6 ms·

Companies are fleeing California. Blame bad government

38 points by danielsht 6y ago

danielsht 6y ago
I'm really curious to hear what the community has to say about this perspective. This is very compelling argument to me, but I've heard other compelling arguments on the other side. These arguments tend to go like this: 1. Big tech has gone unchecked for a long time and it's up to government and regulators to reign them in when it comes to privacy, offering sustainable compensation models for gig workers, limiting an increasing wage gap, and other inequities. 2. The rise of big tech has outpaced the city/area's ability to offer services at low costs. No other industry has seen such a quick rise and it's no wonder prices (including houses) have climbed so much. I live in San Francisco, and have been disappointed, annoyed, and frustrated at many of the issues this article brings up, including high housing prices, homelessness, property crime, but it seems like an easy out to simply blame the government, or the tech industry exclusively. My guess is there's plenty of blame to go around and the answer might be more nuanced than finding a single scapegoat. What are people's thoughts?
- mrkstu 6y ago
  I've lived in multiple states in cities that were at the top or near the top for annual population growth over multiple years- and it was fine. Where I am now is #1 [0] and while property values are going up, there is plenty of housing being built, and since so much of Texas taxes comes via property taxes, there is an incentive for capping top end housing costs. The city council has been approving higher density housing than the area has had historically, despite some grumbling from the SFH owners. The master plan is oriented around mass transit in an area historically devoid of it. People complain about regulatory capture, but California has been captured by incumbent property owners and is now drowning in perverse incentives of their own invention. For a state that owes its success to innovation, there is zero innovation, let alone basic competence, coming out of the state/local government. [0]: https://www.bizjournals.com/austin/news/2020/07/26/austin-area-suburb-named-as-fastest-growing-city-i.html https://www.bizjournals.com/austin/news/2020/07/26/austin-ar...
  - codemac 6y ago
    Austin as a larger metro area has an order of magnitude the amount of land that all of the peninsula has, with no water in the way. Supporting housing growth through suburban sprawl is a story of most cities in the midwest & south in the US, and has completely different problems. I don't think the comparison will hold up. The amount of livable land in a city like Mountain View is 12 square miles in city limits, Palo Alto is a massive 26! Austin is 271 square miles. I agree the tax situation for private housing is nuts in the bay, but we should not pretend the bay and Austin face the same housing problems.
  - 11thEarlOfMar 6y ago
    Reading through the 2 above parents, I was having similar thoughts. Problems are evident and if not addressed effectively, they become pretty serious. The solutions are not effective. Why not? The region is chock full of many of the world's greatest problem solvers. It seems that the 'root cause analysis' is many times simply superficial. Too many homeless people? Give them homes. Too many addicts shoplifting to fund their habit? Decriminalize shoplifting. Cost of rental housing too high? Impose rent control. This may be a consequence of the amount of time a politician is in office vs. the amount of time it really takes to solve these intractable problems. If a politician's term is 4 years, and it takes 12 years to solve a problem, actually identifying the root cause and devising a solution would be the end of their career in politics. I'm pretty sure that if San Franciscans could elucidate what kind of a city they want San Francisco to be, no one would say they want it to be a haven for drug addicts and have the world's highest rents. And there are enough neighborhoods that just about all environs they'd list could be implemented somewhere within the city limits. Given that San Francisco is not the kind of city that San Franciscans want it to be, I can only chalk it up to ineffective leadership by the persons setting and enforcing the rules. That's not solely the politicians. I'd guess it starts with leadership trying to satisfy everyone's issues without triage for practicality or an investigation of possible unintended consequences of their solutions.
    - jessaustin 6y ago
      Too many homeless people? Give them homes. Has this actually been attempted?
- vmception 6y ago
  San Francisco's housing prices have risen the same percentages for the last 100 years straight. People blame whatever recently changed in any city everywhere. In one city it's wealthy people from China, in another city its tech, in another city its finance while the tech people earn the exact same amount as in the prior city and fly completely under the radar. It's just scarcity, no matter how it is sliced.
  - DubiousPusher 6y ago
    I do believe there is an effect from zoning and resistance to rezoning. Though people who think abolishing zoning is the answer should be forced to live for a time in any number of cities that have done this. Little secret, it doesn't produce places most people want to live. Endless, monotonous grid, no community center, school next to a paper mill, etc
    - triceratops 6y ago
      There is a midpoint between "no zoning" and "neighbors can block my toolshed repaint".
      - DubiousPusher 6y ago
        Definitely agree. We just haven't found the right mechanism that can balance creating beautiful communities for people to live without enabling NIMBY abuse.
