Our housing prices tripled, and new buyers don't blend into the community

[Unionville]

I live in a Bay Area neighborhood of teachers and plumbers, but now outsiders are moving in and paying almost $3 million cash for a house because they like our neighborhood. But these same buyers rarely interact with the community, especially when they should (one of them got broken into). Curious if anyone else has experienced a sudden neighborhood wealth gap and how it changed your community.

[Another Reader]

Is it solely a wealth gap or a culture gap as well?  My neighborhood of 30 year-old houses on large lots is slowly being filled by immigrants, mostly from India.  Not from just one part of India, but different areas, cultures, and religions within India.  Not only do they not interact with the mostly native born original residents, they maintain their cultural and religious affiliations within the community.  Carpools, nannys, and social gatherings are very clannish.  They are civil but not friendly to outsiders.

The Bay Area was a nice place to live prior to the late 1980's.  Not so much today for a lot of reasons, this being one of them.

[mountain mustache]

This is happening in my community, except homes are being purchased as "vacation homes or rentals" and the real owners of the homes are rarely actually in my town, or interacting with our community. Instead, random VRBO guests come every weekend, and the neighborhoods are now just filled with tourists who stay up late drinking, being super loud, and parking in really annoying ways. What used to be a quiet small town is now completely unsustainable because of real estate prices, and the demand for short term rentals...it's pretty much ruining our neighborhoods, and small town community.

[Bloop Bloop]

I've noticed a positive change - parts of my neighbourhood which used to be ratty and run-down are now replaced with upscale apartments, cafes and open spaces.

Unfortunately there's always a price to pay with gentrification - some people like the old times, some like the new times.

[Aggie1999]

I live in a Bay Area neighborhood of teachers and plumbers, but now outsiders are moving in and paying almost $3 million cash for a house because they like our neighborhood. But these same buyers rarely interact with the community, especially when they should (one of them got broken into). Curious if anyone else has experienced a sudden neighborhood wealth gap and how it changed your community.

Don't worry. With house prices tripling, your county will continue to raise property taxes to a point where the teachers and plumbers can't afford it. Then all that will be left are the rich folks that interact with each other.

[bacchi]

I live in a Bay Area neighborhood of teachers and plumbers, but now outsiders are moving in and paying almost $3 million cash for a house because they like our neighborhood. But these same buyers rarely interact with the community, especially when they should (one of them got broken into). Curious if anyone else has experienced a sudden neighborhood wealth gap and how it changed your community.

Don't worry. With house prices tripling, your county will continue to raise property taxes to a point where the teachers and plumbers can't afford it. Then all that will be left are the rich folks that interact with each other.

This is California. Crazy property tax increases don't happen there.

[HBFIRE]

Don't worry. With house prices tripling, your county will continue to raise property taxes to a point where the teachers and plumbers can't afford it. Then all that will be left are the rich folks that interact with each other.

One small benefit of CA where you don't completely get ripped off (like all other areas) is that they can only increase the assessed value by a max of 2% each year, below the inflation rate.  The longer you own, the lower your property tax is relatively speaking (i.e. people who purchased 20 years ago pay very little in property tax).  It's a huge advantage of owning real estate here, if you can get over the initial hurdle of a high purchase price.

[bryan995]

Why would a teacher or a plumber choose to live in the bay area???  What is going on!?!?

Take your cash and get out while you can.

[Abe]

I have recently had a similar experience from the opposite side (though renting, not buying). Some of our neighbors were nice and welcomed us to the neighborhood, while others won't even say hi. We tried to invite people over for welcome party and about half showed up (mostly the ones who also have kids). There was no correlation with their wealth or how long they've lived in the neighborhood. I think a lot of this is due to people essentially being too busy at work to have free time, and not wanting to use any of that free time to interact with people they don't already know. I live in southern California in an area prized for its nice weather, and see almost no adults (other than our friends with kids) who spend greater than 30 minutes outside. Same thing with parks: only people there are parents, children, and bums. I guess the internet and TV are more interesting than neighbors.

[calimom]

Don't worry. With house prices tripling, your county will continue to raise property taxes to a point where the teachers and plumbers can't afford it. Then all that will be left are the rich folks that interact with each other.

One small benefit of CA where you don't completely get raped (like all other areas) is that they can only increase the assessed value by a max of 2% each year, below the inflation rate.  The longer you own, the lower your property tax is relatively speaking (i.e. people who purchased 20 years ago pay very little in property tax).  It's a huge advantage of owning real estate here, if you can get over the initial hurdle of a high purchase price.

Here's a hint. People here generally don't like jokes about rape, even if you're being fun and flighty.

[nancy33]

This is happening in my community, except homes are being purchased as "vacation homes or rentals" and the real owners of the homes are rarely actually in my town, or interacting with our community. Instead, random VRBO guests come every weekend, and the neighborhoods are now just filled with tourists who stay up late drinking, being super loud, and parking in really annoying ways. What used to be a quiet small town is now completely unsustainable because of real estate prices, and the demand for short term rentals...it's pretty much ruining our neighborhoods, and small town community.

Sounds exactly like my town. It is sad.

[Hula Hoop]

This has happened in the neighborhood where I grew up in NYC.  Growing up it was a mixture of artists and musicians with some relatively low-earning professionals like teachers, journalists, human rights lawyers, film makers, writers etc.  My parents were in one of those categories.  Things were kind of counter-culture in my neighborhood growing up and it was nice to grow up around creative people who weren't money focused.  Lots of health food stores, book stores and record stores.

