16 ms·

Crazy things happening in SF because of its out-of-control housing prices

97 points by kafkaesque 9y ago

dmix 9y ago
"-because of it's out of control housing regulation"
- Aloha 9y ago
  Arguably SF doesnt have stricter regulation than any other big city (save for seismic) - but the demand far exceeds the units the type of regulation the city has, will allow to be built.
  - zapita 9y ago
    The zoning definitely is more restrictive than other major cities. And it's even worse in the Silicon Valley towns - Palo Alto, Mountain View, etc. The zoning restrictions there are absolutely bananas.
    - DrScump 9y ago
      How, specifically, is zoning different in Mountain View from elsewhere in the Bay Area?
      - rockinghigh 9y ago
        It’s not but it’s true that there are some restrictions in many cities on building higher than 1-story or 2-story houses.
      - zapita 9y ago
        I didn't say it was.
solidsnack9000 9y ago
The regulations that prevent new building are the work of incumbent residents -- people who have been here for many decades, support the arts and fly under the radar when it comes to assigning responsibility for this situation.
xivzgrev 9y ago
Ugh I'm tired of these articles that declare SF / SV are over. This is my last rant...hopefully! They take a small group of people that actually are moving and blow it up into a trend. It's been going on for years. Yes home prices are insane. No salary doesn't make up for it. Yes your house will be smooshed in between others unless you got a lot of money. Yes you could get 2x the house for 1/2 the price anywhere else. But it ignores two huge factors keeping people here. One the network density for tech. There are more jobs and support here than other places. More investment dollars create more startups which hopefully have more exits which attracts more investment dollars. It's a virtuous cycle. Two is the lifestyle. Yes there's a liberal bent but it's traditionally been one of the most open minded places in the country. There are few other places you can experience so much of life's variety within a 3 hr drive. And the whole remote working thing sounds logical but I see few companies actually widely adopting it. A lot of people prefer to connect in person, even though there is no rational reason why anymore.
- chipotle_coyote 9y ago
  I also notice that they do focus on the most extremes. I'm not going to claim that things are remotely cheap anywhere in the Bay Area, but if you're not dead set on being in The City (tm), the prices drop substantially. Again: yes, still expensive. Yes, if I lived somewhere else, my rent share for a 2BR place in Santa Clara would be less than I'm paying. But so would my salary, and in my experience -- and a little contrary to my expectations -- the salary often does make up for it on an absolute dollar basis. There are few other places you can experience so much of life's variety within a 3 hr drive. This, more than anything else, is what makes me reticent to move.
- cylinder 9y ago
  This is how all trend pieces always work. No real data, just a few anecdotes from the extremes. Ignore all trend pieces!
  - dawnerd 9y ago
    Got down to the bend part where they just cited cnbc which only really took the word of that one dude that travels for work and somehow that turned it into a "commute". No one is driving 10 hours for work.
vadimberman 9y ago
> San Francisco’s median two-bedroom rent of $3,040 Is it? It's hearsay, of course, but I was told it's closer to $4K.
- owyn 9y ago
  Not sure where that stat comes from but I suspect that median value would include rent controlled apartments. My 1908 era 6 unit apartment building on the edge of the mission is about $3900 for a 2 bedroom place which is 3 empty rooms, a bathroom and a kitchen. I do like the location but I can hear the upstairs neighbors drop a fork and it wobbles whenever a bart train goes underneath.
  - DrScump 9y ago
    I'd be concerned about living in any structure that was built shortly after any major natural disaster. I'd be paranoid about the inherent pressure for fast, slapdash construction. For example, I wonder about buildings in the Marina and other areas that liquifacted in 1989.
  - vadimberman 9y ago
    I see, that makes sense now - thank you. It's mind-boggling for me that a hundred-plus year old house costs that much, frankly.
    - owyn 9y ago
      It's also 1 block from one of the famous under-freeway homeless encampments. One more anecdote, since part of this discussion is about rent control and how it affects peoples choices living in the area. I currently pay ~ $2150 because I've lived there for 8 years. That's why I'm also holding on to the place even though I currently work in San Jose (a 1 hour drive each way). I'd pay even more than I currently do for a place down there, but probably less than a new tenant moving in here (SJ is merely the 3rd most expensive area in the US). The commute sucks, but I prefer to hang out in SF on the weekends. So yeah, maybe the landlord is missing on a bit of opportunity cost because I live there, but as soon as I move out, it would go to market rate. They could make an extra $20k/year if I moved out but I think generally having a stable tenant in the long run is a benefit, and they've certainly profited far more than that from owning the property. Tenant turnover is pretty high, from what I've seen most people only live here for a year or two.
wpietri 9y ago
There are a lot of causes for this. But one of the easiest to fix: VCs don't like getting on planes. I've lived here since Bubble 1.0, but I still keep in touch with people in the midwest. There are plenty of startup-oriented people there, but in their view to get real investment, they have to move to SF. It'd be great to see more companies starting and growing in places where housing and office spaced is reasonably priced. The Internet has made location much less important for so many things; we should make that true for startups as well.
- nopinsight 9y ago
