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Comment by dunpeal | Hacker News Reader

I'm wondering the same. Two growing trends that I'm observing:

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.

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The issue is that America funds cities poorly. There is a federal subsidy from cities that goes to rural areas. Red areas get more back in services than they pay in taxes, and blue areas pay out more in taxes than they get back.

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.)

Meg McArdle recently wrote a piece with some pretty convincing evidence that this is just factually untrue on a per capita basis.

https://www.bloomberg.com/view/articles/2018-02-05/think-car...

Megan McArdle has an agenda. I've never found she generates much insight for that reason. I apply the Two Papers Rule to her, and to B Stephens:

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.

There is no truth to your assertion that companies will be leaving Bay. Google, Facebook, Salesforce etc. are actually massively expanding their Bay Area footprint.

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.

Salesforce's tower is mostly going to be rented to other tenants. The company will largely maintain distributed office space in the Financial District.

Austin is not a "bit player" in the tech scene. Incredible growth is happening outside of the California bubble. Texas, the entire east coast...

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 don’t understand the obsession with Austin. It’s actually quite a small player in the tech industry.

Its cachet is overblown in most respects. My friends living there joke about it being due to the requirement to drive through the rest of Texas to get there.

The best startups and investment out here tend to be second-tier compared to the Bay Area. It's improving but still small and far from SF-level success. That said, second tier is great compared to everywhere outside of the Bay Area and NYC.

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.

Yea I'm not moving there, but I'm pretty sure they'll figure out the water issue as they always do.

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.

The small towns are feeling it because farmers get priority and use deep wells to suck their local aquifer dry, leaving the townies with mud.

All the startups are moving to other markets. The problem long term is that all these startups provide the training for people that eventually join those other companies. Eventually unicorns will show up in other markets that don't have the insanity of the Bay Area. When that happens these companies won't be able to attract talent and risk becoming a shadow of their former selves along with the city.

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.

1. I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago. California is still there, packed as ever.

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.

> I was reading articles about people and companies picking up and moving out of California to places like Nevada...thirty years ago.

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?

> You've been hearing about fully remote virtual teams thirty years ago, before the internet really existed?

Sure, the Mother of all Demos showed off remote collaborative work in 1968.

> 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.

But we’ve still been hearing about how remote work and the paperless office is the future for 50 years.

Hearing about it? I've been working from home for the last 6 years making well over 4 times the salary at my old job.

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!"

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.

> 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.

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.

> 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,

That's not really saying much given its population AND its land area. It should be performing right where it is.

??? Alaska and Texas are geographically larger states. France and Algeria are both geographically larger and have more people. As does India. Canada is roughly the same size population-wise but has significantly more land and natural resources available for extraction...

However you measure it, California is outperforming other states and other nations.

Texas has far less population than California. If you adjust they perform about the same. Oh, perhaps you should look at GDP per capita, where California isn't at all extraordinary. Hmm, it's almost as if you should compare properly?

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?

> There's a lot more interest in other locations, such as Austin.

Which, I hear, is quickly catching up to Bay Area in terms of cost of living.

Not even remotely close. Like seriously not even on the same planet.

> As of May 2017, the average market value for homes was $380,000 within the Austin city limits and $310,000 in the Austin-Round Rock metropolitan area, reported Austin HomeSearch.

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.

Not even close, and new housing starts have been keeping pace with population growth for years (unlike most other tech boom cities).

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