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Income inequality reaches a 'historic high' in Silicon Valley, new report shows

Original post made on Feb 13, 2020

Despite a hot economy and a slight dip in home prices, 2019 was a year of reckoning for Silicon Valley's high-tech giants, according to a new report from Joint Venture Silicon Valley.

Read the full story here Web Link posted Wednesday, February 12, 2020, 3:41 PM

Comments (32)

12 people like this
Posted by Ride bikes
a resident of Stanford
on Feb 13, 2020 at 9:47 am

Lived in Palo Alto/Menlo Park +15yrs started a tech job 4yrs ago to survive. Make “to much” income to get housing subsidies and unable to save for a down payment and housing monthly mortgage, taxes, maintenance, other don’t seem possible.

Any thoughts?


54 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 13, 2020 at 10:12 am

>> Joint Venture Silicon Valley

The irony. Apparently JVSV staff are lacking in the ability to reflect upon themselves and the role they played in creating the current "housing crisis".

>> "The result is the nation's highest housing prices, an unsettled workforce and a transportation system sagging under the weight of 100,000 megacommuters," Hancock wrote. "Add to this the nation's most sharply pronounced income gaps and you have a formula for despair."

I don't despair. Sooner or later, the geniuses who run these companies will stop overlooking the obvious, and start relocating and locating new growth in other areas. Honestly, they don't have to locate every single tech job in the world right here. They really don't.

>> It doesn't help, he added, that the region's driving industries are "facing a backlash the likes of which we've never seen."

The fastest way to address this is to move 100,000 jobs to where the megacommuters actually live. e.g. near Tracy.

==

Posted by Ride bikes, a resident of Stanford

>> Any thoughts?

Yes. Do what several of my relatives have done. Learn as much as you can as fast as you can to enhance your value on the job market, and then, move elsewhere. There are a number of places where tech jobs are growing and the cost of living is far lower than here.


15 people like this
Posted by What Will They Do Next
a resident of Old Palo Alto
on Feb 13, 2020 at 11:55 am

@ anon.....great post.


43 people like this
Posted by Old and in the way
a resident of Downtown North
on Feb 13, 2020 at 12:05 pm

Why don't we stop allowing all the commercial construction if we need housing so badly? We already have plenty of jobs. Let's concentrate on housing instead of continuing to turn our town into an office park. If Palo Alto only allows affordable housing (apartments and condos that actually are affordable and not a developer's idea of at least a mil per tiny space) on developable areas like the Fry's site and the Ventura site, maybe we could do something to deal with our large share of the problem. And yes, tech companies, why don't you move campuses to the central valley? Or Arkansas or Missouri (home of a great engineering school, Missouri Science and Technology) or other places with a need for revitalization? We're so vitalized we're dying of it!


13 people like this
Posted by george drysdale
a resident of Professorville
on Feb 13, 2020 at 12:06 pm

Supply and demand. It's obvious Silicon Valley is the target city for first rate techies. Rent go up a market signal to move to some place else if you want less expensive housing. If you can't hit or field in the major league go to a farm club like Texas. Enter the price fixers. Everybody can live here: Super Tuesday will California turn Bernie crat? Coming up at our doorstep: Super Tuesday in Mountain View.

George Drysdale land economist and historian of the de-control


19 people like this
Posted by conservativism at work
a resident of Midtown
on Feb 13, 2020 at 12:39 pm

On super Tuesday, California will....





Stay Blue. Every signal from the primary will show that Ca will continue it's slide AWAY from so-called "conservativism".

Maybe someday, so-called conservatives will actually go back to conservative values. Until then, Blue CA.


27 people like this
Posted by Family Friendly
a resident of Old Palo Alto
on Feb 13, 2020 at 1:42 pm

Another week, along lobbyist-funded "study" calling for more dorms for more H1Bs.


10 people like this
Posted by Inequality vs Diversity
a resident of Stanford
on Feb 13, 2020 at 2:12 pm

This is really about diversity. Inequality suggests different pay for the same work. We want economic diversity. We don’t want economic inequality.


