8 ms·

San Francisco: Office space data says tech bubble is not popping

34 points by cft 10y ago

jblow 10y ago
San Francisco is just kind of stupid at this point. I have lived in the Bay Area since 1989 and I am leaving on Tuesday. Whatever benefits there are to being here do not outweigh the huge monetary cost and substantial degradation of quality of life. (And before you can thinking about paying rents or whatever, if you are in the top tax bracket, enjoy paying 13.3% state income tax, which, after Federal tax, is a staggering 22% of your income.)
- adamnemecek 10y ago
  Where are you moving to?
  - jblow 10y ago
    Seattle, and we'll see how that goes.
    - scottlegrand2 10y ago
      Um, sadly, methinks you should have left 5 years ago. IMO Seattle is well on its way to being SF Junior with crappier weather and more expensive restaurants without SF's critical mass of talent.
    - acedinlowball 10y ago
      Hah! If your plan is to escape SF life by going to Seattle... Well... Good luck with that.
- empath75 10y ago
  If you make a million dollars annnually.
- user5994461 10y ago
  22% of your income ONLY. OMG. Paying around 50% here (plus another many percent paid directly by the employer). Note that I'm in Europe.
  - adviceadam 10y ago
    OP's numbers are off. If you make $1,000,000 a year in SF, you pay 45% of your income as income tax. If you make $10,000,000, it's just over 50%. I used this calculator: https://smartasset.com/taxes/california-tax-calculator#ysfEQYrShp https://smartasset.com/taxes/california-tax-calculator#ysfEQ...
    - user5994461 10y ago
      If you take it like that, my numbers are off as well. They were for the usual bracket of income :D If I make more than 200k€ here. The higher bracket is 58.75% of taxes (+66k€ paid directly by the employer to the state).
    - SomewhatLikely 10y ago
      OP's 22% was of the amount remaining after federal taxes. After federal taxes, you would have about 65% of your income left, the state would take about 13.5%/65% = 21% of that.
  - Ar-Curunir 10y ago
    I think the parent meant that 13% of total income = 22% of income after federal tax. Tax rates for the top income brackets in california aren't low either: ~40+%
  - beisner 10y ago
    OP's dubious math aside, the US tax dollar doesn't really feel like it goes as far as it does in many European countries. Public transportation prices are extremely high nationwide, infrastructure is lacking, healthcare and education expenses will break the bank, and welfare programs don't really cut the mustard. Yes, a majority of Americans don't pay any income taxes; but a ~50% income tax in a country like Sweden feels like a fairer deal than an equivalent tax rate (and it does get this high for upper-middle-class incomes in many states) in the US.
- gaur 10y ago
  > (And before you can thinking about paying rents or whatever, if you are in the top tax bracket, enjoy paying 13.3% state income tax, which, after Federal tax, is a staggering 22% of your income.) If the tax rates were less, wouldn't employers just pay employees less? What's the point of calling out the high income tax rates?
cbanek 10y ago
Honest question here: Do people have the right to live wherever they want? I hear a lot about SF prices, and housing, and employment/pay, and it all really seems to come down to this one fundamental question. A lot of people want to live in SF, which is a very small geographic area. The simple law of supply and demand shows that prices will be high, and people that can pay those prices will stay, and people that aren't willing or can't will leave. This seems to be what is happening right now, economics in action. In the end, there's likely a few possible outcomes: 1) We need people to do the "low jobs" that wouldn't pay enough to live in SF. Jobs like cleaning, food service, etc. All of these things still need to happen. So these people either need to get paid enough to live there, or there needs to be some kind of amazing commuting going on. This would continue the price rises. 2) People that can afford SF realize it's so expensive that it's not worth it. This helps deflate the prices, and increase economies elsewhere. It honestly feels like we've got a bit of both going on. Many companies are getting out of SF because of the costs and moving elsewhere. But there's still too many people (and a lot of young people) trying to get in. We haven't hit equilibrium yet, so prices rise. But the real question is, for people that can't afford to live in SF, and are constantly protesting that fact - do you have the right to live there, or should you just move somewhere else? There are plenty of jobs in the US, and while there may be some real reasons that you NEED to live in SF (taking care of family is one that comes to top of mind), I can't honestly see any requirement to living there. This is one of the reasons why I moved out of California entirely, after living in SF and LA, and moved to Nevada. But I'm not one of these people protesting that they can't afford to live where they choose, and thinking that's a right. As far as I can tell, it's not a right. If you can't afford it, you can't have it. Not everyone can live in mid-town Manhattan or SF. Everyone does, so the people that make it are the people that can pay. Things and times change. If you don't change with them, then you're the one standing in the road waiting to get run over.
- seannaM 10y ago
  Maybe people shouldn't run over people who are in the road
- RickS 10y ago
  The socially accepted answer is "no". I don't just mean in the regional sense (san francisco), but the literal sense (your neighbor's yard). Property can be owned, ownership can be transferred/negotiated, and rights tied somehow to that ownership are necessary for occupation. But you're asking the wrong question, IMO. The right question is "do we have a moral obligation to make housing as accessible as it could be for the largest number of people?" I think we do, at least to a point. Some places take it farther than others, but the general consensus is that SF's prices are a result of malleable policies and past decisions, not just hard facts of life (though the "water on 3 sides" thing is a hard fact for sure). People aren't complaining that they're magically entitled to live wherever they happen to be standing. They're complaining that a system capable of helping more people live better is performing pretty poorly. I think that's great that there's uproar. Personally I fear the day we stop demanding that the world around us get better.
jimmywanger 10y ago
I've lived here for over 30 years. The city is getting silly. I remember when 280 would never get traffic, now it's clogged up more often than not. And 85, don't even mention it. I don't see what San Francisco's appeal is, except for the food. In almost every other respect, it's worse than any other major city in the United States, all things considered.
- g_delgado14 10y ago
  I just got back from the Valley last night. I would move here in and instant if I could afford it. Coming from Canada (Waterloo region), where the winter is unbearably cold and the summers unbearably hot, I could get used to the cool and consistent climate. As and outdoorsy person, I can't think of a better place than the valley area to live in and have such an abundance of things to do in nature. You're also pretty close to nevada and colorado, both of which are also beautiful. As a technologist and entrepreneur, it's pretty obvious that the valley is the place to be, what with the greatest density of talent and tech/high-risk financing in the world.
  - RodericDay 10y ago
    I think Vancouver matches San Francisco in terms of "abundance of things to do in nature".
    - superuser2 10y ago
      It also matches San Francisco in terms of "insane housing prices." You can't win.
  - acedinlowball 10y ago
    You describe yourself as a "technologist and entrepreneur"? Yeah, you definitely belong here....
- pmoriarty 10y ago
  I've found food in SF to be pretty mediocre. I would not list food as an attraction for SF at all. For me, the only reasons to live in SF vs many other cities in the US are tech jobs and reasonable weather.
jorblumesea 10y ago
All of these issues are great for Seattle. The influx of talent and wealth has been transformative for the city (but not always in a good way). People fleeing high prices of California in general have found things to be much better here in every regard. Perhaps not the weather. The real issue is whether we will repeat the same mistakes of SF?
ttul 10y ago
Doesn't office space lag a slowdown considerably? I mean, from the first rent default to the suite being on the market takes a while.
- heisenbit 10y ago
  I think it is coincident or lagging. Also let's not forget venture beat is basing it's reporting on the seller side i.e. a real estate firm which has incentives to talk the market up.

