As data continues to surface about how exorbitantly expensive it is to live in a tech hub like San Francisco, San Jose, and even Oakland, local real estate aggregator Trulia reminds us that expensive housing is not a new problem.
First, the facts: Average housing prices in tech hubs are a mind-boggling 82% higher than the average price for a comparable home in a non-tech hub. And even though residents of tech hubs have a higher income than those in other metros, tech hubs have, on average, 16% less affordable housing than other metros. Rents in tech hubs are up, on average, by 5.7%, which is almost double the average across other metro areas of 3%. (And our dear city blows this national average up by more than 10x, with its Y-O-Y rise of 37%.)
While these cost differences are indeed staggering, they are rooted in the pre-Internet era. By Trulia's calculations, homes in 1990 cost an average of 52% more in the tech hubs than of comparative size in other large metros. This at least softens the current 82% figure.
So why were tech hubs more expensive even before the dawn of the Internet era? Trulia explains: "Decades ago, many of the housing markets that would become tech hubs had advantages like major research universities, technically skilled workers, thriving computer manufacturing industries, or nice climates. Places with advantages like these tend to be more expensive, and they turned out to be fertile soil for the today's tech industry."
Of course, tech hubs vary - especially in terms of new construction. Tech hubs like Raleigh and Austin have 10 and 8x as much new construction as San Francisco, making them more affordable than the tech hub average.
· 5 Truths of Tech-Hub Housing Costs [Trulia]