20 people like this
Posted by Just Hire American
a resident of Barron Park
on Feb 13, 2020 at 2:57 pm

> Another week, along lobbyist-funded "study" calling for more dorms for more H1Bs.

^^^ Blame Google (along with others) for the proliferation of imported H1-B labor from India.


30 people like this
Posted by MD Mom
a resident of College Terrace
on Feb 13, 2020 at 2:59 pm

@ Old and in the Way:
"Why don't we stop allowing all the commercial construction if we need housing so badly? "

Good question. Ask the city council.


9 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 13, 2020 at 3:28 pm

This is home to one of the most innovative workforces in the world. High tech companies are two a penny. It is incredible to think that some of the best engineers in the world should not earn more than someone who drives a bus or teaches yoga. The fact is that we need all types of people to do all types of jobs. We need service workers and we need higher paid people who can buy the services.

This is reality.


15 people like this
Posted by George
a resident of Midtown
on Feb 13, 2020 at 4:39 pm

> Posted by Anon
> a resident of Another Palo Alto neighborhood
> Yes. Do what several of my relatives have done. Learn as much as you can as fast as you can to enhance your value on the job market, and then, move elsewhere. There are a number of places where tech jobs are growing and the cost of living is far lower than here.

Classy. Telling people to just get out, now? I didn't think the Palo Alto Online comments section on a housing article could get much lower, but here we are.


32 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 13, 2020 at 5:04 pm

Posted by George, a resident of Midtown

>> Classy. Telling people to just get out, now? I didn't think the Palo Alto Online comments section on a housing article could get much lower, but here we are.

You have it backwards. I'm not going to lie to someone and say stay here, it'll be great, you'll get rich when some startup goes public. That would be lying. Realistically, this is a great place to start a tech career, but, the odds are that you will prosper more in another location where the cost of living is lower. It is very difficult to get ahead here; why lie about it?


27 people like this
Posted by eenee
a resident of another community
on Feb 13, 2020 at 5:35 pm

Pressure needs to be put on Facebook and Google to not just build housing but to do something about the traffic. They’re the ones that made this mess and they’re the ones that should fix it


7 people like this
Posted by 13% own 75%
a resident of Greenmeadow
on Feb 13, 2020 at 5:41 pm

"This is really about diversity."

Did the above posters even bother to read the article?!?

"...with 13% of the households holding more than 75% of the region's wealth."


7 people like this
Posted by Old Palo,Alto
a resident of Old Palo Alto
on Feb 13, 2020 at 5:56 pm

Income inequality growing is a GOOD sign of all getting wealthier, normally.


Eg. Botton 20% 30,000 / year top 20%. Say 90,000 / year Difference: 60,000

NOW all double!


Bottom 20% 60,000 / year top 20%. Now 180,000 per year. Difference 120,000

SO why h is better for bottom twenty?

30,000 or 60,000 .? DUH! Real growth is MORE important, Pareto Optimality ? Check

Makes no the poor better off as central goal? Check

Not so relevant the ratio! Absolute value increase to poorest segment most moral metric ( not harm or limit to others)


Q.E.D.



I”wow ! Inequality up f


11 people like this
Posted by 13% own 75%
a resident of Greenmeadow
on Feb 13, 2020 at 8:24 pm

Nice math. So many flaws with logic, however. Who says the poor are getting "Absolute value increase "?

Do all the silly math you want, with fantasy assumptions, but you still are not addressing the article:

"...with 13% of the households holding more than 75% of the region's wealth."


18 people like this
Posted by Barry
a resident of Professorville
on Feb 13, 2020 at 8:28 pm

The lack of housing has nothing to do with the lack of resources or money it has everything to do with bad public policy. Whose controlled the housing policies for the state the last 30 years? Democrats; progressives. They created a malfunctioning housing market and they refuse to try anything other than what has not worked because they recalcitrant ideologues.