Fast-forward to now and the only people who can afford my old neighborhood are Wall Street types.  They mostly don't come from the city, are obsessed by money and have armies of "help" who do everything for them.  In my father's building there have been several clashes between the young Wall Street types, who don't want to spend a cent on maintaining the building (that's how they got rich, I suppose) and couldn't care less about getting on with their neighbors and the old "hippy' types who still live there.  The hippy types are really shocked by the Wall Streeters life stype - private school for the kids, nannies, house in the Hamptons, ski vacations. And the Wall Streeters appear to be kind of jealous that the hippy types paid so little for their apartments back in the day.  Because they paid mega-bucks for their apartments, they don't want the hippy types to do anything to 'bring down the tone' of the building.  For example, one elderly musician cycles around NYC on an ancient bike (he's done this for the 40 years that I've known him) and leaves it parked in the lobby.  The Wall Streeters tried to get him to take his bike upstairs.  The hippy types were outraged.

The neighborhood is now totally bland - full of expensive baby boutiques and pilates studios.  The book and record stores are gone as are all the bodegas, shoe repair places etc.  Literally the cheapest place to buy food in the neighborhood now is Whole Foods - there are several stores that cost more. 

[ApacheStache]

I live in southern California in an area prized for its nice weather, and see almost no adults (other than our friends with kids) who spend greater than 30 minutes outside. Same thing with parks: only people there are parents, children, and bums. I guess the internet and TV are more interesting than neighbors.

The same thing can be said for kids too. When I was a kid, I had plenty of video games to play, internet to surf and TV to watch but I was outside just about everyday rain or shine — it just seemed like the natural thing to do as a kid. Maybe it's just the neighborhood that I live in, but as an adult, I rarely see anyone outside unless they're taking their dog for a walk, racing down the street going 20 mph over the speed limit in their clown car or when the power goes out in the neighborhood. I think people are too consumed by their smart phones, internet, tv, amazon.com shopping and social media to realize there's a world outside their own. It may not necessarily be a wealth or culture thing.

As far as immigrants moving into a neighborhood and keeping to themselves — they may just need time to acclimate to the rest of the neighborhood's culture and community. As a non-caucasian individual, I never really know what beliefs my immediate neighbors hold towards culture's and individuals that differ from their own. I assume the best in everyone until proven otherwise, but I prefer to "trust but verify" before outwardly introducing myself. With that said, if someone waves, says hi, or attempts to welcome me to the neighborhood, I certainly welcome and enjoy the interaction.

[Hula Hoop]

I'm an immigrant where I live now - although I'm white and most of the people around me are white.  I look a bit 'different' and my language and culture are different which creates a bit off a barrier. Sometimes when people hear by accent, they recoil and assume that they have to speak to me like I'm 5 years old. I have to admit that my best friend is a fellow immigrant from the US.  We share not just a language but also a culture and the experience of fitting into and raising kids in a foreign culture.  I have plenty of Italian friends and speak the language well, but Italians tend not to have had the experience of living in a foreign culture and they have their families around them.  My experience here has definitely given me a new perspective on immigrants in my home country - the US.  Especially when you have kids, it's nice to hang onto the culture of your childhood.  For example, my American friend and I are organizing an Easter Egg hunt (and we're dying Easter Eggs) on Easter.  Italians don't do this but it's something that we preserve from our culture.

[BikeFanatic]

I also agree the rape comment being inappropriate

[exterous]

Not so much about blending into the community but the biggest change I have noticed is the Mom and Pop shops are leaving. The You Pull It junk yard I used for cheap car parts just closed. Small non-chain restaurants are leaving.

The second is the type and cost of home services. Two years ago I got my first flyer about a company that will hang Holiday lights on my house for me. Now there are several companies that advertise this. When neighbors discuss or I see flyers for lawn care, handyman, and tradesmen the cost for the work is shockingly (to me) expensive.

[fuzzy math]

Objectively, I don't see that much of a difference between a person who would spend $1MM vs $3MM on a house. Perhaps I don't understand. It seems out of reach for a household of a teacher and a plumber to afford the first value. Many of those households probably also have a working tech person or skilled medical clinician. I would argue that perhaps when you spent $1MM on your home, you may have displaced the first round of people who were truly lower working class and you might not have noticed it.

[Maenad]

Well, communities change. I live in my childhood home, and I've seen my neighborhood go from middle class to upper class. People come in here, pay $1MM for a house, tear it down, and spend another $1MM on a new one, that's as big as they can make it within the lot lines and a cookie-cutter McMansion. A lot of them appear to have way more money than brains, and it'll be fascinating at the next downturn to see how many have been swimming naked.

But there are also a lot of really nice new people as well. And you can tell a lot about the newcomers by how they treat the remaining middle- and lower-middle-class people who bought smaller properties decades ago and are still hanging on. Some people appear standoffish just because they're busy and don't have a lot of time to socialize, but will spend a few minutes chatting if you run into them when you're picking up your mail, walking your dog, etc.

I'm taking the position of "I'm thisclose to FI, and will be retired in my 40s, having achieved what I wanted to. I don't have anything to prove, and can be friendly to everyone." As a bonus, that attitude really messes with the minds of the social climbers. I can be nice and still confuse the hell out of the snobs.

[Maenad]

I forgot to mention - be really careful how you choose to think about new immigrants moving into your community. Racism and xenophobia can sneak into your thoughts awfully easily. They may be cliquish out of an abundance of caution, given that racism and xenophobia has experienced a resurgence in the world lately, and is suddenly "acceptable" in a way that is just... shitty.

[wenchsenior]

I find this whole thread interesting and sort of alien in terms of the idea of 'a neighborhood culture or community'.   

Do you guys mean how houses/yards are kept? Or neighborhood events that people go to, and if so, what events do you mean? Or somehow getting to know the names of the people up and down your street, and if so, how? Or actual socializing with neighbors, as in developing real friendships? 

