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Silicon Valley exodus: Bay Area tech companies leaving for Texas
- sbinthree 6y agoI think it's interesting that people forget anything network based tends to unwind just as fast as it winds up. Decorrelation (e.g. low viral coefficient) can be antifragile. If everyone moves to your city for a different reason, it is more resilient to downturns than if everyone moves to your city for the same reason and conditions change. Facebook may unwind for the same reason it was successful: the lack of privacy.
- fairity 6y ago> I think it's interesting that people forget anything network based tends to unwind just as fast as it winds up. I think that largely depends on market dynamics. For systems that benefit from strong, direct network effects, the vast majority of users will generally join whichever platform has the largest network. Once you are the clear market leader, you will enjoy fast(er) user growth. Even if your network starts to dwindle, most users will still gravitate to your platform so long as you maintain your market leadership.
- sbinthree 6y agoI agree, I'm arguing that the thing that leads to network success tends to also be the reason it unwinds. Facebook would not have worked if privacy prevailed, which is also the main driver impacting the unwinding of their network.
- popup21 6y agoBuh-bye Texas. Your green landscapes are soon to turn SanFranshitsco brown.
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- maxlamb 6y agoTexas is bigger than France, a country of 67 million people. There should be enough space :)
- bnchrch 6y agoFriendly reminder, Tech is not San Francisco, it's just a city, treat it as such.
- underseacables 6y agoLarry Magid said: “I don't think it matters where the CEO sits. What matters is: where is the innovation and where are the job and both HP and Oracle will remain in the valley as employers," What would be a move Sufficient enough to meet Larry’s assessment?
- readams 6y agoI wonder if the people fleeing California will end up voting for the same bad policies that are the reason they had to leave in the first place. That is, do they connect the bad policies to the bad outcomes, or will they still favor the bad policies? There is one major area for tech people where Texas may prove a nasty surprise to employees: non-compete agreements. For large employers this may be a bonus though as they can keep wages low by stifling competition. Texas does limit non-compete agreements to some degree, but it seems they can still be a serious problem.
- kbenson 6y agoMaybe that's a good policy that was voted for that they can vote for again in the new location?
- shiftpgdn 6y agoTexas doesn't have a full time legislature so unlike California the amount of damage they can do is limited.
- rwc 6y agoEven better than a part time legislature, in fact. Texas only meets for a few months every other year.
- whatshisface 6y agoOn top of that, a huge fraction of the laws are written directly in the constitution, meaning that without a supermajority it's impossible to change almost anything.
- octoberfranklin 6y agoI dearly love this aspect of Texas. It is such total genius. And the escapades with legislators fleeing the state in order to block legislation makes for hilarity.
- jartelt 6y ago
- exabrial 6y agoHigh taxes, regulations for everything, the government running every part of your personal life, cancer labels on everything... seems like a dream come true. What went wrong?
- selestify 6y ago> the government running every part of your personal life Hyperbole much? The rest of your comment can be dismissed based on this alone.
- dannyincolor 6y agoI always wonder if these commenters even live here? I moved from (edit: one of) the most deregulated states in the Union to CA and I have yet to see any tangible example of this. I’d like to know what specific events or changes or limits on freedom are being referenced. I’m even a (very prolific) gun owner, and found CA’s laws to be perfectly reasonable for my self-defense and hunting/sporting needs. Seems like a lot of anti-CA hype so far; perfectly fine with being proven wrong, but just don’t see the real world evidence to back these claims.
- tolbish 6y ago> the government running every part of your personal life Isn't marijuana illegal in Texas? California was one of the first states to grant its citizens that freedom.
- dmode 6y agoCan we compare regulations on the following things between Texas and California ? - Marijuana - Abortion - LGBT rights - Car dealership
- commandlinefan 6y agoMy fear as a Texan is that they're just coming here to spread the "good word".
- baloney1 6y ago
- neom 6y agoDoes climate change play an unspoken role in this? Is California is an increasingly unstable place from an ecology perspective?
- presentation 6y agoThere are many negative things about living in California, but I’ve never heard anyone say that an unstable ecology is one of them.
- gyc 6y agoI don't know about unstable ecology, but I'm kind of tired of the yearly weeks of forest fires causing dangerous air quality here in the bay area.
- proverbialbunny 6y agoActually, it's one of the most commonly cited reasons. One of the more common reasons people are leaving CA is retirement. In the 90s and thousands, it was pretty popular for people to move to Sacrament (Granite Bay and Auburn) to retire. Today it's Tahoe and out of state. People love to retire in the forest, but if it's going to light your house on fire, people will look elsewhere.
- daniel-thompson 6y agoTo be clear, climate change affects Texas too - it gets hotter here every year. https://www.keranews.org/2019-08-22/austin-makes-top-10-list-of-u-s-cities-with-the-greatest-increase-in-hot-days https://www.keranews.org/2019-08-22/austin-makes-top-10-list... And unfortunately we have our share of deadly wildfires as well (https://en.wikipedia.org/wiki/Bastrop_County_Complex_Fire https://en.wikipedia.org/wiki/Bastrop_County_Complex_Fire), although thankfully not to the same degree that California does.
- ascendantlogic 6y agoSome people think if they ignore science hard enough, it'll just make the problems go away.
- sremani 6y agoBoth HPE and Oracle are not moving many people to Texas per the news release so outside of some tax incentives, I am not really sure how this would help Austin and Houston.
- synaesthesisx 6y agoI know multiple people considering abandoning California due to the homelessness crisis, as the unhoused population (and the problems associated) are expected to increase 10x in the near future as a consequence of the pandemic, with no hope in sight.
- xxxtentachyon 6y agoThat strikes me as a bit of a ridiculous reason to move. The homeless in California are concentrated in a handful of cities, and within those cities, in a handful of neighborhoods. It’s not a problem that you’d be exposed to in a way that truly inconveniences you unless you live or work in very specific locales, and even then, what are the homeless doing that is pushing people to move all the way out of the state rather than just one neighborhood over? The notion that the homeless population is going to increase tenfold in the near-term also deserves a citation, that’s an immense jump.
- easde 6y agoMany of the tech companies are in the "bad" neighborhoods. Most notably Uber, Twitter and Square are all headquartered right next to one of the worst parts in the city (Civic Center / Tenderloin). I remember walking to one of those companies for a job interview and seeing someone pooping in broad daylight on the 8th and Market intersection. Not a great first impression.
- throwaway1777 6y agoHomelessness is not unique to Caliifornia. Seattle and Portland have a big problem with it too. Heck, I’ve seen homeless in rural Indiana by the river and in London. California doesn’t have an answer to this, and I haven’t seen any proposals from either the right or the left that seem viable, but if Texas is so great maybe we should ship the homeless there.
- Acrobatic_Road 6y agoThere are 28,995,881 people living in Texas vs 39,512,223 in California. There are 151,278 homeless in California vs 25,848 in Texas. Is homelessness a problem in Texas? Yes, but it isn't remotely as bad as California. And of course, then there are states with nearly non existent homelessness.
- dkobran 6y agoHP and Oracle don’t exactly represent the heart of Silicon Valley today and what makes it special/unique. I actually think zombie corporations like Oracle, companies that haven’t innovated in decades and instead rely on an army of sales people to sell legacy software, are somewhat the antithesis of Silicon Valley which is really about real technological innovation and disruption at it’s core. I know there are lots of exceptions to this somewhat idyllic version of Silicon Valley but at the same time, you can’t really argue that there is a place in the US (or the rest of the world for that matter) that produces more technological advancements than Silicon Valley. I’m not a believer in American Exceptionalism — just stating facts. This is a long winded way of saying who cares if those companies leave, the Bay Area is probably better off.
- Hypx 6y agoAgreed. They're companies trying to avoid taxes or regulation. Only companies on the downslide really consider that as an relevant option.
- dkobran 6y agoSome folks in my network are ex-Oracle and my understanding is that the company is run by the CFO and a huge group of MBAs. Any company where the bean counters are at the helm are optimizing for things like quarterly earnings, tax savings like you said, etc. This is the stage where they milk whatever they can out of a dying cash cow. There’s nothing interesting to me about this flavor of capitalism and I don’t think it’s something America should be proud of producing. Conversely, technology innovation and the entire ecosystem in Silicon Valley is really special and almost irreplicable. Note: I have nothing against MBAs, I just don’t think it’s appropriate for them to have the loudest voice at a non-financial institution. They serve a critical role but it’s a supporting one and not suitable to leadership / company direction.
- rrrrrrrrrrrryan 6y agoGrowth at geriatric tech companies like IBM, HP, Oracle, etc. is largely inorganic, driven by well-negotiated acquisitions of smaller B2B software companies. It takes MBAs to do this sort of work, and while it isn't for me, I don't think it's the worst business model out there.
- jxramos 6y agoDo these tech companies telegraph their moves in advance or does this sort of thing become public once all is said and done? Is there anything in the public record with elected officials in dialog with the companies that could be examined after the fact?
- cheriot 6y agoI think this is over played because the articles get views. First the Bay was in trouble because everyone is going to work from Tahoe and Iowa. Then tech companies continued to lease new office space so we've got to have a different doomsday. Are the headquarters staff for these three companies vital to the Bay area economy? I'm not too worried. The more interesting question is which city will have the largest crop of unicorns in the next business cycle. If those companies go remote or hit their hyper growth phase in non-Bay cities there will be something to talk about.
- rectang 6y ago"Fleeing California" articles are evergreen on HN. I can never tell if there's anything new, or if it's just people voting up the usual nothingburger, presumably to express displeasure with California culture or governmental policies.
- dboreham 6y agoFeels like someone is pulling the strings here. Same thing happened a year or so ago with numerous articles about how robots and self-driving trucks were going to take all the blue collar jobs.
- dannyincolor 6y agoIronically, a ton of SV companies have been working on ways to keep drivers employed (and possibly even better paid, plus a safer job closer to home). Regularly overlooked when SV is being demonized for automating jobs though, naturally.
- dannyincolor 6y agoThey’re evergreen anywhere you find people who low-key wish they could live in CA but can’t. It’s weird; just enjoy your state and do the best to make it better. Truly don’t get why people who don’t live in CA have so many opinions about it. Most states have problems on par with their economic power and population size; not much more too it than that but “hurr liberal policies are gonna ruin the whole country!” get the low-hanging clickbait (RevContent, etc.)
- caseyf7 6y agoMany companies that assumed employees are working from home are discovering large numbers of employees are working from other areas and states.
- burner831234 6y agoAnd they are pulling them back or requesting a full move, using taxes as the reason.
- wildrhythms 6y agoIs there any substance to this other than the U.S. tax system being antiquated?
- kube-system 6y agoWhat’s antiquated about it? Political jurisdictions are lines on maps, and they set their own tax laws. It’s the same everywhere else in the world too, isn’t it?
- denimnerd42 6y agoyup don't tell your employer that though and setup a vpn at a friends house..
- 11thEarlOfMar 6y agoThis general topic seems to come back into focus on a regular basis on HN (last time, 1 week ago). People have been leaving SV in numbers for the 30 years I've been here, always citing traffic & cost of housing as the primary reasons. Though this time, you could add decriminalization of petty crime. Nonetheless, the population growth remains net positive. The fundamental design of the Internet was to be robust against various forms of damage to the network. I see Silicon Valley as a similar type of system. It is not difficult to look back 40 years and see how at each inflection point, The Valley's constituent technologies, and the companies they spawned, led the rest of the world and scaled The Valley up. - In the 1980s, Silicon Valley's Intel lost it's dominance in DRAM production to Japan. The economic impact was dire, and yet - In the early 1990s, networking and workstations emerged from the likes of SUN and Cisco. They carried through until global competition stole their wind, and it was on to - The late 90s and the .COM boom. And what a boom it was, Amazon, Google, followed by another death knell for myriad .COM corpses. Promptly engendering - The 2000s birth of social media. MySpace faltered, then LinkedIn, then Facebook, then Twitter, came up and are still going strong on the foundation of - 2010s open source platforms. Still mind-blowing: At one point WhatsApp had 40 software engineers and 400,000,000 users. At 3 years old. I've heard about the exodus from California, usually citing so many thousands or 10s of thousands of people leaving. But looking a the net population changes, Santa Clara County is down 5,000 from 2018-2019. Alameda, San Mateo, San Francisco are all up. Silicon Valley is a system that regenerates from one generation to the next, and so far, always bigger and more influential than the last.
- fairity 6y agoSince cities thrive based on network effects, my question is: did everyone in past exoduses move to the same location? If not, is that not a good reason to believe this time will be different? Smart, ambitious people tend to congregate, and capital follows. If during past exoduses, people moved to random places, I can see why SV remained the primary magnet. But, this time everyone seems to be moving to Seattle and Austin (based on my anecdotal experience of ~20 SV startups that have moved to Austin in the past 6 months). Other things that make this time different: remote work being generally acceptable & higher state income tax Of course, "every time is different", but eventually SV will fall. The question is just when and what the right conditions are.
- W-Stool 6y agoGiven that the Texas GOP leadership recently mused publicly about seceding from the United States I wonder how many of the people and companies that left California for Texas would be pleased to wake up one morning and discover they now live in a foreign country? My guess would be: "not so many".
- halbritt 6y ago"seceding"
- W-Stool 6y agoFixed, and sincere thanks. Not a word I think I've ever referenced, let alone spelled, recently.
- logicchains 6y agoPeople are self-interested, they might not mind if the new country halves their tax burden.
- lwansbrough 6y agoThese threads have to go. They attract the worst comments HN has to offer.
- Jerry2 6y agoYes, let's censor and ban everything you don't agree with.
- bradlys 6y agoIt’s not that. It’s that these arguments are old and had a thousand times. I’m tired of it too. It’s the same people coming in and frequently it’s a lot of people who have never even lived in California or the Bay Area. These threads bring out some awfully unproductive discussion on HN that is mostly a whine fest. And it’s all sides that whine and it’s old. It’s awfully old.
- octoberfranklin 6y agoOn a very small number of topics HN does appear to do that. My list so far: cryptocurrencies and urbanism. It's really weird that this site has fairly balanced discussions of just about everything except those two topics. Whenver those two topics come up the result is incredibly one-sided. Like somebody powerful and opinionated has their finger on the scale...
- morsch 6y agoI think it's more likely to have the same problem for most if not all topics, you just don't notice it. Somewhat related to Gell-Mann Amnesia...
- lwansbrough 6y agoThe quality of comments was substantially worse when I commented. But even still, this thread is barely more than political rhetoric poorly disguised as personal opinions on the bay area. Many of which come from people who haven’t lived there and are using caricatures of lifestyle and people who are from there as the foundation for their opinions. Threads get closed for less all the time.
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- ralph84 6y agoSilicon Valley won't even leave behind interesting urban ruins.
- burner831234 6y agoAgreed, but luckily the bay area includes all kinds of architecture that isn't corporate offices.
- daveevad 6y agoMoffett + Sunnyvale in 100 years could be decently dystopic.
- millstone 6y agoI am curious if anyone agrees with my take: HP Enterprise and Oracle did not move because Texas is "more tech friendly." Instead they moved because HPE and Oracle are no longer primarily tech companies. While they do substantial technical work, most of that will remain in SV. It's sort of the mirror of Apple, which also has a substantial presence in Austin (finance, etc) but is headquartered in SV because it is primarily a tech company.
- MH15 6y agoI think this checks out. HPE and Oracle still solve "problems", but they are not problems if technology but problems of sales and organization.
