#262 The Rise of Van Dwellers

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The average rent in Mountain View, CA (home of Google) is $4,150. This is leading to many people (including employees) to live in vans parked in the pristine streets and some people are not happy about it.

A growing population of people are bypassing rent and mortgage payments in favor of van dwelling. Listen in for more details.

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Resources Mentioned in this Episode

https://www.bloomberg.com/news/features/2019-05-21/silicon-valley-s-shame-living-in-a-van-in-google-s-backyard

https://www.reddit.com/r/vandwellers/

https://www.reddit.com/r/personalfinance/

https://www.reddit.com/r/financialindependence/

Show Transcription:

00:00 Hey everybody. Welcome back to another episode of RentPrep for landlords. It’s episode two 62 am your host, Eric Worral, and today we’re going to be talking about the rise of the van dweller. So if you’re not familiar with the term van dwellers, it’s pretty obvious,term in itself. These are people who live in vans as opposed to living traditional lifestyle in a home or rental property. But this is actually becoming a pretty big phenomenon, especially in the Silicon Valley area. And we’re going to be covering more of that right after this

00:29 1,2,3,4 ya ya ya…. Welcome to the RentPrep for landlords podcast. And now your host, Steven White and Eric Worral.

00:35 Oh, right. Today’s featured article comes from bloomberg.com was written by a list of bear on published on May 21st, the title of this Bloomberg article is an RV camps spraying up outside of Google’s headquarters. Now, mountain view wants to ban it with prices out of reach.

00:56 Where will the van dwellers go? So again, just to recap, van dwellers. Typically these are people who live on not necessarily a nomadic lifestyle and that they’re going all over the place. Sometimes they’re just somebody who lives in a van on, not Chris Farley, Sally and know van down by the river is where my mind goes to. But um, they live in a van because they get around the cost of housing, whether that be a rental property or owning a home. And there is this movement of a younger, typically younger people doing this and uh, it’s apparently, I don’t want to say an epidemic because that word gets overused, but it’s a pretty big issue, uh, out in silicon valley. So, to start this out, we will paint a lovely picture for you at the beginning of the article, it says in a quiet neighborhood and your Google’s headquarters last month, rusty sewage was seeping from a park RV onto an otherwise pristine street sergeant.

01:46 Why he’d Megee of the mountain view police department was furious. You guys need to take care of it like asap. He said lecturing the young couple, living in a vehicle, I’m not going to tow it today, but tomorrow if I come out here and it’s like this, it’s getting towed. As he delivered the ultimatum, a self driving car will pass. Mountain view is a wealthy town that’s home to Alphabet Inc the world’s fourth most valuable public corporation. And Google’s owner, but he spends a lot of his time knocking on the doors of Rvs, parked out in the city streets, logging license plates and marking rigs that haven’t moved for several days. So this is the epicenter of the Silicon Valley Tech Boom that is minting millionaires, but also fueling a homeless crisis that the United Nations recently deemed a human rights violation.

02:35 That sentence, right? It’s right there. It’s pretty interesting. This isn’t a United States, situation. This was the United Nations recently deemed to human rights violation. So thousands of people live in RVs across San Francisco on the border bay area because they can’t afford to rent or buy homes. Uh, don’t believe this is new information for most people listening to this podcast. We know that the cost of housing in the bay area is crazy. But it’s pretty interesting the fallout that happens from this, right. A lot of times we think immediately of homelessness or maybe people have to leave the area, but in this situation it’s not really either of those people are still living in the area, but they’re living in vans and from the images. Some of these are campers, traditional campers that you might see at a campsite, but some of them kind of look like sprinter vans that people have set up in retrofitted for them to live in and the one image here, it’s got Google’s headquarters.

03:24 You can see the Google sign and then it’s just like campers and vans all around the Google sign and it said that you’ll even see there’s these multicolored Google bikes that are from the campus that’ll be leaned up by these bands because people are getting out of the vans and going right to work at Google. There is a few different types of people I think that do this. There’s some that maybe they have a lower level job there and can’t afford a rental. But I also believe I am from reading, there’s a few different, uh, sub reddits if you’re familiar with reddit.com social app. There’s personal finance, financial independence, which is an interesting one. There’s also one that’s dedicated the van dwellers and I’ve spent some time on all of these researching it and looking into it. And there are people who are on this fire passes.

