Rentals are scarce; home prices are staggering. The wealthy elite are scooping up Silicon Valley properties. These investment homes are sitting empty or rented by people who spend more time on the road than at home, turning neighborhoods into ghost towns. Members of the middle class are leaving the Bay Area in droves, searching for a more realistic reality, a place where they can actually afford a home.
Over the past decade, the media has jumped on these stories helter-skelter. This self-funded, homespun documentary on YouTube packs the insanity into 22 minutes and tells the harrowing tale through the eyes of the filmmakers, Michelle Joyce and Steve Fyffe, a married couple with two kids, who’ve been trying to buy a house in the Bay Area for five years.
Michelle said she and her hussband, who worked as journalist before becoming a communications manager at Stanford University, decided to make the movie because, “The crazy housing situation in the Bay Area is all we talked about and all anyone we know talked about.”
“We didn’t have to go far to find examples of everything we show in the video,” Michelle said. “Many of the people we interview in the video are personal friends. We hoped we could get a more honest conversation started about it.
“We notice stories in the media about ghost houses, rental prices and commuting, but we hadn’t seen a story that put it all together. I don’t think people realize all the pieces of this puzzle.”
With the tech economy booming, home and rental prices in the Bay Area have soared in recent years, creating the country’s hottest and most expensive housing market. In San Jose, for example, rents have gone up 26 percent in the past year, the highest increase in the U.S., according to Zumper.
This is all bad news for middle-class families. A household earning the region’s median income — $86,944 annually — can afford only 12 percent of the homes for sale in San Francisco, Marin and San Mateo counties, as of Sept. 2015, according to real estate website Trulia.
Million Dollar Shack aims to share the plight of the Bay Area’s middle class who are slowly being squeezed out by the high-priced cost of living. “The bigger the tech industry gets, the less room there is for families like us,” Michelle says at start of the film.
The message is communicated through a collection of personal anecdotes from Bay Area locals. There’s the story of Deb Follingstad whose San Francisco landlord raised the rent on her home in San Francisco’s Bernal Heights over 300 percent. And there’s the tale of Maryann Creasy Rieger who was forced to commute some 180 miles a day between her home in Fairfield and her job at Yahoo on the Peninsula when CEO Marissa Mayer put an end to telecommuting. Maryann couldn’t afford to move closer to her job.
A realtor featured in the film named Ken DeLeon doesn’t offer much hope. “As crazy as these prices might seem, I think you’re going to see them double in the next six to 10 years. The amazing part — I don’t think, it’s going to end. I think the fundamental lack of supply and strong demand are going to drive this market forever.”
Michelle grew up in Saratoga, an idyllic town with elegant homes and a charming shopping strip tucked against the Santa Cruz Mountains. After the birth of her first child five years ago, she and her husband assumed they’d buy a home in the Bay Area close to her parents and siblings and her husband’s Palo Alto office. When they started looking, they quickly realized that with Michelle’s part-time income, Steve’s full-time salary and small savings, they could only afford a home under a half-million dollars in the Santa Cruz Mountains. The couple went into escrow on a Ben Lomond property, but backed out realizing they preferred to continue saving money to buy a home closer to Steve’s job at Stanford.
“My husband didn’t want to spend hours in the car everyday away from the kids,” Michelle explained.
Michelle and Steve are currently renting a home in Mountain View, and Michelle says they’re paying 30 percent below market rate.
“It felt really expensive when we moved in, but now, if our landlord raised our rent to market rate, we’d have to leave the Bay Area,” Michelle said. “It’s awful. It’s not a stable way to live.”
After Michelle recently sold her small film production company specializing in dance instruction videos, the couple hoped they could explore buying a house again and learned they were priced out of the Bay Area.
“We were always kind of led to believe that when you’re an adult you buy a house,” Michelle said. “But really our generation is the first that’s supposed to do worse than our parents generation since World War II. We don’t feel like we’re grownups. We don’t have stability in our lives. The rental market is going crazy and our livelihood is at the mercy of our landlord who has been kind enough to not raise our rent.”
Million Dollar Shack has received an overwhelming positive response and Michelle says they’ve heard from many people who are struggling to stay in the Bay Area due to the housing situation and who’ve thanked them for telling their story.
“About 95 percent of the people commenting say they’re in the same boat and say that it’s a shame,” Michelle said.
They’ve also heard from people who’ve called them “whiners who don’t understand the laws of supply and demand” and told them to stop complaining about their “rich white problem.”
“Sounds like a first-world problem,” one Facebook user wrote.
Michelle realizes that she’s not at the bottom of the economic totem pole. She worked as a social worker for some 10 years and had jobs in homeless shelters where she helped the most destitute members of the Bay Area. But she says the film isn’t about exposing the region’s poverty, and instead it’s meant to start a discussion about the Bay Area middle class, a group of people that has traditionally been associated with comfort and optimism and is now stressed with economic insecurity.
The middle class has long been made up of many people who support and inspire a community, such as teachers, social workers and artists. Michelle fears that as these people can no longer afford to live in the Bay Area and leave, the region will lose its economic diversity and have a population mirroring a third world country.
“Any society with gross economic disparity isn’t going to be a healthy place to live,” Michelle said. “I drive a Toyota Corolla that’s about eight years old, and I’ve been noticing recently that all the cars driving by me are Teslas and Mercedes. Something just isn’t right.”
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“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”