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Craziest Solutions to Rising Rent Prices

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October 22, 2015 · 864 Views

A growing trend nationwide is an increase in the cost of living. Rent prices are soaring, and people are struggling to keep up with the exorbitant prices. This unfortunate reality is even more apparent in the San Francisco Bay Area, with rent prices reaching record highs and being the highest in the country.

To live in a 1-bedroom apartment in the city of San Francisco, you’ll now have to fork over an average of $3,500 per month! That price raises to $4,600 per month for a two-bedroom apartment. Compare this to the nationwide average of $985 (for a 1-bedroom place), and even to the California average of $2,070, and it’s easy to see why so many people are frustrated and concerned with soaring Bay Area prices.

While prices continue to rise, more and more families are being forced to pack up their belongings and move to cheaper areas. This has been labeled a “mass exodus,” as over five million Californians have moved within the last decade and have begun to flood nearby Oregon, Washington, Arizona, Colorado, Nevada, and Texas, among other states.

Call them crazy, but here are some outrageous ways people are dealing with the skyrocketing cost of living.

 

The New Normal for Commuting

With these ridiculous prices, along with numerous people leaving their home state, it’s no wonder that people are getting creative with how they cope with this epidemic. For many, it means finding a cheaper place to live in California, namely the Central Valley and the Sacramento area. Unfortunately for these workers, the overwhelming majority of tech jobs remain in the San Francisco Bay Area. So what do you do when your job is in the Silicon Valley, but your budget is forcing you to live somewhere cheaper? Meet the “Megacommuter.”

A “Megacommuter” is defined as someone who travels at least 50 miles and 90 minutes (one way) to work. The Bay Area has the most people that fit this bill, about 2.06% of the full-time workers. Next on the list is New York with 1.9% of full-time workers, with Washington DC not far behind at 1.89%. Sadly it has become the norm for many people to wake up before dawn, drive multiple hours to their job, work a full 8 hour day, and then arrive back home late into the evening.

 

Save Money by Commuting from Vegas to San Francisco?

With “megacommuting” becoming the new norm, why not take it to the extreme? A Reddit user crunched the numbers, and found that renting in Las Vegas and then commuting to a full time job in San Francisco four days per week would actually save about $1,124 per month! It sounds crazy, but when you take a closer look the numbers match up. The average rent for a 2-bedroom apartment in Las Vegas is typically around $2,100 less than a 1-bedroom apartment in San Francisco. Direct flights between these two cities are relatively easy to find and occur frequently, leading to about a $70 round trip cost ($1,120 per month). Factor in $276 per month for traveling to and from the airport, gives you a total of $2,408 for Vegas cost of living. Subtract the $409 per month that you’d avoid spending on expensive San Francisco food, drinks, coffee, utilities, etc. and the final total is $1,124 in savings!

 

Google Employee Living in His Truck

Here’s a case where a 23-year-old Google employee sought a solution to solve both problems of high cost of living and long commutes, all in one. Rather than being forced to pay $2,000 per month to share a 2-bedroom apartment with three other guys through corporate housing, Brandon decided to take matters into his own hands. Instead, he now lives in the back of a truck, which he purchased for $10,000 and is now parked in the Google parking lot. This modest lifestyle has resulted in only one bill per month, his truck insurance, and has allowed him to begin saving roughly 90% of his total income. Google’s company perks have been well documented, and these allow him to have food, showers, a free gym to work out at, and a place to charge his phone and laptop. While an example of extreme frugality, Brandon expects to be able to pay off his student loan debt within six months and set himself up to be very well off financially for years to come. Maybe more people will soon start to follow his lead.

 

Renting Tent in Backyard

Here’s something we had never seen before! John Potter decided to list a backyard tent for rent on Airbnb. The tent is set up in the backyard of his parents’ Mountain View house, within walking distance from Google. After receiving an overflow of reservation requests, he has since bumped up the rate to $46 per night, or $899 monthly. So far no one has opted for the monthly rate, but two people have stayed in the tent so far. Cases like this continue to display the craziness that is the Bay Area housing market.

 

Shack Sold for $1.2 million in San Francisco

We wish we were joking about this one. The housing market in the Bay Area continues to look bleak for average income families, aspurchases like this one have become normal for investors.

 

$1,800 Bunk Bed?!

With so many people unable to afford the cost of renting an apartment, now one of the newest rental options in San Francisco is called “co-creative housing.” This involves a set-up that sort of resembles college dorm rooms, but taken to an extreme. You can live in a small room containing a two person bunk bed and a desk for $1,800 per month. Some of these rooms have two 2-person bunk beds, for a total of four people. All these small rooms makeup a hostel that holds 30 people. It also contains a well-stocked communal kitchen and three bathrooms per floor. Luxurious? Not exactly. Reports are that it’s a really tight fit and might not even be legal technically, but for some people it may be their only affordable option.

 

Best of the Rest

While California is arguably leading the pack for states with extreme cost of living and mega commutes, there are others feeling the pain as well.

New York City has the longest work weeks in the country, averaging 48 hours per week. Combine this with an average commute time of at least 40 minutes each way with hectic public transportation on trains, ferries, car traffic, and more. The cost of living has been growing significantly as well, and is not far behind San Francisco’s record-breaking rates. The going rate for a 2-bedroom apartment is now around $3,600 per month.

Chicago and Philadelphia have very long average commute times as well, ranging from 32-40 minutes each way. Major cities such as Boston ($2,200), Washington DC ($2,100), and Miami ($1,850) have also been experiencing high rent prices.

 

Overall, increased cost of living is one of the biggest issues currently plaguing California residents, and is something the rest of the United States should keep tabs on. This has resulted in longer commute times, as well a number of people being forced to relocate to cheaper areas. This trickle down effect has begun to impact some of the Western states and could soon be felt on a more widespread level throughout the country.

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A lifelong Bay Area native, Matt Spillar graduated in 2013 from Fresno State with a Sports Marketing degree. He strives to combine his passion for sports marketing along with his interests in finance and budgeting. In his spare time, he writes for his personal blog, spillsspot.com

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