Those 821,000 jobs could have been relocated to the barren area on the east side of the Diablo Range along with 200,000 homes over the last 12 years which would have decreased traffic in and out of the Bay Area by 30% while taking a huge bite out housing costs across the region and therefore a reduction of homelessness as a byproduct.

But your extremist environmentalists and dictatorial democrats like Scott Weiner refuse to develop this area which would actually make everyone whom the housing crisis is negatively affecting happy.

You all want a solution, here it is:
Web Link


But the pathetic leaders driving the state into the ground will not employ it. Instead they are arguing over what middlemen are going to take home the biggest junk of Gov. Newsom's Homeless money.
Web Link

Another fraud on Californians; a big give away to do nothing bureaucrats.


12 people like this
Posted by George
a resident of Midtown
on Feb 13, 2020 at 8:38 pm

> Posted by Anon
> a resident of Another Palo Alto neighborhood
> You have it backwards. I'm not going to lie to someone and say stay here, it'll be great, you'll get rich when some startup goes public. That would be lying. Realistically, this is a great place to start a tech career, but, the odds are that you will prosper more in another location where the cost of living is lower. It is very difficult to get ahead here; why lie about it?

Because the answer should instead be, "let's build more housing so that people CAN come, enjoy our wonderful city, and settle in to build a life." Instead, you're taking the easy way out and just telling people to go away.


20 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 13, 2020 at 10:06 pm

Trying times for the poor and middle income citizens in our communities. I didn't use the term middle class because I know many of them and they are high class people.

I now know the deceit of CC candidates campaigning on the affordable housing issue. They are either lying or simply uninformed or maybe just plain dumb and don't have any idea or viable plan to create affordable housing for the very low income, low income, and middle income people, a part of the population that is spelled out in the ABAG housing mandate, and a large number of people who serve us every day in our homes, yards, and in restaurants and other business establishments. Challenge them during the next campaign season before the election...affordable for whom? All the efforts to build affordable housing in PA for people in those categories has failed. Actually, there has been no effort in that regard. The candidates will throw numbers at us but they will be based on median incomes for our area. Those at the bottom income levels don't come close to meeting those income levels.

Consider the ominous task of providing housing for everyone who works in PA. It would do away with the commuter traffic and parking problems. It will never happen because forces are against it happening.

I know the impacts of homelessness based on my volunteer service at Wesley United Methodist Church to feed and house, overnight, 20 homeless guests.

I've made meals for them, sat with them, ate with them, and heard their stories. Come join me any night during the rest of February to have that same experience. It will change your thinking about the members of our homeless population.


20 people like this
Posted by Sense
a resident of Another Palo Alto neighborhood
on Feb 14, 2020 at 2:34 am

The article states: "Even though Silicon Valley and San Francisco remain the two most expensive metro regions in the nation when it comes to housing costs, Silicon Valley's median home sale prices actually declined by 6%, or about $75,000, in 2019. The report posits that this may reflect "a cooling overall market" and possibly a shift of activity away from higher-end homes." Then it turns around and says: "Most of the permits were issued to homes that are only affordable to high-income individuals."

Hello! Can you say 2017 ginormous tax increase on Silicon Valley house poor? The tax landscape between $109,000, which is low income for this area, and three times that has been made absolutely brutal to those who spent all their lives apart from work trying to get into something stable for decades, suddenly the rug was pulled out. The more you earn in that range, the more disproportionately your tax burden shoots up (because of deductibility limits related to income, for example, and every last boobytrap in the code that increases taxes falling on this sector). The code was remade to favor real estate investors and hurt homeowners.

It couldn't have been more clear that this was going to slow the housing market, because anyone on the bottom rungs of homeownership is hanging on by their fingernails. The investor class (look up what S Mnuchin did after the housing crisis) looking for what to them are bargains in high-demand real estate areas, without putting things into the same freefall as 2008.

