San Jose rents remain crazy expensive—even for IT professionals making six figures—with the gap between wages and housing costs officially the largest in the country, outpacing other tech hubs such as San Francisco, Atlanta, Boston and Seattle.
According to a new study from rental listing site RentCafe, IT wages in San Jose still lag far behind rental prices, even as housing costs have started to flatten. From 2016 to 2019 rents increased by 6.9 percent, while between 2014 to 2017 IT wages fell by 0.8 percent.
The study used different time periods because rent prices are usually affected a few years after there’s been an increase or decrease in wages, Florentina Sarac, the author of the study, told San Jose Inside.
San Jose has the most tech jobs of any city in the U.S.; they comprise 12 percent of the market. The number of IT jobs has only been increasing as multinational companies and startups continue to flock to Silicon Valley for its proximity to talent and venture capital. The tech boom has for years been putting a strain on the rental market as demand shoots up. The average rent in the San Jose metro area is $2,871, according to the study.
“As it happens with most tech hubs, following a big boom in the IT job market, a considerable number of people start relocating to the area,” Sarac said.
But while IT workers in San Jose still have the highest average wage at $126,000 compared to other tech hubs, wages have decreased slightly in the area. Boston was the only other tech hub that saw decreasing IT wages, according to the study.
Sarac said this may be because employers are doling out more non-financial perks such as flexible working hours, more days off or the possibility to work remotely.
The combination of increasing rents and decreasing wages may make renting a challenge even for IT workers making six figures. Rents have been steadily increasing since 2012, Sarac said, while IT wages tend to fluctuate.
“IT professionals living in San Jose metro should keep in mind that rent prices might continue to rise in and around the area,” Sarac said. “It would also be a good idea to keep an eye on nearby emerging tech-hubs like Portland metro and Salt Lake City metro, where the cost of living is considerably more affordable at the moment.”
Live in a homeless shelter for a couple of years and save your money. In a couple of years assuming you have a decent IT job then buy a house for cash somewhere else.
easy get rid of prop 13. Sorry but this horrible law is causing it and the people that own homes love it.
Average wage of $126k?!? I better go learn to code!
It’s sort of fake news. It isn’t $126K a year on average. The tech companies go around and use compensation numbers in press releases. They don’t say salary. So take that $126K and take off 30%.
Plus you will be working 60 hours a week.
You’re right, that’s salary. What that doesn’t include is company stock, which can double your salary. So it’s more like $250k, or even more if you include all the other benefits.
Boo-hoo tech workers. Never any emphasis on the rest of us who work in other fields who live in Silicon Valley. If the tech giants want to continue to import so many workers from overseas, then they can foot the bill for the massive residential projects to house them. Then the rest of us would have a better shot at a wider variety of housing options.
Gotta love that free market, invisible hand is hard at work!
I think that’s what the tech companies are doing, they pay their workers a lot, so they can afford all those crazy expensive apartments going up in downtown SJ.
It’s not salary. That includes total compensation which includes health benefits.
Stock options aren’t worth as much as you might think.
Developers? Yes. IT folks? We’re like the computer janitors.
Too bad so sad now the IT whiners can once again attack the firefighters and cops retirments.
>Too bad so sad now the IT whiners can once again attack the firefighters and cops retirments.
Firefighters I can’t speak for, but generally they seem to do their job. SJPD is crap though. Twice this month I’ve seen them show up in force for 2 business issues. One was a suspected shoplifter at Best buy, 5 cops, 3 cars. The other was for a suspected “Non member”.. 2 black people at a 24 hour fitness, one of whom was an off duty cop. Good luck if you’re a resident expecting that same level of service.
This isn’t likely to be popular and some of this is meant to be sarcastic but not by much.
We all know that the tech industry is the problem. Solution. Let the tech industry build housing for its workers. As we all know, tech is h1b infested and let’s face it no (sane) American is willing to live 8+ to a studio apartment . But an h1b will.
So let’s do this.
The big tech boys can build the housing. We can put GPS on the h1b slaves (oops software engineers). Then when Americans go down the coast to see the Pacific Coast then we don’t have to look at the h1bs. A security fence (e.g. Wall or barbed wire) can be used to secure the living compounds. An h1b steps off the plantation can be rounded up and returned to the company.
It’s a win-win. The tech workers won’t be affecting the housing market because they won’t be a part of it. These h1b critters can and will work like slaves making software that everybody uses.
And its going to get worse as SJ phases in its new mandatory section 8 acceptance law. Section 8 pays very good rents and owners of older properties will quickly realize they should not ask for less than what S8 pays, which is much more than many already charge. That’s exactly what happened in Billingham, Wa (https://www.bellinghamherald.com/news/local/article217286575.html).
Also, S8 vouchers are fully portable & local acceptance is mandatory, so anyone who wants to live in a more moderate climate, can simply transfer their voucher from anywhere in the country to SJ – further driving up demand at the expense of working middle class renters.
Never trust the government to fix problems of their own making. They are driving up the cost to build, own and manage rental property and then wonder why there’s a shortage of housing.
Section 8 doesn’t pay very well and most landlords won’t take it.
https://www.scchousingauthority.org/section-8-current-participants/housing-choice-voucher-current-participants/voucher-payment-standard-fmr-utility-allowance/
“Section 8 doesn’t pay very well and most landlords won’t take it.”
All landlords in SJ now have to accept it or be open to private enforcement actions (lawsuits by non-profit law firms) and City fines.
$2234 for a 1 bedroom and $2774 for a 2-bedroom, plus utilities. Sorry, but Section 8 does pay very well, especially for an owner of a 50+ year old property. No owner will have any reason to ask for less than that and if they don’t want to participate in S8, they will simply ask more to self-exempt, as happened in Bellingham, WA.
Middle class renters just got screwed by SJ City Council
The way around taking Section 8 is simply to require Market Rents.
However…..techies need to buy supplies….like groceries and gasoline. Minimum wage workers, can’t afford to live here…nor even to commute. Most young people start out at minimum wage. But…if anything happens to their family relationships….they very soon end up in homeless camps. Silicon Valley….is rapidly becoming a society of greasy-haired engineering nerds….with nobody around to sell them deodorant….or cut their hair.
It won’t happen but if you really want to solve the problem then deport illegal aliens and h1bs. The resultant shock to the labor supply curve will result in increasing wages. The end result is that companies will move out of the area due to the increased labor cost which reduces the demand for housing along with the workers still remaining behind with higher wages being able to afford the lower rents.
Eventually you get to an equilibrium. (Which if you didn’t have h1bs would have happened a long time ago)
Google feeds their employees, breakfast, lunch, dinner, and To go. They also ride google busses. My relative does not own a car anymore and never buys groceries, just like water, fruits, and snacks.
Not to worry people, once the high taxes, mindless pot smokers, and government over regulation drive the business class out, this valley will have plenty of housing just like Detroit does today.