I ask not b/c I want this sort of neighborhood, but b/c I'm almost 50 and I've never lived anywhere that any of these occur, or if they do occur, they are not happening where I can see it (apart from parents attending athletic games down the street at the grade school; some of them presumably get to know each other). 

Honestly, it would never in a million years occur to me to hang out with neighbors...I've lived on the same street for almost 20 years and I only know the name of 1 or 2 people on the street b/c our mail person mis-delivers mail constantly. I mean, we greet people on our street when we are out walking, but we've hardly ever 'met' any of them.  I realize that both my husband and I are nature-oriented introverts, who would prefer to live miles from other people, if it were an option, but I'm wondering if I'm totally blind to some sort of 'culture' that is occurring all around us.  Maybe it's that we don't have kids, and thus are not 'automatically' exposed to other adults on our street that have kids. Or maybe it's that we've lived 20 years in a 'starter' neighborhood (because it's mustachian LOL) with quite a bit of turnover.  On the other hand, during college, we lived in a very ritzy, old, prestigious, established neighborhood in Tucson, and we were constantly out and about walking and biking, and we almost never even SAW people there, let alone 'neighborhood activities'.

Regardless, it's an interesting topic.  I know both my parents grew up in the 50s in neighborhoods where people socialized all the time. And a couple of my childhood friends grew up in the same neighborhoods, and there was still some of that vibe during the 70s, but I thought that was a long-gone era. 

[Hula Hoop]

wenchsenior - in the NYC of my childhood we knew everyone.  Maybe because we were all in apartment buildings and walked or took the subway everywhere.  So I've known all the "hippy" neighbors of my dad since childhood. I knew all the store and bodega owners and the other kids on my street as we used to all play outside on the sidewalk. Now that the neighborhood has become a rich person's playground, there's a huge cultural chasm between the working artists or a journalists who have been there since the 70s and the Wall Street hedge fund owners.  The Wall Street people are all about money and lots of it and the artists, journalists etc care about other things.

I think in the suburbs people often don't know their neighbors.  I guess that's because people drive everywhere and don't live in apartments.  In both my old neighborhood in NYC and where I live now we see the same people all the time at community events, in the park, in the elevator, on the street at the local stores.  After a while, you get to know all their names. For example, last night I was drinking a glass of wine with friends on the street outside the wine bar on the end of my street and three people I knew walked past and sat down briefly with us to chat.

[HBFIRE]

Here's a hint. People here generally don't like jokes about rape, even if you're being fun and flighty.

Sorry about that, you're right.  I was being careless with language there, I'll be more careful in the future.

[Unionville]

Objectively, I don't see that much of a difference between a person who would spend $1MM vs $3MM on a house. Perhaps I don't understand. It seems out of reach for a household of a teacher and a plumber to afford the first value. Many of those households probably also have a working tech person or skilled medical clinician. I would argue that perhaps when you spent $1MM on your home, you may have displaced the first round of people who were truly lower working class and you might not have noticed it.

Just to clarify my original statement - none of the teachers/plumbers I mentioned paid 1 million for their house.  When I said housing prices tripled, that was just tripling from about 5 years ago.  The teachers/plumbers bought their houses several decades ago when a teacher's salary could buy a house. My immediate neighbor is still a delivery man who is the main breadwinner for his household - but he can only continue doing that because they bought their house in a "normal" market.

[seattlecyclone]

We've had a similar phenomenon happen in Seattle. I moved here a decade ago and house prices have doubled since then. My neighborhood used to be pretty middle class, somewhat popular with student renters since we're less than two miles from the university. Now it's next to impossible to buy a home here without a six-figure salary. Many of the old, smaller homes have been demolished in favor of 3,000 square foot mini-mansions that sell for $1.5 million or more.

This change has led to some disagreements about zoning policy, breaking largely along generational lines. The people who have been here for 30 years still have it in their heads that this neighborhood is affordable for all sorts of folks and so there's no need to change anything.

However when the only thing that anyone can build anymore is a $1.5 million house for one rich family, whatever income diversity we still have in this area isn't going to last long. A lot of us are pushing to liberalize the zoning restrictions. If you can build a huge home for one rich family for $1.5 million, why can't you build something the same size and shape with three two-bedroom homes for middle-class families or six one-bedroom homes for singles and couples who don't need a whole house to themselves? Seems like a great change to me.

[FINate]

Cities are living, breathing organisms. Neighborhoods change. If you're extremely lucky, you own in a city that is thriving and prosperous. If you're unlucky you're in a city that's stagnating or deteriorating. So, consider your good fortune.

Much of the Bay Area suffers from rampant xenophobia...don't get sucked into this narrative, it creates an "us" vs. "them" mentality and will only make you miserable. Accept those "outsiders" into your community, most of us will be or have been an outsider at some point in our life.

As for teachers and plumbers getting priced out: It's not the fault of those moving in paying market prices. This is an issue throughout the Bay Area, where homeowners aggressively fight to "preserve the character" of the neighborhood and prevent almost all new housing, esp. high density and/or affordable housing. We then complain that only the wealthy can afford to live here. Nefarious "outsiders" are an easy scapegoat. The real blame lies with entrenched homeowners.

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

[Unionville]

I find this whole thread interesting and sort of alien in terms of the idea of 'a neighborhood culture or community'.   

Do you guys mean how houses/yards are kept? Or neighborhood events that people go to, and if so, what events do you mean? Or somehow getting to know the names of the people up and down your street, and if so, how? Or actual socializing with neighbors, as in developing real friendships? 

I ask not b/c I want this sort of neighborhood, but b/c I'm almost 50 and I've never lived anywhere that any of these occur, or if they do occur, they are not happening where I can see it (apart from parents attending athletic games down the street at the grade school; some of them presumably get to know each other). 

