News

The meaning of 'middle class'

With high incomes and high mortgages, Palo Altans say the label is about more than money

Education? Home ownership? Sports cars? What it means to be middle class is becoming increasingly more difficult to define in Palo Alto, where even those earning well above $200,000 annually struggle to make ends meet. Photo by Veronica Weber.

• View all sections of this story, complete with pictures, charts and more, here.

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From the outside, Palo Alto is a startup wonderland filled with Teslas, baby-faced millionaires and multi-million-dollar Eichler homes.

"It's a town where even the homeless have laptops," jokes one entry on the online Urban Dictionary.

And in some respects, this stereotype holds true. Palo Alto's median household income is $137,043 — more than double that of the U.S. at large. Median home sale prices reached an all-time high at $2.67 million in 2017, and at least 2,300 startups call the suburb home.

But this vision of a foie-gras-nibbling, tree-lined paradise doesn't necessarily match the reality of those living here who are just trying to make ends meet in one of the most expensive communities in the nation.

From the inside, Palo Alto is a place where some monthly rents have increased by $2,000 in a single year, and younger families find themselves drowning in mortgage payments topping $15,000 a month. Everyone from doctors and top-tier tech workers to the self-employed and those with graduate degrees feels the squeeze.

This high cost of living has changed traditional ideas about status, spending and what it means to be middle class.

To more closely examine this unwieldy middle in Palo Alto — a place where spectacular wealth and economic struggles coexist — the Weekly compiled 250 anonymous responses to a short survey, as well as interviews with community members who consider themselves in some way to be middle class. In doing so, the Weekly found the label to be amorphous. Nearly everyone described themselves as "middle class" regardless of their income or spending habits. At the same time, for all of their wealth relative to the rest of the country, many of those interviewed requested that their income levels not be published; others expressed discomfort about using their names in connection with such personal information.

In the end, the picture that emerges of the middle class in Palo Alto is one in which "keeping up with the Joneses" is increasingly difficult, coupled with the fear that the city is digging itself into unrecoverable wealth and income inequality — leading some residents to question whether it's even worth it.

Defining 'middle class'

Pew Research Center defines the middle class as those who earn between two-thirds of and double the median household income for a given area, after adjusting for household size. According to a recent analysis using this definition, Santa Clara County's middle class shrank to 47.2 percent as of 2014 — down 11 percentage points since 1989.

For 2016, the national middle class encompassed those earning between $38,411 and $115,224 annually. In Palo Alto, the range was between $91,362 and $274,086 for 2016, the U.S. Census' latest estimate of median household income (with an average household size of 2.4 people).

But income alone does not determine who is in the middle, Palo Alto residents say. Educational attainment, culture and spending choices, for example, also factor into the self-identification.

One respondent with a household income between $250,000 and $300,000 for a family of four wrote that his family is upper-middle class because they don't spend more than $500 in a single purchase — except for four weeks of travel each year, housing, their children's activities and $1,700 each month on farmers market food.

Meanwhile, another person making between $35,000 to $50,000 yearly for a family of two wrote she is also upper-middle class because of her credentials as a former professor with advanced degrees. A third said their four-person household identified as working class while making $150,000 to $200,000 because there was "not room to have any extras."

"There's the financial structure — how much you make and how comfortable you are with it — and social structure, based on where you came from," said Ramji Digumarthi, a former aerospace engineer living in the Fairmeadow neighborhood of Joseph Eichler-developed homes. "It's a hard thing to define because everyone looks at it in different ways."

Multiple residents said that the term had more to do with educational background and culture than income or wealth. Jens Jensen, a semiconductor engineer from Germany, struggles with the term for this reason. Growing up in an industrial town, Jensen once had a job unloading bananas off ships, and he still feels connected to a more blue-collar attitude. "Middle class" implies a host of attributes he doesn't want to necessarily associate with — the belief that everyone should achieve higher education, for example.

Palo Altans' quickness to claim the middle-class label, despite their income diversity, is explained by research. Across income levels, "middle class" is still the most popular self-chosen designation, according to Pew Research. And in a recent book on the lives of New York City elite, a sociologist found that the wealthy feel stigmatized, instead choosing to describe themselves as "affluent" and "fortunate."

"I know that we're lucky and I don't want anyone to think I'm bragging, or holding this over them or anything like that," a survey respondent who requested anonymity said in an interview. The family of three's combined income is between $300,000 and $350,000. "I guess I don't want to be judged by it, that's probably the best way to put it."

Rita Lancefield, a 79-year-old in the Duveneck neighborhood, views class labels in the same way as Pew: income on a local scale. But she added that the relative terminology hides other privileges that are obvious from the outside. Most Palo Altans — aside from some pockets of residents — have unique elite educational and work opportunities that cannot be brushed aside.

"In terms of lifestyle, I'd say almost everyone in Palo Alto is upper class," Lancefield said. "You take education, you take cultural opportunities, you take cost of living, you put all of these together — I think you'd have to say on a nationwide scale, almost everyone in Palo Alto is upper class."