34 points by cft 10y ago

jblow 10y ago

San Francisco is just kind of stupid at this point. I have lived in the Bay Area since 1989 and I am leaving on Tuesday. Whatever benefits there are to being here do not outweigh the huge monetary cost and substantial degradation of quality of life. (And before you can thinking about paying rents or whatever, if you are in the top tax bracket, enjoy paying 13.3% state income tax, which, after Federal tax, is a staggering 22% of your income.)

adamnemecek 10y ago
Where are you moving to?
- jblow 10y ago
  Seattle, and we'll see how that goes.
  - scottlegrand2 10y ago
    Um, sadly, methinks you should have left 5 years ago. IMO Seattle is well on its way to being SF Junior with crappier weather and more expensive restaurants without SF's critical mass of talent.
  - acedinlowball 10y ago
    Hah! If your plan is to escape SF life by going to Seattle... Well... Good luck with that.
empath75 10y ago
If you make a million dollars annnually.
user5994461 10y ago
22% of your income ONLY. OMG. Paying around 50% here (plus another many percent paid directly by the employer). Note that I'm in Europe.
- adviceadam 10y ago
  OP's numbers are off. If you make $1,000,000 a year in SF, you pay 45% of your income as income tax. If you make $10,000,000, it's just over 50%. I used this calculator: https://smartasset.com/taxes/california-tax-calculator#ysfEQYrShp https://smartasset.com/taxes/california-tax-calculator#ysfEQ...
  - user5994461 10y ago
    If you take it like that, my numbers are off as well. They were for the usual bracket of income :D If I make more than 200k€ here. The higher bracket is 58.75% of taxes (+66k€ paid directly by the employer to the state).
  - SomewhatLikely 10y ago
    OP's 22% was of the amount remaining after federal taxes. After federal taxes, you would have about 65% of your income left, the state would take about 13.5%/65% = 21% of that.
- Ar-Curunir 10y ago
  I think the parent meant that 13% of total income = 22% of income after federal tax. Tax rates for the top income brackets in california aren't low either: ~40+%
- beisner 10y ago
  OP's dubious math aside, the US tax dollar doesn't really feel like it goes as far as it does in many European countries. Public transportation prices are extremely high nationwide, infrastructure is lacking, healthcare and education expenses will break the bank, and welfare programs don't really cut the mustard. Yes, a majority of Americans don't pay any income taxes; but a ~50% income tax in a country like Sweden feels like a fairer deal than an equivalent tax rate (and it does get this high for upper-middle-class incomes in many states) in the US.
gaur 10y ago
> (And before you can thinking about paying rents or whatever, if you are in the top tax bracket, enjoy paying 13.3% state income tax, which, after Federal tax, is a staggering 22% of your income.) If the tax rates were less, wouldn't employers just pay employees less? What's the point of calling out the high income tax rates?