- _fat_santa 6y agoI call it the "COVID come to Jesus moment". I remember for the last year or two. The murmurs here, twitter and reddit has been "Why don't these companies understand that their work can all be remote", "why does X company insist on having on-site employees". Meanwhile on the other side of the spectrum you had the higher ups all murmuring "well if we let people work from home, then our company will be doomed". Then COVID hit and we had no other option. Everyone went WFH and tech CEO's realized a few weeks/months in that no, their org isn't imploding, it's actually doing pretty damn well. Now all these tech CEO's are starting to look around and wonder, if my companies productivity didn't drop off a cliff, why should I be paying for this super expensive office space? Tech CEO's were told this lie that WFH will lead to a catastrophe in their company, all these office closures and moves seem to be a reflection of leadership calling the bluff on this.
- fullshark 6y agoWFH when everyone is forced to do it is different than WFH when you decide freely to do it and your competitor doesn't. These companies are fighting market share battles and are willing to pay millions or billions if the scale is large enough for an edge on competition. I continue to believe when this is over, not much changes in terms of remote work v. in person. Supplemental/support orgs might go WFH but the innovation engines will be in person and close to the c-suite.
- S_A_P 6y agoI had a pretty popular take last week on Elon Musk leaving. The same station is now pushing this narrative. I think they are click baiting us all. HP is not SV. Oracle isnt SV. They arent major players. Maybe there is a larger trend that may come to fruition, but I dont think that will happen. Also, Austin Tx is over crowded already. There is a housing shortage there, we are doomed to see another SF real estate shortage if this becomes true.<rushes to buy Austin property>
- kasperni 6y ago> They arent major players. Not true. Both HP and Oracle are in the top 10 (measured by revenue) of publicly traded companies in California.
- tayo42 6y agoPeople really want to see California and silicon valley fail. Crab mentality I think, people love these articles
- dannyincolor 6y agoWhy do you think this is? I find it really bizarre. My own family in the Midwest kind of passive aggressively implies that they hope I “feel the effect” of these “oppressive laws” and I’m out here shooting guns, enjoying the desert on HOVs, and visiting Yosemite to bask in the beauty. Oppression seems like the last thing I’ve found here, honestly. Like what grinds people’s gears so hard about CA? Really would love a clear answer
- tayo42 6y agoI think it's a side effect of America's culture war and more recently intensified political war. Fly over vs coasts. And some of misery loves company. And jealousy, California is just kind of cool, not everyone is brave enough to take the chance and move or has the resources. So it's comforting to see oh they're miserable over there. Though, NY media writes negative stuff about sf too, I think they're jealous that the bay area might be cooler than NYC. When NY has been the one of the ideal places to be for while lol
- fairity 6y agoFor me, it's largely a question of whether there's reason to relocate my business. If the latest relocation trend is the real deal and there's a sustainable pool of talent, I'll strongly consider it. I suspect many others follow for similar career-related reasons. Basically, I just want to be able to surround myself with talented people at the lowest cost possible.
- paconbork 6y agoMy perspective is probably a bit different than most, but for me it's that SV just seems like wasted potential. Like here's this place where the high-paying jobs are attracting the most talented people from around the world and you get there it's like... you have 3+ working adults sharing a house built in the 1950's. With all it's money and resources, the area could be on it's way to becoming the next NYC or Tokyo, but instead we get an increasingly boring area that nobody outside of the tech monoculture has any reason to move to. Basically, Seattle deserves it more.
- throway1gjj 6y agoPlease don't come here to Texas. You'd fit better in New York.
- shadowgovt 6y agoIf efforts to secede gain any traction, that could disrupt this flow quickly. It's more expensive to do business internationally than state-to-state.
- kibwen 6y agoIf efforts to secede gain any traction, the disruption will be due to Texas being (once again) demoted from statehood to an occupied military district, as was done in 1867. Of course, this scenario applies to California as well.
- throwaway9980 6y agoIt’s already difficult to do business with entities in California if you live in another state. I no longer take contracts with CA based companies after a run in with the FTB. Not worth it.
