5 ms·

This, more than anything else, is going to be what kills Silicon Valley. All those twenty-something hackers today are going to look up one day and realize that

This, more than anything else, is going to be what kills Silicon Valley. All those twenty-something hackers today are going to look up one day and realize that they can't have a family in the Bay Area, and leave.

w1ntermute 13y ago
Austin is calling: https://news.ycombinator.com/item?id=5794372 https://news.ycombinator.com/item?id=5794372 Lower cost of living, less restrictive zoning laws, and a more business friendly legal system.
- jbooth 13y ago
  I think the points related to better transit expanding the amount of available housing stock in other commuter markets have more to do with it than a 'business friendly' legal system or even zoning laws. We're developers. We know shit-all about common vic licenses or actual brick and mortar business, those of us who own businesses incorporate in delaware anyways. Supply and demand of housing stock is much more important than 10% marginal friction in dealing with regulators (who we don't deal with anyways). Austin will succeed or fail at continuing to grow based on how much they can grow their housing stock without turning into a gridlocked nightmare.
  - w1ntermute 13y ago
    Texas has no personal income tax. So it is important regardless of where you incorporate.
    - jbooth 13y ago
      Cops and teachers have to get paid somehow -- Texas doesn't print the money, it gets it from property taxes and other sources. I'd say that even if you hypothesize a gain in not-paying-taxes of, say, 5% of income -- that doesn't change the game compared to local economy, as evidenced by the house prices that TFA is talking about. It's not all about politics. Everyone says they believe in the free market, maybe they should look there first for an explanation of the housing prices.
      - Domenic_S 13y ago
        Property tax: SF: ~1.25% appraised value Austin: ~1.9%-3.1% appraised value (consider the typical "appraised value" in both locations and think in terms of actual dollars) Sales tax: SF: 8.75% Austin: 8.25% State income tax: SF: usually 8%-10% for tech folks Austin: 0% edit: You had a reply that reiterated that TX still can't print money, but deleted it. My response is that you're ignoring the other option, which is to spend less. TX doesn't have a super-train-to-nowhere project or other spending issues that CA has. CA ranks 4th in per-capita spending, with a (pre-federal) budget of nearly $146 billion. TX ranks 50th per-capita, with an $80 billion budget.
        deleted 13y ago
        [deleted]
        jbooth 13y ago
        That's all great. People still want to buy a house in CA so bad that it costs a million bucks. Political conservatives go on and on about the free market and then say with a straight face that a single government policy, income tax rates, is the most important thing to business, more so than market conditions, even if that narrative conflicts with the empirical evidence. We've been hearing about the decline of liberal CA and the northeast for so long now, and it hasn't happened yet. House prices will probably come down and soak some of the new dumb rich, and things will proceed as before. Texas is doing great, and all power to them, but by the time they eclipse CA/NY, they'll be liberal too.
        Domenic_S 13y ago
        Outside of celebrities I don't hear of many folks who move to California to buy million-dollar homes. The handful of people I know who made it big in business have moved out. California's a big place. You can get an awesome house on some property for $150k in many many places in CA. The million-dollar homes are concentrated mostly in SF (+Napa/etc) & LA (+Santa Barbara/etc). IMO a lot of it is the tradeup nature of housing - buy a $300k house, sell it 10 years later for $700k, buy another at $800k, sell 5 years later for $900k, buy at $1MM, on and on. And since SF/LA are centers of business, that's where the people earning that kind of dough live. The $500-700k inventory in the Bay is fiercely competitive, and what do you know, that's the price range two young married techies are looking in. Not a coincidence. I agree with the poster upthread who predicts that once the new generation realizes they're basically permanently priced out the whole area will collapse. > We've been hearing about the decline of liberal CA and the northeast for so long now, and it hasn't happened yet. It's been in progress for a long time and shows no sign of slowing. We've got big swaths of folks who are protected in the armored bubble of technology, but for the average folks things are worse than ever. I could go on and on about business owners I know making plans to evacuate, or the scores of friends rich and poor who have fled, or the stories of the behind-the-scenes trouble from friends and family in the CA government, or just plain looking around up and down the state, but the bottom line is that only time is going to tell. Eventually, one of us will be proven right and I sincerely hope it's you.