High income but 'house poor'

But for many families, access to opportunity doesn't change the sense that they're squeaking by from paycheck to paycheck. And being able to afford one's housing directly correlates with people's notions of class.

In 1976, Karen Price moved to Palo Alto on her 24th birthday to pursue "the dream of California." A Chicago native, she first rented a studio apartment on a minimum-wage salary at Kepler's Books in Menlo Park before becoming a "Rolfer," a type of bodywork therapist. She never bought a home; by the late 1980s when Price was ready to invest, her mother thought that $200,000 was too much and refused to lend her money.

Price has run her own successful therapy studio for nearly 40 years but has been forced to raise the rates of services to keep up with rent hikes on her apartment. She worries it won't be enough, but at this point doesn't know where she would move.

"Unfortunately, it really hits a lot of self-employed professionals ... because there kind of is a ceiling or cap on your income," she said. "At a certain point you can't really charge too much more, and you can't really work too much more."

The loss of the "service class," as she put it, has severely undercut the sense of community — where a heterogeneous mix of professionals and tradespeople intermingled, creating stability and diversity. Instead, the city's becoming a place full of tech companies and workers that come and go.

Other residents also spoke to a stark divide between homeowners and renters. After moving to Midtown in 2015 to begin work at the East Palo Alto branch of San Mateo County Libraries, 28-year-old Kelly Reinaker was worried about her financial stability as a renter. Most people consider renting as a way to save up money to purchase a home. But despite financial support from her parents, Reinaker feels that her rent leaves no room for emergency circumstances or long-term purchasing power.

"Am I middle class, or what does that mean today?" she said. "When half of your monthly income goes toward rent, it's really hard to save anything substantial over the period of a year."

According to Census data, about 33 percent of Palo Altan renters spend more than 35 percent of their income on gross rent. But across Santa Clara County and California, an even higher number of renters are coughing up such a hefty portion of their income — 39 and 47 percent, respectively.

High home prices create "two realities" that in turn lead to distinct lifestyles and sets of concerns, according to some residents. Lancefield, of Duveneck, said that she sees a division between older homeowners and younger, wealthier families, who are in much more stressful economic situations. Another resident described the two categories in Palo Alto as: "old and rich."

Lancefield described a typical younger family as having two jobs, a backbreaking mortgage, three kids and significant taxes. Between work, activities and payments, many people in Palo Alto just don't have the bandwidth to develop neighborhood relationships, she said.

"You don't have time to talk to your neighbors. You can't," Lancefield said, noting her own block has done a good job with maintaining friendships and hosting social gatherings. "It takes a really conscious effort to talk to your neighbors and bring about some kind of community feeling, and I think that's something we've really lost in Palo Alto."

She added, "I really feel for the younger families who are in our neighborhood now because it's really hard for them."

Owning a home, as elusive as the achievement may be, still has its downsides. A house worth $3 million is not the same as having $3 million in the bank, and it may still disqualify owners from financial aid or other services. Several of Price's friends feel stuck. Those who rent eventually leave and those who own a home stay, she said, even if neither group wants to do so.

Buying, wrote one survey respondent, "requires a level of sacrifice you can never imagine before you do it." Another said that because their income puts them below the Palo Alto median but their home value is high, they're not sure whether to identify as middle or upper-middle class anymore.

For Price, the Rolfer, a healthy Palo Alto would encourage middle class lives like the one she's led: the ability to rent or own a space as a young person and chase ambitions of all kinds.

"(We should) make this a community where that's fostered, and that's important," Price said. "Not just like, 'Well, gosh, we can get $10 dollars a square foot, and we have computer companies and computer people everywhere around, and aren't we great.' Because we aren't."

(Not) talking about spending

Money may be at the top of people's minds in Palo Alto, but the residents we spoke with described talking about it as uncomfortable — a Pandora's box of jealousy and awkwardness that only serves to separate people. Most of this anxiety stems from a sense of comparison and the fear of being judged, either for having too much money or too little. And that judgment has to do with the ways that people choose to spend.

Flight attendant Kathryn Soler said that while some of her "tech friends" would think a $400 haircut is a steal, her own range is around $75. She wouldn't think to ask them about bargains for groceries or dry cleaning — they're on a budget, too, but in their own bracket.

Terry Roberts, a user-experience designer for Tableau, has always been a saver, and it surprises her to see younger coworkers who make a lower salary buying coffee every day. She described the spending of many Palo Altans as "down-to-earth" even if their salaries would allow for more obvious consumption.

"Most people don't seem 'ostentatious' rich," she said. "They seem like ordinary people — middle class people who are able to afford some nice travel and stuff in their homes ... It feels like our folks are kind of the middle-class-y rich people rather than the rich-rich people."

