Why did the Bay Area’s housing become so expensive to live in? How did it get so expensive? These questions were often asked by visitors that came from that were cities far from the Bay Area like Fremont and Sacramento. Over the past seven years, the Bay Area’s housing prices have increased exponentially as more people come in for technology job opportunities. According to a scholarly article, called Zillow: Tech Workers’ Silicon Valley Home Values Are Outpacing Neighbors’ ,”Bay Area home values are soaring, driven by a flood of well-paying jobs at technology companies”(qtd.
Zillow: Tech Workers’ Silicon Valley Home Values Are Outpacing Neighbors’). Workers that come to this city would need to find a sustainable housing for themselves. Unfortunately, with so much competition to find housing, landlords are able to increase the prices of their rent. As the rent in the Bay Area increase due to this matter, low paid workers are unable to afford their basic living in the Bay Area due to the high expenses while only few can afford a place to stay. During the past few years, the price for renting an apartment continues to increase as more job opportunities are ocated in the Bay Area.
Although technology companies causes the population to compete between finding affordable living standards and affecting the supply and demand to balance the community are able to improve San Francisco, it also People from other areas come to live in San Francisco because the technology companies offer a higher wage than most of the population living here. The wage difference in San Francisco between the technology workers verses workers in other fields has a big impact.
According to the Tom Kaneshige, a senior online writer at CIO. com that covers BYOD and consumer echnology in the enterprise, and has been covering business and technology for two decades stated that the minimum wage for those working in the technology industry is roughly $19. 00 per hour this year. However, the minimum wage for the people working San Francisco as a normal retail companies like Best Buy is roughly $11. 00. The huge wage difference attracts many people to come to San Francisco because they are able to make 70% more.
As more people continue to move into San Francisco, the housing prices continue to increase because there is not enough space to house all the people moving into the mall city. According to the S. F. Genealogy, San Francisco’s population has been increasing by over 7000 people every year over the past ten years. That is over 70,000 people moving into a small city the size of 46. 87 mi?. According to Michael Lewis, author of The Big Short,”technology companies are unlikely to experience a meltdown as severe as the housing crisis”(qtd. The Rise and Fall of the Unicorns; Technology Companies).
In this article, it shows how the technology companies are wealthy enough to have more supply in its demand. San Francisco houses and rent nearly doubled in prices over the past 7 years imply because there are too much people moving into the small city and there isn’t enough space to house all of them. During these issues erupting into San Francisco, locals needed to compete with the more people looking for careers and housings. Before the job boom that happened in the 1990s, the housings were affordable because there were more jobs available and less people competition needed to get their jobs.
During the 1990’s, the average wage was $4. 50. Renting a house was around $792 and buying a new house with two rooms was usually less than $151,700. However, a decade later, the ousing prices skyrocketed to $3,000 for a one room apartment. It has now become extremely difficult to afford renting an apartment while working full time at the minimum pay of roughly $11. 00 an hour. Buying a two room house today now cost roughly $1,117,300. Those that work in the technology industry has an average wage of $24. 14.
San Francisco now has 16,000 units of low income/affordable houses to support those that do not make enough to affording living in an expensive city. As Blanding continues to claim that, “officials responded with a series of initiatives to increase the number of housing units by 0,000 by 2020″ ( Blanding). Native San Francisco workers are being threatened by the new technology workers because those that move into San Francisco are able to create machines to remove service workers. Replacing manual labor with machines was able to increase more productions and decrease the amount of people needed to work.
This cause many people to lose their jobs because they do not have the skills to keep up with the new technology workers coming into the city. From an article published by Forbes, “The influx of wealthier professionals has driven up housing costs, increased the pace of entrification, and threatened the city’s rich racial and socioeconomic diversity. Now more and more technology businesses are located here in San Francisco. This makes San Francisco’s living value to raise, but also can be a threatening to the culture.
Wealthier professionals have driven up the housing price, increased the pace of gentrification, and threatened the city’s rich racial and socioeconomic diversity. Fortunately, many technology companies in San Francisco requires hundreds of new employees. Today there are 133 technology companies located in San Francisco. The new technology company that tarted at San Francisco is Fitbit (a fitness tracker that tracks your heart rate and it uses a three-dimensional accelerometer to track).
As ABI Research estimates that the growth of fitness tracker will grow from 16. million in 2011 to 93 million in 2017. With that much units out to the world , this company will need to hire people that can support and upgrade the devices that are sold or new devices. When this company started, there was only 42 employees. in the year 2014, there are 240 plus worker working for this company. Many companies like Yahoo, Zendesk, Stubhub,Uber, etc have over 500 new hire this year. There’s more than one technology company in the Bay Area, so there will be more and more people coming for these job opportunity.
By having this in mind, San Francisco will need to build more housing in order to support the demand of the housing needs from the people. Technology companies was also able to contribute new ideas to help the locals afford living in different ways. New technology companies like Uber and Lyft has already hired more than 1000 employees working for them in total. These technology companies was able to set up an application and provide the user with a map to allow the users o set up an business and work their own hours as taxi cabs drivers .
The company simply takes a small percentage of roughly 20% as an commission fee from each taxicab user and use the money to hire more people as customer service. Those that did not have cars and another alternative to make money with another technology company called Postmates. This company is a delivery company that limits the people to walk at a 1 mile radius to deliver the items requested. This has helped the community because they benefitted those that had their careers replaced by machine systems.