About Silicon Valley
Living and Working in High-Tech Heaven
Part II

Cost of Living
In one word, it's expensive. Not only is Silicon Valley "High-Tech Heaven" with lots of jobs, but it's also a stunningly beautiful, mountainous, fertile valley near the Pacific Ocean, with some of the best weather in the US. Entertainment abounds, and there is much to do outdoors. You can snow ski in the Sierras on Saturday, then walk a Pacific beach on Sunday. Money Magazine ranks San Jose, Oakland and San Francisco among the best places to live.

This, plus abundant jobs, makes Silicon Valley a highly desirable area, and desirability is directly proportional to cost of living. Everything from gasoline to dining out costs more than in most of the US. Houses are among the most expensive in the country and rent is high.

For example, a $70,000 homeowner's salary in San Jose has roughly the same buying power as only $39,068 in Indianapolis. To put it another way, if you make $70,000 in Indianapolis, you'd have to make at least $125,423 in San Jose to have the same buying power. What's really scary, is that San Jose is one of the least expensive cities in Silicon Valley! You'd have to make even more to afford cities such as Menlo Park ($142,343) and Palo Alto ($163,507), both near the prestigious Stanford University.

To compare your city with Silicon Valley cities, try the popular Salary Calculator at HomeFair or Compare Salaries at Yahoo. The two may differ by a few thousand, as HomeFair allows you to select your housing preference while Yahoo does not. There are probably other method inconsistencies too, but at least you'll get some idea between the two.

Salaries
Silicon Valley paychecks are generally higher to offset the cost of living—sort of. In January, 1997, the average wage in the entire Bay Area for full-time workers was $20.83 per hour or $43,326 per year, while the US national average was $29,900. That's for all occupations, not just high-tech, and it was a little higher in Silicon Valley at $46,000. For Silicon Valley cluster industries (e.g., biotech, semiconductor and software), it was much higher at $65,200. It's not unheard of for a sharp engineer fresh out of college to start at $50,000 or more per year.

Still, the extra compensation is not proportional when compared to the rest of the US, especially when it comes to housing. In 1997, only 37% of Silicon Valley residents could afford to purchase a median-priced home, while nationally it was 65%. According to a March, 1998 article in the San Jose Mercury News, the 37% figure dropped to 28%. Ouch.

Housing
Be prepared for Silicon Valley sticker shock! In June, 1998, the average price was $318,000. How much more or less you'll pay depends on the neighborhood and mood of the market. You'd be lucky to find a good house in a nice neighborhood for under $300,000. In cities such as Los Gatos, a quaint little town near the base of the Santa Cruz Mountains, you'd be hard-pressed to find even a 40-year-old, cracker-box of a fixer-upper for that price, especially near the heart of town. The average, Los Gatos price in November, 1998 was $667,401.

By typical, single-family home, I mean for the area, not for the country. Yards are small in Silicon Valley, because the most expensive part of a house is the land on which it sits. Houses in most areas are so tightly packed, there isn't room for a big yard anyway; or for that matter, a big house. Most houses don't have basements and there's no such thing as an all-brick home, both because of the threat of earthquakes. Earthquakes are another story we'll get to in Part III.

Housing costs are the major threat to Silicon Valley's economic miracle, and they just keep going up in the long run. The good news is, with good market conditions, you can make a lot of money on your house in only five years or so. The bad news is, you have to move out of Silicon Valley to pocket your gain.

But you don't have to take my word for it. Download the free RealPlayer and listen to an engaged couple experiencing sticker shock, in a 14.4 or 28.8 audio clip.

Commuting
Silicon Valley radio traffic reporters have an easy job. They typically start off with, "All the usual slow-downs in all the usual places..." and Silicon Valley residents know exactly what they mean. It's almost unbearable. Mass transit leaves much to be desired, and Silicon Valley grows so rapidly, the road crews can't keep up. An "easy commute" as advertised by real estate agents means one that takes less than an hour. It can take you 45 minutes or more to go only about eight miles or less. It's bumper-to-bumper all the way to work, and all the way back home, every single day! It's so bad, most of the freeway entrance ramps have traffic lights to regulate the flow onto the freeways during commuting hours. Not that it does much good when the freeway traffic is stopped cold to begin with. There is little "flow" at 7:15 AM.

Some techies who can't afford houses in or near the heart of Silicon Valley, move to outlying areas to save money. But what they save in dollars, they pay in time. It may take four hours or more round trip to Silicon Valley and back. The same round trip takes only ninety minutes or so during non-commuting hours.

Add to heavy congestion the thousands of bozos who put on makeup, shave, or gab on their cell phones instead of paying attention to the traffic around them, and you've got a real mess. Accidents occur daily and really jam up the works. An accident on a main artery jams all roads leading to it for miles.

The good news is, companies are aware of this commuting nightmare and many allow flex hours, four-day work weeks, and telecommuting. The bad news is, jobs with telecommuting benefits are not much easier to find than in any other city. Although many allow telecommuting, Silicon Valley companies are no so desperate for telecommuters that they must advertise for them, the same as in any other locality.

Silicon Valley
Part I • Part II • Part III

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Bay Area map from Public Domain.
Copyright © 1998, J. Steven Niznik. All Rights Reserved.