Welcome to Googletown

I read this great article in the New York Times today.  It's about the constant back and forth debate over how the Bay Area is gentrified with all its industry, including the tech boom.  But the article focuses mostly on the town of Mountain View, which has always been a lovely bedroom community since the government put Moffett Field on it, and then NASA arrived a few decades later.  My dad used to work there.

Then, industry arrived, including tech and pharma.  Years ago, I worked near Shoreline Ampitheatre.  It was glorious because you could overhear concerts and I had a great spot to view the annual fireworks.  It was also hilarious because our building was the only one on our street not owned by Google, and this meant watching "Googlites" not know how to cross the street, wear pajamas to work, and have "meetings" on a bicycle contraption where 8 people pedal at once while facing each other.  That situation changed in short order, and a year after arriving, we were booted out and Google took over our building.  In the ensuing seven years, housing prices in the area have skyrocketed, to say the least.  The same goes for most of the rest of the Bay Area.  And, we see the same in Facebook's town (Menlo Park), and Apple's town (Cupertino). 

Is this a good thing?  The comments in the article from people in places like Nebraska and Pennsylvania say "gee, you IDIOT.  I WISH I had your town's problem!  Bring the industry to us."  Well, be careful what you wish for.  I don't think that such industries as tech would go elsewhere.  There is TOO MUCH money to be had in the Bay Area, and money attracts more money.  Nevermind the gorgeous weather.  Oh, and the many, many world class universities, such as Cal and Stanford at the top of the heap.  Tech is not going to be picking up and moving elsewhere anytime soon.  It may all bust at some point (as booms are wont to do), but I don't think Zuckerberg is thinking "gee, I'm tired of California.  I should move to Pennsylvania..."

Is this a good thing?  Well, why are WE here to begin with?  And isn't change good?  Well, I am here because I was born here.  My parents were, too.  In fact, both sides of my family have been in California for nearly 100 years.  So, I guess you could say I feel comfortable here.  Also, the job opportunities are excellent.  Look at a job site and put your search in the Bay Area.  Then move the search to Phoenix, Portland, Denver, etc.  Sure, people live there, and live there happily.  But the amount of industry in the Bay cannot be beat (even, I would argue, in the New York Metro).

So it follows that if you want a shack in Palo Alto, you'd better be prepared to pay at least a million smackers, and at that price, and in this market, have a huge down payment (or all cash).  Because of the housing boom (a whole other post I could devote to this), people cannot afford to live in certain places, and they are being priced out.  So they move to a place like Fremont, and price out Fremontonians (one of whom I am), and Fremontonians move to Union City or Hayward and price out the original residents of those cities.  It's life, it's capitalism, it's economics, and it happens.

The bigger question is, is this a good thing?  Why are we still here?  It must be.  But every day it takes me nearly an hour to travel a few miles, since I have one of the worst commutes in the country going from the East Bay to the Silicon Valley.  One of the commenters complained that he is having trouble surviving on 70K.  Many commenters from back east snapped at him for that one.  What they don't understand is since housing is many times the price of what it is back east, salaries have to be as well.  Teachers who earn 50-60K per year cannot afford to even rent apartments in some areas.  These are professional people with post-graduate degrees.  And this, my friends, disgusts me.  I "get" that it's capitalism and it's the "price we pay" for living in the Bay.  But it wasn't always so, and it won't always be that way.

In the mean time, in the land of plenty, we scrimp and save so that maybe in a few years we can afford to compete with cash offers for a 900 SF shack.  Life could be worse, and I'll just go to the beach in February to lick my wounds.  Dem's da breaks.

And when the next crash happens (I've been through several real estate booms and crashes in my lifetime), and all the interlopers move back to their respective hometowns, I'll be there to buy their house with the money I saved.