Honestly, it would never in a million years occur to me to hang out with neighbors...I've lived on the same street for almost 20 years and I only know the name of 1 or 2 people on the street b/c our mail person mis-delivers mail constantly. I mean, we greet people on our street when we are out walking, but we've hardly ever 'met' any of them.  I realize that both my husband and I are nature-oriented introverts, who would prefer to live miles from other people, if it were an option, but I'm wondering if I'm totally blind to some sort of 'culture' that is occurring all around us.  Maybe it's that we don't have kids, and thus are not 'automatically' exposed to other adults on our street that have kids. Or maybe it's that we've lived 20 years in a 'starter' neighborhood (because it's mustachian LOL) with quite a bit of turnover.  On the other hand, during college, we lived in a very ritzy, old, prestigious, established neighborhood in Tucson, and we were constantly out and about walking and biking, and we almost never even SAW people there, let alone 'neighborhood activities'.

Regardless, it's an interesting topic.  I know both my parents grew up in the 50s in neighborhoods where people socialized all the time. And a couple of my childhood friends grew up in the same neighborhoods, and there was still some of that vibe during the 70s, but I thought that was a long-gone era.

That's interesting to me.  I'm curious about your neighborhood and why our neighborhood is so different.  Perhaps because people don't drive much here (traffic and parking is hard) , so people walk/bike outside a lot to get places (?)  We have neighborhood events and even babysit the neighbor's kids (not for money, for free). It's not really a complaint, but the only problem I run into is that I have to allow an extra 5 minutes to get to the subway because neighbors will often stop to talk on the street.  Maybe this is unusual?

[ixtap]

This is classic gentrification, breaking up communities across the US.

[Unionville]

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

But people shouldn't be chased out of their neighborhood just because property values have increased around them through no fault of their own.  Some people have lived here their whole lives.  It seems unfair to expect people to cash out and go live in Utah (or wherever). Maybe the people moving in should do that instead. LOL.  Our neighborhood has multigenerational families of multiple ethnicities. Some rent  rooms to students for a side income.  If someone wealthy buys that house, I doubt they would rent to students and therefore the housing density would go down. Replacing these properties with expensive apartment buildings would throw out a lot of average income renters and we'd probably be left with same residents per block (except it would be a high income population). For example, my neighbor rents rooms to about 6 people in his house (that he lives in).  Partly for retirement income, partly because he is elderly and likes having someone around the house in case he needs help at home. I can't imagine a 3 million dollar home owner doing that - nor would those same renters be able to afford newly built apartments.

[SwordGuy]

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

But people shouldn't be chased out of their neighborhood just because property values have increased.  Some people have lived here their whole lives.  It seems unfair to expect people to cash out and go live in Utah (or wherever). Maybe the people moving in should do that instead. LOL.  Our neighborhood has multigenerational families of multiple ethnicities. Our current neighbors rent out rooms to students for a side income.  If someone wealthy buys that house, I doubt they would rent to students and therefore the housing density would go down. Replacing these properties with high density expensive housing would throw out a lot of students and we'd probably be left with same population per block (except it would be a high income population). For example, my neighbor rents rooms to about 6 people in his house (that he lives in).  I can't imagine a 3 million dollar home owner doing that.

It was presented as an option, which it is, not a mandatory prescription.

[FINate]

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

But people shouldn't be chased out of their neighborhood just because property values have increased.  Some people have lived here their whole lives.  It seems unfair to expect people to move out, cash out and go live in Utah (or wherever).  Their entire family network is here.  Just because someone else is rich, they shouldn't determine the future of a neighborhood.

I get the sentiment. I've lived in the Santa Cruz/Monterey area most of my life, have watched it change for better and worse in different ways. My friends and family are here, but I don't see my kids having a future here due to the insane cost of living. What's happening in the Bay Area is particularly frustrating: A lack of coordination and planning across the entire region along with a general no-growth attitude has driven housing up to the point of crisis, and now this is spilling into neighboring areas, including Santa Cruz.

Of course, Santa Cruz is not without blame. Like the Bay Area we've also doubled down on no-growth policies which, rather predictably, intensified the problem.

The question remains of what to do about it? You can't prevent outsiders from moving in. To be bit provocative, I find it ironic that we're opposed to "the wall" (as we should be) while at the same time want to wall off our communities to outsiders.

IMO, the solution is to build up and much more densely. Not just in SF, but in all the Bay Area counties, esp. near BART. And invest heavily in BART, CalTrain, VTA, and other mass transit. It's about time for the Bay Area to grow up and become a real metropolis rather than a collection of suburbs. This would make the region much more socioeconomically inclusive. Alas, our instinct is to cling to visions of the past with single family homes, lawns, and pools.

[Hula Hoop]

FINate - As a person from another extremely HCOL area, I completely agree. 

[seattlecyclone]

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

But people shouldn't be chased out of their neighborhood just because property values have increased.  Some people have lived here their whole lives.  It seems unfair to expect people to cash out and go live in Utah (or wherever). Maybe the people moving in should do that instead. LOL.  Our neighborhood has multigenerational families of multiple ethnicities. Our current neighbors rent out rooms to students for a side income.  If someone wealthy buys that house, I doubt they would rent to students and therefore the housing density would go down. Replacing these properties with high density expensive housing would throw out a lot of students and we'd probably be left with same population per block (except it would be a high income population). For example, my neighbor rents rooms to about 6 people in his house (that he lives in).  I can't imagine a 3 million dollar home owner doing that.

It was presented as an option, which it is, not a mandatory prescription.

Right. Nobody who owns their home is being "chased out" by rising home values. That said, if your house has tripled in value it can be perfectly rational to reevaluate from time to time whether staying put would make you happier than redeploying your home equity toward a richer lifestyle someplace else.

