8 ms·

The dirty secret of the tech industry is that their leaders and investors are making a killing in Real Estate. VC owners and their billionaire friends have boug

The dirty secret of the tech industry is that their leaders and investors are making a killing in Real Estate. VC owners and their billionaire friends have bought a lot of land and buildings in San Francisco, Seattle, and other cities, and are "forcing" their companies to move into these cities. This has the nice side effect of making another fortune for them. At the same time, tech workers need to pay essentially a large tax for living where the jobs are, and other types of workers cannot even live in these cities anymore.

tmh79 9y ago
Yep, biggest example is marc andreesen himself. His wife a member of the Arrillaga family (old money real estate in the south bay, lots of buildings in stanford and palo alto parks & rec named after them), and they have more land wealth than tech wealth. https://en.wikipedia.org/wiki/John_Arrillaga https://en.wikipedia.org/wiki/John_Arrillaga > In the 1960s, Arrillaga and business partner Richard Peery bought California farmland and converted it into office space.[4] They became two of Silicon Valley's biggest commercial landlords with more than 12,000,000 square feet (1,100,000 m2). > His daughter Laura Arrillaga-Andreessen is married to Marc Andreessen, the successful entrepreneur
- adventured 9y ago
  Nice try at slandering Andreessen. Marc Andreessen is worth a billion dollars at 46 years of age. John Arrillaga is worth $2.5 billion at ~81 years old. With Andreessen Horowitz now the preeminent VC firm in the US, it's extremely likely Marc Andreessen is going to far out pace Arillaga's real estate wealth via his investment returns in companies. Simply put, Marc Andreessen found a far more lucrative and faster way to make money than John Arillaga did. Andreessen's current position is worth more than a couple billion in real estate. The biggest companies on earth are all tech companies now. The most profitable companies on earth are all tech companies now. Andreessen has a seat at the center table of the greatest corporate wealth boom in world history (just MSFT+AMZN+GOOGL+FB+AAPL = $3 trillion). Further, Andreessen isn't necessarily entitled to that land wealth. For your premise to even be considered, we'd need to know more details about their marriage. How do you know Andreessen won't be richer - courtesy of his growing tech wealth - than John Arrillaga before John passes away? The money isn't in tech? Just ask Gates, Bezos, Zuckerberg, Ellison, Page, Brin, Powell Jobs, Ballmer, Allen, and Dell how that works. Now compare them to the dozen or so richest real estate tycoons in the US.
  - deleted 9y ago
    [deleted]
  - kmicklas 9y ago
    This is an impressive level of VC worship for even Hacker News.
    - adventured 9y ago
      I miss the days when vapid, completely unsupported character assassination wouldn't be allowed on HN.
      - sqeaky 9y ago
        Declaring that someone owns property, makes money from property and is part of an "old money" family is not character assassination. Nothing is implicitly wrong with any of that.
        adventured 9y ago
        Declaring without proof, is one part of the obvious character hit. Further, being part of a family isn't evidence of entitlement to said wealth. There is most obviously a negative implication there, and it isn't subtle: that the VCs (in this case Andreessen specifically) are harming non-wealthy people in places like SF by intentionally driving up land values for their own benefit. The countless front page stories on HN in the last few years about this specific topic, make it more than a little bit clear there's a negative association in place. And if you want to get really close to a very serious legal charge, here it is: it's being blatantly implied that Andreessen is conspiring with very wealthy land owners, knowingly against at least some of the interests of his own investments through Andreessen Horowitz, for his own personal gain. How is it against the interest of said investments? The claim is he's involved in intentionally driving up the value of real-estate, which drives up the cost of living in eg SF, which makes it more expensive to retain and lure talent, which harms his investments (lowers their odds of success in numerous ways, lowers their margins by raising costs, etc). That's an extremely serious accusation.
fweespeech 9y ago
It isn't just the tech industry. Pretty much any massively wealthy family uses these effects to exploit their affect on the landscape for investment income. Companies like the Irvine Company did this masterfully.
sidlls 9y ago
My tax rate doubled when I moved from the Midwest. So did my cost of living. My salary did, too. But I am saving more now than I was there, and I will easily be able to retire and live very nicely back home: much better than I would have had I stayed. So for some (many?) the "tax" you describe is worth it.
- mistermann 9y ago
  An in exchange, I suspect a much larger percentage of the population in these areas will see their cost of living gradually (like a frog in a pot of slowly heated water) increase to the point that they'll never be able to save money for retirement. I have a very strong feeling that this is what's happening in places like Vancouver, people spend so much (and relentlessly increasing) of their income on rent, but the same thing is happening to almost everyone, so it seems "normal" to them. Or they think just work my ass off for another year or two and "some day" I'll land a good job so I can afford to live here....next thing you know 5, 10 years have passed, and you eventually realize that "some day" is never going to come, and you're middle aged with no savings and no career. I don't know what Canada is going to do with the 30% of its population who hasn't gotten rich in the real estate boom as they get older, have no savings, no pension, and when they can no longer physically work are priced out of rent due to the ever increasing levels of immigration from wealthier nations. Maybe we can just hook them up to machines that feed them basic nutrition and pain killers with a VR headset on.
  - pnutjam 9y ago
    This is happening in the midwest, low cost of living areas also.
ksec 9y ago
I hope this is not true. It just means all these tech billionaires are, not actually "tech" billionaires.... For some unknown, and Stupid reason, I personally think it is unethical to invest in Real Estate. Previously you would have to live in area like Seoul or Hong Kong to understand that. Now I guess people in London, Vancouver or San Francisco may understand a little bit more.
- larsiusprime 9y ago
  > For some unknown, and Stupid reason, I personally think it is unethical to invest in Real Estate. Here's the moral framework you might be unconsciously subscribing to: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism

tmh79 9y ago

Yep, biggest example is marc andreesen himself. His wife a member of the Arrillaga family (old money real estate in the south bay, lots of buildings in stanford and palo alto parks & rec named after them), and they have more land wealth than tech wealth. https://en.wikipedia.org/wiki/John_Arrillaga https://en.wikipedia.org/wiki/John_Arrillaga > In the 1960s, Arrillaga and business partner Richard Peery bought California farmland and converted it into office space.[4] They became two of Silicon Valley's biggest commercial landlords with more than 12,000,000 square feet (1,100,000 m2). > His daughter Laura Arrillaga-Andreessen is married to Marc Andreessen, the successful entrepreneur

adventured 9y ago
Nice try at slandering Andreessen. Marc Andreessen is worth a billion dollars at 46 years of age. John Arrillaga is worth $2.5 billion at ~81 years old. With Andreessen Horowitz now the preeminent VC firm in the US, it's extremely likely Marc Andreessen is going to far out pace Arillaga's real estate wealth via his investment returns in companies. Simply put, Marc Andreessen found a far more lucrative and faster way to make money than John Arillaga did. Andreessen's current position is worth more than a couple billion in real estate. The biggest companies on earth are all tech companies now. The most profitable companies on earth are all tech companies now. Andreessen has a seat at the center table of the greatest corporate wealth boom in world history (just MSFT+AMZN+GOOGL+FB+AAPL = $3 trillion). Further, Andreessen isn't necessarily entitled to that land wealth. For your premise to even be considered, we'd need to know more details about their marriage. How do you know Andreessen won't be richer - courtesy of his growing tech wealth - than John Arrillaga before John passes away? The money isn't in tech? Just ask Gates, Bezos, Zuckerberg, Ellison, Page, Brin, Powell Jobs, Ballmer, Allen, and Dell how that works. Now compare them to the dozen or so richest real estate tycoons in the US.
- deleted 9y ago
  [deleted]
- kmicklas 9y ago
  This is an impressive level of VC worship for even Hacker News.
  - adventured 9y ago
    I miss the days when vapid, completely unsupported character assassination wouldn't be allowed on HN.
    - sqeaky 9y ago
      Declaring that someone owns property, makes money from property and is part of an "old money" family is not character assassination. Nothing is implicitly wrong with any of that.
      - adventured 9y ago
        Declaring without proof, is one part of the obvious character hit. Further, being part of a family isn't evidence of entitlement to said wealth. There is most obviously a negative implication there, and it isn't subtle: that the VCs (in this case Andreessen specifically) are harming non-wealthy people in places like SF by intentionally driving up land values for their own benefit. The countless front page stories on HN in the last few years about this specific topic, make it more than a little bit clear there's a negative association in place. And if you want to get really close to a very serious legal charge, here it is: it's being blatantly implied that Andreessen is conspiring with very wealthy land owners, knowingly against at least some of the interests of his own investments through Andreessen Horowitz, for his own personal gain. How is it against the interest of said investments? The claim is he's involved in intentionally driving up the value of real-estate, which drives up the cost of living in eg SF, which makes it more expensive to retain and lure talent, which harms his investments (lowers their odds of success in numerous ways, lowers their margins by raising costs, etc). That's an extremely serious accusation.

fweespeech 9y ago

It isn't just the tech industry. Pretty much any massively wealthy family uses these effects to exploit their affect on the landscape for investment income. Companies like the Irvine Company did this masterfully.

sidlls 9y ago

My tax rate doubled when I moved from the Midwest. So did my cost of living. My salary did, too. But I am saving more now than I was there, and I will easily be able to retire and live very nicely back home: much better than I would have had I stayed. So for some (many?) the "tax" you describe is worth it.

mistermann 9y ago
An in exchange, I suspect a much larger percentage of the population in these areas will see their cost of living gradually (like a frog in a pot of slowly heated water) increase to the point that they'll never be able to save money for retirement. I have a very strong feeling that this is what's happening in places like Vancouver, people spend so much (and relentlessly increasing) of their income on rent, but the same thing is happening to almost everyone, so it seems "normal" to them. Or they think just work my ass off for another year or two and "some day" I'll land a good job so I can afford to live here....next thing you know 5, 10 years have passed, and you eventually realize that "some day" is never going to come, and you're middle aged with no savings and no career. I don't know what Canada is going to do with the 30% of its population who hasn't gotten rich in the real estate boom as they get older, have no savings, no pension, and when they can no longer physically work are priced out of rent due to the ever increasing levels of immigration from wealthier nations. Maybe we can just hook them up to machines that feed them basic nutrition and pain killers with a VR headset on.
- pnutjam 9y ago
  This is happening in the midwest, low cost of living areas also.

ksec 9y ago

I hope this is not true. It just means all these tech billionaires are, not actually "tech" billionaires.... For some unknown, and Stupid reason, I personally think it is unethical to invest in Real Estate. Previously you would have to live in area like Seoul or Hong Kong to understand that. Now I guess people in London, Vancouver or San Francisco may understand a little bit more.

larsiusprime 9y ago
> For some unknown, and Stupid reason, I personally think it is unethical to invest in Real Estate. Here's the moral framework you might be unconsciously subscribing to: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism