A $250,000 salary puts you in the top 3% of earners nationally, but it Silicon Valley that’s now middle class. In fact, if you only earn $250,000, you probably need government assistance to buy a home in Palo Alto.
Palo Alto’s city council voted to unanimously to put a plan in place to subsidize housing for the city’s middle class. Those earning less than six figures have no chance of buying a home in Palo Alto, so the city is aiming to help those that earn between $150,000 and $250,000. In other words, middle class Silicon Valley families.
Palo Alto is one of the most desirable cities in the Bay Area to live. Its home to many high-flying technology companies and its school system is one of the best in the area. The city is home to numerous research facilities and Stanford University. Google co-founder Larry Page, Facebook CEO Mark Zuckerberg and countless other executives live in Palo Alto.
Combine all of the above factors and the result is that tiny homes in some parts of Palo Alto cost up to $2 million…if you plan on tearing them down. Homes in the $3 million range in popular Palo Alto neighborhoods are often dated and are in need of serious remodeling, such as the above-pictured 1,271 square-foot home on 159 Kellogg Ave. Assuming you could afford a $600,000 (20%) down payment, the mortgage on this property is north of $10,000 per month, putting it out of reach for those earning less than $250,000.
CBS SF Bay Area reported on the city council’s decision to help keep middle-class workers in Palo Alto:
“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff told CBS SF Bay Area.
There’s nothing the Palo Alto city council can do to help middle-class families buy mult-milion dollar homes. Instead, the council is looking to build smaller units and mixed-use buildings. There will likely be stiff competition for new units as there are hordes of tech workers that would much rather buy something than continue blowing $4,000 and up on cramped apartments in the area.