4 ms·

> Most startups don't care about taxes or regulations. Yes, but they care about cost. And the reason that everything is so expensive in California is regulati

> Most startups don't care about taxes or regulations. Yes, but they care about cost. And the reason that everything is so expensive in California is regulation and taxes. Acting like these are separate things is not a valid assumption.

nostrademons 6y ago
I don't believe that the reason everything is so expensive in California is regulation and taxes. Here's why: The North Coast (Eureka, Crescent City) and Central Valley (Chico, Fresno, Modesto, Bakersfield) are under the same regulatory and tax regime as the rest of California. How expensive is Eureka? Houses average $300K [1]. Restaurant meals are about $10-12. [2][3] How expensive is Bakersfield? Houses are about $250K [4], meals are about $11 [5]. In other words, they're not much different from the rest of America. I think that much of the contemporary political narrative gets the causality wrong. The Bay Area and LA are expensive because they are home to global monopolies that funnel cash from all over the world into a small region. There's not much land available in these metros, there's a lot of money floating around, there are a lot of people who want to move in to get a piece of this money, and so they bid up the prices of scarce goods. Regulation comes later, to curb the power imbalances from having corporations with more resources than many nation-states, and taxes come so that the state can get a piece of the huge cash flows coming in. But the primary driver of cost-of-living is being the sink for the disposable income of 7B consumers. Eureka's primary industry is timber, and Bakersfield's is oil. Both of these are commodity markets where the money goes elsewhere in the value chain. Not so with tech and entertainment. [1] https://www.zillow.com/homes/Eureka,-CA_rb/ https://www.zillow.com/homes/Eureka,-CA_rb/ [2] http://www.brickandfirebistro.com/menu-.html http://www.brickandfirebistro.com/menu-.html [3] https://www.humboldtsmokehouse.com/menu https://www.humboldtsmokehouse.com/menu [4] https://www.zillow.com/homes/Bakersfield,-CA_rb/ https://www.zillow.com/homes/Bakersfield,-CA_rb/ [5] https://www.yelp.com/menu/locale-farm-to-table-eatery-bakersfield https://www.yelp.com/menu/locale-farm-to-table-eatery-bakers...
- abernard1 6y ago
  I lived in Bakersfield for a long time. You know what they don't have, insane zoning restrictions that prevent housing. For example, the Houston MSA, which has almost no zoning restrictions is within 90% of the population (and 80% population density) of the Bay Area 9 county MSA with an average house price of... $249K at 2,000 sq ft. And there's a reason I left Bakersfield and moved to Austin. It's because PG&E energy prices are benchmarked at Bay Area temperatures, and they have progressive pricing. Because I had a server rack in a garage in super hot (110+ F) summers, I was paying over $600 a month in energy bills in a tiny 1000 sq foot house in a ghetto. If I had lived in a 4 bedroom house, I would have paid less in energy. And just on a secondary, personal note. Houses in Houston are way, way nicer than houses in San Jose, Oakland, San Francisco etc. This is one of those things where I know that people have just not experienced living in other places when I hear quality arguments around housing, food, or amenities. It's just not that nice in San Francisco. Seriously. The food is just downright bad in quality and variety compared to even Austin, much less Houston. The housing stock is dreadful. Service is slow. The quality of things in Houston is better than the Bay Area, irrespective of cost.
  - nostrademons 6y ago
    I'll grant you that Bay Area zoning is fucked up. That's under local jurisdiction, though: the state keeps trying to override local zoning requirements to build more housing and keeps getting shot down at the ballot box. My sister lives in Houston (well, Sugarland technically), so I'm well acquainted with the metro area. It's a very different lifestyle. The housing stock in the Bay Area is uniquely terrible - most of it is 3BR Eichlers that were mass-produced in the 60s. But people don't spend all that much time indoors. Pre-COVID, my wife and I were out every weekend to museums, hiking, the beach, picnics, restaurants, etc. There are 4 parks within walking distance of my home, 2 commercial downtowns, then the mountains are 5 minutes away, the beach 20, SF 30, SJC 30, the Bay 5, etc. And the weather cooperates - it's a consistent 70 and sunny for 8 months out of the year. Meanwhile, my sister's place is 50% larger for a quarter of the price - but it better be, because it's 100 degrees with sweltering humidity for 8 months out of the year. They need to take a highway onramp to get anywhere. They have no friends, because everyone they meet is so far away. Downtown Houston is a little different (my sister went to Rice, Rice Village is pretty nice), but also a completely different story in terms of housing prices - you start seeing million dollar homes once you get to the downtown areas of Houston. Different strokes for different folks. We could've purchased my sister's house for cash at the time they bought it. I floated the idea by my wife, and she was like "But then we'd have to live in Houston!"

