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This is one of the top factors preventing me from moving back to the Bay Area. It's good to know there's at least SOME serious attempt at a solution (even if fo

This is one of the top factors preventing me from moving back to the Bay Area. It's good to know there's at least SOME serious attempt at a solution (even if folks around here are mostly pessimistic.) It still surprises me that an industry that's all about connecting the world through the internet and allowing anyone to work with anyone else on anything says "yeah but you need to work in this small area of the country to do it." The armchair economist in me says that high housing prices in the Bay Area will cause a market "correction" of sorts with other cities exploding as tech sectors -- see NY, Boston, Chicago, Austin, Las Vegas -- as those cities can get away with much better housing for cheap, even if the opportunities aren't as plentiful (yet.) <conspiracy theory> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity ("you can have my funding if you live in SF" or "we don't allow remote workers"), as they all probably own houses in the area; the incentives for them would be to have housing prices keep rising, NOT fall, as they would lose significant real-estate equity. </conspiracy theory>

brc 10y ago
It's a good theory but I think the investors are pretty straight-up about wanting their companies on a short leash. The key will be those other cities/hubs having their own successes, bringing in the capital and expertise to nurture new talent. It's likely that the number of successful hubs that can be supported is pretty low. I happen to believe that the amount of (awful word) synergy needed to flip a few percent of startups from fail/borderline to success is pretty high. In other words, all those know-a-guy-who-can-help connections have to have a high concentration before it starts to pay off. But then mine is just a theory as well and has a high chance of being wrong.
- pm90 10y ago
  Its true but its not limited to SF/Bay Area. I had the impression the other day that city-specific industries are much like Universities; so you see that MIT, Berkeley etc. that had CS dept's early on now have the best programs in CS. So it is with cities: the tech industry was born in Silicon Valley so of course there are a lot of Software/EE engineers out there.
kbenson 10y ago
> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity I think the benefits of more people meeting, networking, and starting new things in the area vastly outweighs their interest in their homes. It's not like this really affects the pricing of mansions much anyway, and if they aren't living in a mansion, it's probably such a small amount of their overall wealth that it's inconsequential.
nostrebored 10y ago
Somehow the city with the highest average salary/cost of living usually goes unmentioned... Seattle has two huge tech companies, a lot of mid sized tech companies, and a growing startup scene... and it's not that far away from the bay.
- loeg 10y ago
  Shhh, we're trying to keep it a secret. :)
- elliotec 10y ago
  I'm calling BS. Where's your source that Seattle has the highest average salary to cost of living?
  - pyrophane 10y ago
    Good instinct. The housing prices, while still pretty good, are going up fast, and unless you work for MS or Amamzon, I'm not sure the salaries are really that amazing.
- seanmcdirmid 10y ago
  It rains too much, like 14 months per year is just rain. And the Seattle freeze...ya, people in Seattle don't like to talk to other people, it is like Northern Europe. /s We've always made up crazy lies just to keep the Californians away, but ultimately it isn't working. Seattle is a nice place to live/work, and has plenty of jobs for techies.
  - meddlepal 10y ago
    As a Bostonian none of this rain or cold stuff bothers me. Visiting Seattle for the first time next month for DockerCon and I'm super excited!
    - mc32 10y ago
      It's not very cold at all --it might snow a couple of times a year --it drizzles 6 months out of the year, but it's okay. OP was putting a front hence the "/s"
BurningFrog 10y ago
VCs can make millions from owning houses. They can make billions from funding startups.
- rcpt 10y ago
  Why not both?
- vctheory 10y ago
  By increasing the most substantial cost that startups face, VCs end up owning larger portions of each startup.
  - jdminhbg 10y ago
    Is this anything like my plan to invest in McDonalds franchises and then kill off a huge proportion of the world's cattle to "own larger portions" of each?
    - vctheory 10y ago
      No. I was writing a serious reply, but then I realized that there's no point in explaining the mathematics of a VC portfolio to somebody who was a jerk just because they didn't understand the situation. And congratulations on learning how to be rude enough to be a toxic, while using the type of language that dang, pg, and saltman have all decided is A-OK. You're doing a great job of keeping HN horrible.
- blazespin 10y ago
  The keyword is "can". What's the expected value of investing in a startup versus real estate?
galdosdi 10y ago
I think NYC is already there. It's so easy to find a tech job in NYC. Maybe it's even easier in SV, but I've never missed not being in SV. There's such a variety here. Plenty of startups, all the tech giants, and plenty of tech/IT jobs at "regular" companies, consulting opportunities, etc... And it's not _just_ tech -- plenty of other industries are headquartered in NYC. By contrast I can't think of any other industries that SV is the flagship metro-area of besides tech... If software is going to eat the world, it helps to have some of those industries you're going to disrupt nearby already. I'd love to see NYC co-opt SV as the world capital of the tech industry, and I think it could totally happen. The only thing SV has going is historical inertia, and it's eroding. This housing problem in SV is going to make it erode faster. Honestly I don't understand SV at all. They say NYC has a housing cost problem, and it sure does, but it's nothing compared to SV -- in SV you have people paying Manhattan prices so they can live in SF... yet somehow still commuting an hour to the suburbs where the offices are! At least here you can either pay Manhattan prices and get a 10 minute commute for it -- or take an hour-long commute and at least get a much cheaper and/or larger place in exchange. And your commute won't require you to drive, unless you want that. NB: I've never lived in the SV area so maybe I have some misconceptions that need correcting? :-)
- dmode 10y ago
  NYC is far far far way from overtaking SV as the capital of tech industry. The combined value of just Google, Apple, and Facebook is $1.3 trillion dollars. To reach that scale will take many many years and some incredible companies. Honestly, places that can put in a serious competition to SV are in Asia - China and India. Chinese tech companies are raising massive rounds, with multiple billion dollar investments in 2016. Also, most successful hubs are often one industry towns. Think Detroit and Houston. That's how clusters are formed and they have a self full-filing effect. But it is also a mistake to think SV is just a "tech" hub. Is Tesla a tech company ? Or is Sunrun a tech company ? Are Impossible Foods or Bolt Threads tech companies ? Technology is now integral to any industry. And increasingly we are seeing R&D shops being set-up in the valley to stay ahead of the game
  - galdosdi 10y ago