- muzz 13y ago
  This has been the case for a long time. Rather than wonder why reality isn't as one would predict, it would be better to understand why it is the way it is.
- deleted 13y ago
  [deleted]
tomkarlo 13y ago
SF is only a tiny (49 sq mile) part of the Bay Area. It's like saying nobody can live in the New York City MSA because the price of a 2-bedroom apartment in Manhattan is over $1M, despite the fact that most New Yorkers live in Queens or Brooklyn.
- rayiner 13y ago
  SF is the urban core of the Bay Area, but poorly linked with the rest of the MSA. Manhattan is very closely linked with the rest of the MSA thanks to an extensive transit network ranging out to Connecticut, New Jersey, and the New York State suburbs. In most cities with poor transit, living out in the suburbs is totally different from living in the city. You might only ever go into city on rare occasions. In New York, you can get much more affordable housing in say Westchester or New Jersey, and still work in Manhattan, with access to all the jobs Manhattan has, with a very reasonable commute.
  - tomkarlo 13y ago
    In the Bay Area, most jobs aren't in SF. That's why SF has one of the largest proportions of reverse commuters in the country. So the idea that it's a transit situation where folks are trying to live close to work doesn't really make sense.
    - muzz 13y ago
      No, the opposite is true. SF population increases by 20% because of the net increase due to commuters. Table 2 on page 11: http://www.census.gov/hhes/commuting/files/ACS/Commuter%20Adjusted%20Population%20Paper.pdf http://www.census.gov/hhes/commuting/files/ACS/Commuter%20Ad...
      - SamReidHughes 13y ago
        That's not the number the parent is talking about. The question is how many people are commuting out of the city, not the difference between in and out.
bithive123 13y ago
Not to mention the people who never went there in the first place because they have fewer romantic notions about what it means to be a tech startup and never saw the appeal in being paid barely enough to live in an expensive, crowded area.
- encoderer 13y ago
  I moved here 2 years ago from Sarasota, FL. My rent did nearly triple AND i went a little down-market from the high-end condo I had in FL. But my other expenses didn't increase more than 50%. At the same time, my salary without including options is 85% higher. Including options (I work at a somewhat recently IPOd company) is 122% higher. My wifes salary -- she's not really in tech -- also increased 25%. In total, we are far better off financially now than in Florida. And to be clear: In florida my income was a multiple of the median HHI. I was not underpaid there. Most importantly, though: I can't swing my vintage IBM XT without hitting a half dozen job offers. Seriously every experienced engineer here gets pitched via LinkedIn on the regular. I'm not trying to sell you on it. But the way you wrote your comment, "romantic notions" and all, was a little condescending. As if it's some foolish thing. Like you have all these analytically minded engineering types going like lemmings. We may move at some point to another tech-heavy city like Austin or Boulder or, ya know, whatever. But as techy as those places are, truly NO other place can compare to the density of startups and tech companies here.
  - dennisgorelik 13y ago
    Your examples proves that SF/Bay area makes sense for singles and DINK couples. But not for typical family with kids though.
davidw 13y ago
I think 20-somethings have been rotating in and out of that area for decades. I did my time in SF in the late 90ies.
beeffective 13y ago
Like me, I already left. I lived in Hayward and commuted to the south bay while my wife commuted north a little bit. It was rotten and awful. I hate everything about living in the Bay Area and I love it here in Sacramento. I also lived on the peninsula. It was nicer but twice the cost per sq foot to rent and a lot more traffic to deal with during regular hours.
prostoalex 13y ago
I dunno, a quick browse through Craigslist reveals many early-twenty-somethings seeking roommates who are okay with sharing bathrooms for <$2k budgets, and dangle your own private bathrooms if your budget exceeds that. With salary boom, for many foreigners the disposable income after paying rent still exceeds disposable income in their home country, so until salaries are where they are, for a bunch of people the current price levels are still a sustainable and highly desirable proposition.

