San Fran is so expensive, some tech companies can't convince employees to move
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All SF tech companies promote how with technology you can be anywhere, but apparently there is a single point of failure on physical work locations, or on the flip a nice real estate funnel for above market rates. SF is part tech play part real estate, the smartest investors are investing and collecting the rents of those investments and salaries.
The city of SF is half as dense as Brooklyn and there are a lot of empty lots here. There is a lot more room for development. The problem is that the current political situation makes it easy for people to block new housing.
As an example - there is a 600-acre empty lot near the Bayshore Caltrain station. The developer wants to build 4400 units. The city wants to build 0 units and build an office park instead. Which will get built? It's not clear - the 5 people voting on it will probably be swayed by how many people show up to the meetings and advocate one position or another. I showed up last Thursday and one city resident said we should not build housing there because an earthquake may cause the buildings to fall over.
You have agency in this situation.
I wrote about this a little more here: https://kev.inburke.com/kevin/sf-housing-politics/
I am just pointing out that tech workers are generally apathetic about the housing supply and the local politics, because we can outbid everyone.
At some point the high prices will become a problem for the tech industry as a whole. It's already a problem for me.
I also want to point out that we have agency in this situation; we can lobby for SF supervisors and city council members and state senators that will implement more pro-housing legislation, and we can show up to the meetings where new housing gets denied and lobby for it.
This is quite an oversimplification, on multiple fronts.
For one, the reason Brooklyn has higher density has far more to do with historical building patterns than the current political situation, by any calculation for example. In Brooklyn, already by the 1930s, they built multistory housing throughout a much greater portion of available lots than they ever did in SF, for example. And then came the all the massive, federally subsidized housing projects in the 40s-70s (again, at a much greater scale than in SF).
The current political situation may not be helping much (from a growth perspective) -- but that's the just the current velocity you're talking about, not the starting point (i.e. the vastly greater stock of historical housing in Brooklyn over SF).
I showed up last Thursday and one city resident said we should not build housing [at the Baylands site] because an earthquake may cause the buildings to fall over.
Sounds like you're trying to paint this person as some kind of nervous nellie (or just another kneejerk NIMBYist). And yet it's easy to verify[1] that the lot you're referring to lies in a high-susceptibility liquefaction zone. So his concerns don't sound misplaced at all.
So again (and again, and again with these debates): Yes, NIMBYists exist, and the political situation isn't very particularly fun and often feels counterproductive, etc. But these aren't the root causes of the problem. Building (at scale) in mature, established cities is just, well, "complicated". And building in cities with a wealth of historic (and never, ever to be rebuilt) historic architecture -- which also just so happen to straddle one of the most dangerous fault lines on the planet -- even more so.
This really shouldn't be a surprise to anyone.
[1] http://gis.abag.ca.gov/website/Hazards/?hlyr=liqSusceptibili...
The resident in question was a woman.
I agree that liquefaction is a potential problem. But the developer is also aware of the problem and has a vested interest in ensuring that the condos they sell don't fall into the ground; I'm pretty sure that they won't sell condos that will fall into the ground.
> Building (at scale) in mature, established cities is just, well, "complicated".
Buildings on the East Coast are much older than San Francisco and yet they get referred for additional review much more rarely than San Francisco; in general it's much easier to build a new project as long as it fits the zoning guidelines. They also are not subject to CEQA lawsuits.
Yeah, meant to correct that but got distracted.
But the developer is also aware of the problem and has a vested interest in ensuring that the condos they sell don't fall into the ground; I'm pretty sure that they won't sell condos that will fall into the ground.
Like the developer of that tower downtown that's been slowly sinking since the day it was built, you mean?
And seriously -- are you really saying we should take the recommendation of the condo developer of that of the USGS on matters like these?
BTW "fall into the ground" is hyperbole of course. I think you're aware of the fact that all kinds of nasty things can happen to you if you're in caught in a large building during a liquefaction event, even if the whole building doesn't outright "fall into the ground." Either way, there just wasn't anything out of line with the observation that resident brought up.
The resident was using that argument to say "we shouldn't build," I think it should be at best a warning to the developer to build carefully. If the developer builds and people want to buy there it's not clear where the market failure is.
It also ignores that the city wants to get a deal done and either housing or offices will get built. As far as liquefaction matters it needs to be an argument for offices or for housing. The land isn't going to sit empty.
At the margin, there's a lot that could be done - density bonuses, putting teeth into the Housing Accountability Act (SB 167), approving 4400 units in the Baylands, upzoning along transit corridors, approving ADU's (granny units).
Developers have lots of ideas about where to put people but are generally blocked by NIMBY's at every turn.
You can call your supervisor about all of this.
The hard part is not where to put all these people, but to invest in the infrastructure to serve them.
If you mean keeps the riff-raff out of homes and onto the streets, then yes.
