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SAN JOSE, Calif. (KTVU) - A new report by The Mercury News published over the weekend and it confirms what many living in the Bay Area already know and feel: it takes an extraordinary amount of money to live comfortably in the area.
Even high-wage earners feel the pinch. What used to be considered a sizable salary is now barely middle class, and that’s becoming a catalyst for change.
“You’re looking at a very high cost of living. If you have that, you end of probably making what other people would consider to be a significant amount of base income. But then trying to make that base income stretch,” said Dr. Caroline Chen, a San Jose State University tax expert.
Chen said the Bay Area’s cost of living is so sky-high – even worse than New York -- it takes a $60 an hour salary to afford a basic two bedroom apartment. That equals a household income of about $125,000 a year – before taxes.
To achieve what’s now become middle class, a household income would need to grow exponentially – to around $400,000.
Dr. Chen said the primary driver of rising costs is the high cost of housing.
“We have a very limited amount of housing and with the number of people in the Bay Area who need housing and want housing, you need to pay more and more for that housing,” she said.
The demand for housing is leading to another trend. People commuting, not just outside the Bay Area, but outside the state altogether.
KTVU learned of a financial broker living full-time in Las Vegas who flies in for work four days a week.
Hairdressers and tattoo artists are doing the same, all in an effort to escape the high cost of the Bay Area.
The mega commute in the sky may not make sense to some, but Chen said it can make financial sense. Ticket costs and housing once here during the week can all be written off as business expenses.