- hellisothers 6y agoI’ve read a lot of “the party is over” Bay Area exodus articles and this one is pretty limp, it did nothing but reiterate the news that a couple companies recently left and then poorly rehashed all the usual tropes. It even misrepresents how taxes work with “the absence of a state personal income tax amounts to a 13.3% raise for top earners”. Not worth arguing about here.
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- etherwaste 6y agoIn these comments: "bad policies" are when we make insanely wealthy individuals and organizations pay their fair share (like the tech companies in question). "Good policies" are like those of the places these leeches and psychos flock to which will allow them to avoid paying their fair share and horribly exploit their workers, communities, and fellow humans. Maybe we should start opening something worse than Chinese gulags here in the USA so those jobs will come back from overseas? EDIT: -1? The salt! I knew HN had its right wing (economically) bent because of its privileged demographic, but wow!
- 9HZZRfNlpR 6y agoWhat makes you think hackers or hacker news wants to identify as leftists, whatever that means, to begin with? I don't understand why would you take it for granted and why even think a huge website should share the same world view.
- etherwaste 6y agoThe point was that it's not about identity, it's about the majority of Hacker News consisting of people in high paying positions likely from white families which were not impoverished, which lends themselves to right wing economic views which are consistently made apparent on this website more than left wing economic views. I really do have no idea what you're going on about.
- 9HZZRfNlpR 6y agoWhy do you even talk about race, what's the relevance. I have no idea where you're going with this but I can sense a digwhistle here.
- jdlshore 6y agoThe "exodus" is referring to two companies: Oracle and HP Enterprise (spun off from HP in 2015). HPE is moving to Houston and Oracle is moving to Austin. It also references Elon Musk moving to Austin.
- shoguning 6y agoCalifornia and SF are doomed, but the recent news of HPE and ORCL moving are not a big deal. IMO these are stationary phase companies trying to cut cost. They are not growing revenue, they are not really dynamic companies anymore. Who cares? The swashbuckling SV types never would have worked at these companies anyway. Stability-seeking workers in other states are a much better fit for these companies. Win-win-win.
- ramraj07 6y agoThere appears to be no problem here: California is still the same sunny beautiful state and its now hopefully going to become slightly more affordable to a different class of people. At the same time, Texas gets an opportunity to get more "averaged" giving more opportunities for the popular vote and electoral college to be correlated.
- tolbish 6y agoI would agree with you. This apparent exodus benefits Californians who enjoy California, as well as benefiting the Texans who wish Texas would change.
- istillwritecode 6y agoAs a long term resident of the bay area, I'm happy to see companies relocate elsewhere. The unbridled growth of companies here without improvements to infrastructure like housing and transportation are what caused many of the problems. From 2010 to 2018 my commute roughly doubled in time. As the quality of life degrades in the bay area, it's natural for people and companies to act in their own self interest to relocate elsewhere. The bay area will be ok in the long term.
- dave5104 6y ago> ... I'm happy to see companies relocate elsewhere. The unbridled growth of companies here without improvements to infrastructure like housing and transportation are what caused many of the problems. This seems like an odd mindset. Why are you happy to drain the local economy, instead of working to fix those problems and support a good economy?
- GcVmvNhBsU 6y agoThis also seems like an odd mindset. Can’t you have a good economy without overpopulating an area? A saying I grew up with - The frog does not drink up the pond in which it lives.
- Redoubts 6y ago> overpopulating an area No place in America is even close to this
- dave5104 6y agoThe Bay Area is far from overpopulated. It's infamous for building as little housing as possible, but allowing office buildings to go up left and right. There's plenty of room to take a little space from new offices and instead build housing.
- buggycoder 6y agoWe all knew this would happen.
- pbuzbee 6y agoCounterpoint: Google confirmed recently that it's still planning to bring its workers back to the office regularly: https://www.nytimes.com/2020/12/14/technology/google-delays-return-to-office-and-eyes-flexible-work-week.html https://www.nytimes.com/2020/12/14/technology/google-delays-...