  To be fair to them, flying does cause a lot of time waste and hassles. The curious thing is that expansion to places within reasonable driving distance like East Bay has been slow as well. Is the cost saving from East Bay locations not large enough or is it some other factors?
  - closeparen 9y ago
    The BART-connected East Bay is only a little cheaper, and many SF and SV employees already live there. (On my last team, everyone commuted at least an hour on BART). Sacramento is almost a normal American city in terms of real estate prices. It would be pretty reasonable to live and work there, and take the train to SF for investor meetings.
    - nopinsight 9y ago
      In that case, moving the office to East Bay would save everyone about 2 hours each work day? Seems like an amazing benefit for everyone involved—-less commuting time & stress, better productivity, greater employee satisfaction. Why haven’t more companies move there? Really curious.
      - x0x0 9y ago
        .02: once you get off the peninsula and public transit goes to shit (well, even more shit), you're basically committing to never hire people who live on the peninsula. The reverse isn't true.
farnsworthy 9y ago
What is the average 1BR apartment going for now in SF? (I'm not sure that Craiglist or quoted outliers are entirely representative, and am interested in the experiences of people more familiar with the market.) > This is how people outside the area imagine living in San Francisco. She doesn't seem to think much of her readers. > San Francisco's chief housing inspector deemed living in boxes illegal.
- rockinghigh 9y ago
  Around $3000/month for a 1-bedroom.
  - cocochanel 9y ago
    So someone making 100k spends half their disposable income for a 1-bedroom?
    - Eridrus 9y ago
      If you make 100k and are relatively young, you have roommates or move to Oakland.
    - jldugger 9y ago
      Pretty sure we started the intern we hired at 120k base salary plus like 20k in stock a year. So you know, don't accept an offer that only pays $100k. But more seriously, my $3k apt is fairly high end. I toured a number of apartments in the $2k range, which is still kind of absurd, but then again McDonalds is offering like $17/hr an hour as a starting wage and still struggles to hire. At 2000 hours a year, that's a $34k annual wage, and you'd still probably need a 2nd job to make ends meet. Or get paid under the table and save yourself a good 5 thousand bucks on income / payroll taxes.
dizzystar 9y ago
I don't live in SF. I visited a few times and it's not my cup of tea. I prefer LA and plan to stay here forever. LA is expensive as well, but there are places that you can rent on the cheap, or at least a reasonable amount of money, and be safe. If this wasn't the case, LA as a city would break down. We need music, artists, actors, people pouring coffee, and serving tables to keep this city alive. We need a poor person living in the same building as an executive. On top of that, we need places where poor people can afford to eat, so there is a McDonalds anywhere you go. I bring up McD's because I was "over-fooded" in SF and went on a desperate search for something trashy to eat, almost to no avail. I'm just wondering how SF is able to sustain itself and how it plans to sustain itself in the future if they push all the poor people to such a distance that they can't even take the BART or bus to work anymore. The other difference is that LA is very much a gig economy. There are a LOT of people out here that either don't have a job and live just fine, or they have a day job and do random gigs during their off-hours. As someone once told me, you don't sleep in LA, you just rest. Others have pointed out that this is a work area, and so on. But even so, there are so many different industries down here that you can, with time, talent, and luck, have sustainable life and your own place, well outside tech, movies, music, art, and so on. My impression is that the bay area is an area with a few viable ways to make a living. Is it just that the lower class has to live in the dangerous areas of Oakland (and elsewhere) to just have a roof over their head?
- twblalock 9y ago
  > My impression is that the bay area is an area with a few viable ways to make a living, and is it just that the lower class has to live in the dangerous areas of Oakland (and elsewhere) to just have a roof over their head? There is no shortage of fast food workers, waiters, retail workers, coffee shop workers, handymen, etc. It's expensive to live in the Bay Area, but clearly those people are able to make a living or they wouldn't be around anymore. And they don't all commute from far away. I know plenty of people working those jobs who live in the Bay Area near their places of work.
  - closeparen 9y ago
    There's a lot of inertia to people and their geography. The absolute loss of non-tech activity may be small for now, but ask anyone who hires people outside our industry where the think their organization will be in 10 years. A colleague once remarked, "It's the second derivative of the thing that'll get you."
lph 9y ago
"WeWork, a startup that rents out shared workspaces, branched into co-living in 2016. Their "dorms for grown-ups" are intended for people moving to a city and looking for fast friends.The company, which has a $20 billion valuation, has two locations: one in New York and one in Crystal City, Virginia, outside DC. The average apartment is just 450 square feet." How does a company running glorified dormitories have a $20 billion valuation with only two locations?
- ageitgey 9y ago
  You misread it. WeWork is a huge, international network of co-working office spaces that also happens to be experimenting with two co-living locations. See https://www.wework.com/locations https://www.wework.com/locations
  - cylinder 9y ago
    Still incredibly overvalued -- they're just sublessors. They don't own their real estate.
    - vlovich123 9y ago