Many survey responses spoke to this attitude, explaining or justifying the status of "middle class" through the lens of spending. One respondent described himself as "wealthy on paper" but with low expenses and no big purchases; another said, "I know we're rich though I don't feel that way and we are fairly frugal."

Not talking about money, though, doesn't stop friends from knowing each other's financial situations. Roberts said that she and her friends generally can surmise what people earn by their job titles.

Because society at large tends to associate money with self-worth, she speculated, naming salaries remains taboo.

"If there's somebody making $30,000 more than you, that's the company's statement to the both of you that that person is worth $30,000 more than you're worth. And that's kind of an embarrassing thing for both people to have staring you in the face," Roberts said.

Roberts added later that it would be impractical to assume anything without examining someone's whole budget because there are myriad reasons why people can or can't afford things, like the number of children they have. Focusing on income alone seems odd — which also begs the question as to why definitions of middle class tend to do exactly that.

Reinaker, the librarian, said that she's upfront when she can't afford to do something, which happens from time to time. Her own spending habits have changed significantly in Palo Alto — she used to shop at thrift stores for fun, and getting drinks was part of her normal social routine back in Ohio.

Now she focuses on finding free activities like hiking and appreciates the opportunity to go to library conferences in other parts of the state.

"It's not really something, especially among friends, that I'm ashamed of," she said. "It's just being honest and especially understanding that living in this area is crazy-expensive — how can you afford to do anything?"

Money and the next generation

When Roberts' now-adult daughter was in middle school, she lamented that her friends were able to go on hundred-dollar sprees at Stanford Shopping Center and said she "really wished" that she could do the same.

"That was so antithetical to anything that was me, or the way I was raised or the way I am," said Roberts. "And I was appalled."

Others described pressure to pay for expensive after-school activities for younger children or fights with adolescents over their desires for fancy vacations. One Palo Alto parent, who asked to remain anonymous due to her position as an educator, recently turned down an offer for her child to try out for a traveling club baseball team that would cost thousands. Meanwhile, a private art class for her 8-year-old would have cost about $50 per session; she turned that down too.

Still, she described fruitful conversations with her children about the family's financial reality while surrounded by what she called "ubiquitous" privilege. The children's school, she said, seems not to recognize disparities between Palo Alto and surrounding communities or encourage service as much as she would like.

"There's a lack of awareness that there actually is a lot of diversity," the parent said. "I think people here are so privileged, sometimes they're blind to it — because there always is a level of, 'We don't have the Tesla SUV, but we have the Tesla.'"

Digumarthi, the former aerospace engineer, tries to discuss consumption with his school-age children, too. He's not sure how other parents talk to their kids about money, and it's not something he would ask. But he does think that kids should learn the value of a dollar.

"I personally don't believe kids should be provided everything — they need to understand that sometimes you have to work for it," he said. "There are times I have to say 'no.'"

Other parents say that completely divulging the family's financial status can be just as uncomfortable with one's children as anyone else. Several survey respondents described waiting until their kids were adults to discuss finances, and others said the topic never comes up at all. One simply wrote, "It is obvious to them that we are not poor."

The question of how kids are experiencing their parents' and peers' financial situations is central to the future of the middle class in the city, according to several residents. Steve Levy, a research economist, still remembers the passing of the Tinsley Voluntary Transfer Program in 1986. Designed to reduce racial isolation — and enacted after a 10-year legal battle — the program allows minority students in the Ravenswood City School District to transfer into seven other districts, including Palo Alto.

Levy's then-elementary-school age son befriended several students in the transfer program, and to Levy, the experience represented what Palo Alto will be missing if it doesn't begin to solve endemic issues of affordability and housing. When generations grow up only seeing people who look like them, with the same houses and consumption habits, people lose crucial understanding of anything beyond themselves, Levy said.

"Our children benefit by growing up with people who they will live and work with in their adult lives," he said, and added, "I don't want to shut the gate — I want to pass it on. I love this city, I love that it was open to me; I want to make it open to new people."

Lancefield echoed this sentiment. For much of her life in Palo Alto, it was possible to survive on one salary. And now for the last 10 to 20 years, people have gone in circles with the same conversations about housing, traffic and affordability.

"In Palo Alto we have a tremendous opportunity to learn how to solve these problems," Lancefield said. "We have a highly educated, highly diverse population — and we need to find a way to come together, and figure out what kind of Palo Alto we want. And how to get there."

Fiona Kelliher is a former Weekly editorial intern.

Watch "Behind the Headlines" for a discussion of the state of Silicon Valley, transportation and housing, and Palo Altans' views of the middle class.