- triceratops 6y ago
  IMO Prop 13 is at the root of nearly all of California's woes. It stifles housing development, causing high housing prices, homelessness, and property crime. It drives up the costs of offering government services. It increases inequality by disproportionately enriching a small group of landowners who had the good fortune to buy in the Bay Area or LA county 20-30 years ago, and impoverishes everyone else.
  - dano 6y ago
    The inequality may not be as widespread as it appears to be. On HN earlier this year someone posted a link [1] which allows one to peruse property taxes anywhere in the state. For this reply I picked a location in Daly City [2] to have a look. The black represent the highest property taxes and the green the lowest - there are few green bubbles. Take a look around, I'm sure there are areas like Huntington Beach [3] with absurdly low taxes, but I've not seen the actual analysis that favors the claims made either way. Proposition 19 effectively eliminates the Parent to Child reassessment exemption, but it wasn't done for altruistic purposes. It was done to put more houses on the market for the real estate profession who funded the campaign to pass the proposition. Yes, this will increase property taxes and limit generational wealth transfer in the form of low property taxes, but it won't fix all the problems listed. If you'd like to examine some potential problem areas in California I'd encourage you to google things like "Prevailing Wage Law" and similar. 1. https://www.officialdata.org/ca-property-tax https://www.officialdata.org/ca-property-tax 2. https://www.officialdata.org/ca-property-tax/#37.690761077216465,-122.46281587480873,18 https://www.officialdata.org/ca-property-tax/#37.69076107721... 3. https://www.officialdata.org/ca-property-tax/#33.6595536026813,-118.00000352784994,15 https://www.officialdata.org/ca-property-tax/#33.65955360268...
    - jedberg 6y ago
      That map puts too many values in the "black" category. Check this one out: https://www.officialdata.org/ca-property-tax/#37.26178563229173,-122.02253937721254,18 https://www.officialdata.org/ca-property-tax/#37.26178563229... Notice how there are a few outliers in red, making almost all the rest black. But look at the black ones. It ranges from $3000 to $25,000. And if you look at a row of roughly equal houses, you will see most of them are around $10K, while a few are $20K. ALL of them should be $20K+, if not for prop 13.
- deleted 6y ago
  [deleted]
jseliger 6y ago
The main missing word is "voters," which appears only once: "California's legislature has only made matters worse. A bill it enacted in 2019, ostensibly intended to protect gig workers, threatened to undo the business models of some of the state's biggest tech companies until voters granted them a reprieve in a November referendum." Voters put California's legislators into office and voters continue to vote for dysfunctional policies, like the continuation of Prop 13 (https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/). While "bad government" is to blame, the proximate cause of "bad government" is still voters.
- vmception 6y ago
  In your example from the article, it talks about how voters did vote in the company's best interests, which keeps those companies in line with the framework used in the rest of the country. Was that an intentionally undermining of whatever point had set out to make? Because I can dissect that part too, which is also the same as the rest of the country: nobody else really runs for these positions.
- danielsht 6y ago
  That's a great point... and in theory the government elected by the voters is supposed to reflect he will of those who put them into office. But in practice, I don't always see it panning out that way. Prop 22 being a good recent example. California voters elected a state assembly, which passed AB5. But then Prop 22, by direct referendum overturned AB5. So wouldn't this be a case where the government didn't act consistently with the will of the voters?
  - colejohnson66 6y ago
    Nitpick: they didn’t overturn AB5. They just added gig workers to the list of exceptions. Essentially nullifying the whole thing. I’d say that it’s not a direct comparison because of the immense lobbying effort by Uber, Lyft, etc. that convinced many that the companies would disappear overnight if Prop 22 didn’t pass. An uninformed populace is easier to sway (hence the whole representative democracy part) and they (the companies) took advantage of that for their own gain.
codemac 6y ago
Are HPE, Oracle and Palantir the "tech giants" we think of? I have pretty negative opinions of their future, financially and otherwise. I think there are plenty of things wrong with local governments, taxes, and policies - but I'm pretty sure each of these moves are easily explained financially rather than something "animosity".
- deleted 6y ago
  [deleted]
exabrial 6y ago
Please if you leave California, leave the bad ideas and echo chamber there.
- vmception 6y ago
  California migration is going to turn the whole country blue by sheer population alone. The sparsely populated red counties do not have a chance. But at least there is space for the incomplete and perverse incentives to not be noticeable for a long time.
  - bpodgursky 6y ago
    The tech exodus is going to be maybe 200-300k high-earners. Big impact, but we're not talking 10 million people. They aren't a monotonic blue voting block. And they're not all moving to rural Wyoming.
moocow01 6y ago
This narrative has been recycled for as long as I've lived and its not wrong but just continues to re-highlight what is actually just a constant current. California is a place where technology companies are birthed largely due to the educated talent here along with progressive values. When those companies become mature they start looking for tax cuts to bolster their established revenue model. Texas and the like is where these companies go to live out the rest of their lives