      Could be but they're middlemen providing a valuable service. It's a one-stop shop for a work environment. The landlord benefits because they have a regular income stream & don't need to worry about tenants coming & going. Customers get to adjust their needs on a month-to-month basis for a smaller up-front cost than they could get leasing themselves & can dynamically adjust if they grow. Similarly, they don't need to worry about setting up internet service & any of the other things WeWork offers. Additionally you can cheaply temporarily rent space if you have travel needs. That's the value-add. Now how successful they will be I don't know but I fail to see why real estate ownership matters here.
      - dasil003 9y ago
        Personally I think WeWork is pretty exposed to any kind of economic downturn as most of their customers are burning cheap VC money. If half those companies were serious about getting profitable they'd go somewhere else with half the amenities at a quarter of the price.
Kronopath 9y ago
It bothers me that so few people mention the role of Proposition 13 and low property taxes for housing in all this. Proposition 13 makes it so that property taxes are fixed when you buy the house and only ever increase with inflation, whereas most other places make property tax rates proportional to the current market value of the home based on things like recent sale prices of other nearby homes. For example, in Toronto property taxes are set based on the assessed value of the property relative to the city average, and rates are set based on the municipal government’s budget and expenses.[1] As a result, it’s costly for local municipal and county governments to zone for residential areas, because of the need for schools, parks, libraries, and other public services needed. If property taxes don’t balance out those needs, then zoning for commercial buildings instead ends up being far more attractive to local governments. The results: more office buildings, more jobs, but insufficient housing to support them. Increasing property taxes is tricky because of the risk of further displacing long-term residents, or older residents, who have owned their homes for a long time. But in my view the impacts of property taxes on cost of living and the housing crisis are undeniable, and it’s unusual to me that so few people ever even _mention_ it in these discussions. [1]: https://torontoist.com/2014/01/everything-you-ever-wanted-to-know-about-property-taxes/ https://torontoist.com/2014/01/everything-you-ever-wanted-to...
- bsder 9y ago
  The problem with Proposition 13 is that it also applies to commercial real estate. A personal residence can only be about 30 years out of date in terms of assessment. And, when the owner dies, that assessment corrects. Commercial real estate will get buried behind layers and layers of sublease agreements in order to avoid triggering a reassessment. At one place I worked, we had to find the actual original building owner because someone drove a car through a support beam and the rework was going to cause everything to come up to code. We moved out because nobody could actually get through all the layers of subleases (11 layers when I last checked) and guarantee a completion date. The solution is to remove the Proposition 13 protections from commercial real estate. Good luck. Every company with real estate on the books in California is going to fight you tooth and nail.
  - 9y ago
katebrooks 9y ago
Eventually only a specific people who can afford would stay and who can't would move. Other cities would definitely get established which is a good thing. Remote working is not my cup of tea. I live in New York city and I love living and working here.
rdtsc 9y ago
> The median-priced home in San Francisco sells for $1.5 million, according to Paragon. It's not uncommon for buyers to bid hundreds of thousands above asking and pay in all cash. Who are these people? There are a lot of homes there, so there must be a whole lot of buyers with $1M in cash. There are enough of them that they even try to outbid each other by slapping an extra $100k no top of asking price.
- nostrademons 9y ago
  There actually aren't a whole lot of homes on the market (much of the city's housing stock is either rental properties or is owned by longtime residents who ain't moving anytime soon), but to answer your question: anyone who's been at Google, Apple, or Facebook since 2009, got stock options, and held them. Google stock has appreciated 7x since then, Apple 10x, FB a whopping 35x. $100K in stock options is actually a pretty small options package over 4 years, but if you got that much in FB stock when the whole company was worth $15B, that's now worth $3.5M.
  - rdtsc 9y ago
    Thanks, I think that explains it. I guess with enough tech companies and enough exits happening they'd be good amount of these people to skew the market.
    - crzwdjk 9y ago
      And the market in SF and other Bay Area cities is _really small_. I recently read that Cupertino has only a dozen houses on the market total, and SF may have as many as hundreds or even a couple thousand (in a city with a population over 800,000). Actually, I just looked at Zillow and there are 17 properties on the market in Cupertino, which had about 20,000 households as of 2010.
shipintbrief 9y ago
Is there any part of this site where some suggestions could be made to moderators/admins? Like restriction of sharing links to sites which you can't see if adblock is enabled?
- dredmorbius 9y ago
  The "Contact" link belw. hn@ycombinator.com
- mnw21cam 9y ago
  Seconded. I'm not even using adblock, and this broken site insists I switch it off.
  - hackerman12345 9y ago
    I am using adblock (ublock origin), and the site works fine.
- princekolt 9y ago
  I've scraped the adblock block layer and scroll lock, and exported the whole thing as a pdf: https://www.docdroid.net/BFTFpEC/why-people-are-leaving-san-francisco-business-insider.pdf https://www.docdroid.net/BFTFpEC/why-people-are-leaving-san-...
ggm 9y ago
Laws of use and laws of possession always seem to come down to enabling benefit for current holders over future holders. Thing is, changing this is like changing the gravitational constant. It's baked into the DNA of property rights, leases and taxes. sanFran is maybe on an extreme here for the USA but it's not necessarily worse than say Tokyo, or the eggegious failure of leasehold in London, or a number of worldwide housing issues