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Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

Comments

8 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 9, 2018 at 8:48 am

I am very wary of the phrase "middle class". Being classist can be seen as divisive. Growing up I lived in a new development of single family homes on the outskirts of a town some of the parents were airline personnel, factory workers, agricultural managers, realtors, office staff, medical personnel, etc. All probably professional families but income levels varied considerably. As children we all played together and visited each other's homes and felt very much the same. The only way we could tell whose family had more money were on things like the cars or vacations, but even then they were not really things we kids cared about comparing or valuing each other by. We knew where the rich people lived in older neighborhoods and we knew where the poor people lived, neither areas where we would want to spend our time. We would have called ourselves middle class because we were in the middle having absolutely no idea about income levels. We dressed the same, ate the same types of foods, had the same types of furniture, and we even punished the same for our misbehavior. None of us ever felt we had enough money to spend whether it for candy or anything else at the local convenience store. As a group of neighborhood kids we pooled together our coins and whatever we could buy was shared equally between us before riding our bikes home after a few hours of having fun doing whatever we could find to do. Some may have had after school paid activities, I can't quite remember, but we never made a big deal about it which is probably why I can't remember. I think it was a good way to grow up.

Middle class nowadays seems to be all about income. In Palo Alto that is the wrong way of looking at it. My home is surrounded by people who have lived here for varying numbers of years. We have some homes that have been owned by the same family since the homes were first built back in the 50s and 60s, and others which have changed owners many times as well as some like us who have lived here a while. The incomes of the families shouldn't matter as we are all neighbors and consider ourselves Palo Altans. What we eat at home, where we eat when we go out, or even the cars we drive, are nothing about what makes us middle class, or not. To me, what makes us middle class is that we share values of home ownership, or at least wanting to rent long term in the area, of taking a pride in how the street looks, and the values of quality of life issues.

Take away the classist middle class label in the headline of the article and think more about income level if that is what you are writing about. How we choose to spend our discretionary income, or whether to spend it at all, is our own business and nothing to do with how we should be judged as good neighbors.

Unless of course, the underlying motive is something else.


42 people like this
Posted by Donster
a resident of University South
on Feb 9, 2018 at 9:22 am

Middle class in Palo Alto? Surely you jest. When housing is deliberately limited to cause a shortage, a greatly inflated cost of living is the result. That means only the wealthy elite can afford to live here. Having rabble in town would be enough to give one the vapors.

The middle class are still here. They park their motorhomes along El Camino every night. There must be 30 or 40 of them still left.

Classist? Even the po' people here, the mere multimillionaires, are classist. This isn't your dad's Palo Alto.


75 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 9, 2018 at 10:36 am

Back in the day, people moved here because "Palo Alto" meant Education, Trees, Climate, Recycling, Bicycles, social and political Liberalism. This turned out to be a very "successful" strategy.

Now, people move here because it is "Palo Alto". Palo Alto is a victim of its own success. I wish people in other places would build Palo Alto right where they are. They don't all have to move here.


14 people like this
Posted by Jay ess
a resident of Los Altos Hills
on Feb 9, 2018 at 12:46 pm

Jay ess is a registered user.

I always think that the word 'class' has some snobbery connotation. I prefer the "middle income" as a designation.
I remember reading a book called "Caste and Class in America". It defines upperclass as educated, refined, and good mannered.I guess caste refers to race more or less.

Whatever. The cost of living here is atrocious. We moved here in '64 and could not afford an EIchler at $39,000. We found a home in Los Altos for $23,000 and it last sold for 2 million something. It is population and jobs that cause the increase. Our kids cannot move here unless they inherit the house. Same for our friends families.
Another reason for wanting to be here is the climate so perfect for gardening and out door activities.And we have preserved a lot of open space for recreation.


7 people like this
Posted by Meesha
a resident of Charleston Gardens
on Feb 9, 2018 at 1:30 pm

What a terrific article. Having lived in Palo Alto for many years and also owning a business here for 30 years, I know the changes that we've experienced to be dramatic.

Palo Alto, and the surrounding areas, have absolutely lost their service worker community, live in and/or own grossly inflated-value homes and despite being very decent people with wonderful values in most cases have been fostering this competitive consumer life-style to the point where the community as we knew it is crumbling.

I've said for thirty years that "class" would no longer be defined or even equated with wealth but with education. Those two things can go together, of course, but the deciding factor is an earned [as in I did well in school, I'm smart and that's how I got into Harvard way] education as opposed to a bought one.

Look at Donald Trump.


23 people like this
Posted by Palo Alto Native
a resident of Community Center
on Feb 9, 2018 at 2:12 pm

Wow, can't seem go avoid Trump bashing wherever I read. So unfortunate, get over it.

Many students these days who surprise us by being accepted into Ivy Leagues are really accepted because of finances or connections. It's naive to think that it's all meritocracy.

There are many housepoor Palo Altans, as I am involved in PTA and am close with my children so I hear the stories. There are people buying at thrift shops because they live paycheck to paycheck. Pride is the reason they stay here. There are "good schools" in other less expensive areas. Parents are doing a disservice to their children. Raising a child here costs money. Tutors, extracurriculars, overnight camps, trips. Is it really worth staying here if you have no money to save for college, no money for emergencies, no money for your child to have any fun or pay a tutor to help them when they are struggling? NO, Palo Alto isn't ALL THAT. Get over your pride and parent right.