w1ntermute 13y ago

Austin is calling: https://news.ycombinator.com/item?id=5794372 https://news.ycombinator.com/item?id=5794372 Lower cost of living, less restrictive zoning laws, and a more business friendly legal system.

jbooth 13y ago
I think the points related to better transit expanding the amount of available housing stock in other commuter markets have more to do with it than a 'business friendly' legal system or even zoning laws. We're developers. We know shit-all about common vic licenses or actual brick and mortar business, those of us who own businesses incorporate in delaware anyways. Supply and demand of housing stock is much more important than 10% marginal friction in dealing with regulators (who we don't deal with anyways). Austin will succeed or fail at continuing to grow based on how much they can grow their housing stock without turning into a gridlocked nightmare.
- w1ntermute 13y ago
  Texas has no personal income tax. So it is important regardless of where you incorporate.
  - jbooth 13y ago
    Cops and teachers have to get paid somehow -- Texas doesn't print the money, it gets it from property taxes and other sources. I'd say that even if you hypothesize a gain in not-paying-taxes of, say, 5% of income -- that doesn't change the game compared to local economy, as evidenced by the house prices that TFA is talking about. It's not all about politics. Everyone says they believe in the free market, maybe they should look there first for an explanation of the housing prices.
    - Domenic_S 13y ago
      Property tax: SF: ~1.25% appraised value Austin: ~1.9%-3.1% appraised value (consider the typical "appraised value" in both locations and think in terms of actual dollars) Sales tax: SF: 8.75% Austin: 8.25% State income tax: SF: usually 8%-10% for tech folks Austin: 0% edit: You had a reply that reiterated that TX still can't print money, but deleted it. My response is that you're ignoring the other option, which is to spend less. TX doesn't have a super-train-to-nowhere project or other spending issues that CA has. CA ranks 4th in per-capita spending, with a (pre-federal) budget of nearly $146 billion. TX ranks 50th per-capita, with an $80 billion budget.
      - deleted 13y ago
        [deleted]
      - jbooth 13y ago
        That's all great. People still want to buy a house in CA so bad that it costs a million bucks. Political conservatives go on and on about the free market and then say with a straight face that a single government policy, income tax rates, is the most important thing to business, more so than market conditions, even if that narrative conflicts with the empirical evidence. We've been hearing about the decline of liberal CA and the northeast for so long now, and it hasn't happened yet. House prices will probably come down and soak some of the new dumb rich, and things will proceed as before. Texas is doing great, and all power to them, but by the time they eclipse CA/NY, they'll be liberal too.
        Domenic_S 13y ago
        Outside of celebrities I don't hear of many folks who move to California to buy million-dollar homes. The handful of people I know who made it big in business have moved out. California's a big place. You can get an awesome house on some property for $150k in many many places in CA. The million-dollar homes are concentrated mostly in SF (+Napa/etc) & LA (+Santa Barbara/etc). IMO a lot of it is the tradeup nature of housing - buy a $300k house, sell it 10 years later for $700k, buy another at $800k, sell 5 years later for $900k, buy at $1MM, on and on. And since SF/LA are centers of business, that's where the people earning that kind of dough live. The $500-700k inventory in the Bay is fiercely competitive, and what do you know, that's the price range two young married techies are looking in. Not a coincidence. I agree with the poster upthread who predicts that once the new generation realizes they're basically permanently priced out the whole area will collapse. > We've been hearing about the decline of liberal CA and the northeast for so long now, and it hasn't happened yet. It's been in progress for a long time and shows no sign of slowing. We've got big swaths of folks who are protected in the armored bubble of technology, but for the average folks things are worse than ever. I could go on and on about business owners I know making plans to evacuate, or the scores of friends rich and poor who have fled, or the stories of the behind-the-scenes trouble from friends and family in the CA government, or just plain looking around up and down the state, but the bottom line is that only time is going to tell. Eventually, one of us will be proven right and I sincerely hope it's you.
muzz 13y ago
This has been the case for a long time. Rather than wonder why reality isn't as one would predict, it would be better to understand why it is the way it is.
deleted 13y ago
[deleted]

tomkarlo 13y ago

SF is only a tiny (49 sq mile) part of the Bay Area. It's like saying nobody can live in the New York City MSA because the price of a 2-bedroom apartment in Manhattan is over $1M, despite the fact that most New Yorkers live in Queens or Brooklyn.

