Salary & living in high tech silicon valley

[Rick Law]

Well, getting a job from Apple, Google, Facebook, etc with six figure income seem sweet, but finding a place to live would be sweating time...

_{Note: So as to avoid this to seem misleading, please note Apple and Google are in Santa Clara County, they are neighbor to the counties cited in the article.  Very close neighbors but not in them.  Only Facebook is inside one the three cited counties (San Mateo county).}

Article "HUD: $117,000 Now ‘Low-Income’ In 3 Bay Area Counties" CBS news, (San Francisco) Bay Area, June 26, 2018

"Remember when a six-figure salary meant you had a really good job? In three Bay Area counties, San Francisco, San Mateo and Marin, if you make below $117,400, you’re officially poor.
...
According to the latest survey by the Department of Housing and Urban Development, the median income in those three counties tops the entire country, and is so high that households making $117,000 would actually qualify to live in low-income housing projects.
...
...landed a well-paying job, but is only able to afford a one-bedroom apartment and will need to find a roommate soon.
‘People working at Starbucks, where do they live? You know, how are they able to do it?’
...
^{https://sanfrancisco.cbslocal.com/2018/06/26/hud-117000-low-income-san-mateo-san-francisco-marin/}

Article: "Several Google employees say they've lived in the company parking lot — here's why they did it", Business Insider, 2015

"A 23-year-old Google software engineer named Brandon has been living in a truck in the company parking lot for the past five months to save on rent...
...
Technically, you weren't supposed to live at the office, but people got around that by living in their cars in the parking lot of the office or the Shoreline parking lot
...
^{http://www.businessinsider.com/why-google-employees-live-in-the-parking-lot-2015-10}

[BrianHG]

I actually just saw that report + one with the concerns over the lower income workers, like security guards and secretaries and janitors.  They can even afford to rent a single bedroom, let alone be able to do much else without at least 3 jobs.  (I believe it was a docu on VICE news)  These mega corps have raised the price of living in the area so high, that if I were to start my company out in the area, I would have to pay department heads in the neighborhood of 200k$ just so they can afford a 1 bedroom apartment, car, food, and some basic necessities.  Paying programmers at the 125K-150K region would just make ends meet for them unless they have shared accommodations with a partner with a similar salary.  Anyone under 100k would be living in my parking lot...

It's like I would have to get a small apartment building with ground office floor, lower the salaries, but offer free living accommodations for employees, or, at least a reasonable half priced rent for employees.

[The Soulman]

I have to ask, are there any benefits for having your company in such region?
Especially for software companies?

[bd139]

I have to ask, are there any benefits for having your company in such region?
Especially for software companies?

No none at all other than status among other tech companies.

It’s a bubble and it’s going to burst. 

I’ve run teams distributed world wide.

[james_s]

I have to wonder why anyone would even take a job like secretary or janitor in that area unless it paid grossly inflated wages relative to more reasonable regions. Jobs like that are available in areas with much lower cost of living. The bay area is nice, but it's not *that* nice.

[CopperCone]

well a big benefit for your employees is that they are tempted to jump ship to another almost identical company whenever they get pissed at your management and they drive by fifteen similar locations on the way to work, so you need to hire ferocious lawyers to keep those chains attached (management control is not possible because unlike the technical employees, which have like a bit of specificity, the managers you can probably relocate on the fly daily and have them not notice unless the color of the cubicals are different, and even then they might just think they are on the wrong floor not a different company)

I wonder how that whole ecosystem functions, is there even a clear chain of command in the individual companies or do they belong to a group consciousness based on employment density alone. Like ultra high mutual inductance between corporations. Can you actually lose your job there unless your an unfortunate physicist? Normally the housing relocation would at least offer some kind of inconvenience, but its really bizarre there.

I think that's part of the reason they have crazy ass benefits in those places, game rooms, etc... so you at least stay in the place with the same access card if you like it.

Its like a union.. but everyone is in the union, even the CEO's. An invisible union. But despite those great benefits you have the second law of thermodynamics making the housing market go crazy. So some how realtors and tax men are receiving the union dues.   

Now with the increased use of internet labor distribution living there is eventually going to become like owning a taxi medallion if you are doing something unrelated to hardware testing/finishing (someone elsewhere can make the base schematics probably). Will it be a gradual decay or a collapse though?

[wraper]

I have to ask, are there any benefits for having your company in such region?
Especially for software companies?

You have a lot of specialists available in different areas you may need. The downside is, being there is very expensive. Both for employees and companies. Also there are a lot of investors and companies you may need to work with.
https://en.wikipedia.org/wiki/Sand_Hill_Road

[BrianHG]

[Rick Law]

I actually just saw that report + one with the concerns over the lower income workers, like security guards and secretaries and janitors.  They can even afford to rent a single bedroom, let alone be able to do much else without at least 3 jobs.  (I believe it was a docu on VICE news)  These mega corps have raised the price of living in the area so high, that if I were to start my company out in the area, I would have to pay department heads in the neighborhood of 200k$ just so they can afford a 1 bedroom apartment, car, food, and some basic necessities.  Paying programmers at the 125K-150K region would just make ends meet for them unless they have shared accommodations with a partner with a similar salary.  Anyone under 100k would be living in my parking lot...

