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Expensive housing could cause worker shortage
Dave Murphy <mailto:dmurphy@xxxxxxxxxxxxxxx>
Friday, May 25, 2001
©2001 San Francisco Chronicle </chronicle/info/copyright>
URL: <http://www.sfgate.com/cgi-bin/article.cgi?
file=/chronicle/archive/2001/05/25/BU206375.DTL>
One of the dangers of any job is that things can sneak up on you.
Conditions become a little worse and a little worse and a little
worse, just like the mythical bath that gets hotter by one degree
every minute. You don't even know that you've been boiled until it's
too late.
That can happen to individual employees, bosses, companies -- even
industries. But after talking with a relocation expert last week, I'm
afraid it might be happening to a huge chunk of the Bay Area. Before
we know it, we just might be boiled in denial (which is only slightly
better than being boiled in da Amazon).
When you've lived here for a while, you take high housing prices for
granted. Sure, we may be the most expensive region in the country,
but we live in one of the great places of the world. You get what you
pay for.
Agreed. But ask yourself this: Which would you rather have, one home
in San Francisco or two homes, one in Boston and one in San Diego?
If your answer isn't San Francisco, be afraid. Be very afraid.
The relocation expert, David Barlow, a senior vice president with
Cooperative Resource Services and board member of the National
Employee Relocation Council, cited a March report from Runzheimer
International, a management consulting firm. Runzheimer takes a
mythical four-bedroom, 2,200- square-foot house and figures what it
would cost in various communities around the country where middle-
income families reside.
San Francisco finished second, with a cost of $746,500. The only city
ahead of it was San Jose, at $860,100.
In third place was Honolulu, at $403,600. That's right; that home in
San Jose is more than twice as expensive as one in Hawaii.
Something tells me it's not a tiny bubble that's about to burst.
Washington and Los Angeles were the only other cities above $360,000.
Even New York City came in at $336,100, although that excludes
Manhattan, which isn't exactly a place where middle-income families
reside.
At the other end of the scale, you could buy that same home in Port
Arthur, Texas, for $83,600 -- not even 10 percent of what it costs in
San Jose. I can hear people harrumphing now: "Yeah, but who wants to
live in Port Arthur, Texas?"
OK. What about San Antonio? It's the home of the Spurs, a top
professional basketball team, and the mythical home there sells for
$125,600. Three words: Remember the Alamo.
Or consider that the home would cost $130,200 in New Orleans. If you
have six children, it would cost you more to cram them into one house
in San Jose than to buy each of them their own four-bedroom home in
New Orleans.
That kind of figure startled me. I'm used to hearing about median
home prices, and the difference between the Bay Area and the rest of
the country isn't so jarring when you look at it that way. Also,
there are a lot of condominiums here, and the homes might not be as
large as in other areas of the country, so the difference in price
per square foot doesn't jump out at you the way it does in the
Runzheimer study.
What has made the gap so huge is that San Jose's price doubled during
the past six years while San Francisco's went up 77.4 percent. The
only other city in the top 10 that topped 50 percent was Denver, but
the four-bedroom home there would go for the San Jose pocket-lint
price of only $318,400.
Until the rest of the country catches up -- or at least gets much
closer -- I expect that things will be brutal for employers. Those
who don't make retention their top priority will have an extremely
difficult time recruiting, even if the unemployment rate goes up a
little.
People who have owned homes in the Bay Area for years might be happy
because their property values have gone up so much, but as those
people retire or move away, companies will have a difficult time
recruiting their replacements.
Suppose you're a middle manager living somewhere else, and you've
grown used to a four-bedroom house. Would you take the risk of moving
to a place that's so much more expensive than the rest of the
country?
If the dot-com boom is indeed dead and the Nasdaq doesn't bounce back
in a hurry, I'm scared that our region may be in for a long, ugly
time. I hope I'm wrong.
Everybody knows that Tony Bennett left his heart in San Francisco,
but he may have gotten off easy. Before things stabilize, it may cost
the rest of us an arm and a leg.
Chronicle At Work Editor Dave Murphy's column appears Fridays and
Sundays. Call him at (415) 777-8705 or e-mail dmurphy@xxxxxxxxxxxxxxx
<mailto:dmurphy@xxxxxxxxxxxxxxx>.
©2001 San Francisco Chronicle </chronicle/info/copyright> Page B - 4
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