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I predicted this response, right? Boomtown economics are tricky. There is just an extraordinary amount of demand that appeared in a very short time. The velocit

I predicted this response, right? Boomtown economics are tricky. There is just an extraordinary amount of demand that appeared in a very short time. The velocity and magnitude of the surge in demand matters. When you have an entire global population of techies that suddenly want to move to the heart of their industry, you may experience price inelasticity, which basically means you won’t see much downward movement in price. Think of it: before prices come down to affordable levels for the people you see on the street, or even service industry workers and teachers and whatnot, they would first be dirt cheap for tech. How many more tech workers would move to SF or start their companies here if they heard it was cheap now? That’s how deep the demand goes. That’s all the demand that needs to be satiated before market rates come down to where they could reverse homelessness. That’s why tech can’t just pass the buck to NIMBYS or pretend like this is any other city. We are creating some of the most valuable companies in the world here right now and it generally helps your prospects to co-locate. That creates very exceptional demand conditions.

mmmmmmmmm 8y ago
Then only build new housing and not new office buildings. The government has control over which building projects are approved. If there are no jobs here, people will not move here. Technology companies do not benefit from sky-high housing prices. They'd be able to pay lower salaries if the housing wasn't so expensive. Only homeowners and landlords benefit from rising house prices.
pm90 8y ago
You have good points. In a hypothetical scenario where the housing market was highly elastic, it would certainly lead to a huge movement of tech labor force to the Bay Area. But I feel like that is the way SFBA will grow. Every city has its secret sauce, for SFBA it is tech. Instead of fighting it, I can imagine a scenario where the concentration of Tech leads to a transformation of the area to be more like NYC. Or maybe it will take a different direction. As naive as it sounds, I still believe in Tech as a force for good (not Big Tech necessarily). I moved here from Austin, and folks there talk about how the tech industry is growing, but its still Satellite offices for Big Tech. The kind of talent I see in SFBA is staggering.
- abalone 8y ago
  Do you really feel that Prop C is “fighting” tech growth, though? Not sure if that is your position. I think a big reason Benioff came around is that he’s taking a long view. Perhaps you could even draw a connection with the maturity of Salesforce as a company vs young startups whose current teams might exit in under 10 years. Benioff got his whole team on board not only out of altruism, but by noting that homelessness was seriously threatening Saleforce’s future in the city.
  - pm90 8y ago
    Benioff didn't come around. He is from SF, unlike a lot of other Tech CEO's. His company has made significant investments in the City proper. He's been playing the long game for a while now. I don't have an opinion on Prop C. The thrust of my argument was more around prop 13.
jtd514 8y ago
The tech people are not going to live in the shitty apartments you should be building. People are not fooled, they see whats happening in SF. You need to stop playing games and build more apartments. This is not difficult.

mmmmmmmmm 8y ago

Then only build new housing and not new office buildings. The government has control over which building projects are approved. If there are no jobs here, people will not move here. Technology companies do not benefit from sky-high housing prices. They'd be able to pay lower salaries if the housing wasn't so expensive. Only homeowners and landlords benefit from rising house prices.

pm90 8y ago

You have good points. In a hypothetical scenario where the housing market was highly elastic, it would certainly lead to a huge movement of tech labor force to the Bay Area. But I feel like that is the way SFBA will grow. Every city has its secret sauce, for SFBA it is tech. Instead of fighting it, I can imagine a scenario where the concentration of Tech leads to a transformation of the area to be more like NYC. Or maybe it will take a different direction. As naive as it sounds, I still believe in Tech as a force for good (not Big Tech necessarily). I moved here from Austin, and folks there talk about how the tech industry is growing, but its still Satellite offices for Big Tech. The kind of talent I see in SFBA is staggering.

abalone 8y ago
Do you really feel that Prop C is “fighting” tech growth, though? Not sure if that is your position. I think a big reason Benioff came around is that he’s taking a long view. Perhaps you could even draw a connection with the maturity of Salesforce as a company vs young startups whose current teams might exit in under 10 years. Benioff got his whole team on board not only out of altruism, but by noting that homelessness was seriously threatening Saleforce’s future in the city.
- pm90 8y ago
  Benioff didn't come around. He is from SF, unlike a lot of other Tech CEO's. His company has made significant investments in the City proper. He's been playing the long game for a while now. I don't have an opinion on Prop C. The thrust of my argument was more around prop 13.

jtd514 8y ago

The tech people are not going to live in the shitty apartments you should be building. People are not fooled, they see whats happening in SF. You need to stop playing games and build more apartments. This is not difficult.