It's like I would have to get a small apartment building with ground office floor, lower the salaries, but offer free living accommodations for employees, or, at least a reasonable half priced rent for employees.

That cost is unbearable by the average is because decision makers don't have to live with the impact of their decisions.  At least that is the conclusion of Dr. Victor Davis Hanson. (Senior Fellow in classics and military history at Stanford University's Hoover Institution)

VDH (Victor Davis Hanson) apart from being a historian, is also a farmer.  He lives in his farm house (5th generation in the same house).  So he commutes from average folk's area to the "ivory tower" and sees the elites vs average more than most ivory tower dwellers.

I have to wonder why anyone would even take a job like secretary or janitor in that area unless it paid grossly inflated wages relative to more reasonable regions. Jobs like that are available in areas with much lower cost of living. The bay area is nice, but it's not *that* nice.

VDH actually thinks the area is nice, very nice.  Sitting in his Stanford University office, year round temperature ~70F, never need to turn on the AC or the heat.  So decision makers (or academia) think they can increase the cost of electricity to X whereas poor folks (in his words) goes to Walmart just to be in air-conditioned environment to avoid the heat.

In his view, California now is a Medieval society.
http://victorhanson.com/wordpress/beautifully-medieval-california/

[ataradov]

By living in a van for a couple of years, you can make enough money to buy a house some place less stupid.

[rstofer]

I have to ask, are there any benefits for having your company in such region?
Especially for software companies?

Stanford, cross-pollination, lots of talent in a small area and so on.  The companies aren't there for giggles, they NEED to be there.  All the brains of technology in one small area.  Synergy!

The employees will take the view that they don't want to relocate to some one company town in Texas, New Mexico or Colorado.  They can change jobs by just driving in the wrong parking lot in the morning and get a raise for doing it!

I worked there from 1976 until I retired in 2003 so nearly 30 years.  About 10 years in I moved to the Central Valley - about 60 miles from where I worked.  Not a bad commute in the early years - about an hour.  It sucked as the Central Valley became the default bedroom community for Silicon Valley.  As far out as Stockton (90 miles), people that live there are commuting to the Bay Area.  Now I read that they are commuting from Sacramento!

Those articles are all biased, every one written with an agenda.  Of course entry level workers can't afford to live in the prime locations where a shack sells for a couple of million.  They just need to commute from further out.

It doesn't pay to get in a bidding war with people willing to pay $2 million for a post war tract house:
https://sf.curbed.com/2018/3/2/17073100/silicon-valley-house-home-sunnyvale-record-price-crisis

It also doesn't pay to drop out of college.  There are some good paying jobs for graduates and post-graduates as long as the degrees are in STEM.  Two such people, both with good paying jobs, will do just fine.  They're known as DINKS - Dual Income No Kids.  They can party hearty knowing their property values are going up, regardless of how much they paid.

Until the next housing crisis...

[rstofer]

Now with the increased use of internet labor distribution living there is eventually going to become like owning a taxi medallion if you are doing something unrelated to hardware testing/finishing (someone elsewhere can make the base schematics probably). Will it be a gradual decay or a collapse though?

If that were true, all of the programmers would be working from home in their jammies.  I assure you, that isn't the case.  Look at the size of the new Apple campus, Microsoft has a campus, so do hundreds of other companies.  All that square footage is filled with people - including programmers.

Team projects don't benefit from mixed locations.  More gets done in the cafeteria over coffee than could ever be done over Skype or any other collaborative system.

[CatalinaWOW]

There are many benefits to the Bay Area.  In addition to others mentioned there is excellent air transport to the rest of the world, among the best in US access to Asian sources for HW, parts and talent, and easy access to a variety of recreation from ocean sports to skiing in the Sierras.

But the drawbacks are piling up.  Longer commutes to lower cost areas was one adaption that made it bearable, but that is reaching its limits.  While I have known people who do several hour commutes each way to work, it is no way to live and most do not last long doing it.  Grandfathering, works in California because of Prop 13.  Much of the support population bought decades ago when prices were lower and can afford to stay because taxes don't go up if they don't sell.  But those folks are aging out or cashing out and the new set point isn't working too well.

Many companies are moving part or all of the their operations to lower cost areas.  Either near other, not so bloated areas or within easy travel distance of the core operation in Silicon Valley.  The long term prognosis is probably somewhat like the Boston area, which once had a somewhat similar reputation and suffered the same kind of pricing problems.  It hasn't gone away, just faded back into the pack sort of gracefully.

[Kjelt]

I think it is for a large part the name which is well build up since the 70s but should not be a guarantee for the future. If you start a startup company with a hipster image and product you probably raise millions more from investors than if you start from Camden, New Jersey. Image.....