tomc1985 6y ago
Wow, whos payroll is this SFGate writer on?
- DubiousPusher 6y ago
  It's truly a piece of incurious writing. Basically a mashup of all the Andy Rooney type "California, am I right?" gripe articles you've ever seen. Turns out that everything wrong with California is all the things it tried to do to protect consumers and residents. Nevermind that state and local government is not a monolith and lots of bad consequences stem from competing interests creating a stalemate.
  - tomc1985 6y ago
    This is exactly my point. That Uber legislation, for example, OF COURSE it's going to eviscerate exploitative business models, as that is exactly what it was designed to do. That privacy legislation means that I get a bit more control over my data than I had before. I'm all for making life harder for businesspeople that fail or don't want to take into account the human consequences and second/third-order effects of their "innovative thinking" and market "disruption"
- athms 6y ago
  It is an opinion piece from Bloomberg.
  - tomc1985 6y ago
    Ah, didn't notice that before. Makes a lot more sense now.
outside1234 6y ago
C'mon. These companies are fleeing because they can't be competitive in the local labor market. Who wants to work at HPE or Oracle? Almost literally nobody.
- danielsht 6y ago
  Is the same true of Tesla? I know of plenty of people who work or would like to work for Tesla. Another group of companies that haven't received as much attention in the recent "SF exodus" narrative are Google and FB. Google has been opening large offices outside of SF for years and is slowly contributing to the growing of tech hubs around the country. Google's Boulder office comes to mind as a good example. I'm not aware of any large FB spokes, but FB remote work allowance might end up having a similar effect. Not to mention the many startups that have realized that the distributed model works fairly well if you know how to do it, and opens up a large talent pool. I currently work for such a startup and we don't plan on going to back to a central SF office model post pandemic.
  - moocow01 6y ago
    To be fair Tesla hasn't moved as of yet
    - jjulius 6y ago
      Yeah, and Google's HQ remains in Mountain View.
      - 11thEarlOfMar 6y ago
        And Facebook, Google, Nvidia and Apple all spent $1 Billion + to build new headquarters in the last 5 years. https://www.theguardian.com/artanddesign/2017/jul/23/inside-billion-dollar-palaces-of-tech-giants-facebook-apple-google-london-california-wealth-power https://www.theguardian.com/artanddesign/2017/jul/23/inside-... https://officesnapshots.com/2018/10/15/nvidia-headquarters-santa-clara/ https://officesnapshots.com/2018/10/15/nvidia-headquarters-s...
  - 6y ago
DubiousPusher 6y ago
> These two traits - poor governance and animosity toward business - have collided calamitously with respect to the city's housing market. Yeah it has nothing to do with powerful property owners lobbying against loosening zoning because they're worried a housing project will "ruin" the neighborhood and decrease property values.
dahart 6y ago
> Far from welcoming experimentation, it has sought to undermine or stamp out home-rental services, food-delivery apps, ride-hailing firms, electric-scooter companies, facial recognition technology, delivery robots and more, even as the pioneers in each of those fields attempted to set up shop in the city. This feels pretty hyperbolic and unreasonable to frame it this way. Startups have been trying to "disrupt" markets by doing things that are in gray areas, or sometimes are outright illegal, and they cause all kinds of problems and outsource the management and cleanup of the problems they cause to the communities and cities. Littering scooters on sidewalks everywhere and taking no responsibility for user safety isn't the kind of experimentation we need. California labor is super expensive, and HPE's stated reason for moving is cost savings. If anything, I might suggest that the Bay Area's friendliness to tech companies is the very reason the salaries there are so high. People in San Francisco have been complaining and protesting for at least a decade about the tech migration there, and the complete pricing out of the blue collar workforce. I think this article might have it completely wrong.
- natalyarostova 6y ago
  Why is Tokyo able to support density levels several times higher then SF, without worrying about pricing anyone out?
  - ortusdux 6y ago
    zoning laws
  - jedberg 6y ago
    Japan has zoning laws at the country level, and they are much more sane than local zoning laws. Basically, local zoning says "this piece of land can be used for one thing". Japan's laws say "this piece of land can cause a maximum nuisance of X, but it can have all these different things on it". And then it's up to the developers to decide if building a multi-unit building would more profitable than a single family home.
  - athms 6y ago
    It is very difficult to build anything in SF. The city doesn't have any available land, therefore you need to demolish existing structures and build higher. There is a loud and vocal community of activists that refuse to allow new construction because of gentrification. Additionally, many won't allow retail businesses that are not local. SF prevents retail chains of a certain size in some neighborhoods. Also, the city has a law that allows any resident to challenge a change of use permit or new construction, no matter where they live in the city. These cases ultimately come up before the Board of Supervisors which tend to attach requirements and restrictions for construction leading to expensive delays.