Why is this not being reported on? Given the numbers of people who took SALT deductions in higher cost-of-living states on both coasts before the tax change, if you conservatively consider 24 million people seeing an average increase of $10,000 in their taxes each, that's around a quarter of a trillion dollars to the federal treasury.

Why isn't there a cost-of-living adjustment for anything like that in the tax code? It ends up resulting in unequal treatment under the law. If you use a cost-of-living calculator, $150,000 here is the same as about $22,000 in many middle states, i.e., about the same standard of living. Losing another $10,000-$15,000 suddenly like that without even a phaseout is devastating. But only people in high-cost-of-living places are hit. Again, unequal treatment under the law.

It's sickening how deaf lawmakers in blue states are to the pain of their constituents, and how they just accept the twisted argument that the situation is aimed at lowering CA taxes. If California charged me nothing in taxes, it wouldn't reverse the federal increase, which has funneled even more money from blue states to red states, and from those less well off to the richest. But they shouldn't have to -- this is a high cost-of-living state, and that person making $150,000, living the same as the person making $22,000 in a lot of the rest of the country, is already paying tons more to the federal government, even when they deduct their state taxes (which, like everything else, are higher because of COST OF LIVING (you would think people on the right would understand actual supply and demand).

But because the media never talk about the cost-of-living differences and how hard it is to be Silicon Valley house poor, people are not complaining even while their children's college plans are suddenly ruined and they must suddenly face leaving after sacrificing for decades to put down roots here.

I really wish some of my fellow residents would start a referendum to make companies give any new workers coming in a contract that THEY will be the ones reducing their water usage up to 90% the next drought (which we are technically in) before existing residents who are already having their time with their families, their health because of the stress and pollution, their quality of lives destroyed by the tech companies playing king of the hill with Silicon Valley. And now their futures because of the tax law. Which has never even been reported on.

Actually, I'd rather see all the lawmakers first have to reduce THEIR water usage by 95% during the next big drought. Then the tech company workers who took the jobs the companies really should be looking to move to where the housing is. There are water usage, fire and earthquake safety dangers, pollution, noise, loss of quality of life, etc etc issues being cause by this tech hiring overcrowding. The solution is NOT more housing, the solution is less office development. Most of that office space should be converted to housing.

Good article that looks at the actual housing justice situation:
Web Link

Scroll down through this list to get a better idea of where tech hubs should be growing:
Web Link


12 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 14, 2020 at 5:05 am

As a child I moved into a new neighborhood, a new development of nicer homes. From memory, our neighbors were a gardener, an insurance agent, a doctor, a salesman, a teacher, a tv set designer, a pilot, a factory manager. My Dad was one of those, all the houses appeared to me to be about the same, some had nicer cars, some of the wives worked, some had house cleaners and others didn't, most did various remodels over the years.

Income variations are a fact of life. The house and the street where we live used to be "blue collar" but most are now high tech. When we bought our house, we struggled like most to be able to afford it - Palo Alto has always been more expensive than neighboring cities, but at the same time, there was very little available and our only other option would have been to buy in Fremont or Union City where we could have afforded a bigger and nicer home, but had a dreadful commute. Our 50s condition home has slowly been upgraded and remodeled and now is worth a great deal more than we paid for it. But, it is only book value as it has been a bit of a money pit. We can still afford to live in Palo Alto and we have the advantages of reasonably short commute which is worth a great deal to us.

Income inequality happens, it is what and how you choose to live within your income. I know that many teachers, police, firefighters, etc. prefer to work somewhere other than where they live. There are cheaper places to live on the Peninsula than Palo Alto. Some of these cheaper places are not much farther away from jobs that we are from ours. Living within your means is a value we have been taught by our parents and a value we have tried to teach our children. However, buying $5 coffees daily and $100 sneakers is a choice and when people say they can't afford to live somewhere nice, they should start looking at their spending habits before they ask themselves why.

