1. Businesses moving out of California, especially NorCal. Sergey Brin already said two years ago that he would not have started Google in NorCal today. He was right. There's a lot more interest in other locations, such as Austin.
2. Remote work, and fully remote virtual offices.
Personally I know a bunch of people who declined offers in the SFBay to avoid the pincer squeeze of impossible housing costs + highest tax rate in the nation. A friend of mine did the math and realized that downtown Manhattan (!) was more affordable for him than the Bay.
This stupid rule will not be the last straw. I do think it will deter companies from starting large complexes in MTV specifically, and SF if it passes this same rule.
It is however a sign of the arrogance and greed of municipalities, and their mistaken belief that they can just keep squeezing big tech indefinitely.
Which, I hear, is quickly catching up to Bay Area in terms of cost of living.
https://www.tripsavvy.com/austins-cost-of-living-255111
Now let's do SF!:
> As usual, the result is grim for San Francisco, since, according to CAR, a house in San Francisco now runs over $1.5 million on average.
https://sf.curbed.com/2018/2/15/17016992/affordable-homes-me...
That's almost x4 times more. Austin has some headroom still.
Moreover, don't forget taxes! California state tax for an engineer will be about 10% of gross. 0% in Austin. Quite a difference.
Google is expanding their Mountain View and building a massive new headquarters
https://sf.curbed.com/2017/3/8/14858200/google-headquarters-...
Google is also expanding into San Jose
Apple just recently completed their spaceship campus
Facebook is massively expanding their Menlo Park footprint https://www.bizjournals.com/sanfrancisco/news/2018/03/15/fac...
In addition, they signed the largest lease ever in SF https://sf.curbed.com/2018/5/14/17353094/facebook-park-tower...
Salesforce recently opened their new 60 story tower in downtown SF http://www.salesforcetower.com/
And I haven't even touched upon continued expansion of Uber, Lyft (which opened a new autonomous division in Palo Alto), Airbnb etc.
Austin is a bit player in the tech scene. The only other alternative right now is Seattle.
Many talented people don't want to relocate for work, and companies are realizing that. Distributed offices are becoming more and more of a thing.
I'd recommend not moving to Central Texas, by the way. Water availability is going to be a huge issue as the population continues to increase. Cities aren't feeling it yet but the small towns on the fringes definitely are - and the issue will continue to spread.
My point was more that there's probably 8-10 metro areas that fall into the "second-tier", but Austin somehow gets pretty consistently thrown out as some alternative to the valley.
But the numbers play out a bit differently. In terms of VC investments, Austin is yes..second-tier (really 3rd, b/c NYC, LA, and Boston make a case for being the 2nd and everyone else is well behind them)..right there with Miami, Chicago, DC, Philadelphia, Atlanta, Dallas, etc. In other words...it's just a regular city that has an ok tech scene.
Not to say that VC money is the only metric by which we should judge, but it's a pretty decent barometer.
At one time Armonk, NY and Maynard, MA were the center of tech too.
It's will be a long slow death by a thousand cuts.
2. Been hearing that for thirty years, too.
Now, that’s not to say that there isn’t a breaking point, I just don’t think we’re there yet. CA might be willing to amputate a leg or a wing, but there’s too much gold in the goose to kill it all at once.
That's like saying "I was reading about government deficit 10 years ago, and look at it, it's still growing and we're still here and the deficit is even larger!".
It's a growing problem. California grows less attractive as more of these exploitative measures and taxes pile up, and the impact is noticeable. No NorCal location was in the shortlist for Amazon's 2nd HQ, for instance.
> Been hearing that for thirty years, too.
You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed?
Maybe as some future prediction?
Sure, the Mother of all Demos showed off remote collaborative work in 1968.
...and was certainly an exciting futuristic demo, but unfortunately neither practical nor feasible with the actual widely available technologies of its time.
Yeah, pretty much. I’m saying it’s nothing new, and things are still churning along just fine, whether it is in reference to the deficit or CA. Nothing has changed, CA is still ridiculously expensive, as it always has been. CA taxes the shit out of you, as it always has. And jobs pay better, so one has to calculate if the added expense is worth it, as we always have. Will it ever change? In the long term, yeah, it’s likely. In the short term? I see no evidence that a change is in the making. Those gleefully predicting CA’s demise have been around as long as I’ve been alive, and much like TSLA shorts, they’re probably going to have to wait a while longer.
You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed?
Yes. Remote access to centralized and/or distributed computing resources was a solved problem long before the internet showed up.
Most economists will disagree with you about the deficit :-)
It's not something we tend to think about on a daily basis, but it's a huge, growing problem that already has ill effects and may end in a catatstrophe: https://www.washingtonpost.com/news/wonk/wp/2018/04/09/why-a...
Similarly, California got away with squeezing the "rich techies", but it keeps losing some of them, and if it's not careful, that will escalate. I can tell you about a bunch of my friends who all had great offers in Cali, and normally would move there in a heartbeat, but the combination of taxes + housing costs + other crap made them go elsewhere. Once a bunch of companies open HQs in other states (besides Amazon that will certainly not open HQ2 in California), this will become worse.
> CA is still ridiculously expensive, as it always has been.
Not as bad as this. If you lived in California for decades, as you claim, you know it's been growing worse than ever.
> Remote access to centralized and/or distributed computing resources was a solved problem long before the internet showed up.
Same deal: it's a developing process. Folks wanted to do remote offices for a long time now, and technology has improved steadily to enable this. Now we're seeing more and more remote teams. This trend will likely strengthen as the internet gets faster, virtual reality gets better, etc.
Hahaha. California is a very nice place to live, and very many people want to live here. Last year, California's economy grew so much that it took back its spot as #5 in the world...behind only the US, China, Japan, and Germany, despite having a population less than half the size of any jurisdiction ahead of it.
Most of that GDP is not related to the tech industry, which despite its importance to the Bay Area represents less of the California economy than manufacturing.
NorCal may not have been on the shortlist for Amazon's 2HQ, but LA was...LA and the Inland Empire also have a less severe housing shortage and are far more pro-development.
That's not really saying much given its population AND its land area. It should be performing right where it is.
However you measure it, California is outperforming other states and other nations.
Imagine bowing down to a state and ignoring facts. I never said California wasn't performing well. But in a pro-business country (far more than France), one of its biggest states, with its largest population, that is bigger than most countries on earth, why is it so shocking that their GDP is that high?
So cities have to raise funding somehow.
(This is also a problem with the way America funds schools. The US needs to figure out how to distribute tax dollars more equally - or at least figure out how to keep most of the country out of poverty while still building infrastructure that keeps city housing costs down.)
https://www.bloomberg.com/view/articles/2018-02-05/think-car...
https://twitter.com/Noahpinion/status/1017590957984735232
There are some worth reading, like Will Wilkinson, J Rubin, and T Nichols. But they're few and far between.