[Unionville]

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

But people shouldn't be chased out of their neighborhood just because property values have increased.  Some people have lived here their whole lives.  It seems unfair to expect people to cash out and go live in Utah (or wherever). Maybe the people moving in should do that instead. LOL.  Our neighborhood has multigenerational families of multiple ethnicities. Our current neighbors rent out rooms to students for a side income.  If someone wealthy buys that house, I doubt they would rent to students and therefore the housing density would go down. Replacing these properties with high density expensive housing would throw out a lot of students and we'd probably be left with same population per block (except it would be a high income population). For example, my neighbor rents rooms to about 6 people in his house (that he lives in).  I can't imagine a 3 million dollar home owner doing that.

It was presented as an option, which it is, not a mandatory prescription.

Right. Nobody who owns their home is being "chased out" by rising home values. That said, if your house has tripled in value it can be perfectly rational to reevaluate from time to time whether staying put would make you happier than redeploying your home equity toward a richer lifestyle someplace else.

But it kind of is like being chased out.  It is saying: "Millionaires get to decide the future of this neighborhood just because they have money". Not every decision should be made on the basis of "for the money".  Otherwise we could build factories in public parks. I can't imagine many of my neighbors moving for money. It's not the way they think.  Maybe it's an American national problem: Money controls everything.  If our neighbors moved away, we would lose so much.  One man has a wood shop that helps people fix things. Another person is a retired Navy Seal who knows a lot about emergency preparedness (and is a boy scout leader).  A retired teacher helps kids with homework. A legal secretary helps people with legal stuff. It's a major loss to a community when these valuable, skilled (and generous) people move away. This is not the type of people who are buying houses here. You can't put a value or price on a self sustaining "community."   People moving here are paying all-cash for houses - are they going to babysit neighbors kids, help in the wood shop, etc? I doubt it.

[Roland of Gilead]

I have mixed feelings about the property tax situation in California.   On the one hand it is good to be able to stay in your home on a reasonable salary (not getting priced out of the neighborhood) but on the other hand it really is unfair to young couples who would like to purchase a home but are saddled with the burden of paying a much higher share of the tax.

A fair solution might be to keep the property tax low but collect it on the back end, when someone eventually sells.   So when you collect your $3,000,000 for a house you paid $200,000 for a couple decades back, you pay back some of that cheap property tax rate you enjoyed.

But hey, Californians voted for it, so they get the government they want/deserve I guess.

[seattlecyclone]

But it kind of is like being chased out.  It is saying: "Millionaires get to decide the future of this neighborhood just because they have money". Not every decision should be made on the basis of "for the money".  Otherwise we could build factories in public parks. I can't imagine many of my neighbors moving for money. It's not the way they think.  I think it all comes down to our national problem: Money controls everything.  If our neighbors moved away, we would lose so much.  One man has a wood shop that helps people fix things. Another person is a retired Navy Seal who knows a lot about emergency preparedness (and is a boy scout leader).  A retired teacher helps kids with homework. A legal secretary helps people with legal stuff. It's a major loss to a community when these valuable, skilled people move away. This is not the type of people who are buying houses here. You can't put a value or price on a self sustaining "community."  Isn't that why co-housing communities started?  They try to artificially create this kind of community?  Why should we sell it out just because someone else feels that money is the final say-so for decisions?  People moving here are paying all-cash for houses - are they going to babysit, help in the wood shop, etc? I doubt it.

Your area has created a bunch of very prosperous people. They understandably want to live close to their jobs, and many of them could afford to buy even at twice the price. The thing is, nobody particularly enjoys paying millions of dollars for a relatively modest home. Nobody really wants to be that guy who needs to wave ever-increasing amounts of cash in peoples' faces in hopes of convincing a retiree or a Scout leader or a woodworking enthusiast to move out. But when your whole area is zoned such that it's basically illegal to add more housing, the whole thing becomes a game of musical chairs. Nobody can move in without someone else moving out, and the people who leave are those with less rather than more money, those who value a million dollars cash much more than staying in their community. It's so predictable and so preventable, but here we are. At least those who managed to buy a home 30 years ago get to leave with a big pile of cash, on their own terms. Those who have been renting have less say in the matter of when or if they leave, and when they do go they don't get a big cash windfall on their way out.

[Another Reader]

Cities are living, breathing organisms. Neighborhoods change. If you're extremely lucky, you own in a city that is thriving and prosperous. If you're unlucky you're in a city that's stagnating or deteriorating. So, consider your good fortune.

Much of the Bay Area suffers from rampant xenophobia...don't get sucked into this narrative, it creates an "us" vs. "them" mentality and will only make you miserable. Accept those "outsiders" into your community, most of us will be or have been an outsider at some point in our life.

As for teachers and plumbers getting priced out: It's not the fault of those moving in paying market prices. This is an issue throughout the Bay Area, where homeowners aggressively fight to "preserve the character" of the neighborhood and prevent almost all new housing, esp. high density and/or affordable housing. We then complain that only the wealthy can afford to live here. Nefarious "outsiders" are an easy scapegoat. The real blame lies with entrenched homeowners.

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

Your pompous, arrogant attitude is offensive.

Xenophobia by the existing residents is not the issue.  It's the new immigrants that rebuff becoming part of the larger neighborhoods and stick to their clans.  It's kind of funny to see people of the different cultures from India not interact other than superficially with people from other cultures from their own country.  At least they are not killing each other here, as happens sometimes in India. 

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures.  If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

Once Google finishes the San Jose campus, I will be a landlord for the house I live in now.  I bought many years ago, and I will collect the ridiculous rent from some newly transferred high income pair of professionals, while living in a far nicer environment.  At least until the earthquake hits...

[Tyson]

Cities are living, breathing organisms. Neighborhoods change. If you're extremely lucky, you own in a city that is thriving and prosperous. If you're unlucky you're in a city that's stagnating or deteriorating. So, consider your good fortune.