nostrademons 6y ago

I don't believe that the reason everything is so expensive in California is regulation and taxes. Here's why: The North Coast (Eureka, Crescent City) and Central Valley (Chico, Fresno, Modesto, Bakersfield) are under the same regulatory and tax regime as the rest of California. How expensive is Eureka? Houses average $300K [1]. Restaurant meals are about $10-12. [2][3] How expensive is Bakersfield? Houses are about $250K [4], meals are about $11 [5]. In other words, they're not much different from the rest of America. I think that much of the contemporary political narrative gets the causality wrong. The Bay Area and LA are expensive because they are home to global monopolies that funnel cash from all over the world into a small region. There's not much land available in these metros, there's a lot of money floating around, there are a lot of people who want to move in to get a piece of this money, and so they bid up the prices of scarce goods. Regulation comes later, to curb the power imbalances from having corporations with more resources than many nation-states, and taxes come so that the state can get a piece of the huge cash flows coming in. But the primary driver of cost-of-living is being the sink for the disposable income of 7B consumers. Eureka's primary industry is timber, and Bakersfield's is oil. Both of these are commodity markets where the money goes elsewhere in the value chain. Not so with tech and entertainment. [1] https://www.zillow.com/homes/Eureka,-CA_rb/ https://www.zillow.com/homes/Eureka,-CA_rb/ [2] http://www.brickandfirebistro.com/menu-.html http://www.brickandfirebistro.com/menu-.html [3] https://www.humboldtsmokehouse.com/menu https://www.humboldtsmokehouse.com/menu [4] https://www.zillow.com/homes/Bakersfield,-CA_rb/ https://www.zillow.com/homes/Bakersfield,-CA_rb/ [5] https://www.yelp.com/menu/locale-farm-to-table-eatery-bakersfield https://www.yelp.com/menu/locale-farm-to-table-eatery-bakers...

abernard1 6y ago
I lived in Bakersfield for a long time. You know what they don't have, insane zoning restrictions that prevent housing. For example, the Houston MSA, which has almost no zoning restrictions is within 90% of the population (and 80% population density) of the Bay Area 9 county MSA with an average house price of... $249K at 2,000 sq ft. And there's a reason I left Bakersfield and moved to Austin. It's because PG&E energy prices are benchmarked at Bay Area temperatures, and they have progressive pricing. Because I had a server rack in a garage in super hot (110+ F) summers, I was paying over $600 a month in energy bills in a tiny 1000 sq foot house in a ghetto. If I had lived in a 4 bedroom house, I would have paid less in energy. And just on a secondary, personal note. Houses in Houston are way, way nicer than houses in San Jose, Oakland, San Francisco etc. This is one of those things where I know that people have just not experienced living in other places when I hear quality arguments around housing, food, or amenities. It's just not that nice in San Francisco. Seriously. The food is just downright bad in quality and variety compared to even Austin, much less Houston. The housing stock is dreadful. Service is slow. The quality of things in Houston is better than the Bay Area, irrespective of cost.
- nostrademons 6y ago
  I'll grant you that Bay Area zoning is fucked up. That's under local jurisdiction, though: the state keeps trying to override local zoning requirements to build more housing and keeps getting shot down at the ballot box. My sister lives in Houston (well, Sugarland technically), so I'm well acquainted with the metro area. It's a very different lifestyle. The housing stock in the Bay Area is uniquely terrible - most of it is 3BR Eichlers that were mass-produced in the 60s. But people don't spend all that much time indoors. Pre-COVID, my wife and I were out every weekend to museums, hiking, the beach, picnics, restaurants, etc. There are 4 parks within walking distance of my home, 2 commercial downtowns, then the mountains are 5 minutes away, the beach 20, SF 30, SJC 30, the Bay 5, etc. And the weather cooperates - it's a consistent 70 and sunny for 8 months out of the year. Meanwhile, my sister's place is 50% larger for a quarter of the price - but it better be, because it's 100 degrees with sweltering humidity for 8 months out of the year. They need to take a highway onramp to get anywhere. They have no friends, because everyone they meet is so far away. Downtown Houston is a little different (my sister went to Rice, Rice Village is pretty nice), but also a completely different story in terms of housing prices - you start seeing million dollar homes once you get to the downtown areas of Houston. Different strokes for different folks. We could've purchased my sister's house for cash at the time they bought it. I floated the idea by my wife, and she was like "But then we'd have to live in Houston!"