jedberg 6y ago
The problem is the direct proposition system. It makes good governance impossible. Most states require the legislature to approve all direct propositions, but California does not. Prop 13 was voted in by people who did not understand the long term ramifications of what they were doing. All they heard was "lower taxes!". The partial repeal of Prop 13 on the ballot failed (and the expansion of it passed!) just this November, again by people who don't understand the ramifications of what they are doing and just hear "lower taxes!". Prop 13 is single handedly destroying this state. 49 other states manage to get by without an equivalent and don't have old people getting priced out of their homes from tax increases. Yet somehow that is the red herring people use to keep Prop 13 around. Because of Prop 13, people won't sell their house, middle class people are subsidizing rich people, and in some cases, the profit being made on rentals is purely because of the low tax. If not for Prop 13, the rental would be breakeven and it would make more sense to sell. Prop 13 also encourages people to vote against expansion in housing supply, because they want their home price to go up, up, up! Especially since their property tax will be nearly flat. Local areas are starved for money because of long term owners. Here in the Silicon Valley I have found homes valued at over $4M that pay less than $1000 a year in property tax (whereas someone just buying that home would pay about $30,000). Pretty much every problem in this state can be traced to Prop 13. Everything else is just a poor workaround.
- rufus_foreman 6y ago
  >> The problem is the direct proposition system. It makes good governance impossible. Most states require the legislature to approve all direct propositions, but California does not. So the problem is...democracy? You want things that other people don't want. Your claim is that they are too unintelligent to understand the long term ramifications of their choices. I would definitely vote for something like Proposition 13 in my state, if I had the chance. You disagree. Why is one person one vote a bad rule, and how many votes should you get as opposed to mine?
  - jedberg 6y ago
    > So the problem is...democracy? Yes, exactly. No system of direct democracy has worked in the history of the world. Even here on HN, it is moderated, and some people have more voice than others. > Your claim is that they are too unintelligent to understand the long term ramifications of their choices. It's not that they aren't intelligent enough, it's that they don't have the background to make an informed decision. A politician specializes in understanding the ramifications of law (at least in theory). You as a voter do not have time to learn everything necessary to understand what you are voting for. It's a full time job and then some. Just like you are perfectly capable of fixing your own car, but you don't have the time to spend learning how to do it properly. Politicians focus on policy and their long term affects, and you do whatever it is that you do. > Why is one person one vote a bad rule, and how many votes should you get as opposed to mine? One person one vote is fine for selecting representation, but we select representation specifically because we expect them to be experts in policy.
danielsht 6y ago
As I read the discussion, one interesting question came to mind. There are so many cities that want to be the next "tech hubs", and many of them have been promoting that label (with or without merit) for years. I can't tell you how many articles like this one [0] I've read. But in reality, many of these cities are making an honest effort to live up to that label by attracting talent, corporate HQs and investment to make these claims real. Texas' tax policies are one example [1] In contrast, I see SF and the broader Bay Area making moves in the opposite direction. One such example is the new CEO wealth tax [2], along with others that make SF seem hostile rather than welcoming. It's no surprise that companies want to leave. Do other people see it this way too? Has SF or the Bay Area enacted policies to attract or retain tech talent, investment and innovation? Or is the valley's success due to a strong network effect that has been self reinforcing (more talent means more investment means more talent, etc). Have California, SF or Bay Area policies in the last 20 years truly encouraged the flourishing of the tech industry, or has it happened despite these governments? Really curious to hear what people think. [0] https://www.theatlantic.com/sponsored/jpmc-2018/are-these-cities-americas-new-tech-hubs/1820/ https://www.theatlantic.com/sponsored/jpmc-2018/are-these-ci... [1] https://www.investopedia.com/articles/personal-finance/101415/taxes-texas-small-business-basics.asp https://www.investopedia.com/articles/personal-finance/10141... [2] https://apnews.com/article/san-francisco-approves-taxes-on-ceos-9dbf9e764220830dcfabeed96b45a63d https://apnews.com/article/san-francisco-approves-taxes-on-c...
alphabettsy 6y ago
Surprised nobody has pointed out that the premise seems suspect. Does a few very large organizations mean companies in general are fleeing or does it say something about these companies? There are people who desperately want this to be true or believed, but it doesn’t seem supported by evidence.
SecurityMinded 6y ago
Everybody with a modicum of common sense was saying this for the past decade and more I lived in this god damned quasi-communist state. Now, when Larry Ellison and Elon Musk flee, it makes it to the headlines. Good grief.