Much of the Bay Area suffers from rampant xenophobia...don't get sucked into this narrative, it creates an "us" vs. "them" mentality and will only make you miserable. Accept those "outsiders" into your community, most of us will be or have been an outsider at some point in our life.

As for teachers and plumbers getting priced out: It's not the fault of those moving in paying market prices. This is an issue throughout the Bay Area, where homeowners aggressively fight to "preserve the character" of the neighborhood and prevent almost all new housing, esp. high density and/or affordable housing. We then complain that only the wealthy can afford to live here. Nefarious "outsiders" are an easy scapegoat. The real blame lies with entrenched homeowners.

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

Your pompous, arrogant attitude is offensive.

Xenophobia by the existing residents is not the issue.  It's the new immigrants that rebuff becoming part of the larger neighborhoods and stick to their clans.  It's kind of funny to see people of the different cultures from India not interact other than superficially with people from other cultures from their own country.  At least they are not killing each other here, as happens sometimes in India. 

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures.  If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

Once Google finishes the San Jose campus, I will be a landlord for the house I live in now.  I bought many years ago, and I will collect the ridiculous rent from some newly transferred high income pair of professionals, while living in a far nicer environment.  At least until the earthquake hits...

You're so right, it's always those damn immigrant's fault!  They never integrate fast enough.  Ruins the damn place.

/sarcasm

[Unionville]

But it kind of is like being chased out.  It is saying: "Millionaires get to decide the future of this neighborhood just because they have money". Not every decision should be made on the basis of "for the money".  Otherwise we could build factories in public parks. I can't imagine many of my neighbors moving for money. It's not the way they think.  I think it all comes down to our national problem: Money controls everything.  If our neighbors moved away, we would lose so much.  One man has a wood shop that helps people fix things. Another person is a retired Navy Seal who knows a lot about emergency preparedness (and is a boy scout leader).  A retired teacher helps kids with homework. A legal secretary helps people with legal stuff. It's a major loss to a community when these valuable, skilled people move away. This is not the type of people who are buying houses here. You can't put a value or price on a self sustaining "community."  Isn't that why co-housing communities started?  They try to artificially create this kind of community?  Why should we sell it out just because someone else feels that money is the final say-so for decisions?  People moving here are paying all-cash for houses - are they going to babysit, help in the wood shop, etc? I doubt it.

Your area has created a bunch of very prosperous people. They understandably want to live close to their jobs, and many of them could afford to buy even at twice the price. The thing is, nobody particularly enjoys paying millions of dollars for a relatively modest home. Nobody really wants to be that guy who needs to wave ever-increasing amounts of cash in peoples' faces in hopes of convincing a retiree or a Scout leader or a woodworking enthusiast to move out. But when your whole area is zoned such that it's basically illegal to add more housing, the whole thing becomes a game of musical chairs. Nobody can move in without someone else moving out, and the people who leave are those with less rather than more money, those who value a million dollars cash much more than staying in their community. It's so predictable and so preventable, but here we are. At least those who managed to buy a home 30 years ago get to leave with a big pile of cash, on their own terms. Those who have been renting have less say in the matter of when or if they leave, and when they do go they don't get a big cash windfall on their way out.

I don't mean to be provocative but: Are saying that we should tear down our houses and replace them with high rise apartment buildings?  Are the plumbers and teachers now expected to take on an additional burden of solving the housing crisis?  I think my neighbor is contributing a lot by renting to roommates. No need for him to build apartment buildings for each of them. 

And to another point - just because you are a family does not mean you must automatically own a home. I grew up and we never owned a home, and more shocking (compared to these days) is we only had one bathroom (which is still the case).  It's not that weird for a family to rent, and for kids to share a bedroom.  And where I live there are a lot of apartments for rent.  Yes, they are expensive, but way cheaper and less stressful than trying to enter bidding wars for houses. AS MMM often recommends -- you don't need a lot to have a fulfilling life and happy family - especially in a place where you can spend most of your time outdoors. 

[FINate]

Your pompous, arrogant attitude is offensive.

Please help me understand, how am I being pompous and arrogant? I'll try not to be, but I have strong opinions about this because I'm tired of seeing people suffer due to poor housing policies. The science is pretty clear: high demand + low supply.

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

How can you claim to know what others want on such a broad scale? Sure, people may prefer a SFH on a large lot, but the question is how much they value this. What would they choose if given the option between a 500K efficiency condo close to work or a 2M house on a large lot? I don't think anyone can really say because the former option doesn't exist in large numbers.

Also, not sure what density has to do with the quality of schools?

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures. 

I would argue that density increases as the value of land increases as a way to make the economics of development pencil out.

If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

...the housing crisis in a nutshell.

[Another Reader]

Cities are living, breathing organisms. Neighborhoods change. If you're extremely lucky, you own in a city that is thriving and prosperous. If you're unlucky you're in a city that's stagnating or deteriorating. So, consider your good fortune.

Much of the Bay Area suffers from rampant xenophobia...don't get sucked into this narrative, it creates an "us" vs. "them" mentality and will only make you miserable. Accept those "outsiders" into your community, most of us will be or have been an outsider at some point in our life.

As for teachers and plumbers getting priced out: It's not the fault of those moving in paying market prices. This is an issue throughout the Bay Area, where homeowners aggressively fight to "preserve the character" of the neighborhood and prevent almost all new housing, esp. high density and/or affordable housing. We then complain that only the wealthy can afford to live here. Nefarious "outsiders" are an easy scapegoat. The real blame lies with entrenched homeowners.

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

Your pompous, arrogant attitude is offensive.

Xenophobia by the existing residents is not the issue.  It's the new immigrants that rebuff becoming part of the larger neighborhoods and stick to their clans.  It's kind of funny to see people of the different cultures from India not interact other than superficially with people from other cultures from their own country.  At least they are not killing each other here, as happens sometimes in India. 

