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All the crazy things happening in San Francisco because of its out-of-control housing prices
All the crazy things happening in San Francisco because of its out-of-control housing prices
Melia RobinsonMar 7, 2018, 00:59 IST
Melia Robinson/Business Insider
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People are leaving San Francisco in droves as the cost of living reaches new highs.
A recent report from real estate site Redfin reveals that San Francisco lost more residents than any other city in the country in the last quarter of 2017. The great migration is far from over. Last month, 49% of Bay Area residents said they would consider leaving California because of the cost of living, according to a survey of 500 residents by public relations firm Edelman.
Here are all the crazy things happening because of the Bay Area's insane housing prices.
This is how people outside the area imagine living in San Francisco.
And this is the reality.
The median-priced home in San Francisco sells for $1.5 million, according to Paragon. It's not uncommon for buyers to bid hundreds of thousands above asking and pay in all cash.
$1 million doesn't get you much. In the ritzy Pacific Heights neighborhood, you could buy 697 square feet of home, and in the affordable Sunset District, you get 1,115 square feet.
A person who wants to buy property in the city needs a household income of $303,000 in order to afford the 20% down payment on a $1.5 million home, according to Paragon.
Only about 12% of households in San Francisco can afford the median-priced home.
In Silicon Valley, a recent survey showed that people who earn up to $399,999 a year in income consider themselves middle-class because they still can't afford to buy homes.
People are going to extreme lengths in order to afford living in San Francisco.
When Misa Gidding-Chatfield and Mike Kraft decided to move in together, they had two options: Buy a home for half a million dollars in the outskirts of the Bay Area (which would leave them with an hours-long commute into San Francisco) or live in the Bay on a boat.
Ten years after making the decision to live on a boat, the couple plans to reside at sea for the rest of their lives. The couple's monthly expenses include payment on the boat's mortgage (they have about $150,000 left on their balance) and a $900 slip fee to live aboard the boat.
In 2014, Heather Stewart and Luke Iseman were spending $2,200 a month on rent in San Francisco when they decided to downsize and live out of a tiny house of their own making.
The couple bought a shipping container online for $2,300, had it delivered to a vacant parking lot in the East Bay that they leased, and converted it into a tiny house.
Stewart and Iseman makes a living as the pseudo-landlords of Boxouse, a maker space where amateur builders and hobbyists can construct the tiny homes of their dreams.
Peter Berkowitz, an illustrator, spent $400 a month to live in a homemade wooden crate in a friend's San Francisco apartment. He described it as "cozy" in a 2016 interview.
His pod contained a drop-leaf desk, a slanted backboard, and string lights. He was later evicted when San Francisco's chief housing inspector deemed living in boxes illegal.
People are spending over $1 million on the "earthquake shacks" built as temporary housing for the homeless after the 1906 fires.
This earthquake shack in the Outer Mission was in desperate need of TLC when it sold 17% above asking price for $408,000 in 2015. It received four all-cash offers in just 10 days.
The Bay Area's insane housing prices have caused people to flood the rental markets. San Francisco's median two-bedroom rent of $3,040 is above the national average of $1,160.
Others pack their bags and leave for more affordable housing markets. San Francisco is experiencing a shortage of U-Haul moving vans, which has inflated the cost to rent one.
It costs $2,000 to rent a truck going from Silicon Valley's San Jose to Las Vegas, but it only costs $100 the other way around, according to an investigation by the San Francisco Chronicle.
Some people move away but keep their high-paying jobs in the Bay Area.
Tom Fowkes, a nurse living in Pennsylvania, told the San Francisco Chronicle that he commutes 2,600 miles to work in Oakland. Fowkes flies home about every two weeks.
The town of Bend, Oregon, is becoming a commuter town for a select few people, according to CNBC. Some people make the 10-hour drive, while others opt for the 70-minute flight.