38 points by danielsht 6y ago

I'm really curious to hear what the community has to say about this perspective. This is very compelling argument to me, but I've heard other compelling arguments on the other side. These arguments tend to go like this: 1. Big tech has gone unchecked for a long time and it's up to government and regulators to reign them in when it comes to privacy, offering sustainable compensation models for gig workers, limiting an increasing wage gap, and other inequities. 2. The rise of big tech has outpaced the city/area's ability to offer services at low costs. No other industry has seen such a quick rise and it's no wonder prices (including houses) have climbed so much. I live in San Francisco, and have been disappointed, annoyed, and frustrated at many of the issues this article brings up, including high housing prices, homelessness, property crime, but it seems like an easy out to simply blame the government, or the tech industry exclusively. My guess is there's plenty of blame to go around and the answer might be more nuanced than finding a single scapegoat. What are people's thoughts?

mrkstu 6y ago
I've lived in multiple states in cities that were at the top or near the top for annual population growth over multiple years- and it was fine. Where I am now is #1 [0] and while property values are going up, there is plenty of housing being built, and since so much of Texas taxes comes via property taxes, there is an incentive for capping top end housing costs. The city council has been approving higher density housing than the area has had historically, despite some grumbling from the SFH owners. The master plan is oriented around mass transit in an area historically devoid of it. People complain about regulatory capture, but California has been captured by incumbent property owners and is now drowning in perverse incentives of their own invention. For a state that owes its success to innovation, there is zero innovation, let alone basic competence, coming out of the state/local government. [0]: https://www.bizjournals.com/austin/news/2020/07/26/austin-area-suburb-named-as-fastest-growing-city-i.html https://www.bizjournals.com/austin/news/2020/07/26/austin-ar...
- codemac 6y ago
  Austin as a larger metro area has an order of magnitude the amount of land that all of the peninsula has, with no water in the way. Supporting housing growth through suburban sprawl is a story of most cities in the midwest & south in the US, and has completely different problems. I don't think the comparison will hold up. The amount of livable land in a city like Mountain View is 12 square miles in city limits, Palo Alto is a massive 26! Austin is 271 square miles. I agree the tax situation for private housing is nuts in the bay, but we should not pretend the bay and Austin face the same housing problems.
- 11thEarlOfMar 6y ago
  Reading through the 2 above parents, I was having similar thoughts. Problems are evident and if not addressed effectively, they become pretty serious. The solutions are not effective. Why not? The region is chock full of many of the world's greatest problem solvers. It seems that the 'root cause analysis' is many times simply superficial. Too many homeless people? Give them homes. Too many addicts shoplifting to fund their habit? Decriminalize shoplifting. Cost of rental housing too high? Impose rent control. This may be a consequence of the amount of time a politician is in office vs. the amount of time it really takes to solve these intractable problems. If a politician's term is 4 years, and it takes 12 years to solve a problem, actually identifying the root cause and devising a solution would be the end of their career in politics. I'm pretty sure that if San Franciscans could elucidate what kind of a city they want San Francisco to be, no one would say they want it to be a haven for drug addicts and have the world's highest rents. And there are enough neighborhoods that just about all environs they'd list could be implemented somewhere within the city limits. Given that San Francisco is not the kind of city that San Franciscans want it to be, I can only chalk it up to ineffective leadership by the persons setting and enforcing the rules. That's not solely the politicians. I'd guess it starts with leadership trying to satisfy everyone's issues without triage for practicality or an investigation of possible unintended consequences of their solutions.
  - jessaustin 6y ago
    Too many homeless people? Give them homes. Has this actually been attempted?
vmception 6y ago
San Francisco's housing prices have risen the same percentages for the last 100 years straight. People blame whatever recently changed in any city everywhere. In one city it's wealthy people from China, in another city its tech, in another city its finance while the tech people earn the exact same amount as in the prior city and fly completely under the radar. It's just scarcity, no matter how it is sliced.
- DubiousPusher 6y ago
  I do believe there is an effect from zoning and resistance to rezoning. Though people who think abolishing zoning is the answer should be forced to live for a time in any number of cities that have done this. Little secret, it doesn't produce places most people want to live. Endless, monotonous grid, no community center, school next to a paper mill, etc
  - triceratops 6y ago
    There is a midpoint between "no zoning" and "neighbors can block my toolshed repaint".
    - DubiousPusher 6y ago
      Definitely agree. We just haven't found the right mechanism that can balance creating beautiful communities for people to live without enabling NIMBY abuse.
triceratops 6y ago
IMO Prop 13 is at the root of nearly all of California's woes. It stifles housing development, causing high housing prices, homelessness, and property crime. It drives up the costs of offering government services. It increases inequality by disproportionately enriching a small group of landowners who had the good fortune to buy in the Bay Area or LA county 20-30 years ago, and impoverishes everyone else.
- dano 6y ago
  The inequality may not be as widespread as it appears to be. On HN earlier this year someone posted a link [1] which allows one to peruse property taxes anywhere in the state. For this reply I picked a location in Daly City [2] to have a look. The black represent the highest property taxes and the green the lowest - there are few green bubbles. Take a look around, I'm sure there are areas like Huntington Beach [3] with absurdly low taxes, but I've not seen the actual analysis that favors the claims made either way. Proposition 19 effectively eliminates the Parent to Child reassessment exemption, but it wasn't done for altruistic purposes. It was done to put more houses on the market for the real estate profession who funded the campaign to pass the proposition. Yes, this will increase property taxes and limit generational wealth transfer in the form of low property taxes, but it won't fix all the problems listed. If you'd like to examine some potential problem areas in California I'd encourage you to google things like "Prevailing Wage Law" and similar. 1. https://www.officialdata.org/ca-property-tax https://www.officialdata.org/ca-property-tax 2. https://www.officialdata.org/ca-property-tax/#37.690761077216465,-122.46281587480873,18 https://www.officialdata.org/ca-property-tax/#37.69076107721... 3. https://www.officialdata.org/ca-property-tax/#33.6595536026813,-118.00000352784994,15 https://www.officialdata.org/ca-property-tax/#33.65955360268...
  - jedberg 6y ago
    That map puts too many values in the "black" category. Check this one out: https://www.officialdata.org/ca-property-tax/#37.26178563229173,-122.02253937721254,18 https://www.officialdata.org/ca-property-tax/#37.26178563229... Notice how there are a few outliers in red, making almost all the rest black. But look at the black ones. It ranges from $3000 to $25,000. And if you look at a row of roughly equal houses, you will see most of them are around $10K, while a few are $20K. ALL of them should be $20K+, if not for prop 13.
deleted 6y ago
[deleted]