9 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 9, 2018 at 5:08 pm

Gale Johnson is a registered user.

It breaks my heart to read all the comments above, and ones I read every day. I knew and remember the good times in 'my town'. Unfortunately, they are gone forever. Actually they disappeared at least two decades ago. Almost every day I read about the housing problems, the traffic problems, the parking problems. I will probably stick around until I die, because there are still enough reasons to stay here, most of which are the same reasons we moved here in 1961 in the first place. Palo Alto was a very unique town back then. It still is in some ways, but has lost so much of it's glamor...openness, neighborliness, and other aspects of a real caring community. I've written stories about that. If anyone is interested I'd be happy to attach them in emails...ggandglj@yahoo.com.



15 people like this
Posted by Curmudgeon
a resident of Downtown North
on Feb 9, 2018 at 5:11 pm

"Now, people move here because it is "Palo Alto"."

And there's the solution. Change the name of the town. Every few years. Maybe keep it's current "Tall Stick" but in a different language.


9 people like this
Posted by Shallow Alto
a resident of Another Palo Alto neighborhood
on Feb 9, 2018 at 5:12 pm

Well, folks, it's time for Palo Alto to hit the national news again, for all of you old enough to remember. And, you bet that we will with that article, even though I think that it does gives a fairly broad Palo Alto perspective. Do you have ANY idea of how privileged we are? There's a reason that the nation is in such tatters and you can't blame it all on cadet bone spurs, The middle of the nation dislikes us and I really can't say I blame them, especially when reading the overall message in that article. It's called inequitable distribution of income both here and elsewhere in the nation. We are so, so insulated. Many good points in the article are raised; the one I would emphasize more is that many "oldsters" (who live beyond Oregon Expressway, especially) are house rich and cash poor. Do you readers have any idea of what that means? Yes, their kids will reap $$bennies fom the sale of the house, but the parents won't. We're proud and lucky to live here. Savvy, savvy SAVINGS (thank you, husband) have helped as well as frugal expenditures (except for intl travel). I pray that Palo Alto will survive, at least in some small resemblance of its former self. And, to all of you drivers (and you know who you are), stop driving like speeding crazies down Palo Alto's streets and thoroughfares. Like you are the most important person on the road??


8 people like this
Posted by State Skuled
a resident of Downtown North
on Feb 9, 2018 at 6:11 pm

"I've said for thirty years that "class" would no longer be defined or even equated with wealth but with education. Those two things can go together, of course, but the deciding factor is an earned [as in I did well in school, I'm smart and that's how I got into Harvard way] education as opposed to a bought one."
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Earned Education... yep, that's it! PA residents and college dropouts Steve J. and Mark Z. didn't quite make your education cut-off. So very close, since they were smart enuf to get into Reed and Harvard (respectively), but just couldn't quite graduate. And yes, evidently they both "bought" graduate degrees when they gave Stanford and Harvard (again, respectively) commencement addresses and got the obligatory honorary degrees that way.


8 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 9, 2018 at 9:19 pm

Posted by Shallow Alto, a resident of Another Palo Alto neighborhood

>> Well, folks, it's time for Palo Alto to hit the national news again, for all of you old enough to remember.
>> And, you bet that we will with that article, even though I think that it does gives a fairly broad Palo Alto perspective.
>> Do you have ANY idea of how privileged we are?

Presumably, Palo Alto must be "special" or people from all over the planet wouldn't be trying to move here. The "envy" thing happens every time there is a boom here, and then, when there is bust, a bunch of disappointed people move away, things become more normal, and you get the "sour grapes" thing. Apparently boom/bust cycles are in the water here. I'm not sure why I should feel guilty about all that. Other places have boom/bust cycles, too, although most of them don't have the nice climate.

>> There's a reason that the nation is in such tatters and you can't blame it all on cadet bone spurs, The middle of the nation dislikes us and I really can't say I blame them, especially when reading the overall message in that article.

I'm not sure what the "overall message" in that article is. That we are in a boom? There has been a bust every 10 years (average) for the last 50 years. "Time Series Analysis" suggests another one fairly soon. But hey, what do I know? I'm just another cranky senior.


7 people like this
Posted by Resident
a resident of College Terrace
on Feb 9, 2018 at 11:34 pm

There is no perfect solution. The reality is that the class divide is happening at a larger scale than just "Palo Alto"
Look at the home prices of what is selling in Los Altos or Mountain View or Menlo Park. Stop the finger pointing and saying it's simply Palo Alto.

The other issue is that middle class as a group is shrinking in the United States. The extremely wealthy are holding more and more wealth in the USA, and taxes and congress are ensuring the wealth go to wealthy and very little is left over for the middle class and poor.

