5 ms·

This makes sense for companies to back: how many billions of their investors dollars just go straight to rent?

by davidw 9y ago

no_one_ever 9y ago
But once those dollars are given to the employees, why does it matter where they end up? Why would a company care if it goes to a mortgage or rent?
- davidw 9y ago
  Because if more $$$ are in the employees pockets, the employees are easier to attract and happier, and the company is more competitive.
- zasz 9y ago
  Because high rents cancel out the benefits of a high salary. It's simple arithmetic. Why give up 30k of a 100k salary to work and live in SF, when I could give up 10k of an 90k salary in Austin instead? (These are just illustrative figures.) And the high price of housing means that even tech workers who want families can't afford the space to raise them.
  - no_one_ever 9y ago
    My case is interesting. I have big student loan payments that don't adjust to my income or salary. I feel tethered to high CoL areas because those areas offer higher salaries with more take-home income, despite a higher median rent. The best balance for me is a high salary in a low CoL so I don't burn my take-home on rent, but I'd rather be given a larger salary, spend some more on rent, and have more money left over to pay off my debt.
    - zasz 9y ago
      What about working remotely?
  - s73v3r_ 9y ago
    Cause it's usually 30k of a 180k salary.
  - loeg 9y ago
    People will quibble with the exact trade-off in CoL and salary between SFBA and other locations. I don't think there is one general answer — you have to do the math for your specific situation to find out where you earn more money after expenses. Keep in mind Federal graduated taxes don't have any relief for high CoL renters (and the tax benefit for mortgage-holders has been diminished somewhat in the latest tax reforms). Don't forget state income tax, too.
- awalton 9y ago
  Employers might care about the fact it's taking longer and longer to get employees to work, which is directly cutting into productive time and adding costs to their employee commute programs (extra shuttle miles, extra trips, etc). You know, on top of the terrible hit to quality of life and general morale that longer commutes generate. High rent prices have priced out even relatively highly paid professionals in cities like Palo Alto and Mountain View where many of these companies are headquartered. That's a tremendous red flag about just how broken the state of housing is in the Bay Area - if the highly paid tech employees can't live there, neither can anyone earning less than them (read: pretty much everyone else). How is that building a sustainable local community and economy?
  - nojvek 9y ago
    Paying $4000 a month on a one bedroom apt, means throwing 48k away a year. Tax is about 35% so your take home income from 150k senior salary is ~50k. That’s not a lot of money for “all other expenses”.
  - deleted 9y ago
    [deleted]
  - s73v3r_ 9y ago
    I feel that, if they did care, it's a lot easier to spin up an office in a different part of the country.
- imglorp 9y ago
  Office space is outrageous also, it's not just employees. Investors are paying directly to overhead/opex instead to capital/product. No thanks.
nradov 9y ago
Noted investor Peter Thiel claims that the majority of capital invested in Silicon Valley startups just flows to landlords instead of funding real innovation. https://www.sfgate.com/expensive-san-francisco/article/peter-thiel-silicon-valley-capital-landlords-12759450.php https://www.sfgate.com/expensive-san-francisco/article/peter...
s73v3r_ 9y ago
Then why not go somewhere else?
- Decade 9y ago
  For short-term competitiveness. The largest pool of technical jobs is here, so the largest pool of technical workers is here, so the largest pool of technical knowledge is here. Each generating more of the other. https://www.scientificamerican.com/article/glaeser-triumph-of-the-city-excerpt/ https://www.scientificamerican.com/article/glaeser-triumph-o... On a selfish personal level, I prefer my home city to remain solvent and a viable place to live. Without the tech jobs, the city government would be even more in the red, services would have to be cut, and the various support industries would have to move out. I would prefer for my city not to collapse. http://www.sfexaminer.com/san-francisco-officially-10-billion-hole/ http://www.sfexaminer.com/san-francisco-officially-10-billio...

This makes sense for companies to back: how many billions of their investors dollars just go straight to rent?

by davidw 9y ago

This makes sense for companies to back: how many billions of their investors dollars just go straight to rent?

But once those dollars are given to the employees, why does it matter where they end up? Why would a company care if it goes to a mortgage or rent?

davidw 9y ago
Because if more $$$ are in the employees pockets, the employees are easier to attract and happier, and the company is more competitive.
zasz 9y ago
Because high rents cancel out the benefits of a high salary. It's simple arithmetic. Why give up 30k of a 100k salary to work and live in SF, when I could give up 10k of an 90k salary in Austin instead? (These are just illustrative figures.) And the high price of housing means that even tech workers who want families can't afford the space to raise them.
- no_one_ever 9y ago
  My case is interesting. I have big student loan payments that don't adjust to my income or salary. I feel tethered to high CoL areas because those areas offer higher salaries with more take-home income, despite a higher median rent. The best balance for me is a high salary in a low CoL so I don't burn my take-home on rent, but I'd rather be given a larger salary, spend some more on rent, and have more money left over to pay off my debt.
  - zasz 9y ago
    What about working remotely?
- s73v3r_ 9y ago
  Cause it's usually 30k of a 180k salary.
- loeg 9y ago
  People will quibble with the exact trade-off in CoL and salary between SFBA and other locations. I don't think there is one general answer — you have to do the math for your specific situation to find out where you earn more money after expenses. Keep in mind Federal graduated taxes don't have any relief for high CoL renters (and the tax benefit for mortgage-holders has been diminished somewhat in the latest tax reforms). Don't forget state income tax, too.
awalton 9y ago
Employers might care about the fact it's taking longer and longer to get employees to work, which is directly cutting into productive time and adding costs to their employee commute programs (extra shuttle miles, extra trips, etc). You know, on top of the terrible hit to quality of life and general morale that longer commutes generate. High rent prices have priced out even relatively highly paid professionals in cities like Palo Alto and Mountain View where many of these companies are headquartered. That's a tremendous red flag about just how broken the state of housing is in the Bay Area - if the highly paid tech employees can't live there, neither can anyone earning less than them (read: pretty much everyone else). How is that building a sustainable local community and economy?
- nojvek 9y ago
  Paying $4000 a month on a one bedroom apt, means throwing 48k away a year. Tax is about 35% so your take home income from 150k senior salary is ~50k. That’s not a lot of money for “all other expenses”.
- deleted 9y ago
  [deleted]
- s73v3r_ 9y ago
  I feel that, if they did care, it's a lot easier to spin up an office in a different part of the country.
imglorp 9y ago
Office space is outrageous also, it's not just employees. Investors are paying directly to overhead/opex instead to capital/product. No thanks.

nradov 9y ago

Noted investor Peter Thiel claims that the majority of capital invested in Silicon Valley startups just flows to landlords instead of funding real innovation. https://www.sfgate.com/expensive-san-francisco/article/peter-thiel-silicon-valley-capital-landlords-12759450.php https://www.sfgate.com/expensive-san-francisco/article/peter...

s73v3r_ 9y ago

Then why not go somewhere else?

Decade 9y ago
For short-term competitiveness. The largest pool of technical jobs is here, so the largest pool of technical workers is here, so the largest pool of technical knowledge is here. Each generating more of the other. https://www.scientificamerican.com/article/glaeser-triumph-of-the-city-excerpt/ https://www.scientificamerican.com/article/glaeser-triumph-o... On a selfish personal level, I prefer my home city to remain solvent and a viable place to live. Without the tech jobs, the city government would be even more in the red, services would have to be cut, and the various support industries would have to move out. I would prefer for my city not to collapse. http://www.sfexaminer.com/san-francisco-officially-10-billion-hole/ http://www.sfexaminer.com/san-francisco-officially-10-billio...