6 ms·

I really wonder what it will take to kill this Golden Goose. Bay area employees are already a big premium over employees in other areas, but companies still rea

I really wonder what it will take to kill this Golden Goose. Bay area employees are already a big premium over employees in other areas, but companies still really want to be here. No free food is almost asinine... but it's not a big thing compared to the extra cost in salaries.

dunpeal 8y ago
I'm wondering the same. Two growing trends that I'm observing: 1. Businesses moving out of California, especially NorCal. Sergey Brin already said two years ago that he would not have started Google in NorCal today. He was right. There's a lot more interest in other locations, such as Austin. 2. Remote work, and fully remote virtual offices. Personally I know a bunch of people who declined offers in the SFBay to avoid the pincer squeeze of impossible housing costs + highest tax rate in the nation. A friend of mine did the math and realized that downtown Manhattan (!) was more affordable for him than the Bay. This stupid rule will not be the last straw. I do think it will deter companies from starting large complexes in MTV specifically, and SF if it passes this same rule. It is however a sign of the arrogance and greed of municipalities, and their mistaken belief that they can just keep squeezing big tech indefinitely.
- AceJohnny2 8y ago
  > There's a lot more interest in other locations, such as Austin. Which, I hear, is quickly catching up to Bay Area in terms of cost of living.
  - rco8786 8y ago
    Not even remotely close. Like seriously not even on the same planet.
  - dunpeal 8y ago
    > As of May 2017, the average market value for homes was $380,000 within the Austin city limits and $310,000 in the Austin-Round Rock metropolitan area, reported Austin HomeSearch. https://www.tripsavvy.com/austins-cost-of-living-255111 https://www.tripsavvy.com/austins-cost-of-living-255111 Now let's do SF!: > As usual, the result is grim for San Francisco, since, according to CAR, a house in San Francisco now runs over $1.5 million on average. https://sf.curbed.com/2018/2/15/17016992/affordable-homes-median-price-san-francisco-afford https://sf.curbed.com/2018/2/15/17016992/affordable-homes-me... That's almost x4 times more. Austin has some headroom still. Moreover, don't forget taxes! California state tax for an engineer will be about 10% of gross. 0% in Austin. Quite a difference.
  - alexforster 8y ago
    Not even close, and new housing starts have been keeping pace with population growth for years (unlike most other tech boom cities).
  - deleted 8y ago
    [deleted]
- dmode 8y ago
  There is no truth to your assertion that companies will be leaving Bay. Google, Facebook, Salesforce etc. are actually massively expanding their Bay Area footprint. Google is expanding their Mountain View and building a massive new headquarters https://sf.curbed.com/2017/3/8/14858200/google-headquarters-expansion-tech https://sf.curbed.com/2017/3/8/14858200/google-headquarters-... Google is also expanding into San Jose Apple just recently completed their spaceship campus Facebook is massively expanding their Menlo Park footprint https://www.bizjournals.com/sanfrancisco/news/2018/03/15/facebook-fb-campus-expansion-menlo-park-gehry.html https://www.bizjournals.com/sanfrancisco/news/2018/03/15/fac... In addition, they signed the largest lease ever in SF https://sf.curbed.com/2018/5/14/17353094/facebook-park-tower-250-howard-lease-sf https://sf.curbed.com/2018/5/14/17353094/facebook-park-tower... Salesforce recently opened their new 60 story tower in downtown SF http://www.salesforcetower.com/ http://www.salesforcetower.com/ And I haven't even touched upon continued expansion of Uber, Lyft (which opened a new autonomous division in Palo Alto), Airbnb etc. Austin is a bit player in the tech scene. The only other alternative right now is Seattle.
  - malandrew 8y ago