Given the circumstances, just get out there and try and fix things. Get involved. Vote. Make political changes. Don't like how Palo Alto city council runs? Fix it. Run for office. Change the regulations. Make it better. Palo Alto is damn lucky as a city and filled with educated people with much talent. Get involved and contribute instead of complaining.

And for heaven's sake... if there are >20 bidders on a home... calm down and figure out whether you can be part of the top 5 bids and if you can not.. don't bid. The real estate companies are contributing to the problem by listing the homes too low and causing a feeding frenzy and causing unnecessary bidding of homes when people won't be able to afford the real price.


5 people like this
Posted by Chip
a resident of Professorville
on Feb 10, 2018 at 8:18 am

@ Resident -
I don't think real estate companies are listing houses "too low." A house newly on the market is usually priced at about the same # as the 2 or 3 other most similar houses in the neighborhood that have sold very recently. What skews the numbers here is the stock-option-rich people or young couple with very wealthy parents, who throw un-earned (in the sense of saving to build a down payment) money at a house they want & bidding 10-20% more than the listing price just because they want it & they can afford it. In many of those "top 5" bids, the winner is the one that is at least 100K more than the number 2 bid.
Some people don't care that the new spec house amidst 50 yr old bungalows, Eichlers, etc, is priced at 3-4 times the value of immediately neighboring houses & will buy a Two-day Tudor because they want new, big & a bathroom for every bedroom. If a couple with 2 high-paying jobs buys a house, they want it "done" because they don't have time or patience to deal with household disruption that accompanies major remodeling.


9 people like this
Posted by Irene
a resident of Duveneck/St. Francis
on Feb 10, 2018 at 11:33 am

What about the ghost homes?

Is the city taking care of it?

I have heard some rumors that it's 30% of the homes in Palo Alto.


That phenomenon increases the house rent tremendously.


Like this comment
Posted by Donster
a resident of University South
on Feb 10, 2018 at 2:30 pm

"It breaks my heart to read all the comments above, and ones I read every day. I knew and remember the good times in 'my town'. Unfortunately, they are gone forever."

What you see as the good times are seen as a sad decline by others. The Palo Alto of the 1960s had replaced an earlier Palo Alto with plenty of cow pastures and orchards. I remember my elders bemoaning their loss and telling me that it was too bad I never got to see Palo Alto when it was still really nice. Dunno, 1960s and 1970s Palo Alto seemed great to me. I still miss some of the dive bars, though. Aw well...

The truth is that the good times are as much about our own attitudes and responses as anything else. We can never go back to paradise lost, but the current Palo Alto can become a newer and better place. For those determined to lament any and all change, they will find the outcomes less than happy. Change can be good as well as bad, though. Don't worry, everything will work out fine in the end. It always has.


3 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 10, 2018 at 2:33 pm

Gale Johnson is a registered user.

Wow! This article and other recent ones I've read in all the newspapers I get, local and regional, are enough to depress me, if I let them. They appear almost daily... housing issues, affordability issues, long commute issues, traffic congestion issues, parking issues.

We moved here in 1961 so I've had a much broader period to experience and observe changes in 'my town' than most people. Okay, Jay Thorwaldson, is an exception, and he's right up there with me, and beats me on most accounts. He not only lived it, but he reported it in newspapers. That's a big distinction. And let's thank him for his good work as reporter, columnist, and editor.

Oh yes, there were issues back then, but not to the extent we have them now. Home prices varied depending on which part of town you lived in, north or south, but we all understood that difference, based on wealth and incomes, and we accepted it, but housing itself was never an issue. You bought or rented wherever you could afford to, and there was enough supply so prices weren't exorbitant. And traffic and parking weren't big issues either, as I recall.

Well, of course, there was that fuss up about Oregon Expressway, and parking meters were finally removed from shopping areas in downtown PA, driven by Stanford Shopping Center's offer of free parking.

And yes, there was a fuss about tall buildings blocking views of the mountains to the west and casting shadows on residences, causing moss and mildew/mold growth in yards and inside homes. Thus evolved the 50' height limit.

But, even though they were big and important issues at that time, most of our residents weren't impacted by them and just went on living the good life in our local neighborhoods, and enjoying the benefits of the best town and area on earth. Unfortunately, that's what has really, and sadly, changed so much. Most of us old timers only know our old neighbors. I've tried to meet and have a good neighborly relationship with my new neighbors, some renters, some new home owners, but most of them want to be left alone. They only want to be friends with family members of their race and ethnic backgrounds. Most are recent immigrants and don't want to assimilate into our community.

I love Diana Diamond's column in that other newspaper, mainly because she agrees with me on so many issues. Actually, I think she steals from my post comments on PA Online, before she writes her column. lol! C'mon, lighten up, I'm joking! Read her latest one. I'm solid with her view about County Supervisor Joe Simitian's plan for housing of teachers, and she touched another chord by her reference to our traffic congestion and new bike boulevards. Yes, please, every staff planner and CC member needs to get out and experience, on their bikes, what was just proposed and they approved for the Ross Road bike boulevard. Good luck on that wonderful roundabout at the corner of Ross Rd and East Meadow Drive. I'll meet you there. Who will go first, thru the roundabout, you or me? It's a life saving decision, so I'll let you make it.


