Finally! Great New Affordable Bay Area Housing!

18 thoughts on “Finally! Great New Affordable Bay Area Housing!”

  1. 10 years ago my girlfriend (now wife) and I were graduating college and planning on moving to San Francisco. No jobs lined up, just wanted a change. Instead, with very little thinking, we decided to move to Nashville. I’m very glad we did. We have never made a ton of money, nowhere near tech-level, and I think things would have been seriously tough on the west coast. Instead we had cheap roommate situations for a few years and then a pretty nice apartment the last few, always walking distance to work (though this is pretty rare in Nashville). Now we’re buying a house that will be a 25 minute bike commute. Not bad.

  2. Does Nashville have a national or at least a good regional level university? Is Vanderbilt up to the job?

    SF has Berkeley and Stanford. Boston has MIT and Harvard. Austin has UT. Seattle has UW. NYC has NYU and Columbia. Pittsburgh has CMU and UofP. It does make a difference with respect to how well a high tech area develops. I’m based near Seattle, so I’ve been watching to city rebuild itself as a high tech center, but also watching people realize just how valuable UW is as an economic engine.

    Universities help both provide the necessary trained work force and a starting point for business creation. The work force thing is rather obvious, but a lot of colleges are noted for their professors and students forming new technology companies. Some, like MIT, Stanford and CMU make a cult of it. Others are less heard of, like U of Illinois Champaign-Urbana or Georgia Tech, but still produce a lot of new businesses.

    1. Vanderbilt is a prestigious private school with an elite medical center. Belmont University is well respected. Tennessee State serves well enough along with a smattering of specialized Christian schools that meet a certain need. I suspect there’s a chicken-and-egg thing going on here. The schools and the local employment base feed off each other. In some towns the smart kids stick around while other towns repel them. Pittsburgh hemorrhaged talent for decades. Now it seems to be holding on to more of its best people – or has them boomerang back after stints in NYC, SF, etc. when it comes time to have kids and buy a house. Again… Nashville isn’t competing with big exciting cities. Nashville is competing with the overpriced low grade suburbs of those big cities.

    2. You are certainly correct that good major schools CAN help, and certainly the Boston and SF bay areas are exceptional. But don’t over-simplify. I am from an area with many first-class (but smaller) schools. They were often the RESULT of thriving communities, not the driver, and local policies at the State level helped the winds change and history saw the areas rot outside the campus gates. Look at what has been happening around the U. of Rochester the past 25 years; the school is great, has about 30k employees, and the town that created it used to be a “high tech center” (Xerox, B&L, Kodak) complete with fancy cultural ammens. — yet, complacency was there but not called for and eventually nothing new, no growth was evident. Later, these mid-century powerhouses collapsed. You go back further in time, you see how RPI could not save the economy of Troy, NY, and Union could not sustain Schenectady. Meanwhile, there are many places in the USA that lack first class institutions that nevertheless Hoover up people educated in other areas (often my home area, and many like it). Dartmouth and Colgate universities are, for example, surrounded by farms. Brown doesn’t seem to help the immediate area much….. But look at what is happening in Texas….. Texas is of course improving its schools, and it is fun history to read how east-coasters used to scoff at the rough west coast upstarts (especially the history of Stanford)

      Anyhow, Nashville is THE example of a smallish city doing everything right and do not underestimate the quality and prestitige, especially the regional prestitige, of Vanderbilt—- some people scoff at “local ivies” or “southern ivies” but historically many top students with choices have chosen places like Vanderbilt (and many others) and the place has the potential to move up in research scale as the area moves up, if they so choose. I am saying this as a person who has never even BEEN to Nashville, and only DROVE THROUGH TN once, at NIGHT no less. But I speak to many people and read a lot…. Nashville and TN in general are excellent places to invest in, with some caveats. BTW Jonnie, nice article; it wasn’t long before I knew that it was impossible that the place you were describing was in CA though….

  3. I work in tech. Currently I think the tech hub ranking is:

    1. S.F. Bay Area.
    2. Austin or Seattle
    3. The other “Western” cities: SLC, Denver/Boulder, Portland
    4. Other big cities: Boston, NYC, LA, Chicago
    4. Nashville? Call me in 15 years. Pittsburgh is more likely.

