5 ms·

As high-cost cities that refuse to allow adequate housing to be built force residents out, the jobs are eventually going to follow. Established companies may st

As high-cost cities that refuse to allow adequate housing to be built force residents out, the jobs are eventually going to follow. Established companies may stay to an extent, but the new ones will grow up in Denver, Phoenix, Austin, and so forth. It's a shift that may be impossible to arrest if or when it really gets going. Then we'll see thousands of articles about how SF, Boston, and so forth can't pay for the public services the cities want to pay for, and how terrible it is that companies are leaving. Those stories will contrast with the ones we've seen over the last decade, about how companies are evil and driving up the cost of housing. Edit to add, the other question is eviction. Right now SF appears to have banned eviction: https://sfist.com/2020/06/10/sf-supervisors-extend-eviction-moratorium-indefinitely/ https://sfist.com/2020/06/10/sf-supervisors-extend-eviction-.... If or when that ends, we'll see what the market clears at. I assume courts will eventually forbid an indefinite eviction moratorium, but courts are already willing to go along with rent control, so who knows?

yuhong 6y ago
I am thinking that forcing tens of thousands of employees to show up at office buildings and live in apartments is somewhat ridiculous, especially considering issues like food. Duplexes and fourplexes are probably a good compromise.
adamsea 6y ago
> Then we'll see thousands of articles about how SF, Boston, and so forth can't pay for the public services the cities want to pay for, and how terrible it is that companies are leaving. Perhaps, but I've also gotten the impression those companies weren't paying that much to begin with. But perhaps it is they were paying a lot, but not nearly as much as they should have been if they weren't able to buy their own legislation?
- neilparikh 6y ago
  Because of bad tax policy in California (Prop 13), the biggest source of taxes in California is personal income tax, and mostly by high earners, who are likely employees of these companies. There's already an effect on revenues when the stock market goes up and down, so I imagine companies leaving California would have an even more pronounced effect. Just because corporate tax is low, doesn't mean the money isn't taxed, it'll just be taxed when it's given to employees as salaries. Additionally, I don't get the impression that companies are able to buy legislation in SF. Otherwise, we wouldn't have policies like Gross Receipts tax, which most of tech companies in SF opposed [0]. In general, I think this obsession with "making corporations pay their fair share" isn't the right way of deciding a good tax policy. We should tax things we want to incentivize as little as possible, and tax things we want to discourage as much as possible. Maybe that leads to higher corporate taxes (I suspect it wouldn't), but the mindset should not revolve around trying to get a pound of flesh. Additionally, it isn't even guaranteed that the tax burden will fall on the corporation just because they're the ones writing the check. So even if our goal is "make corporations pay", tax incidence can just lead to us making labour and customers pay instead. [0] - FWIW, I don't think gross receipts is not a very efficient tax, since it just encourages vertical integration and discourages multiple companies working together; ie. less competition. Unfortunately, Prop 13 prevents the economically efficient and fair source of revenue
  - AnthonyMouse 6y ago
    > FWIW, I don't think gross receipts is not a very efficient tax, since it just encourages vertical integration and discourages multiple companies working together; ie. less competition. Unfortunately, Prop 13 prevents the economically efficient and fair source of revenue They could just use VAT, which gives no advantage to vertical integration.
    - grandmczeb 6y ago
      Implementing a VAT at the state level is difficult when goods can easily move across state borders. You'd need a federal system of collecting sales tax.
      - AnthonyMouse 6y ago
        They already have the big online retailers collecting sales tax. People can't save money by driving hundreds of miles to another state to buy small ticket items, and big ticket items like cars and boats get taxed on registration.
        grandmczeb 6y ago
        How do you calculate value add if you’re a factory that imports parts from another state and sells an assembled final product?
        AnthonyMouse 6y ago
        Being produced out of state doesn't get you out of it. If you import something from out of state, the act of importing causes VAT to be due on its value. If you then add value in the factory, you owe that too. The total VAT is always equal to the sale price. (If you like to promote exports you then give a refund for products not sold in the state.)
        grandmczeb 6y ago
jadbox 6y ago
Why has Denver suddenly become a spot compared to the rest of the country? I'm not too familiar with what's happening there.
- r00fus 6y ago
  Pot?
- labcomputer 6y ago
  It has many of the advantages of the Bay Area (outdoor activities, craft brewing scene, bike paths). Denver and Boulder have very nice, walkable downtowns. Cost of living is lower than the Bay Area or NYC (but Boulder is approaching fast).
  - monadic2 6y ago
    I live in downtown Denver and I just want to point out all the good food is spread out across the metro area, it’s only walkable in a very weak sense. There’s also zero bodega/corner store/corner deli/food carts downtown, aside from two 7-11s and a CVS. Boulder has much better food and stores close to where people live.
    - Joof 6y ago
      I don't know if Denver has any food it's known for. Maybe craft beer? Mountains are the thing.
      - monadic2 6y ago
        Totally, but it’s also not easy to get over to the mountains without a car!
- jseliger 6y ago
  Denver is inexpensive compared to California, Seattle, NYC, and Boston. But it is (relatively) urban, dense, walkable, and bikeable, with lots more bike lanes incoming. It has a mass-transit system of sorts, although it really needs a north-south subway connecting Cherry Creek to Downtown and past the freeway, as well as an east-west subway along Colfax. It has relatively good and sunny weather. The airport is very large and relatively easy to get to. The economy is pretty strong. Taxes are not insanely high. I was looking at it as a possible place to move. Austin has many of those, but without mass transit, and Phoenix has some, but it's less urban and the traffic is horrible.
solidasparagus 6y ago
This is a dream that we've been hearing for decades and has never materialized. We have consistently seen cities like Boston and San Francisco survive and thrive despite their central industries fading or collapsing. New industries just take their place. Why? Well one very reasonable explanation is the quality of the workforce [1]. These areas are highly educated and there has always been a large amount of skilled workers, probably due to the density of high quality education. I see no reason to believe that this will be the time that the 'Silicon Valley is dying' people will finally be right. [1] National Bureau of Economic Research paper on Boston between 1640 and 2003 https://www.csus.edu/indiv/c/chalmersk/econ251fa12/glaeserboston.pdf https://www.csus.edu/indiv/c/chalmersk/econ251fa12/glaeserbo...
- DrAwdeOccarim 6y ago
  The biotech IPO bonanza occurring right now is unreal. I think we're entering the next phase of tech if biotech get us out of the pandemic. This should add to SF and Boston cache even more than before.
  - perl4ever 6y ago
    A lot of existing biotech companies seem to be selling stock too. I wonder how much they can push it, if investors don't really care about dilution as long as they feel like they're saving the world. People often say the stock market is disconnected from actually funding companies, but it seems like not in this area.
    - DrAwdeOccarim 6y ago
      I wonder how much loose Fed policy is funnelling into these IPO and 2ndary offerings. Honestly, that or like infrastructure is fine by me for things freshly printed money to go into. Investing in science always pays off in the long-run. Our leaders should re-read Science The Endless Frontier, by Vannevar Bush (https://nsf.gov/od/lpa/nsf50/vbush1945.htm https://nsf.gov/od/lpa/nsf50/vbush1945.htm)
      - 6y ago
throwaway0a5e 6y ago
>It's a shift that may be impossible to arrest if or when it really gets going. >Then we'll see thousands of articles about how SF, Boston, and so forth can't pay for the public services the cities want to pay for, and how terrible it is that companies are leaving. Good. Stupid should hurt. These cities had 20yr and nearly unbounded money they could have used to become somewhat sustainable. That they didn't is only their fault. And I say that as someone who lives in one of those cities.
smoyer 6y ago
Then it will be "those evil companies came here, drove up rents and then left when their employees couldn't afford it anymore" - because it will never be the city planners fault!