9 people like this
Posted by BlarryG
a resident of Greenmeadow
on Feb 11, 2018 at 1:40 am

All older people in all times in history bemoan the terrible changes, and things just aren't right ... because they just don't fit the old categories I imprinted in my youth. Silicon Valley has become the new Athens of our planet. Software I've written here is flying in Iranian drones attacking Israel as it is in the Israeli helicopter shooting down that drone as it is in Google maps and the WayMo autonomous car driving down the street. No one knows me here, but in China, I'm stopped for autographs because they read my books, and I'm just barely on the pecking order here.

They'll be writing about this place and period like the write about ancient Greece. All this economic activity raises prices. People want to come here and be a part of it ... and they are right. In the times of ancient Greece, Athens was the place to be, not some barley field out in the plains.

I do feel sorry for the high prices people have to pay for rent. If you really want to do something about it, it will have to be radical -- Build large, dense apartment/incubator buildings. Very dense, small rooms, but lavish shared kitchens, shared spaces, shared machine shops and incubator office space below. No parking. Get with Google, uber or Lyft and connect these places with autonomous cars. Except on major roads, eliminate cars altogether near shools etc. Parking outside of town, autonomous within. That kind of thing.

Finally, for the article itself ... It is not income alone, you have to consider net wealth. I sold a company and paid off my house. Oops, my "rent" now goes down to prop-13 $4K/year. I run startups. Investors don't want to see big salaries by the founders, so my salary is modest by Palo Alto standards (I'm quite negative in income due college expenses etc), but I own a lot of stock and real estate trusts, several board seats, ownership in 16 startups etc, so my "not enough" salary doesn't matter. Of course, it wasn't always this way. my parents were government workers, modest salaries. I just had some technical skill and cognitive-emotive ability to take well thought out risks, along with generally good health (part luck, part daily exercise etc). Even when I was a grad student on $16K/year, I saved $2-3K per year. I met my multi-millionaire wife later (she never inherited anything and never earned more than $40K/year... she was just a saver and investor).

If you have talent and can live for years below your means ... I mean no coffee out, crap hotels when traveling, mostly camping instead of fancy trips (we did that for years, now it's easier)-- then this is the place to make your mark. I was talking with a high school girls robotics team. "What do use?" PSP Deep neural networks trained on a TX1 NVidia chip. I have 2 billionaire friends. I part of a movement of people who are finally achieving real artificial intelligence, something I dreamed about 45 years ago. That's why you live here. I live in a close community ... but I do regret that this isn't often the case here, I do regret for others how expensive it is to start here. I'd love for artists, teachers etc to have more space, cheaper places to live. I've helped dozens earn enough to live here. I think people ought to think about doing something radical like my plan above: cheaper, denser, communal housing.

If you are house rich, retired, but town poor. Sell & move. Really. Live the life, there are plenty of communities to live in with plenty of nice/smart/interesting people elsewhere that maybe are not so driven, or not so forced to be driven. We live in new Athens. Shine while it is still light.


5 people like this
Posted by musical
a resident of Palo Verde
on Feb 11, 2018 at 1:58 am

Wow. Had to go review Mac Davis' lyrics for It's Hard to Be Humble.


1 person likes this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 11, 2018 at 4:14 pm

Gale Johnson is a registered user.

@musical

Funny, and well directed!


5 people like this
Posted by Donster
a resident of University South
on Feb 11, 2018 at 5:23 pm

"I wish people in other places would build Palo Alto right where they are. They don't all have to move here."

And those that came here anyways a long time ago are now turning around and saying the same thing to more recent arrivals. The more recent arrivals probably wish all the complainers would move away to a Palo Alto somewhere else. We all know that Palo Alto's population will continue to increase over time, and that telling people to get lost doesn't work. Most of our current problems are due to unchecked NIMBYism over the past 40 years. Now the chickens have come home to roost. We can either fix things in an inclusive manner or wallow in misery and whine here on Town Square. Telling others to do anything we are not willing to do ourselves is futile, and we might wind up being the ones excluded.

I hope you and the other discounted people are able to make your peace with the new Palo Alto. It really is a great place, much better than most.


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Posted by Donster
a resident of University South
on Feb 11, 2018 at 5:25 pm

I meant discontented.


5 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 11, 2018 at 8:04 pm

Posted by Donster, a resident of University South

>>>> "I wish people in other places would build Palo Alto right where they are. They don't all have to move here."

>> We all know that Palo Alto's population will continue to increase over time,

Perhaps it will decrease over time. Who knows? I'm more worried about Palo Alto's daytime -automobile- population, however. I'm looking for ways to make that population -decrease-.

>> Most of our current problems are due to unchecked NIMBYism over the past 40 years. Now the chickens have come home to roost.