cbanek 10y ago

Honest question here: Do people have the right to live wherever they want? I hear a lot about SF prices, and housing, and employment/pay, and it all really seems to come down to this one fundamental question. A lot of people want to live in SF, which is a very small geographic area. The simple law of supply and demand shows that prices will be high, and people that can pay those prices will stay, and people that aren't willing or can't will leave. This seems to be what is happening right now, economics in action. In the end, there's likely a few possible outcomes: 1) We need people to do the "low jobs" that wouldn't pay enough to live in SF. Jobs like cleaning, food service, etc. All of these things still need to happen. So these people either need to get paid enough to live there, or there needs to be some kind of amazing commuting going on. This would continue the price rises. 2) People that can afford SF realize it's so expensive that it's not worth it. This helps deflate the prices, and increase economies elsewhere. It honestly feels like we've got a bit of both going on. Many companies are getting out of SF because of the costs and moving elsewhere. But there's still too many people (and a lot of young people) trying to get in. We haven't hit equilibrium yet, so prices rise. But the real question is, for people that can't afford to live in SF, and are constantly protesting that fact - do you have the right to live there, or should you just move somewhere else? There are plenty of jobs in the US, and while there may be some real reasons that you NEED to live in SF (taking care of family is one that comes to top of mind), I can't honestly see any requirement to living there. This is one of the reasons why I moved out of California entirely, after living in SF and LA, and moved to Nevada. But I'm not one of these people protesting that they can't afford to live where they choose, and thinking that's a right. As far as I can tell, it's not a right. If you can't afford it, you can't have it. Not everyone can live in mid-town Manhattan or SF. Everyone does, so the people that make it are the people that can pay. Things and times change. If you don't change with them, then you're the one standing in the road waiting to get run over.

seannaM 10y ago
Maybe people shouldn't run over people who are in the road
RickS 10y ago
The socially accepted answer is "no". I don't just mean in the regional sense (san francisco), but the literal sense (your neighbor's yard). Property can be owned, ownership can be transferred/negotiated, and rights tied somehow to that ownership are necessary for occupation. But you're asking the wrong question, IMO. The right question is "do we have a moral obligation to make housing as accessible as it could be for the largest number of people?" I think we do, at least to a point. Some places take it farther than others, but the general consensus is that SF's prices are a result of malleable policies and past decisions, not just hard facts of life (though the "water on 3 sides" thing is a hard fact for sure). People aren't complaining that they're magically entitled to live wherever they happen to be standing. They're complaining that a system capable of helping more people live better is performing pretty poorly. I think that's great that there's uproar. Personally I fear the day we stop demanding that the world around us get better.

jimmywanger 10y ago

I've lived here for over 30 years. The city is getting silly. I remember when 280 would never get traffic, now it's clogged up more often than not. And 85, don't even mention it. I don't see what San Francisco's appeal is, except for the food. In almost every other respect, it's worse than any other major city in the United States, all things considered.

g_delgado14 10y ago
I just got back from the Valley last night. I would move here in and instant if I could afford it. Coming from Canada (Waterloo region), where the winter is unbearably cold and the summers unbearably hot, I could get used to the cool and consistent climate. As and outdoorsy person, I can't think of a better place than the valley area to live in and have such an abundance of things to do in nature. You're also pretty close to nevada and colorado, both of which are also beautiful. As a technologist and entrepreneur, it's pretty obvious that the valley is the place to be, what with the greatest density of talent and tech/high-risk financing in the world.
- RodericDay 10y ago
  I think Vancouver matches San Francisco in terms of "abundance of things to do in nature".
  - superuser2 10y ago
    It also matches San Francisco in terms of "insane housing prices." You can't win.
- acedinlowball 10y ago
  You describe yourself as a "technologist and entrepreneur"? Yeah, you definitely belong here....
pmoriarty 10y ago
I've found food in SF to be pretty mediocre. I would not list food as an attraction for SF at all. For me, the only reasons to live in SF vs many other cities in the US are tech jobs and reasonable weather.

jorblumesea 10y ago

All of these issues are great for Seattle. The influx of talent and wealth has been transformative for the city (but not always in a good way). People fleeing high prices of California in general have found things to be much better here in every regard. Perhaps not the weather. The real issue is whether we will repeat the same mistakes of SF?

ttul 10y ago

Doesn't office space lag a slowdown considerably? I mean, from the first rent default to the suite being on the market takes a while.

heisenbit 10y ago
I think it is coincident or lagging. Also let's not forget venture beat is basing it's reporting on the seller side i.e. a real estate firm which has incentives to talk the market up.