    All the startups are moving to other markets. The problem long term is that all these startups provide the training for people that eventually join those other companies. Eventually unicorns will show up in other markets that don't have the insanity of the Bay Area. When that happens these companies won't be able to attract talent and risk becoming a shadow of their former selves along with the city. At one time Armonk, NY and Maynard, MA were the center of tech too. It's will be a long slow death by a thousand cuts.
  - kingnothing 8y ago
    Salesforce's tower is mostly going to be rented to other tenants. The company will largely maintain distributed office space in the Financial District.
  - echelon 8y ago
    Austin is not a "bit player" in the tech scene. Incredible growth is happening outside of the California bubble. Texas, the entire east coast... Many talented people don't want to relocate for work, and companies are realizing that. Distributed offices are becoming more and more of a thing.
- mikestew 8y ago
  1. I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago. California is still there, packed as ever. 2. Been hearing that for thirty years, too. Now, that’s not to say that there isn’t a breaking point, I just don’t think we’re there yet. CA might be willing to amputate a leg or a wing, but there’s too much gold in the goose to kill it all at once.
  - dunpeal 8y ago
    > I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago. That's like saying "I was reading about government deficit 10 years ago, and look at it, it's still growing and we're still here and the deficit is even larger!". It's a growing problem. California grows less attractive as more of these exploitative measures and taxes pile up, and the impact is noticeable. No NorCal location was in the shortlist for Amazon's 2nd HQ, for instance. > Been hearing that for thirty years, too. You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed? Maybe as some future prediction?
    - fzzzy 8y ago
      > You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed? Sure, the Mother of all Demos showed off remote collaborative work in 1968.
      - dunpeal 8y ago
        > Sure, the Mother of all Demos showed off remote collaborative work in 1968. ...and was certainly an exciting futuristic demo, but unfortunately neither practical nor feasible with the actual widely available technologies of its time.
        fzzzy 8y ago
        But we’ve still been hearing about how remote work and the paperless office is the future for 50 years.
- mhneu 8y ago
  The issue is that America funds cities poorly. There is a federal subsidy from cities that goes to rural areas. Red areas get more back in services than they pay in taxes, and blue areas pay out more in taxes than they get back. So cities have to raise funding somehow. (This is also a problem with the way America funds schools. The US needs to figure out how to distribute tax dollars more equally - or at least figure out how to keep most of the country out of poverty while still building infrastructure that keeps city housing costs down.)
  - neap24 8y ago
    Meg McArdle recently wrote a piece with some pretty convincing evidence that this is just factually untrue on a per capita basis. https://www.bloomberg.com/view/articles/2018-02-05/think-carefully-before-cutting-off-subsidies-to-red-states https://www.bloomberg.com/view/articles/2018-02-05/think-car...
    - mhneu 8y ago
      Megan McArdle has an agenda. I've never found she generates much insight for that reason. I apply the Two Papers Rule to her, and to B Stephens: https://twitter.com/Noahpinion/status/1017590957984735232 https://twitter.com/Noahpinion/status/1017590957984735232 There are some worth reading, like Will Wilkinson, J Rubin, and T Nichols. But they're few and far between.
deegles 8y ago
Wherever Amazon puts HQ2 will be the next Valley. Not because companies can’t already move, but because it will be an easy excuse to focus there.
- jhowell 8y ago
  I haven't worked there, but from a lot of anecdotes I hear it's not a happy place. Quality of life is a thing.