yuhong 6y ago

I am thinking that forcing tens of thousands of employees to show up at office buildings and live in apartments is somewhat ridiculous, especially considering issues like food. Duplexes and fourplexes are probably a good compromise.

adamsea 6y ago

> Then we'll see thousands of articles about how SF, Boston, and so forth can't pay for the public services the cities want to pay for, and how terrible it is that companies are leaving. Perhaps, but I've also gotten the impression those companies weren't paying that much to begin with. But perhaps it is they were paying a lot, but not nearly as much as they should have been if they weren't able to buy their own legislation?

neilparikh 6y ago
Because of bad tax policy in California (Prop 13), the biggest source of taxes in California is personal income tax, and mostly by high earners, who are likely employees of these companies. There's already an effect on revenues when the stock market goes up and down, so I imagine companies leaving California would have an even more pronounced effect. Just because corporate tax is low, doesn't mean the money isn't taxed, it'll just be taxed when it's given to employees as salaries. Additionally, I don't get the impression that companies are able to buy legislation in SF. Otherwise, we wouldn't have policies like Gross Receipts tax, which most of tech companies in SF opposed [0]. In general, I think this obsession with "making corporations pay their fair share" isn't the right way of deciding a good tax policy. We should tax things we want to incentivize as little as possible, and tax things we want to discourage as much as possible. Maybe that leads to higher corporate taxes (I suspect it wouldn't), but the mindset should not revolve around trying to get a pound of flesh. Additionally, it isn't even guaranteed that the tax burden will fall on the corporation just because they're the ones writing the check. So even if our goal is "make corporations pay", tax incidence can just lead to us making labour and customers pay instead. [0] - FWIW, I don't think gross receipts is not a very efficient tax, since it just encourages vertical integration and discourages multiple companies working together; ie. less competition. Unfortunately, Prop 13 prevents the economically efficient and fair source of revenue
- AnthonyMouse 6y ago
  > FWIW, I don't think gross receipts is not a very efficient tax, since it just encourages vertical integration and discourages multiple companies working together; ie. less competition. Unfortunately, Prop 13 prevents the economically efficient and fair source of revenue They could just use VAT, which gives no advantage to vertical integration.
  - grandmczeb 6y ago
    Implementing a VAT at the state level is difficult when goods can easily move across state borders. You'd need a federal system of collecting sales tax.
    - AnthonyMouse 6y ago
      They already have the big online retailers collecting sales tax. People can't save money by driving hundreds of miles to another state to buy small ticket items, and big ticket items like cars and boats get taxed on registration.
      - grandmczeb 6y ago
        How do you calculate value add if you’re a factory that imports parts from another state and sells an assembled final product?
        AnthonyMouse 6y ago
        Being produced out of state doesn't get you out of it. If you import something from out of state, the act of importing causes VAT to be due on its value. If you then add value in the factory, you owe that too. The total VAT is always equal to the sale price. (If you like to promote exports you then give a refund for products not sold in the state.)
        grandmczeb 6y ago

