover it unless the damage causes a fire, which then insurance will cover.

But put all of those together, and you have the perfect reason why the expensive cost of owning property in the Bay area is passed down to the tenant.

All the more reason that now in the pandemic environment we are in, it is easier to move out of the area altogether and still keep your job in the Bay area. Even the cost of flying into the area for a meeting or working in the office and living out of state is cheaper than living in state and closer to the office.

BL.

 

[steve333]

And why did rents start “going up by huge amounts”?

Large companies started buying out mom and pop owned complexes, population increases, in my area large numbers of university students that UCSD didn't build dorms for

 

[amartinez1660]

Market forces will solve the issue, you will see more and more companies making satellite operations and working from home. I think certain regulation can work like controlling rent increase and certain restrictions on speculation buying. Not sure how the Market is in SF but in many Canadian Markets where I am there are many empty condos owned by foreigners. To address this certain jurisdictions have introduced taxes on these properties that are vacant and foreign owned and also a 15% tax on the purchase if you are not a citizen or resident.

Been living in Canada for over 10 years now, Quebec. Now that I’m a bit less blind to the way of things here, that doesn’t strike me like a solution to the problem and more of an opportunistic approach to get more cash through those taxes and purchases.
There’s definitely a problem though, during summer have seen marches and complaints regarding house renting, apartments, etc. When I arrived there was the whole Vancouver housing thing having reached Toronto.

 

[Bobby Smallwood]

Been living in Canada for over 10 years now, Quebec. Now that I’m a bit less blind to the way of things here, that doesn’t strike me like a solution to the problem and more of an opportunistic approach to get more cash through those taxes and purchases.
There’s definitely a problem though, during summer have seen marches and complaints regarding house renting, apartments, etc. When I arrived there was the whole Vancouver housing thing having reached Toronto.

I was born in Montreal and left for around 12 years but have recently returned. Home ownership in Montreal is the lowest in Canada and the rental control is very strike in Quebec, you can only raise rent at the rate of inflation more or less. When Toronto and Vancouver instituted the foreign buyers tax, many investors started buying in Montreal and now prices in montreal have skyrocketed. I was flipping house in Toronto at the time that they made the new tax and it did have a chilling effect, I was able to sell my properties right before the new tax came into effect. A friend of mine made the same house but was a year behind me and sold the house for $800K LESS 14 months after I sold min. I was able to sell in 1 month vs 10 months and I made 800K more.

I was fortunate and used the money I made to buy properties in Montreal and a few years later they have almost double in value. The Government doesn't want to stop this because building homes is what is driving most of the economy, It's unfortunate because it is only making the poorest even more vulnerable. Montreal may not have the highest real estate prices in Canada but Montreal also has the lowest salaries and highest taxes for Major cities in Canada. My Cousin who was a Nurse in Montreal recently moved to the USA, her salary more than doubled and her living expenses are much lower. I'm fortunate, to have my own business otherwise I would never have returned to Quebec.