"Prove it." I would say to the contrary that most of our current problems are due to allowing unchecked growth of jobs without finding a more efficient method for getting people to those jobs. "NIMBY" is one of the favorite derogatory terms used by developers who criticize anybody who wants to limit the flood of autos. But knee-jerk NIMBYism is a rational response from people whose interests have been damaged by developers over the years. Sorry, I don't trust developers to do the right thing. We've been burned too many times.

>> I hope you and the other discounted people are able to make your peace with the new Palo Alto. It really is a great place, much better than most.

Even Saturdays and Sundays have tons of traffic now. Sure, it's still pretty good on extra long holiday weekends when few are commuting in. The goal is to find ways to transport people more efficiently so that every day is like an extra long holiday weekend.


3 people like this
Posted by Evan Adams
a resident of another community
on Feb 11, 2018 at 11:40 pm

It drives me crazy when I see 35% of income on rent as rent burdened. This is incorrect. It is 35% of NET income after taxes. I see this mistake made all over the bay area. The NET part is critical.


5 people like this
Posted by maguro_01
a resident of Mountain View
on Feb 13, 2018 at 7:37 pm

@anon - "...I would say to the contrary that most of our current problems are due to allowing unchecked growth of jobs without finding a more efficient method for getting people to those jobs."

But it wasn't 'allowing'. It was policy. The towns, the homeowners, liked the business tax money and where all the people lived was someone else's problem. Many of the cities around here played that game. Not building housing drove up house prices as well. As one poster put it, the chickens have come home to roost. Especially since PA and the area is now part of the world market.

Developers, of course, are a perennial problem much exacerbated by the US Pay-To-Play political system. Running up to the last local election every day my mailbox had a stack of campaign ad placards signed by real estate interests. Real estate developers and resellers consider political donations to be more or less speculative investments, of course.

Most of the growth would have happened anyway but could have been better planned. No one anywhere at any time has been entitled to buy a house and then freeze the world around them to the horizon. Change is accelerating and today's public school students will live in a world unrecognizable today and it will change out from under them in their lifetimes.

In PA, most students have to face the problem that after high school or after a commute to a JC or university, they have to leave the area and may actually never see it again. For some percentage of people that change is very hard.

Somewhat OT: Little kids have that phenomenal ability to learn new languages that they start to lose in late grade school. It's reasonable that evolution would do that. But it seems that most people start to lose their ability to assimilate the world actually around them in their late thirties. It's reasonable that evolution would do that too. But that's increasingly dysfunctional with so much change within a generation now and such longer lifespans than thousands of years ago. Our local Masters of the Universe, we read, are spending R&D money to get much longer healthspans for themselves.


4 people like this
Posted by maguro_01
a resident of Mountain View
on Feb 13, 2018 at 7:48 pm

The following was originally at the end of the above post, but accidentally truncated -

Our local Masters of the Universe, we read, are spending R&D money to get much longer healthspans for themselves. Hopefully, they are spending also to find out how to get longer mindspans which is more important and would be a major contribution or the future.


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Posted by Just for fun
a resident of Menlo Park
on Feb 23, 2018 at 7:01 pm

Building on the idea above, change the town's name to Trumpville, and you'll solve the desirability problem.

But seriously, how can we find out the true number of "ghost homes" owned in PA and other local towns?


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Posted by Just for fun
a resident of Menlo Park
on Feb 23, 2018 at 7:11 pm

But seriously, if your household makes $300,000 gross income per year, there is no question you are wealthy, upper class, whatever the definition, regardless of your mortgage status or educational attainment.

I can understand living paycheck to paycheck at that rate, because there's always something to buy or bill to pay, but you have choices. The middle/lower income have far few choices, and loss of a paycheck can mean homelessness. It doesn't mean that if your income is well over 6 figures.

No one talks about money or class, but you can see it in the vacations people take, clothes and cars they buy, school choice and more.

There are few true middle class in PA.


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Posted by musical
a resident of Palo Verde
on Feb 24, 2018 at 12:37 am

How about the number of ghost bedrooms in your home? That counts the den or sewing room or storage area which was built for a bed or two or three but is currently uninhabited. Undoubtably several thousand in town. How about the number of ghost garages, where behind that big garage door at the end your driveway there is no car inside? And gross income is immaterial without knowledge of the cost. You can gross $300,000 by selling stock that cost you $400,000. If you run a business, you are often lucky if profit is 10 percent of your gross.

"... and somewhere in the darkness the gambler, he broke even."


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Posted by Just for fun
a resident of Menlo Park
on Feb 24, 2018 at 10:19 am

Is that a valid comparison? No one in their right mind, or having choices, would sell $300K in stock that cost them $400k.

Few would begrudge a person or family with with a room not used as a bedroom. Also a false comparison.

Empty houses bought by investors in a crazy tight housing market? That's something local legislation can and should stop. Where's the bill for that?


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