04:08 So that’s financial independence, retire early and exactly what it sounds like. They want to become financially independent, retire early. And what they do is they have a skill set where they can be hired by somebody like Google, where you’re going to make 150 $200,000 a year because a, you have a desirable skill set would be, it’s really expensive to live there. Right? Uh, we’ve got some, information on the average, a rental property in this area I think was $4,150 a month. I’ll see if I can find that and verify it in the article here. Uh, but that’s some crazy money to be spending on rent. So with some of these people who are really interested in fire are doing is they’re getting a van, you know, that might cost them $15,000 and living in it, and granted, you know, you’re probably gonna have a tough time in the dating life or something like that, but if you’re making $200,000 a year and instead of, you know, immediately just giving back 50,000 of that to rent, maybe you bought a vehicle for 15,000 and suddenly your costs are way down and you’re showering at Google’s headquarters and you’re doing everything else that you can, uh, to keep your job and keep your expenses as low as possible.

05:20 So it’s kind of this a subculture of people that are not really living off the grid because it’s not like you can’t find him right there close to work, but they’re living off the grid, so to speak, that they’re living in vans. But a lot of them, uh, you know, are educated and making money. It’s not just people who are uneducated and can’t find work. A lot of the people are working, but have decided that they’re not going to spend $50,000 a year to live. Yeah, right here in the article it says that the median rent in mountain view almost doubled since late 2010 to $4,151 a month. So that’s nearly triple the national average. According to Trulia, the median home value is 1.8 million up from 750,010 years ago. So $4,151 like quick math, I’m thinking if it was 4,000 even, you’re looking at $48,000 a year just for median rent.

06:17 So that’s a pretty crazy number to really wrap your head around. I mean you can get like a low level of Mercedes new and you could just buy one each year for that kind of money. I mean you’re buying essentially a low level luxury car every single year just to rent and live. So it’s a really interesting as error or I don’t know if you want to call it an air, but a situation that’s unfolded out in San Francisco and it kind of makes you wonder too, just from a capitalist mindset of like, what kind of services will evolve from this? Like is there somebody who’s got a used van a lot just outside of the bay area where he’s selling all these? Or are there people that are, you know, uh, creating some sort of service where it might be able to combine, do sewage removal for cheaper?

07:07 Who knows? Um, but anytime that, one of the things then that we go back to a lot in this podcast is anytime that there’s something extreme that happens, there’s always these ancillary, uh, either benefits or fall outs that happen from it. So it’s great that all this money and investment in technology booms are happening in this area. Uh, you know, it’s the epicenter of some of the most innovative companies and technologies in the world. And it’s changing the way the world is just this small bay area. But then at the same time, you’re seeing that there’s people who work for these companies that are changing the world and are deciding that they should live in a van instead of a rental property because it’s too expensive. Uh, and there’s just these fall outs that happen when you know, you see an extreme go one way, there’s always something else to kind of falls out the back side of it where you’re like, oh, like, yeah, we didn’t think about the fact that we can’t pay teachers in San Francisco enough to live because we don’t have a budget to pay teachers $150,000 a year.

08:10 And that’s what they need. So now what they have, and I think I’ve covered this on the podcast before, they have teachers that are either homeless or sleeping in vans or are commuting two hours out because it’s impossible if they’re working downtown San Francisco to be able to afford it. So it’s a pretty interesting problem to have in that based on just the geography of the land. If you have a school in downtown San Francisco Public School, there’s no way, unless that person has, you know, a side hustle or a spouse who is making a lot of money, that somebody can afford to work as a teacher for under a hundred thousand dollars in that, in that area and not be living almost on the poverty line, which is crazy to think about. It’s a really hard to kind of wrap your mind around if you’re, you know, a guy who grew up in Buffalo, New York, where, you know, I could probably a drive about five minutes and buy a rental property for 40,000 bucks.

09:06 So really interesting stuff going on out there. Um, if you’re not on Reddit, I suggest checking out. It’s pretty cool. It’s like a, you know, there’s Facebook which a lot of people are love, hate with, but with reddit there’s a, you can get down to the sub reddits for niche topics that you’re interested in. Like I said, I am on personal finance, uh, financial independence. I’ve poked around and van dwellers just because I’m fascinated by the psychology of it. I think it’s really interesting too that you have some people in there that who are high earners doing this just because of like, I want to retire in five years at, you know, 35 and then you have people in there that, you know, are just nomadic and travel in the world that way. And this just kind of got a, a, a weird sense of a romance about it. Right. But, yeah, check out US everybody. I’ll try and link to some of the ones that I like in the show notes of this episode to 62. All right guys. Well, until next week, have a great rest of your weekend. Take care.