Our first home was a struggle. We shared one old car for several years before being able to replace it and only became a two car family after our eldest child started kindergarten. Vacations were either camping or visiting family. Our children survived on hand me downs and eating out was rare. Babysitters were expensive, so date nights were romantic desserts after the children went to bed.

As a couple and as a family, I think we are stronger because of this. There have been times that it has not been easy from both the practical and the emotional issues. We were never promised or expected an easy life. Hopefully our values are the same as others as there will always be the haves and the have nots.


22 people like this
Posted by 13% own 75%
a resident of Greenmeadow
on Feb 14, 2020 at 6:17 am

Huh. Did I click back into the wrong thread - isn't this the "Income inequality reaches a 'historic high'" thread?


"...with 13% of the households holding more than 75% of the region's wealth."


9 people like this
Posted by Chris Zaharias
a resident of another community
on Feb 14, 2020 at 6:59 am

[Post removed.]


9 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Feb 14, 2020 at 7:19 am

Re income inequality, look at what type of start-ups are being funding and think about the massive NEW unemployment that will result from some of the AI and the autonomous vehicle companies. Remind me how many millions of truck drivers there are in this country.


11 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Feb 14, 2020 at 8:47 am

Posted by Online Name, a resident of Embarcadero Oaks/Leland

>> Re income inequality, look at what type of start-ups are being funding and think about the massive NEW unemployment that will result from some of the AI and the autonomous vehicle companies. Remind me how many millions of truck drivers there are in this country.

Don't worry. They will all retrain themselves as Python coders.


8 people like this
Posted by Oleg
a resident of another community
on Feb 14, 2020 at 9:45 am

I tink it is berry difficult to have true income equalitee in Palo Alto today.

The city is now for rich people or those who have lived here for dekades.

I work in Palo Alto and see many people from udder countries living here.

Since houses cost many millions of dollars, how did dey get so rich?

Many are from China.


6 people like this
Posted by Liz Gardner
a resident of Mayfield
on Feb 14, 2020 at 11:04 am

To Gennady Sheyner. Great start for more to come, I hope. Pinpoint Palo Alto's affordable housing. Yes. You have the picture of Mayfield Place, but who exactly in PA is this inequity affecting? What would be good to see is a historic overview -- has there ever been affordable housing in Santa Clara County/Bay Area and where. Population growth and the unlucky Pro 13 contributed to the crisis. Finally. Some quotes from real residents/families of the area who are struggling to survive thrive or go else where could add much depth to your journalism.


11 people like this
Posted by Inequality vs Diversity
a resident of Stanford
on Feb 14, 2020 at 11:45 am

“13% of the households holding more than 75% of the region's wealth.“

This doesn’t seem that far from the 80/20 rule, and isn’t remarkable or concerning.

More concerning would be everyone holding equal wealth, given the vast differences in productivity, savings, investments, spending, judgement, lifestyle, temperament and responsibility.


10 people like this
Posted by Jerry99
a resident of Barron Park
on Feb 15, 2020 at 5:51 pm

It is too difficult to move to another area. I have lived here for 30 years in the same place but moving to a new area South of Palo Alto would cost approx 40% of the sales price would be CA income tax and Federal Capital Gains Tax. There would not be enough money left to but the same house/townhouse in another city. It is the taxes in CA that are strangling the residents.
The answer is that the tech behemoths should move to Phoenix, Salt Lake City, Tracy, Fresno, etc. to have a lower cost of living and their employees could afford to buy homes.


4 people like this
Posted by Born in PS
a resident of Midtown
on Feb 15, 2020 at 9:58 pm

Usually a good recession will fix this instead of artificial growth restraints such as taxes, etc. Or tax for better mass transit like everywhere else in the world.


7 people like this
Posted by Huey Long
a resident of College Terrace
on Feb 15, 2020 at 10:13 pm

@Jerry99
You get !500k of your profits tax exempt. So (sales price - cost basis - improvements and sales costs - 500k) = Your taxable cap gain.


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