97 points by kafkaesque 9y ago

dmix 9y ago

"-because of it's out of control housing regulation"

Aloha 9y ago
Arguably SF doesnt have stricter regulation than any other big city (save for seismic) - but the demand far exceeds the units the type of regulation the city has, will allow to be built.
- zapita 9y ago
  The zoning definitely is more restrictive than other major cities. And it's even worse in the Silicon Valley towns - Palo Alto, Mountain View, etc. The zoning restrictions there are absolutely bananas.
  - DrScump 9y ago
    How, specifically, is zoning different in Mountain View from elsewhere in the Bay Area?
    - rockinghigh 9y ago
      It’s not but it’s true that there are some restrictions in many cities on building higher than 1-story or 2-story houses.
    - zapita 9y ago
      I didn't say it was.

solidsnack9000 9y ago

The regulations that prevent new building are the work of incumbent residents -- people who have been here for many decades, support the arts and fly under the radar when it comes to assigning responsibility for this situation.

xivzgrev 9y ago

Ugh I'm tired of these articles that declare SF / SV are over. This is my last rant...hopefully! They take a small group of people that actually are moving and blow it up into a trend. It's been going on for years. Yes home prices are insane. No salary doesn't make up for it. Yes your house will be smooshed in between others unless you got a lot of money. Yes you could get 2x the house for 1/2 the price anywhere else. But it ignores two huge factors keeping people here. One the network density for tech. There are more jobs and support here than other places. More investment dollars create more startups which hopefully have more exits which attracts more investment dollars. It's a virtuous cycle. Two is the lifestyle. Yes there's a liberal bent but it's traditionally been one of the most open minded places in the country. There are few other places you can experience so much of life's variety within a 3 hr drive. And the whole remote working thing sounds logical but I see few companies actually widely adopting it. A lot of people prefer to connect in person, even though there is no rational reason why anymore.

