So many residents are fleeing the Bay Area’s high housing costs that a moving truck shortage has formed.
Consider a resident moving from San Jose to Las Vegas.
They’re basically winning the housing jackpot with this move, since a median priced home is just over $1 million in San Jose versus $241,000 in Las Vegas, according to Zillow data.
But to get their things to Las Vegas, they’re going to have to pay $1,990 to rent a one-way moving truck from U-Haul — 16 times the amount it costs to rent the same moving truck from Las Vegas to San Jose, according to the American Enterprise Institute.
That’s because there are so few moving trucks returning to San Jose relative to those leaving. U-Haul will practically pay you to take their trucks back to San Jose.
For instance, an entrepreneurial individual who needs to drive from Las Vegas to San Jose may choose to drive an empty moving truck, since it’s only $121 to rent with four days driving included compared to $800 for a one-way compact car between Las Vegas and San Jose with the same mileage and days included.
Another sign of the housing crisis
California is well-known for its high housing costs, but the Bay Area — especially Silicon Valley — is on a whole different level. These high home values and rents are driven by a severe housing shortage.
The 2018 report by Silicon Valley Joint Ventures highlights the housing shortage that is causing people to leave. According to the report, from 2007-2018, construction has lagged behind by 31,200 units to keep up with the population growth occurring during these years. So where are all the new people going?
They’re rooming together to save money — evidenced by the declining birth rate, but growing household size in the area. This negatively impacts residents’ quality of life.
Further, of all the units being built, only a miniscule amount are built to accommodate low- or even middle-income households. Since 2015, 89% of the units granted construction permits in Silicon Valley were for buildings for sale or rent to individuals qualifying with incomes exceeding 120% of the median income, according to the Joint Ventures report.
All of these factors add up to the mass exodus which has led to the moving truck shortage.
For local real estate professionals, the housing crisis has meant fewer home sales and a more volatile market. As a result, the real estate profession is stagnant here, with no job growth occurring in Santa Clara County during 2017, according to California’s Employment Development Department.
Rising construction permits will slowly add to the inventory of homes and lead to a recovery in real estate sales — eventually. But the remedy will come too late for the many residents who have already abandoned the Bay Area for more housing-friendly cities.