- dmode 6y agoI am wondering if people going to Texas are aware that the state attorney general filed a lawsuit to the Supreme Court arguing that democratic elections be overturned and Trump appointed king.
- dmode 6y agoThis is like 1000th article about people leaving Bay Area tech. I get it. Let's check back in a year.
- innagadadavida 6y agoDespite all these reports, Zillow shows home prices have actually risen. Something is just not adding up here.
- g42gregory 6y agoOracle, HPE, Schwab may not be the hubs of innovation, but they acquire a lot of SV startups, supporting the startup ecosystem. Of course Google, FB will continue to acquire startups just fine, but the pool of acquiring money just got a bit smaller. If large companies continue to leave, they pool will get even smaller over time. I think it represents a potential problem for SV. These departures affect B2B startups so far. But, what happens if Twitter moves HQ? I remember Jack Dorsey saying the SF workforce does not reflect Twitter's user base and he was considering to adjust that. I think that talks of the wealth tax in CA, is another problem. Now that the possibility has been put forward, the high-net individuals may not be waiting around for that to happen. High-net individuals are funding a lot of startup ecosystem as well. I think that might be a problem.
- Ericson2314 6y agoTraditionally this stuff has meant race to the bottom in terms of taxes and regulations. That is terrible. But if it instead helps wake up California to actually rezone, densify, remove prop 13, and improve social services, that could be quite good.
- gedy 6y agoProp 13 is one of the few reasons many could consider staying in California, vs having to pay property taxes on the bubble prices here. Property taxes do go up at what amounts to reasonable inflation numbers.
- jeffbee 6y agoProp 13 caused the bubble in the first place.
- gedy 6y agoNo, Prop 13 was in response to people being "taxed out of their homes" . Inflation, low interest rates, and turning homes into an "investment" did more to make the bubble.
- jeffbee 6y agoProp. 13 allowed people to advocate for exclusionary development policies, capture all of the land value increment of those policies, while at the same time being totally shielded from the taxes on their windfalls. The timeline of California land use abuse was that first came zoning, downzoning, historical preservation, and all the other anti-housing controls. Then came rent control and Prop 13, both of which act to shield incumbents from the consequences of their own actions.
- bradlys 6y agoAlmost no one was being taxed out of their homes. A real estate tycoon was the reason the bill passed.
- 6y ago
- vmchale 6y agoHuge subsidy to Texas because of ridiculous policies in CA. Maybe CA should crack down on zoning policy in SF etc.?
- meesles 6y ago> the cost of housing is one-third of Bay Area prices and the absence of a state personal income tax amounts to a 13.3% raise for top earners. This point always makes me laugh because anyone who lives in affluent TX neighborhoods knows your property tax is _enormous_ and usually makes up for a majority of state income tax you save. They still need to pay for roads and schools, right?
- bluedevil2k 6y agoVery true - here in Round Rock (outside Austin), it’s about 2.2% of the home value.
- cam0 6y agoFor quick comparison it's 1.18% in San Francisco. Property tax bill on a $2.7m house in SF is ~$32,400/yr, and the property tax bill on a $1.5m house in Austin would be around ~$33,000/yr.
- almost_usual 6y agoIf you’re buying a 2.7m house in SF you’re paying at least 80k in state income tax.
- cam0 6y agoTrue, and not everyone's goal is to minimize their tax bill.
- bluedevil2k 6y agoThere aren’t many $1.5M houses in Austin. In Round Rock (home of Dell), the highest price you’ll find is around $800k for a 5600 square ft house with premium upgrades.
- jjav 6y agoAccording to zillow there are 300 homes over $1.5M for sale right now in Austin. Surely many more not currently listed for sale. Sorry for the long link.. https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22Austin%2C%20TX%22%2C%22mapBounds%22%3A%7B%22west%22%3A-98.19083434960937%2C%22east%22%3A-97.3956988515625%2C%22south%22%3A30.069570870364913%2C%22north%22%3A30.505958688057213%7D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22sort%22%3A%7B%22value%22%3A%22globalrelevanceex%22%7D%2C%22price%22%3A%7B%22min%22%3A1500000%7D%2C%22mp%22%3A%7B%22min%22%3A4917%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A11%7D https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%...