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures.  If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

Once Google finishes the San Jose campus, I will be a landlord for the house I live in now.  I bought many years ago, and I will collect the ridiculous rent from some newly transferred high income pair of professionals, while living in a far nicer environment.  At least until the earthquake hits...

You're so right, it's always those damn immigrant's fault!  They never integrate fast enough.  Ruins the damn place.

/sarcasm

Fault?  Who said anything about fault?  I'm making an observation about something I see.

The motivation to move out of the area is as described above, too many people, too much traffic, more crime and more pollution.  Where people are from and how long they or their ancestors have been here is irrelevant.  The people that will want to buy or rent my house are likely used to these problems and apparently tolerate them better than I am willing to do.

[Another Reader]

Your pompous, arrogant attitude is offensive.

Please help me understand, how am I being pompous and arrogant? I'll try not to be, but I have strong opinions about this because I'm tired of seeing people suffer due to poor housing policies. The science is pretty clear: high demand + low supply.

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

How can you claim to know what others want on such a broad scale? Sure, people may prefer a SFH on a large lot, but the question is how much they value this. What would they choose if given the option between a 500K efficiency condo close to work or a 2M house on a large lot? I don't think anyone can really say because the former option doesn't exist in large numbers.

Also, not sure what density has to do with the quality of schools?

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures. 

I would argue that density increases as the value of land increases as a way to make the economics of development pencil out.

If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

...the housing crisis in a nutshell.

It's your arrogant condescending attitude about what people should do if they don't agree with you.

Families with children don't want cramped $500k condos with no yards and lots of stairs.  Those that can afford it will buy single family houses with yards in proximity to excellent public schools.  Prices tell you what people "value."  $2MM is a lot more than $500k.  It's as simple as that.

[FINate]

Your pompous, arrogant attitude is offensive.

Please help me understand, how am I being pompous and arrogant? I'll try not to be, but I have strong opinions about this because I'm tired of seeing people suffer due to poor housing policies. The science is pretty clear: high demand + low supply.

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

How can you claim to know what others want on such a broad scale? Sure, people may prefer a SFH on a large lot, but the question is how much they value this. What would they choose if given the option between a 500K efficiency condo close to work or a 2M house on a large lot? I don't think anyone can really say because the former option doesn't exist in large numbers.

Also, not sure what density has to do with the quality of schools?

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures. 

I would argue that density increases as the value of land increases as a way to make the economics of development pencil out.

If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

...the housing crisis in a nutshell.

It's your arrogant condescending attitude about what people should do if they don't agree with you.

Not sure what you're referring to. I provided another option to consider, not a "should do". Will add this is an option we're likely taking in the near future, though making this decision has not been easy and comes with a mix of sadness and excitement. When we move away we'll make room for someone else who values our house more. Essentially, it's economics at work responding to the incentives created in the local housing market.

Families with children don't want cramped $500k condos with no yards and lots of stairs.  Those that can afford it will buy single family houses with yards in proximity to excellent public schools.  Prices tell you what people "value."  $2MM is a lot more than $500k.  It's as simple as that.

Agree, most people would like more space. But for many folks housing is truly at a crisis level. I volunteer for an afterschool program at my local elementary school. Many families are living in single room garages and other substandard housing. One day a kid was tired and I asked him what was up - it rained overnight the the roof was leaking and soaked his bed. Many of these folks would not be able to afford a 500k efficiency condo, but a SINK, DINK or retiree could, which in turn reduces demand for other housing and helps with the filtering effect that has been disrupted by failure to increase housing supply sufficiently.

[Paul der Krake]

As a pompous professional transient, nothing gives me greater pleasure than to shovel large sums of money for unremarkable housing to unremarkable people who happened to make one good decision 20 years ago. That really shows them!

I then make sure to invite all my Indian friends over to the local park for some curry and cricket, to assert dominance over the remaining mortgage-carrying plebs.

[Unionville]

Re: the bay area housing crises --  Even MMM would say: Just because you have kids does not mean you  must own a home.  There are many benefits to renting. There are 3 bedroom apartments available in a decent price range throughout the bay area ($2500-$4000).  This is way cheaper than owning a home (or paying the expensive property taxes, repairs, crime, parking), and the new complexes often provide security and often have shared community spaces. And when the earthquake happens you won't be stuck fixing a house and losing half the value.

Example of just one of many nice neighborhoods and near BART: https://www.rent.com/california/el-cerrito-apartments/3-bedroom_max-price-4000?WT.mc_id=23000&gclid=EAIaIQobChMIhPHh3pC84QIVPyCtBh0NPA7HEAAYAiAAEgK53PD_BwE&boundingbox=-122.335,37.881,-122.205,37.947

[MaybeBabyMustache]

Cities are living, breathing organisms. Neighborhoods change. If you're extremely lucky, you own in a city that is thriving and prosperous. If you're unlucky you're in a city that's stagnating or deteriorating. So, consider your good fortune.

Much of the Bay Area suffers from rampant xenophobia...don't get sucked into this narrative, it creates an "us" vs. "them" mentality and will only make you miserable. Accept those "outsiders" into your community, most of us will be or have been an outsider at some point in our life.

As for teachers and plumbers getting priced out: It's not the fault of those moving in paying market prices. This is an issue throughout the Bay Area, where homeowners aggressively fight to "preserve the character" of the neighborhood and prevent almost all new housing, esp. high density and/or affordable housing. We then complain that only the wealthy can afford to live here. Nefarious "outsiders" are an easy scapegoat. The real blame lies with entrenched homeowners.

Of course, another option (if you own) is to sell your highly appreciated house, take your capital gains exclusion (assuming you meet the requirements), and walk away with a big chunk of tax free cash.