brc 10y ago

It's a good theory but I think the investors are pretty straight-up about wanting their companies on a short leash. The key will be those other cities/hubs having their own successes, bringing in the capital and expertise to nurture new talent. It's likely that the number of successful hubs that can be supported is pretty low. I happen to believe that the amount of (awful word) synergy needed to flip a few percent of startups from fail/borderline to success is pretty high. In other words, all those know-a-guy-who-can-help connections have to have a high concentration before it starts to pay off. But then mine is just a theory as well and has a high chance of being wrong.

pm90 10y ago
Its true but its not limited to SF/Bay Area. I had the impression the other day that city-specific industries are much like Universities; so you see that MIT, Berkeley etc. that had CS dept's early on now have the best programs in CS. So it is with cities: the tech industry was born in Silicon Valley so of course there are a lot of Software/EE engineers out there.

kbenson 10y ago

> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity I think the benefits of more people meeting, networking, and starting new things in the area vastly outweighs their interest in their homes. It's not like this really affects the pricing of mansions much anyway, and if they aren't living in a mansion, it's probably such a small amount of their overall wealth that it's inconsequential.

nostrebored 10y ago

Somehow the city with the highest average salary/cost of living usually goes unmentioned... Seattle has two huge tech companies, a lot of mid sized tech companies, and a growing startup scene... and it's not that far away from the bay.

loeg 10y ago
Shhh, we're trying to keep it a secret. :)
elliotec 10y ago
I'm calling BS. Where's your source that Seattle has the highest average salary to cost of living?
- pyrophane 10y ago
  Good instinct. The housing prices, while still pretty good, are going up fast, and unless you work for MS or Amamzon, I'm not sure the salaries are really that amazing.
seanmcdirmid 10y ago
It rains too much, like 14 months per year is just rain. And the Seattle freeze...ya, people in Seattle don't like to talk to other people, it is like Northern Europe. /s We've always made up crazy lies just to keep the Californians away, but ultimately it isn't working. Seattle is a nice place to live/work, and has plenty of jobs for techies.
- meddlepal 10y ago
  As a Bostonian none of this rain or cold stuff bothers me. Visiting Seattle for the first time next month for DockerCon and I'm super excited!
  - mc32 10y ago
    It's not very cold at all --it might snow a couple of times a year --it drizzles 6 months out of the year, but it's okay. OP was putting a front hence the "/s"

BurningFrog 10y ago

VCs can make millions from owning houses. They can make billions from funding startups.

rcpt 10y ago
Why not both?
vctheory 10y ago
By increasing the most substantial cost that startups face, VCs end up owning larger portions of each startup.
- jdminhbg 10y ago
  Is this anything like my plan to invest in McDonalds franchises and then kill off a huge proportion of the world's cattle to "own larger portions" of each?
  - vctheory 10y ago
    No. I was writing a serious reply, but then I realized that there's no point in explaining the mathematics of a VC portfolio to somebody who was a jerk just because they didn't understand the situation. And congratulations on learning how to be rude enough to be a toxic, while using the type of language that dang, pg, and saltman have all decided is A-OK. You're doing a great job of keeping HN horrible.
blazespin 10y ago
The keyword is "can". What's the expected value of investing in a startup versus real estate?

galdosdi 10y ago

I think NYC is already there. It's so easy to find a tech job in NYC. Maybe it's even easier in SV, but I've never missed not being in SV. There's such a variety here. Plenty of startups, all the tech giants, and plenty of tech/IT jobs at "regular" companies, consulting opportunities, etc... And it's not _just_ tech -- plenty of other industries are headquartered in NYC. By contrast I can't think of any other industries that SV is the flagship metro-area of besides tech... If software is going to eat the world, it helps to have some of those industries you're going to disrupt nearby already. I'd love to see NYC co-opt SV as the world capital of the tech industry, and I think it could totally happen. The only thing SV has going is historical inertia, and it's eroding. This housing problem in SV is going to make it erode faster. Honestly I don't understand SV at all. They say NYC has a housing cost problem, and it sure does, but it's nothing compared to SV -- in SV you have people paying Manhattan prices so they can live in SF... yet somehow still commuting an hour to the suburbs where the offices are! At least here you can either pay Manhattan prices and get a 10 minute commute for it -- or take an hour-long commute and at least get a much cheaper and/or larger place in exchange. And your commute won't require you to drive, unless you want that. NB: I've never lived in the SV area so maybe I have some misconceptions that need correcting? :-)

dmode 10y ago
NYC is far far far way from overtaking SV as the capital of tech industry. The combined value of just Google, Apple, and Facebook is $1.3 trillion dollars. To reach that scale will take many many years and some incredible companies. Honestly, places that can put in a serious competition to SV are in Asia - China and India. Chinese tech companies are raising massive rounds, with multiple billion dollar investments in 2016. Also, most successful hubs are often one industry towns. Think Detroit and Houston. That's how clusters are formed and they have a self full-filing effect. But it is also a mistake to think SV is just a "tech" hub. Is Tesla a tech company ? Or is Sunrun a tech company ? Are Impossible Foods or Bolt Threads tech companies ? Technology is now integral to any industry. And increasingly we are seeing R&D shops being set-up in the valley to stay ahead of the game
- galdosdi 10y ago