chipotle_coyote 9y ago
I also notice that they do focus on the most extremes. I'm not going to claim that things are remotely cheap anywhere in the Bay Area, but if you're not dead set on being in The City (tm), the prices drop substantially. Again: yes, still expensive. Yes, if I lived somewhere else, my rent share for a 2BR place in Santa Clara would be less than I'm paying. But so would my salary, and in my experience -- and a little contrary to my expectations -- the salary often does make up for it on an absolute dollar basis. There are few other places you can experience so much of life's variety within a 3 hr drive. This, more than anything else, is what makes me reticent to move.
cylinder 9y ago
This is how all trend pieces always work. No real data, just a few anecdotes from the extremes. Ignore all trend pieces!
- dawnerd 9y ago
  Got down to the bend part where they just cited cnbc which only really took the word of that one dude that travels for work and somehow that turned it into a "commute". No one is driving 10 hours for work.

vadimberman 9y ago

> San Francisco’s median two-bedroom rent of $3,040 Is it? It's hearsay, of course, but I was told it's closer to $4K.

owyn 9y ago
Not sure where that stat comes from but I suspect that median value would include rent controlled apartments. My 1908 era 6 unit apartment building on the edge of the mission is about $3900 for a 2 bedroom place which is 3 empty rooms, a bathroom and a kitchen. I do like the location but I can hear the upstairs neighbors drop a fork and it wobbles whenever a bart train goes underneath.
- DrScump 9y ago
  I'd be concerned about living in any structure that was built shortly after any major natural disaster. I'd be paranoid about the inherent pressure for fast, slapdash construction. For example, I wonder about buildings in the Marina and other areas that liquifacted in 1989.
- vadimberman 9y ago
  I see, that makes sense now - thank you. It's mind-boggling for me that a hundred-plus year old house costs that much, frankly.
  - owyn 9y ago
    It's also 1 block from one of the famous under-freeway homeless encampments. One more anecdote, since part of this discussion is about rent control and how it affects peoples choices living in the area. I currently pay ~ $2150 because I've lived there for 8 years. That's why I'm also holding on to the place even though I currently work in San Jose (a 1 hour drive each way). I'd pay even more than I currently do for a place down there, but probably less than a new tenant moving in here (SJ is merely the 3rd most expensive area in the US). The commute sucks, but I prefer to hang out in SF on the weekends. So yeah, maybe the landlord is missing on a bit of opportunity cost because I live there, but as soon as I move out, it would go to market rate. They could make an extra $20k/year if I moved out but I think generally having a stable tenant in the long run is a benefit, and they've certainly profited far more than that from owning the property. Tenant turnover is pretty high, from what I've seen most people only live here for a year or two.

wpietri 9y ago

There are a lot of causes for this. But one of the easiest to fix: VCs don't like getting on planes. I've lived here since Bubble 1.0, but I still keep in touch with people in the midwest. There are plenty of startup-oriented people there, but in their view to get real investment, they have to move to SF. It'd be great to see more companies starting and growing in places where housing and office spaced is reasonably priced. The Internet has made location much less important for so many things; we should make that true for startups as well.

nopinsight 9y ago
To be fair to them, flying does cause a lot of time waste and hassles. The curious thing is that expansion to places within reasonable driving distance like East Bay has been slow as well. Is the cost saving from East Bay locations not large enough or is it some other factors?
- closeparen 9y ago
  The BART-connected East Bay is only a little cheaper, and many SF and SV employees already live there. (On my last team, everyone commuted at least an hour on BART). Sacramento is almost a normal American city in terms of real estate prices. It would be pretty reasonable to live and work there, and take the train to SF for investor meetings.
  - nopinsight 9y ago
    In that case, moving the office to East Bay would save everyone about 2 hours each work day? Seems like an amazing benefit for everyone involved—-less commuting time & stress, better productivity, greater employee satisfaction. Why haven’t more companies move there? Really curious.
    - x0x0 9y ago
      .02: once you get off the peninsula and public transit goes to shit (well, even more shit), you're basically committing to never hire people who live on the peninsula. The reverse isn't true.

farnsworthy 9y ago

What is the average 1BR apartment going for now in SF? (I'm not sure that Craiglist or quoted outliers are entirely representative, and am interested in the experiences of people more familiar with the market.) > This is how people outside the area imagine living in San Francisco. She doesn't seem to think much of her readers. > San Francisco's chief housing inspector deemed living in boxes illegal.