jseliger 6y ago

The main missing word is "voters," which appears only once: "California's legislature has only made matters worse. A bill it enacted in 2019, ostensibly intended to protect gig workers, threatened to undo the business models of some of the state's biggest tech companies until voters granted them a reprieve in a November referendum." Voters put California's legislators into office and voters continue to vote for dysfunctional policies, like the continuation of Prop 13 (https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/). While "bad government" is to blame, the proximate cause of "bad government" is still voters.

vmception 6y ago
In your example from the article, it talks about how voters did vote in the company's best interests, which keeps those companies in line with the framework used in the rest of the country. Was that an intentionally undermining of whatever point had set out to make? Because I can dissect that part too, which is also the same as the rest of the country: nobody else really runs for these positions.
danielsht 6y ago
That's a great point... and in theory the government elected by the voters is supposed to reflect he will of those who put them into office. But in practice, I don't always see it panning out that way. Prop 22 being a good recent example. California voters elected a state assembly, which passed AB5. But then Prop 22, by direct referendum overturned AB5. So wouldn't this be a case where the government didn't act consistently with the will of the voters?
- colejohnson66 6y ago
  Nitpick: they didn’t overturn AB5. They just added gig workers to the list of exceptions. Essentially nullifying the whole thing. I’d say that it’s not a direct comparison because of the immense lobbying effort by Uber, Lyft, etc. that convinced many that the companies would disappear overnight if Prop 22 didn’t pass. An uninformed populace is easier to sway (hence the whole representative democracy part) and they (the companies) took advantage of that for their own gain.

codemac 6y ago

Are HPE, Oracle and Palantir the "tech giants" we think of? I have pretty negative opinions of their future, financially and otherwise. I think there are plenty of things wrong with local governments, taxes, and policies - but I'm pretty sure each of these moves are easily explained financially rather than something "animosity".

deleted 6y ago
[deleted]

exabrial 6y ago

Please if you leave California, leave the bad ideas and echo chamber there.

vmception 6y ago
California migration is going to turn the whole country blue by sheer population alone. The sparsely populated red counties do not have a chance. But at least there is space for the incomplete and perverse incentives to not be noticeable for a long time.
- bpodgursky 6y ago
  The tech exodus is going to be maybe 200-300k high-earners. Big impact, but we're not talking 10 million people. They aren't a monotonic blue voting block. And they're not all moving to rural Wyoming.

moocow01 6y ago

This narrative has been recycled for as long as I've lived and its not wrong but just continues to re-highlight what is actually just a constant current. California is a place where technology companies are birthed largely due to the educated talent here along with progressive values. When those companies become mature they start looking for tax cuts to bolster their established revenue model. Texas and the like is where these companies go to live out the rest of their lives

tomc1985 6y ago

Wow, whos payroll is this SFGate writer on?

