I just got back from San Francisco, where I had the opportunity to check out the area. From San Francisco to Santa Clara, I ride shared and talked to many of the hardworking men and women that are the heartbeat of the town. Your average Joe and Janes who police the towns, cook and serve the food, serve at hotels, and build the towns. They are the people who I lent my ear to this past weekend, as I asked about where to go and how to live there.
It is one thing to hear how expensive the community is but another to experience it. $5 per gallon gas, rent skyrocketing into the $5000- $6000 (per month) area. Food, clothing, utilities, insurance, everything was expensive compared to living on the East.
Every store I went into the clerk just handed me my items after I purchased them. A move that threw me back, because on the East I always had my item put in a cheap plastic bag. Yet in this town bags cost, and the consumer paid.
On my ride from beautiful Santa Clara toward the Googleplex, I asked the Lyft driver about the costs. He shared with me that the house he grew up in shot up from 700,000 to 3 million. A house that was not really fixed up and on the less attractive side of town. Rent averaged around $2500 per month. A deal was finding a place for 1200.
But this is nothing people haven’t heard before. San Francisco is a hard place to live in. So just move.
But then the question has to be where?
A community need the average Joe (and Jane) to operate. Without people to operate the stores, restaurants, hotels, and banks the city can not function. And people need a wage to live. The problem is that as a town is having to pay employees more to operate, they are then having to pass that cost to the consumers. Consumers need more money to pay the increased costs, so they go to their employer demanding more money in order to live.
But what do all this have to do with Google?
It is no question that having tech companies like Google, Apple, Facebook, and more operating here in the US is a benefit to our economy. They provide jobs that allow employees to feed back into the nearby towns and communities. But as the push for more tech companies increase, towns and communities are increasing the costs of rent (mortgage) to levels that only tech companies can afford. But unlike the nearby stores and restaurants, tech companies are able to pay the 6 figure salaries to support their employees. Add in the competition between tech companies to keep engineers from going across the way, and we are looking at the current situation happening in the Bay area (aka Silicon Valley).
So this lead me to the question on whether my love for tech is hurting communities?
Yes and no. Yes, because the more I invest in the ecosystem and products offered by Google, the more the company is able to continue to grow. Therefore continuing the trend of them hiring engineers at the costs propelling this cycle.
No, in that this should not lie at the feet of the tech companies alone. They are having to pay those wages to get engineers as a result of the increased housing prices and cost of living. As engineers are going to want a wage that is affordable to live in the area.
This seems to be an issue of both greed and municipal policies. Greed in the fact you have housing soaring to take advantage of the fact they have tech companies paying 6 figure salaries. By increasing rent to these outrageous prices, communities are able to make more on the same piece of land that they already owned. We are talking about over a 300% increase in profits for property owners, if they purchased the property about 15-20 years ago. And in a move to remain competitive with the current market trends, other properties are seeing an increase as well.
Municipal policies and laws could also be the cause of the increases. As taxes continue to increase, someone is forced to pay it. One entity required to shoulder some of the costs are businesses. As taxes are increased to pay for government employees, improve roads, and to fund projects, people and companies are having to pay those costs. To be able to pay for the increase in taxes, companies and employees are going to need more money, thereby continuing on a path that leads to the increased costs of living. Eventually this could lead to a collapse as the people are no longer able to shoulder the costs.
For now as we see this tech boom continue, there seems to be no signs of slow down as of yet. Especially now that Apple just reached the Trillion dollar company mark. Unfortunately for the restaurant workers, store clerks, hotel staff, security guards, shop mechanics, construction workers, firefighters, law enforcers, and other blue collar jobs, they are having to forego the dream of owning a home and scrap for every penny and dollar to be able to live. Something I could not truly appreciate until actually visiting the area myself.
But the people of the Bay area are tough. They do what they have to do to earn every cent they can. It is not hard to find a ride share there as a number cars have both a Lyft and Uber sticker. In an expensive community that would turn anyone bitter, the people there are friendly and helpful. Hotel drivers go out their way to let you know when your hotel bus will arrive. And when your particular shuttle do arrive, the driver is friendly and very helpful. Good luck being able to place your own bags in the back, before you can say “I” the driver already placed it in the back and is ready to get you to your destination.
I found myself just amazed at how “chill” everyone was. Where I, as an outsider, can point out how things are crazy expensive here, they are just keeping their heads up and working. Despite everything around them continuing to make life difficult, they find a way to make it. Whether it is through community by sharing homes, apartments and meals, working multiple jobs, or using their car to chauffeur, the people by the Bay continue on. Malls are full, iPhones and Galaxies in hand, people are living their life as a community of hard working, friendly, blue collared workers who admire the city they are in. For them the scenery, weather, and the culture keeps them there, as there is no other place like it anywhere else. And this is why they are not going anywhere.
So when you take the time to visit the people by the Bay, enjoy the weather, the area, the culture, but also remember to tip.