[Red Squirrel]

Personally I would have no interest in working for these big companies, it sounds great and prestigious, but at the end of the day, with a company that big you're just a number and places like silicon valley are super cut throat.  If you're not constantly giving it 150% you're just a nobody.  The salaries are great but costs of living are crazy and you're in a huge city.  Not my idea of living personally.

I work at a NOC making around 80k in a small city where it's more laid back and not really stressful. Not a prestigious job by any means but it pays well and I get to live in a house in northern Ontario where I'm walking distance to real nature and 3-5 minute drive from work.  Would not have it any other way.

[CJay]

By living in a van for a couple of years, you can make enough money to buy a *very nice* house some place less stupid.

FTFY

[rdl]

Obviously, the best job to have in Silicon Valley is "landlord".

[CopperCone]

I think living in a van for a few years will result in the need for an expensive private psychologist for a few years.

[bd139]

Not so sure. I had a maths teacher who lived in a van. With random floozies. And a snake. Haven't worked out if he was a genius or a madman yet.

[CJay]

Genius and madman are not necessarily mutually exclusive...

[schmitt trigger]

I had a very nice offer from National Semiconductor in the early 1990s. The salary offer was great, there was a signing bonus, and I would be working on topics which I was greatly interested in.

However, I was already married, my wife was not very fluent in English so her job prospects were nil, and had two small kids.
Before I signed.......Spreadsheet in hand, I calculated and re-calculated all the expenses and possible solutions to make ends meet. But no matter what I calculated, there were no solutions unless I was willing to go thru significant personal sacrifice as compared to Dallas, where we were living at the time.

Therefore, with the heaviest of hearts, I had to decline the offer.

Why companies set shop there?
As others have mentioned, the incredible talent pool. Synergy. Technical critical mass. Similar to Boston's technical corridor in the 50s and 60s. And similar to what is happening at Shenzhen nowadays.

[schmitt trigger]

I think living in a van for a few years will result in the need for an expensive private psychologist for a few years.

Reminds me of the late Chris Farley's over-the-top SNL character: "I lived in a van, down by the river".

[Rick Law]

Obviously, the best job to have in Silicon Valley is "landlord".

Short term only...  too short even to pay off the interest portion of the property mortgage.  You can bet your bottom dollar some SJW would introduce rent control.  Take a look at places like NYC, Philly, or many other older cities.  Owning a rental is a owning a white elephant - nothing but an albatross.

I think companies like Google, Facebook, and Apple; they are almost like a cult because they have their own culture, believes, and ways of live -- and mostly young as least from what is visible.  They should have university-like dormitories for their employees or like the mining companies in the old days.  Google janitors and programmers will be assigned their barracks upon reporting to work.

[rstofer]

The mortgage payment for a $1 million house is about $5000/mo or $60,000 per year.  If the home prices rise at 6% per year, the value is exactly tracking the payments.  And the payments are tax deductible - I think...  I'm not entirely sure what Trump's tax cut does.  I'll find out next April.  Selling a primary residence is not taxable if you have lived in it for two of the last five years but the gains are limited.  In theory, a married couple can take $500k of profit and, as long as they use it to buy another residence, no tax.  Take the profit early and RUN!  Buy a mansion somewhere else and kick back.

The bigger problem is the down payment.  This is typically 20% and $200k is a lot of cash.  The good news is VA loans cover the first $679,650 of the mortgage amount in the Santa Clara area.  So, no down payment on the first $679,650 and 20% of the last $320,350 or about $60k.  That's a lot more manageable.  But you have to be a Vet...

When I moved to the area in '76, I thought new houses in Milpitas (very near the heart of Silicon Valley) for $50k was outrageous.  Duh!

Moving up to the $2 million neighborhood will require a LOT more down payment and the monthly payment will be staggering.  OTOH, if the price goes up by 6% per year, you still make out.  You also run out of the capital gains exclusion sooner so you can get out of Dodge sooner..

As was explained to me when I turned down a $100k house in Santa Clara back around '83, "You need to be more flexible in your thinking!".

[CopperCone]

at least get a trailer. Or a freaking box truck.

Van's are just not designed to live in. High noise levels, reflections, cramped, poor insulation, living on suspension springs.... you can't even stand in the thing. I don't understand how anyone would be in a van for any decent period of time and be mentally OK without being intoxicated/turning to alcoholism. Get done with a stressful 8 hour shift to go relax in a van??

Not to mention air conditioning, being in proximity to gas fumes while its running, engine vibrations, it sounds like a recipe to make you go insane. Plus people will piss on it, sit on the bumper, kids might fuck with it, bang on the side walls, steal your tires, cops..

I imagine people getting out of van life need rehabilitation like people getting out of prison

even shitty apartments are bad for you:
https://www.theatlantic.com/health/archive/2013/12/the-health-risks-of-small-apartments/282150/