In San Francisco you can earn $180,000 a year and not make ends meet easily. The AI boom It is making what would be a huge salary anywhere else become mere pocket change, preventing entry into an impossible real estate market and a standard of living unattainable for the majority.
Silicon Valley’s dream is to move. In it New York Times They tell the story of Katrine Razniak, a LinkedIn recruiter, and her partner Adam Woodbury, a software engineer. They have been in the city for five years and earn 180,000 and 185,000 dollars respectively, but despite this they are not able to get something as basic as an apartment for two. They spent months looking for a one-bedroom apartment to move in together on a budget of $5,000 a month, but it was impossible. They say they saw one for $5,200 and the waiting list already had 30 interested parties an hour after the open house.
Buying a house is not an option either: The median home price is $1.7 million.. Given this situation, the couple is considering moving to another state where their salaries would allow them to live as an upper class.
The new elite. While Katrine Razniak and her partner have to continue living in shared apartments, there is a new technological upper class that can afford to live comfortably in the city. They are the new millionaires of the AI boom, employees of companies like OpenAI and Anthropic, with stratospheric valuations and stock options. In October of last year, when OpenAI was worth $500 billionwe already talked about that the city’s real estate market was exploding. Employees began selling stocks and buying homes like there was no tomorrow, causing prices to skyrocket.
There is no improvement in sight. Not even a year has passed and Sam Altman’s company worth 852 billion dollars and Anthropic aims for 900 billion. To put it in context, when Uber went public in 2019 it was worth 82 billion, we are talking about ten times that amount. The imminent IPO of the two companies, added to the recent IPO of SpaceX, aims to create new fortunes, until 20 new billionairesaccording to estimates. Working in technology is no longer a guarantee of success in San Francisco, now you have to work in AI (and own stocks).
It’s not just the rent. The median salary in San Francisco is also higher than the rest of the country and has been growing over the past six years, going from $153,000 to $196,000 today. However, everything else has also gone up. Aside from housing, life in general isn’t exactly cheap either. According to data from Cost of Living Indexthe cost of living in San Francisco is 65.6% higher than the rest of the United States. Katrine Razniak says her monthly spending has grown by $1,000 without changing her lifestyle, causing her and her friends to replace restaurant outings with home-cooked dinners.
The housing problem in San Francisco. Spain is going through a housing crisis unprecedented, but we are not the only country facing this situation; Canada, Germany, Mexico, China o The United States are also suffering from it. In San Francisco specifically, the housing market is absolutely broken. As we said, the average price of a home is 1.7 million dollars, more than triple the national average of $450,000, and the rent is already the most expensive in the entire country, even ahead of New York. The demand is very high and the construction of new buildings is stagnant and the little that there is at a decent price ($5,000 a month is decent) flies in a matter of seconds.
Image | photoholgic in Unsplash
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