$250K Per Year Salary Could Qualify For Subsidized Housing Under New Palo Alto Plan

[bananas]

Source: CBS

Palo Alto is seeking housing solutions for residents who are not among the region’s super-rich, but who also earn more than the threshhold to qualify for affordable housing programs.

The city council has unanimously passed a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.

Sky-rocketing housing prices in Palo Alto have left some in limbo; with teachers, firefighters and other government workers not earning enough to afford cost of living.

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Read more: http://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/

[kennetha]

1. We in California Definitely don't think of 250K as rich.

[still_one]

4. That actually depends where in California. Palo Alto, and the entire bay area is far more expensive

then the San Joaquin valley, as an example.

However, even in the bay area, excluding areas such as Palo Alto, San Franciscan, and Marin, 250K is still a hell of a lot of money.

[Bonx]

5. Retire from CA public service with a $150K annual benefit

to most places elsewhere in the US and you will be very well off. Especially if you sell your three bedroom CA house for 1.5 million and buy another for $225K.

[Recursion]

6. $250K is twice the median household income in Palo Alto

And four times the state median income

[Gormy Cuss]

18. The issue is housing affordability.

If the master plan and zoning for the city has been hostile to the production of housing affordable to this income tier then it's also exerting considerable pressure on housing options for those with incomes below the median. What Palo Alto needs is more housing period and setting a priority to produce housing for these higher income renters may be more appealing to residents while taking some pressure off the lower cost rental stock. HUD has in the past has had loan programs that were used to produce high end rentals in urban areas for just this reason.

[GummyBearz]

27. The disconnect is really hard to explain to people

I was born and raised in California. My parents have lived here since my dad got out of Vietnam in the 60s. They live in the central valley, which is quite affordable. I am in a high tech field in southern California and started making about double my dad's salary when he retired. They think I should be living in a mansion like some kind of celebrity based on my income. I have a condo that is half the size of their house, and just enough left over per month to have a couple fun weekends (too bad I will never be able to afford children - something I always wanted).

There will be people here telling me how rich I am due to my salary, just like my parents. They don't get that about 66% of that salary pays the mortgage, student loans, car loans... its really annoying to have people think you are rich based on your salary, when you are really just able to pay for a 2 bedroom 1250 square foot condo and 2 fun weekends per month.

[saidsimplesimon]

2. If only more communities

near SF were looking at this real problem. How will Palo Alto fund this project?

[CentralCoaster]

3. The down side of high tech industries and trickle down economics.

sigh
It's an absolute mess between housing costs and traffic and the consequences flow out to the East Bay and over into the valley where homes are more affordable but people spend four hours to go 70 miles each way to live there.
Beyond BART, there isn't a transportation system to manage this commuting mess because transit=bad, SUVs=good!

This idea of subsidizing high income earners is REPULSIVE!
Building smaller units makes sense, however, and mixed use pedestrian and transit friendly development is the right response to the now-failed suburban model.

http://www.paloaltoonline.com/news/2016/03/22/palo-alto-looks-to-spur-more-affordable-housing

I think there are plenty of REAL middle and low income working class people who would like to quit driving in to their low pay jobs, why not help them?

[still_one]

7. Over in cupertino off Wolfe Road where they are building the New Apple campus, they have put up some

apartments nearby, and the monthly rent for a two bedroom is around 5500 dollars.

As you mentioned the housing prices into the San Joaquin valley are more affordable, and a fair number are commuting from Stockton into the Bay Area, but that commute is really a drag.

San Mateo really screwed things up by refusing to have Bart run through, but that isn't the only reason. Bart has essentially not been expanded for over 40 years. Yes, they are going in the process of expanding Bart to San Jose via the East Bay, but that should have been started decades ago.

150K - 250K is a lot of money even by California standards. A hell of a lot of folks in California make less than 100K.

I agree with everything you said. You encapsulated it quite well, but I don't see an end in site, unless the real estate bubble bursts

[KamaAina]

10. Some of us make less than 40K!

And my Three's Company-era one-bedroom in an iffy neighborhood just went up to $1485/month, despite its stellar walk score of 55!

[still_one]

16. I know, I was specifically addressing the OP's article which said 150-250K was consider middle class

in California, and that is bull:

"new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year. "

Notice that I said a lot of people are making less than 100K. That includes people in the 40 and 50K range also, and even when two people are working.