DubiousPusher 6y ago
It's truly a piece of incurious writing. Basically a mashup of all the Andy Rooney type "California, am I right?" gripe articles you've ever seen. Turns out that everything wrong with California is all the things it tried to do to protect consumers and residents. Nevermind that state and local government is not a monolith and lots of bad consequences stem from competing interests creating a stalemate.
- tomc1985 6y ago
  This is exactly my point. That Uber legislation, for example, OF COURSE it's going to eviscerate exploitative business models, as that is exactly what it was designed to do. That privacy legislation means that I get a bit more control over my data than I had before. I'm all for making life harder for businesspeople that fail or don't want to take into account the human consequences and second/third-order effects of their "innovative thinking" and market "disruption"
athms 6y ago
It is an opinion piece from Bloomberg.
- tomc1985 6y ago
  Ah, didn't notice that before. Makes a lot more sense now.

outside1234 6y ago

C'mon. These companies are fleeing because they can't be competitive in the local labor market. Who wants to work at HPE or Oracle? Almost literally nobody.

danielsht 6y ago
Is the same true of Tesla? I know of plenty of people who work or would like to work for Tesla. Another group of companies that haven't received as much attention in the recent "SF exodus" narrative are Google and FB. Google has been opening large offices outside of SF for years and is slowly contributing to the growing of tech hubs around the country. Google's Boulder office comes to mind as a good example. I'm not aware of any large FB spokes, but FB remote work allowance might end up having a similar effect. Not to mention the many startups that have realized that the distributed model works fairly well if you know how to do it, and opens up a large talent pool. I currently work for such a startup and we don't plan on going to back to a central SF office model post pandemic.
- moocow01 6y ago
  To be fair Tesla hasn't moved as of yet
  - jjulius 6y ago
    Yeah, and Google's HQ remains in Mountain View.
    - 11thEarlOfMar 6y ago
      And Facebook, Google, Nvidia and Apple all spent $1 Billion + to build new headquarters in the last 5 years. https://www.theguardian.com/artanddesign/2017/jul/23/inside-billion-dollar-palaces-of-tech-giants-facebook-apple-google-london-california-wealth-power https://www.theguardian.com/artanddesign/2017/jul/23/inside-... https://officesnapshots.com/2018/10/15/nvidia-headquarters-santa-clara/ https://officesnapshots.com/2018/10/15/nvidia-headquarters-s...
- 6y ago

DubiousPusher 6y ago

> These two traits - poor governance and animosity toward business - have collided calamitously with respect to the city's housing market. Yeah it has nothing to do with powerful property owners lobbying against loosening zoning because they're worried a housing project will "ruin" the neighborhood and decrease property values.

dahart 6y ago

> Far from welcoming experimentation, it has sought to undermine or stamp out home-rental services, food-delivery apps, ride-hailing firms, electric-scooter companies, facial recognition technology, delivery robots and more, even as the pioneers in each of those fields attempted to set up shop in the city. This feels pretty hyperbolic and unreasonable to frame it this way. Startups have been trying to "disrupt" markets by doing things that are in gray areas, or sometimes are outright illegal, and they cause all kinds of problems and outsource the management and cleanup of the problems they cause to the communities and cities. Littering scooters on sidewalks everywhere and taking no responsibility for user safety isn't the kind of experimentation we need. California labor is super expensive, and HPE's stated reason for moving is cost savings. If anything, I might suggest that the Bay Area's friendliness to tech companies is the very reason the salaries there are so high. People in San Francisco have been complaining and protesting for at least a decade about the tech migration there, and the complete pricing out of the blue collar workforce. I think this article might have it completely wrong.

natalyarostova 6y ago
Why is Tokyo able to support density levels several times higher then SF, without worrying about pricing anyone out?
- ortusdux 6y ago
  zoning laws
- jedberg 6y ago
  Japan has zoning laws at the country level, and they are much more sane than local zoning laws. Basically, local zoning says "this piece of land can be used for one thing". Japan's laws say "this piece of land can cause a maximum nuisance of X, but it can have all these different things on it". And then it's up to the developers to decide if building a multi-unit building would more profitable than a single family home.
- athms 6y ago
  It is very difficult to build anything in SF. The city doesn't have any available land, therefore you need to demolish existing structures and build higher. There is a loud and vocal community of activists that refuse to allow new construction because of gentrification. Additionally, many won't allow retail businesses that are not local. SF prevents retail chains of a certain size in some neighborhoods. Also, the city has a law that allows any resident to challenge a change of use permit or new construction, no matter where they live in the city. These cases ultimately come up before the Board of Supervisors which tend to attach requirements and restrictions for construction leading to expensive delays.

