Is there a bubble in Silicon Valley? Subsidized housing is usually associated with low-income buildings and supplemental food stamps, but Palo Alto, California is looking to raise the definition of a qualifying household income by a couple hundred thousand dollars. According to CBS San Francisco, the city council is considering subsidizing new housing for its "middle class":
The city council has voted to study a housing proposal that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.
The plan would focus on building smaller, downtown units for people who live near transit and don't own cars, along with mixed-use retail and residential developments.
To put it in perspective, $250,000 would be considered wealthy in nearly any other place in America--potentially in the top 3 percent. I used to live in Silicon Valley, so residents have my empathy with it being a tough place to live. I've had a least one millionaire friend unironically lament the cost of housing. Palo Alto is ground zero for Facebook as well as the unicorn factory, Stanford University. Calling the real estate prices inflated is an understatement.
Even if we're seeing a bubble, jumping up to aid the quarter-millionaires neglects the issue of those who make significantly less, like the Google Bus chaperones who shuttle the residents back and forth to work, the local business owners who helped Palo Alto become what it is today, or even the fledgling startups that need significant funding just to make rent.
It's also clear that the one-car garage where Bill Hewlett and Dave Packard started HP couldn't happen in Palo Alto today. Such a startup would have to be launched somewhere else in America, if not the world. We've been warned.