    It also depends on whether you’re talking satellite or principal office. Austin is the preferred satellite because of the cost differential yet still being close enough for meetings. It’s absolutely booming now. For an alternate principal office, Seattle is cheap enough to eek out an advantage over S.F. yet still gets C-suite respect.

    Whether tech people want the cultural/urbanism bits depends on the vertical. The bulk of the tech industry is not hip in the least. There are tons of coders shipping boring Enterprise software in uber-suburban places like Richardson, TX. Talking big picture, the preferred environment of tech (e.g. where the CEO wants to live) is probably an upscale college town with outdoorsy appeal. Palo Alto is the blueprint:

    I agree that, whether urban or suburban, the overall direction of tech is towards cheaper locales though. Just the other day in fact, I witnessed the Austin office make a big power grab (err… leadership initiative) and it went off brilliantly. A thousand cuts…

    1. I’m a big fan of Pittsburgh. I totally agree. I talked to some people in Nashville who currently live and work in San Francisco/Sunnyvale who went to Carnegie Mellon and they hated Pittsburgh weather. Personally I think the trade off is worth it. You can buy a lot of sunny vacations with the $700K you save on your mortgage in Pennsylvania compared to California. But we all find our sweet spot.

      Austin is no longer cheap. It’s certainly cheaper than San Francisco (that’s not hard) and Texas does have endless lebensraum for expansion unlike the Bay Area. And Austin has the cool hip factor. Nashville is lower down on the pecking order. Nashville is to Austin as Los Gatos is to Cupertino… smaller, sleepier, a little farther away, a bit cheaper.

      As I’m fond of saying – places like Nashville aren’t competing with San Francisco. They’re competing with the low grade distant suburbs of San Francisco. Even if you’re making $200K a year you’re housing choices are extremely limited so you end up with far less house and a serious location compromise in California. Nashville looks so much better than an $850K two bedroom townhouse with a view of a Jiffy Lube in Livermore with a two hour commute.

  4. There have been attempts before to move tech development out of the Bay Area, and they’ve failed. Maybe this time will be different?

    1. Nearly every tech company has a lower level branch in a smaller city. PayPal has a branch in Phoenix where it keeps its back-up servers along with loads of other tech companies – Phoenix is out of the earthquake zone. Salt Lake is an ancillary hub for back office activities for a number of big tech firms. It’s a great place to raise kids in a big house at a reasonable cost. Nashville is attractive for younger workers since it has affordable real estate along with a fun local culture. The analogy is Detroit a few decades ago. The executive functions are maintained in the traditional headquarters, but more and more of the parts are manufactured in Tennessee, Alabama, and South Carolina. Gradually the assembly plants are moved South as well. Then bits are sent off to Mexico and Indonesia. It happens slowly, but one day you wake up and cars aren’t made anywhere in particular anymore. The industry has atomized and just spread itself out everywhere and nowhere.

      1. The “fun culture” must be a big bonus for recruiting talented workers to Nashville. World class music.

        The tech folks cross-pollinate with the entertainment (content) folks too.

        1. From what I hear, many folks in the music industry consider Nashville to be the “cool” alternative to LA, in that it is more “authentic” (an interesting topic….) and has better quality of life, and, because it is small, you often bump into your music heroes in bars and such, and not in exclusive places either.

      2. There is of course a parallel phenom going on in the finance industry. In my area, Charlotte and Richmond have not only been getting the back office type financial jobs, but have increasingly successfully growing financial corps. (Like Capital One), th se cities are not alone in this; other cities in different regions have seen an impressive growth of financial jobs, but I think these are the big two outside of NYC and SF that are growing fast in this industry.

      3. But that’s the rub. The juicy jobs stay in the high cost areas, while the mundane gets farmed out. So not entirely fixing the problem of excessively concentrated opportunity.

  5. I did something similar in Minneapolis.

    I bought a loft style apartment in a converted 1924 manufacturing building in Northeast Minneapolis right before the pricing really started ticking up.

    There are only a few minor differences… I am a (29 year old ) architectural designer and a single mother. Also I came from the east coast.

    Really enjoy reading about the common thread happening all over the country. Thanks for writing!

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