jadbox 6y ago

Why has Denver suddenly become a spot compared to the rest of the country? I'm not too familiar with what's happening there.

r00fus 6y ago
Pot?
labcomputer 6y ago
It has many of the advantages of the Bay Area (outdoor activities, craft brewing scene, bike paths). Denver and Boulder have very nice, walkable downtowns. Cost of living is lower than the Bay Area or NYC (but Boulder is approaching fast).
- monadic2 6y ago
  I live in downtown Denver and I just want to point out all the good food is spread out across the metro area, it’s only walkable in a very weak sense. There’s also zero bodega/corner store/corner deli/food carts downtown, aside from two 7-11s and a CVS. Boulder has much better food and stores close to where people live.
  - Joof 6y ago
    I don't know if Denver has any food it's known for. Maybe craft beer? Mountains are the thing.
    - monadic2 6y ago
      Totally, but it’s also not easy to get over to the mountains without a car!
jseliger 6y ago
Denver is inexpensive compared to California, Seattle, NYC, and Boston. But it is (relatively) urban, dense, walkable, and bikeable, with lots more bike lanes incoming. It has a mass-transit system of sorts, although it really needs a north-south subway connecting Cherry Creek to Downtown and past the freeway, as well as an east-west subway along Colfax. It has relatively good and sunny weather. The airport is very large and relatively easy to get to. The economy is pretty strong. Taxes are not insanely high. I was looking at it as a possible place to move. Austin has many of those, but without mass transit, and Phoenix has some, but it's less urban and the traffic is horrible.

solidasparagus 6y ago

This is a dream that we've been hearing for decades and has never materialized. We have consistently seen cities like Boston and San Francisco survive and thrive despite their central industries fading or collapsing. New industries just take their place. Why? Well one very reasonable explanation is the quality of the workforce [1]. These areas are highly educated and there has always been a large amount of skilled workers, probably due to the density of high quality education. I see no reason to believe that this will be the time that the 'Silicon Valley is dying' people will finally be right. [1] National Bureau of Economic Research paper on Boston between 1640 and 2003 https://www.csus.edu/indiv/c/chalmersk/econ251fa12/glaeserboston.pdf https://www.csus.edu/indiv/c/chalmersk/econ251fa12/glaeserbo...

DrAwdeOccarim 6y ago
The biotech IPO bonanza occurring right now is unreal. I think we're entering the next phase of tech if biotech get us out of the pandemic. This should add to SF and Boston cache even more than before.
- perl4ever 6y ago
  A lot of existing biotech companies seem to be selling stock too. I wonder how much they can push it, if investors don't really care about dilution as long as they feel like they're saving the world. People often say the stock market is disconnected from actually funding companies, but it seems like not in this area.
  - DrAwdeOccarim 6y ago
    I wonder how much loose Fed policy is funnelling into these IPO and 2ndary offerings. Honestly, that or like infrastructure is fine by me for things freshly printed money to go into. Investing in science always pays off in the long-run. Our leaders should re-read Science The Endless Frontier, by Vannevar Bush (https://nsf.gov/od/lpa/nsf50/vbush1945.htm https://nsf.gov/od/lpa/nsf50/vbush1945.htm)
    - 6y ago

throwaway0a5e 6y ago

>It's a shift that may be impossible to arrest if or when it really gets going. >Then we'll see thousands of articles about how SF, Boston, and so forth can't pay for the public services the cities want to pay for, and how terrible it is that companies are leaving. Good. Stupid should hurt. These cities had 20yr and nearly unbounded money they could have used to become somewhat sustainable. That they didn't is only their fault. And I say that as someone who lives in one of those cities.

smoyer 6y ago

Then it will be "those evil companies came here, drove up rents and then left when their employees couldn't afford it anymore" - because it will never be the city planners fault!