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The Twin Cities: New York & San Francisco Are The Two Most Expensive Places To Live In America

The Northern Californian city is in a virtual dead heat with New York as America’s most expensive places to call home.

By Jeff Vasishta August 8, 2016

It’s changed a lot since barefoot hippies stood on Haight-Ashbury in 1967, tripping on acid. These days the only thing that will scramble your brains about San Francisco is how much it costs to live there. The Northern Californian city is in a virtual dead heat with New York as America’s most expensive places to call home.

Related: Gentrification is Changing the Complexion of New York City

According to ApartmentList.com both cities now charge an average $3500 for a one bedroom apartment. In fact, there are a lot similarities between New York and San Francisco and the surrounding areas. New York has Wall St, The Bay Area has Silicon Valley. Oakland has much in common with Brooklyn. Both are historically black neighborhoods with a history of arts, culture, activism and on the downside, crime. Both are now gripped in the midst of breakneck gentrification with crippling rents and a mass exodus of their black populations. The average price of rent for a one bedroom in Oakland catapulted a staggering 13.5 percent in 12 months to $2,270, which is on the heels of many area in Brooklyn.

A recent report from the Bay Area Council, revealed that one third of the areas residents say they are likely to leave the region in the next few years over its lack of affordability. Home values have rocketed over the last year by 11.5 percent. According the the Bay Area Council’s report, millennials are the most inclined to leave the region.

“That is the future workforce and talent that is helping drive the innovation economy and tech sector…we need to stop this now,” the group’s spokesperson Rufus Jeffris told CNN Money. “It sends a bad message about the Bay Area economy and that there isn’t an open door for top talent to come and work here,” continued Jeffris. “It can hurt the diversity of our economy. We need all skill levels and income levels to have a strong economy that is resilient to a downturn.”

Part of the issue is a lack of housing. Since 2010 the population has grown by 60,000 only 12,000 new units of housing were constructed. Now though San Francisco is the midst of a building boom but many are high end condos with prices as stratospheric as the skyscrapers in which they are constructed. A “starter home” in SF is likely to cost around $1.2 million. The net result has been a dramatic demographic shift, as in New York. Lower uneducated minorities (Hispanic and blacks) are moving out, well educated whites and Asians are moving in. The communal backyard barbecue atmosphere among middle class families is dissipating along with the city’s famously mellow, granola vibe.

Related: San Francisco’s Most Expensive Property: How Have You Lived This Long Without Seven Fireplaces?

As with New York, San Francisco’s African American exodus has been particularly profound. The city was13.4% African American in 1970, but its population as of 2016 is less than 6% Black. The population has steadily declined, and the trend seems likely to continue. From 2010-2014, there was annual net out migration of around 2,000 African Americans from the city. That represents a 4.6% decline of the population every year. The tech industry, which attracts the majority of the city’s new arrivals is notoriously lacking in diversity.

However, there are signs that the Bay Area is getting too rich even for six figure earning techies. Employment in the sector (internet, software-publishing and data-hosting) grew 5 percent in San Francisco in the year ending February, down from a 10.3 percent increase the year before, according to Bureau of Labor Statistics data. In smaller markets, in the same industries, job growth is accelerating: 7.6 percent in Portland, 7.8 percent in Seattle and 4.6 percent in Los Angeles data shows.

“We see re-locations out of San Francisco increasingly,” Mehul Patel, CEO at Hired Inc., a San Francisco startup that connects job seekers to employers, told Bloomberg.com. “If you actually factor in cost of living, there are much better places to live.”

“In the last year, there’s been a constant flow of workers moving from San Francisco to Seattle, Denver, Austin and the Los Angeles area,” Patel said. “Many tech workers start out in San Francisco to boost salary and establish themselves before moving to more affordable markets, he added. “They’ve become tech hubs in their own right in a way that they weren’t three to five years ago,” he said. “It’s a lower cost of living, high quality of life and a great tech ecosystem there.”

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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