Rents are through the roof in San Francisco, and are going up in Oakland and the East Bay.

In a fair neighborhood in Oakland, a 1 bedroom goes for about 2000/month. Santa Clara County rents are almost as bad as San Francisco.

I imagine this can go on for some time, but something is going to break

[Adsos Letter]

28. My daughter and son-in-law live in Los Gatos.

$2,400 per month for 600sq ft. in a sub-divided Victorian. Nice neighborhood, but that strikes me as a lot of money for what they get.

[still_one]

37. That 's actually not a bad price for Los Gatos, and I agree if you compare just regular housing that

we have here in California, to most anywhere else in the country, the price is too high for what you get. In fact you can get a heck of a house or rental unit else where as others have pointed out.

Without multiple people working, and perhaps parents helping out, I don't see how most young people can afford a place in California.

[Adsos Letter]

41. They both have very good jobs.

They are in their mid-twenties, both professionals, and doing quite well; still, housing prices can be discouraging.

You are correct on all the points you made.

[still_one]

42. My daughter and her husband are in a very similar situation. I real feel for the millennials

[REP]

39. I live in Los Gatos

It's cheaper to buy than to rent up here, so that's what I did.

[Roland99]

12. $5500/mo for a 2BR apartment???

I could have a 7,500 sq ft mansion in the area near where the sports stars live in Orlando and pay about that much for a mortgage.

[KamaAina]

17. Yeppers.

Lots of venture capital $$$ sloshing around $iliValley these days. And rampant NIMBYism prevents much in the way of new housing starts, as do public policy fiascoes like San Jose's "Jobs First" policy, which prioritizes business over housing because thanks to dear old Prop 13, housing does not generate much in the way of tax revenue.

[still_one]

19. I am pretty sure you would have at least two people sharing that apartment, with both of them

working. The only advantage is if they work for Apple, they will be near the new Apple campus, but that doesn't justify it.

There is a shopping center, Vallco in the same area that is going to be torn down for new housing development, and there is no doubt in my mind they will be very expensive, and NOT worth it.

It is very bad. I feel very sorry for a lot of people coming into the workforce now in the bay area. It is just too damn expensive

[GummyBearz]

23. And unless you are a sports star, where are you going to work in Orlando that can afford 5500/mo?

This is the problem people constantly over look. In LA and, more so in SF, you can have a high tech job which brings in $5500/mo after taxes, but a single family residence costs around 4000/mo. Good luck with your car payment, student loan debt payments, grocery shopping, filling your car up with gas, paying utilities, and god forbid subscribing to something as fancy as HBO.

If Orlando has high tech jobs paying $5500/mo after taxes and has 7,500 sq ft mansions within a 20 minute commute I will move within 3 weeks and pay you the realtor commission

[Roland99]

30. If all I had to worry about was PITI, groceries, and the electric bill, I could swing it

But then there's nothing left for deductibles/co-pays, gas, tolls, entertainment, car payment, school fees, horse lessons, clothes, etc etc

[GummyBearz]

31. Horse lessons?

lol

[Roland99]

32. Yeah...ol' fleabiscuit is a slow learner

nah...we have quite the equestrian in our household. For all practical purposes she *is* a horse! I've been making do with my 12 year-old car (201,000 miles and going) so she can keep going to lessons.

[still_one]

38. That's the problem. Is that living?

[REP]

40. That's a little high for this area

[Akicita]

24. If they can build two bedroom apartments and get $5,500/mo. why in the world aren't they building

many more such apartment buildings? You would think the contractors would make a killing doing so. Is it a zoning/regulation problem?
Does Palo Alto discourage affordable apartments being built to keep the wrong kind of people (ie. POC ) from moving in? If houses are so expensive why isn't there a major building boom to take advantage?

Subsidizing housing for those making $150K-$250K is just going to make the high housing pricing problem worse. Prices will keep going up and subsidies will keep going up to match.

[kennetha]

34. It's not exclusively about keeping the wrong sort of people out

it's about preserving the small townish feel that Palo Alto still has, keeping traffic congestion down, protecting the property values of them that already got their own.

