Burbed has often maintained that It’s Special Here, and therefore home prices can never go down (offer does not apply to homes not in the Real Bay Area). Careers, employment, and investments, however, can and do change. This is a rather bleak look at what happens when one was a Have but is not longer part of that group.
REDWOOD CITY, Calif. — The first time Michele arrived at the Maple Street homeless shelter three years ago, she was still driving her BMW 325xi, the final remnant of her Silicon Valley affluence.
Her paper wealth of more than $2 million had evaporated a decade earlier, she says, via a stock options fiasco. She had used the options to buy stock in her high-flying software startup, netting a seven-figure profit by the government’s reckoning, but then held the shares until they were nearly worthless. That left her with no cash and a $200,000 tax bill. She had sold nearly everything to cover it: her house, her remaining stocks, her art collection.
Periods of joblessness, punctuated by depression and bouts with alcoholism filled out the ensuing years, with cause and effect blurring into a cohesive whole — one life, unraveling.
She had used the shelter as a way station, finding a new job at another software company within two months and then moving into a rented apartment. But by last November, just before Thanksgiving, she was out of work again, broke again, and back at the shelter, again. This time, she arrived on foot, carrying a backpack that contained all she had left in the world: some clothes, about ten dollars in cash, her laptop computer and her mother’s Omega watch.
This is a fairly long piece (3 pages) covering a few who had a high-flying life but are now looking at shelters and the Food Bank. The Brookings Institution had recently examined the growth of suburban poverty, and the SF Bay Area wasn’t one of the growth standouts. Nonetheless, the poverty rate in Bay suburbs has increased from 7.3 to 9.2 percent over ten years, or just over one out of eleven suburban residents.
There are stronger indicators of problems. San Mateo County has tripled the number of people receiving food stamps in the last five years. Second Harvest Food Bank is now serving 250,000 in both San Mateo and Santa Clara Counties, an increase of 50 percent over the last four years.
Homelessness can be rendered invisible in this area when you drive from nice home to nice office in your nice car. One of those profiled said you’ll notice it when you have to ride the bus. In San Mateo County, you can even apply for county assistance at a kiosk or online from home (assuming you still have one).
Here’s how the various people profiled in the HuffPo article ended up losing it all.
|The unnamed former Oracle sales exec invested his $6 million into tech stocks, and lost most of it. The rest has been spent down over three years of unemployment. He is now asking a social services agency for assistance with his rent and was told to take in a roommate before they would help.|
|Steven Carey formerly owned a mortgage finance company, which was clobbered in the 1990s by Wall Street firms entering the sector. He moved into subprime mortgages after declaring bankruptcy, and was again caught short when credit dried up in 2009. After living out of his car and then at a homeless shelter, he now lives in another shelter he is managing.|
|Liza Tellez and her family lived in Gustine where she worked in a permit office, which was busy from all the exurban home construction. Her husband commuted to Silicon Valley, working as a marketer. When work hours were reduced for both and then ended, they lost their large home to foreclosure, and she moved back to San Mateo. She couldn’t find a job, farmed her children out to different relatives, and eventually ended up at a family homeless shelter where many of the clients were struggling with alcohol or behavior problems. She is now looking for Section 8 housing.|
|Michele, who grew up in Woodside and had an EE degree from Duke, had to sell everything, including her Menlo Park house and her BMW, to pay the tax bill for exercising her startup options. The stock eventually became worthless. She admits she did not understand how to manage her money and spent lavishly when she was flush. She is the only one of the four to have found a high-paying job again, but is living in a home for recovering alcoholics. She does not have enough savings to pay the high security deposit she would need due to her bad credit or to buy a car.|
One final note on poverty in Silicon Valley: While 12 percent of San Mateo County households earn less than $25,000, according to the Insight Center for Community Economic Development, a family of three (single parent of two children) there is not self-sufficient earning less than $79,000 a year.
Do you agree with that number or the methodology used in determining it?