Saturday, February 10, 2018

The "Exodus" From San Francisco



The Lab Manager asks:
Off topic, but I would like to hear RW's view:
http://sanfrancisco.cbslocal.com/2018/02/08/san-francisco-bay-area-mass-exodus-residents/
There is a contradiction in the story. It also says:
Joint Venture Silicon Valley’s own study of the out-migration says workers are moving to Sacramento, Austin, and Portland due to a number of factors. But topping the list is the high cost of housing.
If the cost of housing is high, and it is very high, there is no mass exodus. What is occurring is that second tier workers are leaving for areas where the standard of living is lower and SF is becoming an exclusive city for the very wealthy and the very high-income workers (and, of course, the homeless).

For the very rich in the area, money is no object. There is a very wealthy money manager in the area who outbids for the house cleaning services of a woman who is a talented professional and could earn good money in her profession but he pays her more to clean his house.

A second tier earner is just not going to compete against these kind of people. And with building restrictions so onerous there is not a lot of new housing on the market to push rents down for the second tier. The "exodus" is not about the collapse of the city but that it is becoming only a city for the rich (and the homeless)

According to Brookings, San Francisco’s top 5% of earners are blowing the rest of the country out of the water. The top 5% in San Francisco earn 17 times what the bottom 20% earn. The average for the top 5% in the 50 biggest US cities was 11.6 times what the bottom 20% earned.

This has been going on for awhile, San Francisco’s top earners made at least $423,000 in 2013. No city’s top earners come within even $100,000 of those in San Francisco.

 -RW

11 comments:

  1. Thanks RW.

    But if you watch the video, at least one person is not happy about the sanctuary cities policy or leftard politics of the state.

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    Replies
    1. But was he a white European male you can fantasize about, Labby?

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    2. If you are white person Torres, please off yourself. You are an embarrassment to any humans on this planet. Pretty clear you are too stupid to answer any of the statistical evidence on race and IQ and culture.

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    3. Ha ha ha!

      Great comeback, buster.

      Paraphrasing captain Kirk: "I laugh at the 'superior intellect'".

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    4. When are you moving to Haiti then? It's all blacks who live in filth, stench, and squalor. Am I a racist to point that out? Show me any functioning predominately black American city or country that is on par with anything in the West or the East like Singapore or Hong Kong?

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  2. I listen to about eight minutes of Michael Savage each week. He said what you said as well, Robert, last night in that eight minutes.

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  3. That is very much what is happening but the companies from which these high earners derive their income will at some point eventually starve for employees in this very rich and the homeless demographic.

    Just some math. A typical engineering salary in that region as I understand it for someone with good experience is a $150K a year. After taxes that come from that figure (income, real estate, FICA, etc) we're looking at ~90K. After the sale of midwest house he'll have at least an hour commute and a 1.25 million dollar mortgage. At 4.5% that's $56K in interest. That leaves him with $33.75K from which to pay principle on the mortgage, eat, have transportation, and it all costs more there. For this he's probably working 60-80 hours a week because he can't afford to lose his job. How much more of this will people put up with?

    At some point the only people who will be available to hire are those already there. That population will decline over time. How long can it go on? I don't know but they need people who know how to do math and the math is pretty ugly right now, but some gamblers still take the bet that they'll come out ahead in the end with stock options and such. As the bet worsens there will be fewer takers.

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    Replies
    1. If people stop "putting up" with this, then the housing prices will drop because fewer people will be bidding them up.

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    2. Ideally. But with enough government restrictions and fed money flowing that may or may not happen. Also it requires sellers to agree to lower prices and if they just may be stuck there unable to sell and unable to walk away because of what they have into it. That is the supply of homes for sale may simply collapse to compensate.

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  4. The real question is, are you moving anytime soon? I have friends in California, have thought about moving there, but the taxes just seem so onerous. Maybe it's overblown.

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  5. It's the people who want to raise a family that must leave. This will play out in the public school system first. San Jose is closing 3 schools due to crashing enrollment. Catholic schools will also be affected.

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