Employees of tech corporations like Google and Facebook cannot actually afford to own homes within a comfortable commuting distance of their jobs, according to a new study authored by real estate analyst firm Open Listings. While some companies are doing something to remedy this and provide living arrangements to their employees, the demand for housing in the Silicon Valley is simply too strong for the major tech firms to do anything about it, short of sinking cash into the local real estate market, and even that could end up being a band-aid solution, some experts believe.
The study used the median sales pricing data and pubicly available salary data, all centering on a number of top tech companies in the Silicon Valley. A sampling of employee salaries and housing prices in close proximity to big companies like Apple, Google, Snapchat, and Facebook all revealed the same thing; expenses tied to owning a home exceed the 28-percent income guideline when considering the median salary for each company. While employees could also rent, use alternative housing tied to their employers, or just live further away, the simple and stark fact is that the Silicon Valley tech boom has inflated the local housing market so much that it’s not only driven out low-income and middle-class citizens that used to live there, it’s even priced out the very workers that caused the boom in the first place. Outside of the Silicon Valley, the mass exodus of highly paid tech workers to nearby areas in order to escape that boom is causing smaller knock-on booms in certain areas of places like Los Angeles. Essentially, this means that tech workers have to choose between a short, stress-free commute, and living comfortably.
For the time being, the pattern shows no signs of slowing down or that it may be a bubble, ready to pop and bring down the prices at the slightest provocation. The Silicon Valley’s best and brightest have been responding by doing things like sleeping at the office, living out of their vehicles, or renting rooms from local homeowners, among other solutions. With housing costs well into the millions in the Silicon Valley, rendering six-figure salaries less valuable than the income of the working poor in some parts of the country, tech workers will likely continue to find creative ways to fulfill their need for housing, all while delaying or entirely eschewing things like owning pets and starting families, some industry watchers predict.