rayiner 13y ago
SF is the urban core of the Bay Area, but poorly linked with the rest of the MSA. Manhattan is very closely linked with the rest of the MSA thanks to an extensive transit network ranging out to Connecticut, New Jersey, and the New York State suburbs. In most cities with poor transit, living out in the suburbs is totally different from living in the city. You might only ever go into city on rare occasions. In New York, you can get much more affordable housing in say Westchester or New Jersey, and still work in Manhattan, with access to all the jobs Manhattan has, with a very reasonable commute.
- tomkarlo 13y ago
  In the Bay Area, most jobs aren't in SF. That's why SF has one of the largest proportions of reverse commuters in the country. So the idea that it's a transit situation where folks are trying to live close to work doesn't really make sense.
  - muzz 13y ago
    No, the opposite is true. SF population increases by 20% because of the net increase due to commuters. Table 2 on page 11: http://www.census.gov/hhes/commuting/files/ACS/Commuter%20Adjusted%20Population%20Paper.pdf http://www.census.gov/hhes/commuting/files/ACS/Commuter%20Ad...
    - SamReidHughes 13y ago
      That's not the number the parent is talking about. The question is how many people are commuting out of the city, not the difference between in and out.

bithive123 13y ago

Not to mention the people who never went there in the first place because they have fewer romantic notions about what it means to be a tech startup and never saw the appeal in being paid barely enough to live in an expensive, crowded area.

encoderer 13y ago
I moved here 2 years ago from Sarasota, FL. My rent did nearly triple AND i went a little down-market from the high-end condo I had in FL. But my other expenses didn't increase more than 50%. At the same time, my salary without including options is 85% higher. Including options (I work at a somewhat recently IPOd company) is 122% higher. My wifes salary -- she's not really in tech -- also increased 25%. In total, we are far better off financially now than in Florida. And to be clear: In florida my income was a multiple of the median HHI. I was not underpaid there. Most importantly, though: I can't swing my vintage IBM XT without hitting a half dozen job offers. Seriously every experienced engineer here gets pitched via LinkedIn on the regular. I'm not trying to sell you on it. But the way you wrote your comment, "romantic notions" and all, was a little condescending. As if it's some foolish thing. Like you have all these analytically minded engineering types going like lemmings. We may move at some point to another tech-heavy city like Austin or Boulder or, ya know, whatever. But as techy as those places are, truly NO other place can compare to the density of startups and tech companies here.
- dennisgorelik 13y ago
  Your examples proves that SF/Bay area makes sense for singles and DINK couples. But not for typical family with kids though.

davidw 13y ago

I think 20-somethings have been rotating in and out of that area for decades. I did my time in SF in the late 90ies.

beeffective 13y ago

Like me, I already left. I lived in Hayward and commuted to the south bay while my wife commuted north a little bit. It was rotten and awful. I hate everything about living in the Bay Area and I love it here in Sacramento. I also lived on the peninsula. It was nicer but twice the cost per sq foot to rent and a lot more traffic to deal with during regular hours.

prostoalex 13y ago

I dunno, a quick browse through Craigslist reveals many early-twenty-somethings seeking roommates who are okay with sharing bathrooms for <$2k budgets, and dangle your own private bathrooms if your budget exceeds that. With salary boom, for many foreigners the disposable income after paying rent still exceeds disposable income in their home country, so until salaries are where they are, for a bunch of people the current price levels are still a sustainable and highly desirable proposition.