rockinghigh 9y ago
Around $3000/month for a 1-bedroom.
- cocochanel 9y ago
  So someone making 100k spends half their disposable income for a 1-bedroom?
  - Eridrus 9y ago
    If you make 100k and are relatively young, you have roommates or move to Oakland.
  - jldugger 9y ago
    Pretty sure we started the intern we hired at 120k base salary plus like 20k in stock a year. So you know, don't accept an offer that only pays $100k. But more seriously, my $3k apt is fairly high end. I toured a number of apartments in the $2k range, which is still kind of absurd, but then again McDonalds is offering like $17/hr an hour as a starting wage and still struggles to hire. At 2000 hours a year, that's a $34k annual wage, and you'd still probably need a 2nd job to make ends meet. Or get paid under the table and save yourself a good 5 thousand bucks on income / payroll taxes.

dizzystar 9y ago

I don't live in SF. I visited a few times and it's not my cup of tea. I prefer LA and plan to stay here forever. LA is expensive as well, but there are places that you can rent on the cheap, or at least a reasonable amount of money, and be safe. If this wasn't the case, LA as a city would break down. We need music, artists, actors, people pouring coffee, and serving tables to keep this city alive. We need a poor person living in the same building as an executive. On top of that, we need places where poor people can afford to eat, so there is a McDonalds anywhere you go. I bring up McD's because I was "over-fooded" in SF and went on a desperate search for something trashy to eat, almost to no avail. I'm just wondering how SF is able to sustain itself and how it plans to sustain itself in the future if they push all the poor people to such a distance that they can't even take the BART or bus to work anymore. The other difference is that LA is very much a gig economy. There are a LOT of people out here that either don't have a job and live just fine, or they have a day job and do random gigs during their off-hours. As someone once told me, you don't sleep in LA, you just rest. Others have pointed out that this is a work area, and so on. But even so, there are so many different industries down here that you can, with time, talent, and luck, have sustainable life and your own place, well outside tech, movies, music, art, and so on. My impression is that the bay area is an area with a few viable ways to make a living. Is it just that the lower class has to live in the dangerous areas of Oakland (and elsewhere) to just have a roof over their head?

twblalock 9y ago
> My impression is that the bay area is an area with a few viable ways to make a living, and is it just that the lower class has to live in the dangerous areas of Oakland (and elsewhere) to just have a roof over their head? There is no shortage of fast food workers, waiters, retail workers, coffee shop workers, handymen, etc. It's expensive to live in the Bay Area, but clearly those people are able to make a living or they wouldn't be around anymore. And they don't all commute from far away. I know plenty of people working those jobs who live in the Bay Area near their places of work.
- closeparen 9y ago
  There's a lot of inertia to people and their geography. The absolute loss of non-tech activity may be small for now, but ask anyone who hires people outside our industry where the think their organization will be in 10 years. A colleague once remarked, "It's the second derivative of the thing that'll get you."

lph 9y ago

"WeWork, a startup that rents out shared workspaces, branched into co-living in 2016. Their "dorms for grown-ups" are intended for people moving to a city and looking for fast friends.The company, which has a $20 billion valuation, has two locations: one in New York and one in Crystal City, Virginia, outside DC. The average apartment is just 450 square feet." How does a company running glorified dormitories have a $20 billion valuation with only two locations?

ageitgey 9y ago
You misread it. WeWork is a huge, international network of co-working office spaces that also happens to be experimenting with two co-living locations. See https://www.wework.com/locations https://www.wework.com/locations
- cylinder 9y ago
  Still incredibly overvalued -- they're just sublessors. They don't own their real estate.
  - vlovich123 9y ago
    Could be but they're middlemen providing a valuable service. It's a one-stop shop for a work environment. The landlord benefits because they have a regular income stream & don't need to worry about tenants coming & going. Customers get to adjust their needs on a month-to-month basis for a smaller up-front cost than they could get leasing themselves & can dynamically adjust if they grow. Similarly, they don't need to worry about setting up internet service & any of the other things WeWork offers. Additionally you can cheaply temporarily rent space if you have travel needs. That's the value-add. Now how successful they will be I don't know but I fail to see why real estate ownership matters here.
    - dasil003 9y ago
      Personally I think WeWork is pretty exposed to any kind of economic downturn as most of their customers are burning cheap VC money. If half those companies were serious about getting profitable they'd go somewhere else with half the amenities at a quarter of the price.

