# What are people doing with all these massively overpriced houses (shacks) in Silicon Valley? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 12, 2017, 11:52pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140 "2017-07-12T23:52:22Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [July 13, 2017, 9:35pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/41 "2017-07-13T21:35:17Z")
> [@Tamerlane](#): > > I love the Bay Area in a lot of ways, but nobody but the 1%'ers loves the real estate market out here. There are plenty of folks who work in construction who are not in the 1% but still love it. 😃 ---
**Author:** ![Helena330](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/helena330/32/531_2.png) [@Helena330](https://boards.straightdope.com/u/Helena330)\ **Post date:** [July 13, 2017, 10:05pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/42 "2017-07-13T22:05:16Z")
Nobody come to Seattle to escape California prices because you’ll be disappointed. Our property values are skyrocketing mostly as a result of Amazon’s domination of the south Lake Union area and our traffic rivals yours. We’re also getting a lot of Chinese investment in the Seattle area. I recently read an article in a local business journal that Chinese financiers are building high rise condos in Bellevue (across the bridge from Seattle and adjacent to Redmond, home of Microsoft) and getting permanent green card status via the EB-5 visa. > [@](#): > > provides a method for eligible Immigrant Investors to become lawful permanent residents — informally known as “green card” holders — by investing at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers. > **[EB-5 visa](https://en.wikipedia.org/wiki/EB-5_visa)** > > The United States EB-5 visa, employment-based fifth preference category or EB-5 Immigrant Investor Visa Program was created in 1990 by the Immigration Act of 1990. It provides a method for eligible immigrant investors to become lawful permanent residents—informally known as "green card" holders—by investing substantial capital to finance a U.S. business (known as a "new commercial enterprise") as long as it creates at least 10 new, full-time jobs for Americans and work-authorized immigrants.\[2 ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [July 13, 2017, 10:17pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/43 "2017-07-13T22:17:40Z")
> [@Helena330](#): > > Nobody come to Seattle to escape California prices because you’ll be disappointed. You mean by all the rain? 😃 > [@](#): > > Our property values are skyrocketing mostly as a result of Amazon’s domination of the south Lake Union area and our traffic rivals yours. Home prices can’t be as bad as the Bay Area. The Median price of a home in Santa Clara County (which basically is Silicon Valley) is \> $1M. That’ll get you a 2 bedroom home in an OK area, maybe 1800 Sq Ft. I don’t even want to think of what the media price is in SF County. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [July 13, 2017, 10:28pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/44 "2017-07-13T22:28:36Z")
> [@Scoobysnax](#): > > For people not familiar with California’s weird property tax rules, under prop 13 your house value for property tax purposes is based on what you paid for the property plus up to 2% annual growth for inflation. Housing prices go up far more that 2% per year in California, so you get the situations where one neighbor is paying 10% of what his neighbor is paying in property taxes. It also means that businesses can hold onto property for decades and still pay early 80s property tax rates. The value of a property is only updated whenever it is sold or transferred. After 10-15 years people tend to get locked into their homes. One thing to add to that, if a homeowner is 55 or older, they can move to a house of equal or lesser value and maintain their basis. This enabled older people to be able to afford to downsize and free up inventory for families starting out. ---
**Author:** ![Scoobysnax](https://avatars.discourse-cdn.com/v4/letter/s/c4cdca/32.png) [@Scoobysnax](https://boards.straightdope.com/u/Scoobysnax)\ **Post date:** [July 13, 2017, 11:06pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/45 "2017-07-13T23:06:49Z")
> [@hajario](#): > > One thing to add to that, if a homeowner is 55 or older, they can move to a house of equal or lesser value and maintain their basis. This enabled older people to be able to afford to downsize and free up inventory for families starting out. Haven’t gotten to that point yet so I was not aware of that exemption. We are busy improving our house because I don’t want to pay an additional $4000/yr in property taxes if we moved. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [July 13, 2017, 11:39pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/46 "2017-07-13T23:39:16Z")
> [@Scoobysnax](#): > > Haven’t gotten to that point yet so I was not aware of that exemption. We are busy improving our house because I don’t want to pay an additional $4000/yr in property taxes if we moved. I’m about a year and a half away but I love where I live and I won’t be leaving any time soon. I live in a tract neighborhood. The guy next to me bought his house in 1961 when it was new. He pays probably $1000 per year. I bought in 1993 and pay a bit over $3000. The guy across the street pays over $10k. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [July 14, 2017, 12:55am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/47 "2017-07-14T00:55:07Z")
> [@Doug\_K](#): > > 200-300K? Try 40-65 k. I live squarely in the midwest. 150k will get you a near mansion. If you don’t mind a little work and 4-5 k in improvements you can easily get a decent home for around 30k. We paid 31k for our house a little less than 2 years ago. The most expensive house in the town where I lived 2 years ago sold for 500K, and most of the people agreed that the owners were idiots to pay that much, because the house had been sitting on the market for several years with no lookers. Jeez, not bad. In the town where I grew up, the local doctor sold his house for about 450k. It had maybe 6 bedrooms and 6 baths, an outdoor pool and who knows what else. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [July 14, 2017, 1:33am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/48 "2017-07-14T01:33:09Z")
> [@John\_Mace](#): > > Can you elaborate? My first thought is that’s nonsense, but maybe I’m misunderstanding you. Also, clarify if you’re talking about SF or the SF Bay Area. The latter is huuuuuuuuge, with wildly different zoning rules depending on where you are. It’s hard to overstate the degree of dysfunction that has enmeshed the entire Bay Area housing market. Every time you think you’ve reached the bottom of the mess, there’s an even deeper level of fucked upness to uncover. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [July 14, 2017, 1:36am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/49 "2017-07-14T01:36:38Z")
> [@John\_Mace](#): > > This is largely not true. Houses are torn down (we say “scraped”) all the time. The trick is, you often don’t want to tear down the house because then you are dealing with a “new build” and all the new code applies. If you can meet the requirements for a “remodel” instead, you don’t have to do things like put in fire sprinklers. But often those rules are superficial, and what you are doing is making a brand new house even though you technically didn’t. > > As an example, you will need to “save” a certain amount of the original walls to make it a remodel. But you can cover those walls with new siding material, as long as the old stuff is still there, underneath. Crazy. You’re talking about not triggering building code changes which is different from not triggering CEQA. Someone I know wanted to add a 3rd story to their 2 story house (cut down from the original 4 because of a different complaint) recently which was a CEQA change and was defeated in courts because, no shit, the houses on his street formed a descending pattern of heights which was aesthetically pleasing and his house being 3ft higher than his neighbour would break the pattern and change the distinctive characteristic of the neighbourhood. He had over 50 statements and affidavits from the neighbours saying they welcomed the change and a chance to improve the neighbourhood but a single complaint was enough to get the SF housing commission to deny his change. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [July 14, 2017, 6:35pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/50 "2017-07-14T18:35:48Z")
> [@Acsenray](#): > > 1. Supply is low, because of geography… This is a huge key and one reason housing in Metro Atlanta is so (relatively) inexpensive. From downtown Atlanta north to the Blue Ridge mountains is about 100 miles, south to the ocean is about 250 miles. There is literally nothing in between, from a geological perspective, to stop the creep. People who want cheaper housing just move farther (and farther) out. 30 years ago the city where I live was “in the boonies”. Now we’re solidly In the Atlanta MSA - which encompasses 29 counties and over 6,100 square miles, virtually all of it buildable. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [July 14, 2017, 6:38pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/51 "2017-07-14T18:38:48Z")
> [@Shalmanese](#): > > You’re talking about not triggering building code changes which is different from not triggering CEQA. Someone I know wanted to add a 3rd story to their 2 story house (cut down from the original 4 because of a different complaint) recently which was a CEQA change and was defeated in courts because, no shit, the houses on his street formed a descending pattern of heights which was aesthetically pleasing and his house being 3ft higher than his neighbour would break the pattern and change the distinctive characteristic of the neighbourhood. > > He had over 50 statements and affidavits from the neighbours saying they welcomed the change and a chance to improve the neighbourhood but a single complaint was enough to get the SF housing commission to deny his change. That’s why I said it was “largely not true” rather than “not true”. Your example would be exceedingly rare. Go back and read the part that I quoted. You made it sound like the norm rather than the exception. ---
**Author:** ![Bullitt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bullitt/32/5725_2.png) [@Bullitt](https://boards.straightdope.com/u/Bullitt)\ **Post date:** [July 14, 2017, 9:02pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/52 "2017-07-14T21:02:43Z")
> [@Acsenray](#): > > To summarize: > > 1. Supply is low, because of geography but also because of restrictions that prevent the replacement of low-density housing with high-density housing. I don’t know about those restrictions. In Sunnyvale there are a lot of new high-density units being built. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [July 14, 2017, 11:35pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/53 "2017-07-14T23:35:32Z")
> [@Bullitt](#): > > I don’t know about those restrictions. In Sunnyvale there are a lot of new high-density units being built. Enough to affect the supply significantly? For those not familiar with the area, most of what we call “the Peninsula” (the area Southwest of the SF Bay) is pretty much built out. What vacant land there is is either set aside for open space, or up in the Santa Cruz mountains and not open to development anyway. There’s lots of new housing being built in the East Bay, out in the Tri Valley (Livermore area) and to some extent down south in Gilroy or San Benito County. But the West side of San Jose and north up the SF is pretty much done. And “everyone” wants to live there, if they can. The other trend we’ve seen in the last 10 years or so it’s that the young folks are flocking to SF proper, and driving rents and housing prices to heights that are hard to comprehend. Once you have kids, it’s bye-bye SF, and good luck finding a place in the 'burbs. ---
**Author:** ![ReticulatingSplines](https://avatars.discourse-cdn.com/v4/letter/r/e274bd/32.png) [@ReticulatingSplines](https://boards.straightdope.com/u/ReticulatingSplines)\ **Post date:** [July 15, 2017, 7:37am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/54 "2017-07-15T07:37:10Z")
Geography is an issue, but NIMBYism and politics are just as big of one. There’s plenty of buildable space from Hunter’s Point up through Dogpatch, or if they just tore shit down in the 'Loin. There’s even more space in the suburbs, but good luck building there. Marin even blocked a BART line. ---
**Author:** ![Bullitt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bullitt/32/5725_2.png) [@Bullitt](https://boards.straightdope.com/u/Bullitt)\ **Post date:** [July 15, 2017, 11:47am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/55 "2017-07-15T11:47:43Z")
Well the area around the new(-ish) Pac Bell Park has improved dramatically in the last 20 years! ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [July 15, 2017, 5:03pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/56 "2017-07-15T17:03:54Z")
Is there any place in the US where so many people from all over the world are desperately trying to get to? NYC, maybe, but nowhere else that I can think of that even comes close. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [July 16, 2017, 5:37am UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/57 "2017-07-16T05:37:44Z")
> [@John\_Mace](#): > > Is there any place in the US where so many people from all over the world are desperately trying to get to? NYC, maybe, but nowhere else that I can think of that even comes close. LA & DC are the other two big ones. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [July 17, 2017, 6:58pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/58 "2017-07-17T18:58:54Z")
> [@Scoobysnax](#): > > Haven’t gotten to that point yet so I was not aware of that exemption. We are busy improving our house because I don’t want to pay an additional $4000/yr in property taxes if we moved. What kind of improvements? It was my understanding that improvements will be assessed at the new value. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [July 17, 2017, 7:15pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/59 "2017-07-17T19:15:23Z")
> [@Balthisar](#): > > What kind of improvements? It was my understanding that improvements will be assessed at the new value. It depends. If it’s a bathroom or kitchen remodel where you don’t pull permits, there is no re-assessment. If it’s a big one where you need a building permit, you are re-assessed but your basis only goes up for the difference in value that the improvement makes. ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [July 17, 2017, 10:27pm UTC](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140/60 "2017-07-17T22:27:19Z")
> [@Wesley\_Clark](#): > > I’ve heard Chinese real estate investors are becoming common in the US, because they know the economic prospects, health and environment in the US are much better than in China. Investing in real estate is a way to get their kids into a better country. > > But why go to Silicon valley? You can buy a dilapidated shack in the midwest for $20,000. You can buy a decent home in a decent neighborhood for 200-300k in the midwest. That will get you into the US, you don’t need to spend $1-2 million in Silicon Valley. Because they’re not Chinese families trying to get a toehold in the US’s economic prosperity. They’re Chinese millionaires trying to invest some of their wealth in the stable US real estate market. If you’ve decided to invest $5 million of your net worth in U.S. real estate, do you want to buy 2 houses in silicon valley, or a whole town of shacks in the mid west? [Previous page](https://boards.straightdope.com/t/what-are-people-doing-with-all-these-massively-overpriced-houses-shacks-in-silicon-valley/791140.md?page=2)