Your pompous, arrogant attitude is offensive.

Xenophobia by the existing residents is not the issue.  It's the new immigrants that rebuff becoming part of the larger neighborhoods and stick to their clans.  It's kind of funny to see people of the different cultures from India not interact other than superficially with people from other cultures from their own country.  At least they are not killing each other here, as happens sometimes in India. 

All of these folks buying where I live want the same thing I want, a spacious single family home on a large lot with excellent local schools.  They don't want to settle for what you propose  and they are willing to pay up to get what they want.

The existing residents in the Bay Area are tired of all that density crap being shoved down their throats.  Too many people, too much traffic, more crime and more pollution.  Cities push high density as the cheapest way to fill housing needs and fulfill legal mandates.  It minimizes their infrastructure expenditures.  If cities had their way, there would never be any new residential development, because residents cost money, while businesses whose employees live elsewhere would be recruited and subsidized.

Once Google finishes the San Jose campus, I will be a landlord for the house I live in now.  I bought many years ago, and I will collect the ridiculous rent from some newly transferred high income pair of professionals, while living in a far nicer environment.  At least until the earthquake hits...

Can we quit with this rhetoric? It's divisive, insulting, & we are better than that. We live in the Bay Area, and I've found people to be generally inviting & welcoming, regardless of their nationality. If they aren't, I don't assume it's because of their nationality, but rather about who they are as a person. Perhaps people are picking up on your attitude & are not including you as a result. Do you go out of your way to include others, despite where they come from?

[scantee]

It's your arrogant condescending attitude about what people should do if they don't agree with you.

As an outsider observing this back and forth it really appears that you are the one being offensive and condescending.

OP, you can’t have both ways: skyrocketing property values that make you rich simply because of when you bought into the market AND stable neighborhoods without a lot resident turnover. Were I in your situation I would be saying a little prayer of thanks every single morning for my good fortune rather than perseverating on how not all of the changes in the neighborhood are to my liking. Maybe work on shifting your mindset to focus on the good you have or will experience as a result of this change.

[Another Reader]

Then maybe those people cannot afford to live here.  They need to make a different choice than living in a leaky garage.  There are lots of opportunities in other parts of the country, especially for lower income wage earners.  And maybe we should take a serious look at illegal immigration to see what it is costing all of us.  Because, whether you like it or not, that is a not unsubstantial source of pressure on housing. 

In the long run, maybe we need not to create more jobs here.  They need to go where land is cheaper and people can afford to live comfortably.  Lots of people would be willing to move elsewhere if the move came with a decent job and affordable housing.  My guess is many people would choose an affordable single family house with a decent job over your $500k condo, all else being equal.

[Another Reader]

As a pompous professional transient, nothing gives me greater pleasure than to shovel large sums of money for unremarkable housing to unremarkable people who happened to make one good decision 20 years ago. That really shows them!

I then make sure to invite all my Indian friends over to the local park for some curry and cricket, to assert dominance over the remaining mortgage-carrying plebs.

Please move to my neighborhood and make some new friends!  We have a nice little non-park park that would benefit from this.

[FINate]

Then maybe those people cannot afford to live here.  They need to make a different choice than living in a leaky garage.  There are lots of opportunities in other parts of the country, especially for lower income wage earners.  And maybe we should take a serious look at illegal immigration to see what it is costing all of us.  Because, whether you like it or not, that is a not unsubstantial source of pressure on housing. 

Moving out of the area is often the right choice, but it's difficult to come to this conclusion if you've rented here for a long time and/or your landlord hasn't kept up with market rate (happens around here with mom-and-pop landlords). Then the house is sold and then there's the sudden shock of trying to find a reasonably priced rental on the open market. I've helped several people in this situation over the years, mostly by providing free housing for a few months while they get stabilized and find work and housing elsewhere. But it takes time.

Things are different for the very poor. These folks are on the very edge financially. Moving is expensive. Finding a new job in a far away location isn't simple and takes away from work time they need to make ends meet. For multi-income families (many are muti-generational) there's the problem of everyone having to find work in the new location. Basically, there's not a lot of cushion in the budget.

In the long run, maybe we need not to create more jobs here.  They need to go where land is cheaper and people can afford to live comfortably.  Lots of people would be willing to move elsewhere if the move came with a decent job and affordable housing.  My guess is many people would choose an affordable single family house with a decent job over your $500k condo, all else being equal.

Many people are moving. Many of our friends and family have already moved making our decision easier. Good jobs aren't easy to come by, so this is never taken lightly. For us being FIRE makes it all much simpler, but understand it's way harder for others.

As for what people would choose, condo or a house: If sophisticated developers are willing to risk tens of millions of dollars to build mid-rise condo complexes then there must be demand for this option. Reminds me of the Yogi Berra quote "nobody goes there anymore, it's too crowded."

[Unionville]

Then maybe those people cannot afford to live here.  They need to make a different choice than living in a leaky garage.  There are lots of opportunities in other parts of the country, especially for lower income wage earners.  And maybe we should take a serious look at illegal immigration to see what it is costing all of us.  Because, whether you like it or not, that is a not unsubstantial source of pressure on housing. 

In the long run, maybe we need not to create more jobs here.  They need to go where land is cheaper and people can afford to live comfortably.  Lots of people would be willing to move elsewhere if the move came with a decent job and affordable housing.  My guess is many people would choose an affordable single family house with a decent job over your $500k condo, all else being equal.

My relative in Indiana has been trying to sell his 2 story brick house (+basement/attic) for $35,000 and my cousin (lives in the same area) was complaining to me that he couldn't find enough employees for good paying jobs. If people are willing to consider small towns (1,000-2,000 people) - they might welcome a rural lifestyle.