dunpeal 8y ago

I'm wondering the same. Two growing trends that I'm observing: 1. Businesses moving out of California, especially NorCal. Sergey Brin already said two years ago that he would not have started Google in NorCal today. He was right. There's a lot more interest in other locations, such as Austin. 2. Remote work, and fully remote virtual offices. Personally I know a bunch of people who declined offers in the SFBay to avoid the pincer squeeze of impossible housing costs + highest tax rate in the nation. A friend of mine did the math and realized that downtown Manhattan (!) was more affordable for him than the Bay. This stupid rule will not be the last straw. I do think it will deter companies from starting large complexes in MTV specifically, and SF if it passes this same rule. It is however a sign of the arrogance and greed of municipalities, and their mistaken belief that they can just keep squeezing big tech indefinitely.

AceJohnny2 8y ago
> There's a lot more interest in other locations, such as Austin. Which, I hear, is quickly catching up to Bay Area in terms of cost of living.
- rco8786 8y ago
  Not even remotely close. Like seriously not even on the same planet.
- dunpeal 8y ago
  > As of May 2017, the average market value for homes was $380,000 within the Austin city limits and $310,000 in the Austin-Round Rock metropolitan area, reported Austin HomeSearch. https://www.tripsavvy.com/austins-cost-of-living-255111 https://www.tripsavvy.com/austins-cost-of-living-255111 Now let's do SF!: > As usual, the result is grim for San Francisco, since, according to CAR, a house in San Francisco now runs over $1.5 million on average. https://sf.curbed.com/2018/2/15/17016992/affordable-homes-median-price-san-francisco-afford https://sf.curbed.com/2018/2/15/17016992/affordable-homes-me... That's almost x4 times more. Austin has some headroom still. Moreover, don't forget taxes! California state tax for an engineer will be about 10% of gross. 0% in Austin. Quite a difference.
- alexforster 8y ago
  Not even close, and new housing starts have been keeping pace with population growth for years (unlike most other tech boom cities).
- deleted 8y ago
  [deleted]
dmode 8y ago
There is no truth to your assertion that companies will be leaving Bay. Google, Facebook, Salesforce etc. are actually massively expanding their Bay Area footprint. Google is expanding their Mountain View and building a massive new headquarters https://sf.curbed.com/2017/3/8/14858200/google-headquarters-expansion-tech https://sf.curbed.com/2017/3/8/14858200/google-headquarters-... Google is also expanding into San Jose Apple just recently completed their spaceship campus Facebook is massively expanding their Menlo Park footprint https://www.bizjournals.com/sanfrancisco/news/2018/03/15/facebook-fb-campus-expansion-menlo-park-gehry.html https://www.bizjournals.com/sanfrancisco/news/2018/03/15/fac... In addition, they signed the largest lease ever in SF https://sf.curbed.com/2018/5/14/17353094/facebook-park-tower-250-howard-lease-sf https://sf.curbed.com/2018/5/14/17353094/facebook-park-tower... Salesforce recently opened their new 60 story tower in downtown SF http://www.salesforcetower.com/ http://www.salesforcetower.com/ And I haven't even touched upon continued expansion of Uber, Lyft (which opened a new autonomous division in Palo Alto), Airbnb etc. Austin is a bit player in the tech scene. The only other alternative right now is Seattle.
- malandrew 8y ago
  All the startups are moving to other markets. The problem long term is that all these startups provide the training for people that eventually join those other companies. Eventually unicorns will show up in other markets that don't have the insanity of the Bay Area. When that happens these companies won't be able to attract talent and risk becoming a shadow of their former selves along with the city. At one time Armonk, NY and Maynard, MA were the center of tech too. It's will be a long slow death by a thousand cuts.
- kingnothing 8y ago
  Salesforce's tower is mostly going to be rented to other tenants. The company will largely maintain distributed office space in the Financial District.
- echelon 8y ago
  Austin is not a "bit player" in the tech scene. Incredible growth is happening outside of the California bubble. Texas, the entire east coast... Many talented people don't want to relocate for work, and companies are realizing that. Distributed offices are becoming more and more of a thing.
mikestew 8y ago
1. I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago. California is still there, packed as ever. 2. Been hearing that for thirty years, too. Now, that’s not to say that there isn’t a breaking point, I just don’t think we’re there yet. CA might be willing to amputate a leg or a wing, but there’s too much gold in the goose to kill it all at once.
- dunpeal 8y ago
  > I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago. That's like saying "I was reading about government deficit 10 years ago, and look at it, it's still growing and we're still here and the deficit is even larger!". It's a growing problem. California grows less attractive as more of these exploitative measures and taxes pile up, and the impact is noticeable. No NorCal location was in the shortlist for Amazon's 2nd HQ, for instance. > Been hearing that for thirty years, too. You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed? Maybe as some future prediction?
  - fzzzy 8y ago
    > You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed? Sure, the Mother of all Demos showed off remote collaborative work in 1968.
    - dunpeal 8y ago
      > Sure, the Mother of all Demos showed off remote collaborative work in 1968. ...and was certainly an exciting futuristic demo, but unfortunately neither practical nor feasible with the actual widely available technologies of its time.
      - fzzzy 8y ago
        But we’ve still been hearing about how remote work and the paperless office is the future for 50 years.
mhneu 8y ago
The issue is that America funds cities poorly. There is a federal subsidy from cities that goes to rural areas. Red areas get more back in services than they pay in taxes, and blue areas pay out more in taxes than they get back. So cities have to raise funding somehow. (This is also a problem with the way America funds schools. The US needs to figure out how to distribute tax dollars more equally - or at least figure out how to keep most of the country out of poverty while still building infrastructure that keeps city housing costs down.)
- neap24 8y ago
  Meg McArdle recently wrote a piece with some pretty convincing evidence that this is just factually untrue on a per capita basis. https://www.bloomberg.com/view/articles/2018-02-05/think-carefully-before-cutting-off-subsidies-to-red-states https://www.bloomberg.com/view/articles/2018-02-05/think-car...
  - mhneu 8y ago
    Megan McArdle has an agenda. I've never found she generates much insight for that reason. I apply the Two Papers Rule to her, and to B Stephens: https://twitter.com/Noahpinion/status/1017590957984735232 https://twitter.com/Noahpinion/status/1017590957984735232 There are some worth reading, like Will Wilkinson, J Rubin, and T Nichols. But they're few and far between.

deegles 8y ago

Wherever Amazon puts HQ2 will be the next Valley. Not because companies can’t already move, but because it will be an easy excuse to focus there.

jhowell 8y ago
I haven't worked there, but from a lot of anecdotes I hear it's not a happy place. Quality of life is a thing.