The thing is that left to it's own devices, the free market would RADICALLY alter many towns on the Peninsula -- including Palo Alto. In particular, housing density would be drastically increased, if the the free market it had its way. And the Peninsula would be peppered with multi-family dwellings of all sorts, including probably a lot more high rises. The area would get very crowded, very fast. Plus the remaining open spaces would be paved over. We'd have to upgrade our infrastructure significantly. We'd need more schools, more roads, and on and on.

But people are understandably resistant to that sort of change. And for lots of different reasons.

One consequence of the resistance to letting the free market just wreak havoc or work its magic (depending on your point of view) is that the supply of housing relative to the demand for it is WAY out of balance. Way, way out of balance. Way too much money chasing way too little housing. Now if you own one those scarce resources, it's not at all a bad deal. On the other hand, if you are trying to acquire one or even rent one, be prepared to have your pocket seriously picked.

It's a little insane.

A similar dynamic is happening in San Francisco itself. 20 years ago, when all the dot.com companies were headquarter in the Valley, rather than in SF, real estate was a lot cheaper in the city than out here on the Peninsula. But because many, many tech workers want to live in the city -- which is much more exciting than the Valley -- and many companies now have headquarters or offices in SF, SF real estate has become astronomically expensive. The demographics of the city have thus changed significantly over the last two decades. The middle class, the working class and the poor are being squeezed in the extreme.

One of the reasons Bernie might do less well in California than you might at first think has to with the fact that what in other places sounds like a reasonable tax rate on the so-called "wealthy" here will hit people who are basically living what anywhere else would count as a middle class life style -- and not all that comfortably. The problem is that to afford that middle class life style here, it takes a salary that elsewhere would count as at least upper middle class or even moderately wealthy.

But believe me if you make 250K around here, especially if you are a recent arrival, who has to buy in or rent in the current housing market, you won't feel all that wealthy at all. And somebody who promises to raise your taxes or cap your deductions (for your super expensive but ordinary house) isn't likely to be greeted with totally open arms, however much you agree with them on other matters.

[Akicita]

36. Thanks for the very informative response. It shed a lot of light.

I guess if the citizens of Palo Alto are willing to subsidize those in the $150-250K range to protect their small town atmosphere that is up to them.

[B2G]

29. Holy crap. I lived in Cupertino 25 years ago

VERY close to Wolfe Rd (Stevens Creek Blvd.) and we were paying $900 for a 2 bedroom apartment back then.

Once of the major reasons we moved after having our first child.

[alp227]

8. Wealthfare. nt

[Paper Roses]

9. Good term for it! n/t

[Akicita]

25. You nailed it.

[KamaAina]

11. Xposted to California group

http://www.democraticunderground.com/?com=forum&id=1040

[Spitfire of ATJ]

13. To put this in perspective....

3805 Martha Ave,
Toledo, OH 43612
3 beds 1 bath 1,214 sqft

FOR SALE BY OWNER
[font size=10]$9,900[/font]


http://www.zillow.com/homedetails/3805-Martha-Ave-Toledo-OH-43612/34645377_zpid/?view=public

[KamaAina]

15. Holy Toledo!

[KamaAina]

14. Meanwhile, Palo Alto's largest mobile home park is in the crosshairs of greedy developers

http://www.democraticunderground.com/104010374

[Gormy Cuss]

21. Nothing to see here.

[jwirr]

20. Using a HUD formula places that have extremely high housing

costs probably can all do this. I think they use a cost of living index and assume 30% is supposed to be for housing. If most housing is very high that means the eligibility ceiling goes up. Which means that taxpayers are going to be paying for those who can no longer afford to live in the area.

I suspect this is really going to hurt the HUD housing programs that once were created for the poor. I can just see the Rs complaining about this.

[Xithras]

22. This is why I commute

It's a 120 mile round trip from my house to my office. Luckily, I work for a telecommuting friendly company, so I only have to go in 1-2 days per week. I have coworkers who live in the Bay Area who occasionally give me a hard time about commuting, because I technically COULD afford to live over there. When I show them a photo of my house and tell them how much I paid for it, they usually shut up.

[scscholar]

26. Why should wealthy people...

be able to get the government to take our money? To take our money?

[kennetha]

35. wealth is relative

a person who makes 250K in Palo Alto and a person who makes 250K in Kansas City are not equally wealthy. Not even close.

[Initech]

33. Time to put a cap on housing prices.

You know it's bad when even people in that class can't afford rent.