Yes, higher operational costs in the Bay Area - market-rate property taxes, for example, would encourage Google and other large incumbents to grow or relocate e

Yes, higher operational costs in the Bay Area - market-rate property taxes, for example, would encourage Google and other large incumbents to grow or relocate employees to more favorable locales, all things being equal. Of course, there could be a specific machine learning expert that the company receiving Bay Area-tied subsidies must have, or a startup they would like to acquire, whose employees refuse to work outside the Mountain View office. By paying market rate rents, these companies would look more closely outside the area and existing office space made available to new players - these new market entrants are paying market-rate anyways. "Triple net" only affects long term leases (usually 20-30 years, often longer) and as the real estate consultants cited by the NYT, usually corporate space is not passed onto the lessee (e.g. they would pay more for the lower tax base). Startups and new mom-and-pop shops suffer (maybe the VC can became a long-vested landlord?). Good point about local planning departments and equilibrium achieved that way. Decreasing tax revenue with fixed costs (sewage, schools, highway, park maintenance) should encourage planning committees to greenlight more new development or better, zoning rights, to increase tax revenue. But this assumes that the new construction would cover their outgoing expenses (families require schools, and everyone needs transit and police services). Thus, you see only a few luxury condos being added like in the San Antonio shopping area in Mountain View.