Kronopath 9y ago

It bothers me that so few people mention the role of Proposition 13 and low property taxes for housing in all this. Proposition 13 makes it so that property taxes are fixed when you buy the house and only ever increase with inflation, whereas most other places make property tax rates proportional to the current market value of the home based on things like recent sale prices of other nearby homes. For example, in Toronto property taxes are set based on the assessed value of the property relative to the city average, and rates are set based on the municipal government’s budget and expenses.[1] As a result, it’s costly for local municipal and county governments to zone for residential areas, because of the need for schools, parks, libraries, and other public services needed. If property taxes don’t balance out those needs, then zoning for commercial buildings instead ends up being far more attractive to local governments. The results: more office buildings, more jobs, but insufficient housing to support them. Increasing property taxes is tricky because of the risk of further displacing long-term residents, or older residents, who have owned their homes for a long time. But in my view the impacts of property taxes on cost of living and the housing crisis are undeniable, and it’s unusual to me that so few people ever even _mention_ it in these discussions. [1]: https://torontoist.com/2014/01/everything-you-ever-wanted-to-know-about-property-taxes/ https://torontoist.com/2014/01/everything-you-ever-wanted-to...

bsder 9y ago
The problem with Proposition 13 is that it also applies to commercial real estate. A personal residence can only be about 30 years out of date in terms of assessment. And, when the owner dies, that assessment corrects. Commercial real estate will get buried behind layers and layers of sublease agreements in order to avoid triggering a reassessment. At one place I worked, we had to find the actual original building owner because someone drove a car through a support beam and the rework was going to cause everything to come up to code. We moved out because nobody could actually get through all the layers of subleases (11 layers when I last checked) and guarantee a completion date. The solution is to remove the Proposition 13 protections from commercial real estate. Good luck. Every company with real estate on the books in California is going to fight you tooth and nail.
- 9y ago

katebrooks 9y ago

Eventually only a specific people who can afford would stay and who can't would move. Other cities would definitely get established which is a good thing. Remote working is not my cup of tea. I live in New York city and I love living and working here.

rdtsc 9y ago

> The median-priced home in San Francisco sells for $1.5 million, according to Paragon. It's not uncommon for buyers to bid hundreds of thousands above asking and pay in all cash. Who are these people? There are a lot of homes there, so there must be a whole lot of buyers with $1M in cash. There are enough of them that they even try to outbid each other by slapping an extra $100k no top of asking price.

nostrademons 9y ago
There actually aren't a whole lot of homes on the market (much of the city's housing stock is either rental properties or is owned by longtime residents who ain't moving anytime soon), but to answer your question: anyone who's been at Google, Apple, or Facebook since 2009, got stock options, and held them. Google stock has appreciated 7x since then, Apple 10x, FB a whopping 35x. $100K in stock options is actually a pretty small options package over 4 years, but if you got that much in FB stock when the whole company was worth $15B, that's now worth $3.5M.
- rdtsc 9y ago
  Thanks, I think that explains it. I guess with enough tech companies and enough exits happening they'd be good amount of these people to skew the market.
  - crzwdjk 9y ago
    And the market in SF and other Bay Area cities is _really small_. I recently read that Cupertino has only a dozen houses on the market total, and SF may have as many as hundreds or even a couple thousand (in a city with a population over 800,000). Actually, I just looked at Zillow and there are 17 properties on the market in Cupertino, which had about 20,000 households as of 2010.

shipintbrief 9y ago

Is there any part of this site where some suggestions could be made to moderators/admins? Like restriction of sharing links to sites which you can't see if adblock is enabled?

dredmorbius 9y ago
The "Contact" link belw. hn@ycombinator.com
mnw21cam 9y ago
Seconded. I'm not even using adblock, and this broken site insists I switch it off.
- hackerman12345 9y ago
  I am using adblock (ublock origin), and the site works fine.
princekolt 9y ago
I've scraped the adblock block layer and scroll lock, and exported the whole thing as a pdf: https://www.docdroid.net/BFTFpEC/why-people-are-leaving-san-francisco-business-insider.pdf https://www.docdroid.net/BFTFpEC/why-people-are-leaving-san-...

ggm 9y ago

Laws of use and laws of possession always seem to come down to enabling benefit for current holders over future holders. Thing is, changing this is like changing the gravitational constant. It's baked into the DNA of property rights, leases and taxes. sanFran is maybe on an extreme here for the USA but it's not necessarily worse than say Tokyo, or the eggegious failure of leasehold in London, or a number of worldwide housing issues