jedberg 6y ago

The problem is the direct proposition system. It makes good governance impossible. Most states require the legislature to approve all direct propositions, but California does not. Prop 13 was voted in by people who did not understand the long term ramifications of what they were doing. All they heard was "lower taxes!". The partial repeal of Prop 13 on the ballot failed (and the expansion of it passed!) just this November, again by people who don't understand the ramifications of what they are doing and just hear "lower taxes!". Prop 13 is single handedly destroying this state. 49 other states manage to get by without an equivalent and don't have old people getting priced out of their homes from tax increases. Yet somehow that is the red herring people use to keep Prop 13 around. Because of Prop 13, people won't sell their house, middle class people are subsidizing rich people, and in some cases, the profit being made on rentals is purely because of the low tax. If not for Prop 13, the rental would be breakeven and it would make more sense to sell. Prop 13 also encourages people to vote against expansion in housing supply, because they want their home price to go up, up, up! Especially since their property tax will be nearly flat. Local areas are starved for money because of long term owners. Here in the Silicon Valley I have found homes valued at over $4M that pay less than $1000 a year in property tax (whereas someone just buying that home would pay about $30,000). Pretty much every problem in this state can be traced to Prop 13. Everything else is just a poor workaround.

rufus_foreman 6y ago
>> The problem is the direct proposition system. It makes good governance impossible. Most states require the legislature to approve all direct propositions, but California does not. So the problem is...democracy? You want things that other people don't want. Your claim is that they are too unintelligent to understand the long term ramifications of their choices. I would definitely vote for something like Proposition 13 in my state, if I had the chance. You disagree. Why is one person one vote a bad rule, and how many votes should you get as opposed to mine?
- jedberg 6y ago
  > So the problem is...democracy? Yes, exactly. No system of direct democracy has worked in the history of the world. Even here on HN, it is moderated, and some people have more voice than others. > Your claim is that they are too unintelligent to understand the long term ramifications of their choices. It's not that they aren't intelligent enough, it's that they don't have the background to make an informed decision. A politician specializes in understanding the ramifications of law (at least in theory). You as a voter do not have time to learn everything necessary to understand what you are voting for. It's a full time job and then some. Just like you are perfectly capable of fixing your own car, but you don't have the time to spend learning how to do it properly. Politicians focus on policy and their long term affects, and you do whatever it is that you do. > Why is one person one vote a bad rule, and how many votes should you get as opposed to mine? One person one vote is fine for selecting representation, but we select representation specifically because we expect them to be experts in policy.

danielsht 6y ago

As I read the discussion, one interesting question came to mind. There are so many cities that want to be the next "tech hubs", and many of them have been promoting that label (with or without merit) for years. I can't tell you how many articles like this one [0] I've read. But in reality, many of these cities are making an honest effort to live up to that label by attracting talent, corporate HQs and investment to make these claims real. Texas' tax policies are one example [1] In contrast, I see SF and the broader Bay Area making moves in the opposite direction. One such example is the new CEO wealth tax [2], along with others that make SF seem hostile rather than welcoming. It's no surprise that companies want to leave. Do other people see it this way too? Has SF or the Bay Area enacted policies to attract or retain tech talent, investment and innovation? Or is the valley's success due to a strong network effect that has been self reinforcing (more talent means more investment means more talent, etc). Have California, SF or Bay Area policies in the last 20 years truly encouraged the flourishing of the tech industry, or has it happened despite these governments? Really curious to hear what people think. [0] https://www.theatlantic.com/sponsored/jpmc-2018/are-these-cities-americas-new-tech-hubs/1820/ https://www.theatlantic.com/sponsored/jpmc-2018/are-these-ci... [1] https://www.investopedia.com/articles/personal-finance/101415/taxes-texas-small-business-basics.asp https://www.investopedia.com/articles/personal-finance/10141... [2] https://apnews.com/article/san-francisco-approves-taxes-on-ceos-9dbf9e764220830dcfabeed96b45a63d https://apnews.com/article/san-francisco-approves-taxes-on-c...

alphabettsy 6y ago

Surprised nobody has pointed out that the premise seems suspect. Does a few very large organizations mean companies in general are fleeing or does it say something about these companies? There are people who desperately want this to be true or believed, but it doesn’t seem supported by evidence.

SecurityMinded 6y ago

Everybody with a modicum of common sense was saying this for the past decade and more I lived in this god damned quasi-communist state. Now, when Larry Ellison and Elon Musk flee, it makes it to the headlines. Good grief.