Nice weather, good infrastructure, funding for city services, and disposable income in the area could be driving both.
Pool of affordable housing might provide a better signal for homelessness than median housing costs in an area this expensive.
ie, There's probably not a large percentage of marginal homeless in SF, who could afford a $1.03 million home but not the current median $1.15 million home.
Either way, average rent is trending slightly downward, and Zillow predicts home prices in SF to fall 0.5% next year, so maybe we'll see.
I don't think these marginal shifts, even if magnified 10 times, will really be a substitute for something like housing first or mental health programs.
https://www.rentjungle.com/average-rent-in-san-francisco-ren...
This is really inaccurate, and especially discouraging on a message board for "entrepreneurs", who should really be in favor of cheaper housing close to venture capital, so new businesses are more viable.
[1] http://www.businessandeconomics.mq.edu.au/our_departments/Ec...
If I didn't have equity to vest I would have zero reason to live here.
FWIW, I have a relatively low "tech" salary, so I don't disagree with you on the relative cost of living.
I understand there are a lot of young professionals here – and you may disproportionately exposed to that demographic – but there is certainly a lot culture and diversity in this city.
There are some good things about San Francisco, like the incredibly strong job market for tech workers but other than that I couldn't bring myself to live there.
I have outright blacklisted San Fransisco for potential employers. I would avoid travelling to SF even for consulting work for limited duration. I am surprised why tech companies want to setup shop there in first place.
Specifically you're a company and you're trying to hire people to fill roles. If they are are required to be at the company you have to pay them enough that they can live near you.
You set up a series of constraints on hiring:
1) Compensate[0] enough so that someone from outside can enter the local economy effectively.
2) Compensate enough to convince someone who is already in the local economy to change from where they work to working for you.
3) Compensate enough that someone working for you won't go work somewhere else.
Within that system to have to operate a business model where the value you capture in the market has to cover not only your operating costs (which include compensation for the employees creating that value) but allows for you to fund maintenance, depreciation, and some R&D efforts for new product development.
If you can't find a solution set that works you have to improve the business model (generally add revenue or cut costs). Not really rocket science of course.
I keep watching to see if some large presence in SF ends up moving to the east bay or even Reno as a way of changing the cost parameters. If you look at job changing as brownian motion you can watch an environment parameters start to change which results in people (the particles in this case) start changing where they are likely to be.
Personally I would love some quantitative data collection that helped map out the weights of the various factors. It would help predict the next 10 years.
[0] Compensation is also a complex thing, more than just dollars per week/month/year there are things like free food, bus rides, and other services in addition to environmental plusses and minuses and work demands.
I'm pretty sure that vested stock for public companies are taxed just like bonuses and wage-raises. I think the real reason why companies don't just "pay more" is because... well... they don't want to pay more. They either don't have the money, or they prefer to keep the money/stock for themselves.
Then I realized, I'm almost 40, no startup wants to hire my geriatric ass.
When 40% of the people in your city want to move away, you know there's a problem.
https://www.zillow.com/homes/for_sale/East-Palo-Alto-CA/cond...
There are no 1 bedrooms from Santa Clara to Burlingame for < $350K, and only one two-bedroom for less than $500K.
Either way, consider that between buying costs, potential upkeep, selling costs, property taxes and capital gains taxes, you probably would not have made out with very much.
That's...interesting? I always figured this was an industry phenomenon - not a city one.
The startup scene is pretty much moribund for the 20-something:
The dynamic people left Qualcomm years ago--it currently resembles DEC or IBM of old.
Med/biotech is long term--if you're a 20-something who wants to get rich that isn't a great path. (Side note; biotech salaries seem to suck--it's part of the reasons why we have so many microbreweries--if you're going to be underpaid doing microbiology anyway, you might as well brew beer. LOL.)
Culturally San Diego is kind of a suburban wasteland--that means very little "Social Network Foo Yahooglezonsoft(tm) Buyout Bait". The "cool kids" are going to want to be in NYC, SF, or Austin with possibilities in LA or Chicago.
I don't know if anyone has studied the benefits of this but I have to say it's so nice to just be able to walk out the door of the office at lunch and wander around, sit on a bench, etc. Escape for 45 min - 1 hr and be refreshed. I think that's the appeal in more 'happening' city areas, even if we don't acknowledge or necessarily know it consciously.
Complaining about San Fran as a nickname is...odd or idiotic/strange (why the objection?). It's unique, everyone knows what you're referring to, it's not derogatory - merely a truncation, why the objection?
Chicago's nick as the 2nd City is a reference to the rebuilding after the great Chicago Fire of 1871 (and the source of the MLS team of the same name - and a source of pride).
Now, our nicknames for Columbus, OH are intended to be derogatory (Detroit south). But, I don't get the objection to San Fran...
I vote for bringing back Frisco. It's a lot easier to say and write.