- almost_usual 6y agoThe real state I wonder about is Illinois. Who the hell wants to live in Illinois? Both the state income tax and property tax is absurd and you can easily cross state lines to somewhere cheaper with pretty much the same scenery.
- paloaltokid 6y agoHave you never been to Chicago? Pretty nice town.
- almost_usual 6y agoYes, and Cook County has a property tax rate that is nearly 2x San Francisco county.
- JMTQp8lwXL 6y agoBut income taxes are lower. A $200k income has an effective state tax rate of 7.67% in California and 4.95% in Illinois (IL has a flat tax rate). And considering real estate is much cheaper in Chicago, a home that's half as much would offer the same standard of living, when compared to SF. So you could pay the same amount in property taxes, and less income tax.
- lotsofpulp 6y agoIL tax rates will have to go to pay for all of the debt for their defined benefit pensions and retiree healthcare. CA also has that problem, but not to the degree IL has. IL has fewer high income earners to spread the pain around, and higher debt amounts overall. It’s part of the reason why land is so much cheaper in IL.
- JMTQp8lwXL 6y agoIllinois voters defeated an initiative to implement graduated income tax in the November 2020 election: https://ballotpedia.org/Illinois_Allow_for_Graduated_Income_Tax_Amendment_(2020) https://ballotpedia.org/Illinois_Allow_for_Graduated_Income_... Agreed the state has financial issues, but it remains unclear if the upper middle class will bear the responsibility.
- outside1234 6y agoTo be clear, these are dying companies. Good riddance! More room for the green shoots.
- dude3 6y ago“Some who have already left San Francisco complained of mismanagement of the city and state. Though it's not clear what exactly they're referring to” (read this the other day) “Haven't left Silicon Valley; they're still continuing to employ people” There is this general aloofness of the problems. They need to address it head on and make it more hospitable for companies and residents.
- bigdubs 6y agoMy bone to pick with this is in order to make a real dent in these problems, you have to be able to put down roots and live in a place for many years. San Francisco and the bay area generally are just too expensive (and frankly, too dangerous) for most people to put down those roots and raise a family and get involved meaningfully in the community. Doesn't excuse most gold-rush tech people from not being involved in local politics at all, you can get involved trivially, but in order to build real lasting coalitions and build real influence people need to stay here a long time and fight it out. And it's just easier to throw your hands up and move to a new trendy city that doesn't have these problems.
- yumraj 6y agoThese companies leaving for Texas will not have a negative impact on the Bay Area, but it will have a positive impact on Texas. One of the things I didn't see mentioned in the comments here is the contribution of immigrants in Bay Area tech scene. And CA, with Bay Area in particular is very friendly to immigrants from all over the world. A very large percentage of those will never move to Texas, well unless this migration over the next few decades causes Texas to change its character.
- nubbins 6y agoIs the Bay Area really friendly to all immigrants in a way that metropolitan Texas is not? I think the definition of friendly should include being able to afford decent space to live. I could imagine that for a young well off Chinese or Indian engineer many cultural aspects such as food and being around many members of your community would be preferable in the Bay Area certainly. But Houston is of the most foreign born cities in the US and for less skilled immigrants their pay check will go much further in Texas.
- mcguire 6y agoNote: Texas doesn't have a state income tax.
- 1290cc 6y agoAustin is the perfect place for companies that are expanding administration, finance, operations, legal, marketing etc. Talented individuals with specialist skills now have the freedom to be anywhere. All of this is a good thing. I completely sympathize with the personal assistant, accountant or support agent (normal commodity jobs) that has a family and is forced to live on the SF peninsula and commute on the 101 each day back to their crummy home that is extortionately priced because they have to compete with the salaries of CEO's and VPs who live a few miles away.
- aaccount 6y agoLOL, tech companies destroyed silicon valley now they are moving to Texas to do it again