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One effect of this problem is that when hiring, it's only viable to bring young single people to the bay area -- anyone with a family that needs to live in something bigger than a one (or 0) bedroom condo would need to be paid an unreasonable salary to afford it.

We had one employee quit after 2 months because his wife couldn't stand living in the 2 bedroom apartment they and their 2 kids were living in while they searched for a permanent residence - a search that never succeeded. He paid back the reloc costs, and said that was worth it.

There are a lot of perks to living in the Bay Area (the weather being one of them, there are few other places where you can go kayaking, biking and skiing in the same weekend), but if I were asked to move here today (rather than 20 years ago), I doubt I'd come due to the high cost of housing and lousy commute (with poor public transportation) for those that live farther away for cheaper housing.

>> I don't think this will happen on its own. You'll need a crash of some sort for the area to find its real prices. And it is alarming talking to the recruiters, whom seem to think that housing prices will only ever go up.

Well they aren't wrong. Yes, crashes like 2008 did happen and will likely happen again. But over a decade, you can safely bet that Bay Area housing will continue to appreciate. Why? Prop 13(0). The market dynamics of CA housing are severely warped as a result of Prop 13. Some of my family members pay ~1/20th of the monthly costs that their immediate neighbors pay (mortgages, taxes, etc) due to it. As a result, the supply is very strange and very limited. Some people are very rich when counting the price of the house. But if you take the real estate away, they are very poor. As such, they cannot move around in-state, ever. Reno is their only option. This affects traffic, schools, local taxes, really everything. And every year the effects get worse, and every year it continues to be on the book, mostly because young people don't vote. No discussion on CA housing can go on without talking about Prop 13's distortion field.

0: https://en.wikipedia.org/wiki/California_Proposition_13_(197...

It really depends on what you want, though. I'd rather be in a coliving space in San Francisco than in a big house in suburbia outside the Bay Area. As people's priorities and expected standards of living change, so does the market rate for different properties. And it seems like my generation is willing to sacrifice space for being in a large city.

Candidates who make this argument ("pay me 5x my current salary so I can afford similar housing") come across as super tone-deaf.

The cost of housing reflects the opportunity you find in the area. It's a matter of personal preference. If you prefer a big home and less opportunity, stay in the midwest. If you prefer to be where opportunity is greatest, and are willing to sacrifice on square feet, consider the bay area.

But to expect both reflects a lack of common sense. Market salaries and home prices are what they are.

Respectfully, I disagree with

> The cost of housing reflects the opportunity you find in the area.

The cost of housing reflects the market for housing which is driven by many factors, including local opportunity.

Again, with all due respect, the tone deafness isn't on my part (and I don't ask for 5x salary).

It is on recruiters calling me up, telling me how wonderful it is there, then offering salaries on par with, if not below what I am making or being offered elsewhere. I have to help them understand the very real aspect of opportunity cost, the huge negative impact, and that if they want someone like me to view this as an attractive offer, they are going to need to think about these issues.

Put another way, the symptom I alluded to is one where you wind up pricing pretty much all of the talent out of the area. Which, as the invisible hand of the market often does, fixes the problem for you.

Are some people willing to lower their quality of life, live in a dorm with N other people, in a space they cannot call their own, for exorbitant rates? Yes, of course. The article was about that.

Is this a stable scenario? I doubt it. I could be wrong, but I've seen too many of these cycles to buy into "housing prices always rise." Or, "the reason it is so expensive is due to opportunity."

The reason it is so expensive is due to rent-seeking behavior, driven in part but not in whole by opportunity. At what point will people say "no more"? That is the question I find interesting.

I can tell you that candidates from outside the bay area made all the same arguments in 1989, the year I moved to Cupertino from a very low cost state. And yes there were several booms and busts since that time.

So go ahead, place your bet.

>opportunity is greatest

Opportunity is emphatically not "greatest" if it does not include maintaining the lifestyle you can get elsewhere, and there is no plausible path for even recovering that level of comfort, much less exceeding it.

So it's the kind of "opportunity" where you can't afford the lifestyle you had before then.

Yes, exactly.