Honest question... is that really true? It reads like hyperbole or certainly an over simplification.
So if they want to hire another, say, 5k engineers, they either have to somehow convince 5k people to move to the Bay Area or expand in satellite offices. Word on the street from local recruiters is that you can still get new grads to move to the Bay Area (for a few years at least), but it has become nearly impossible to get senior talent to move in because of cost of living and quality of life issues. So depending on the type of engineer they're looking for, yes, they may be effectively forced to expand in other locations.
Expanding their NYC office will allow Facebook to hire more of those engineers without lowering their hiring bar or further fragmenting campuses.
Lots of people who love the access to nature, the climate, etc. in the Bay Area would never move to NYC. And lots of people who consider anyplace that's not Manhattan to be a provincial hick town would never move to the Bay Area.
I'm closer to the second camp (though I live in Brooklyn).
Something a lot of people don't seem to realize is that there are a lot of very smart people working on trading apps for big banks on Wall Street that absolutely hate it. High Frequency Trading apps require a ton of programming talent, but a lot of the engineers who work on this stuff really dislike the bank atmosphere. When I worked at Jet.com, I had several coworkers who were substantially smarter than me, who actually took a paycut to work for Jet, simply because they hated the bank environment so much.
I think some of the tech companies know this fact, and feel that they can probably poach some of this talent by offering competitive salaries while having a more interesting atmosphere.
EDIT: DISCLAIMER
I work for one of these "primarily California companies expanding stuff to NYC".
I do, on the other hand, understand the attraction of the Bay Area given enough money although, in this case, the negative side of the balance sheet has gotten much longer and redder.
I agree with your basic point. Another reason I never seriously went after an investment banking job was that the sort of thing I was interested in was pretty much viewed as grunt stuff that techies did, i.e. not really respected.
(ADDED: I was using Manhattan as a term for the [nice uber-urbanized] parts generally although I know that's not accurate. I don't think I ever set foot in Brooklyn until relatively recently.)
The Bay Area’s transit system is a joke in comparison; if companies have to resort to a private shuttle system to get anything done, it’s reflective of a failure in planning.
They are very likely to be very good and very unlikely to be bad. But they are not gods walking amongst us. There are hundreds if not thousands of professionals in the Bay Area who have the talent FB is looking for AND are working at nearby, lower-paying companies. Facebook pays higher than Amazon, Uber, and all kinds of "sexy startups". So I can't buy the scarcity of talent excuse.
1. Housing prices will continue to increase since the supply is not changing yet demand (and ability to pay at current prices) is increasing
2.1 Gentrification happens and existing bay area natives get more adversarial to tech companies
2.2 Existing employees experience a decrease in QOL if comp packages remain the same
3. Tech companies keep having to increase TC packages to keep their employees' abilities to purchase homes
Also by expanding into other large markets tech companies can hire people who have lots of ties to an area and don't want to move. This has an added benefit of perhaps not having to offer as much TC since these markets might be less competitive.
2) The NYC housing market, unhealthy as it is, is healthier than the SF Bay Area's. NYC is somewhat less geographically constrained and, importantly, has excellent public transit infrastructure for long-distance commutes from lower-cost outer suburbs.
In SV and SF, half the paycheck goes to the GOv and the other half goes to real estate.
If you want to cut labor costs, Simply find a city with a lower cost of labor. There's plenty to choose from: Austin, Dallas, Houston, Chicago, etc. All of these places sport roughly 100K salaries for senior devs. They could hire all the engineers they wanted.
And of course, there's always the final (least palatable) option: Improve your highering process. It's pretty ridiculous when half the employees of your own company wouldn't hire the other half.
A dev who bought a home eight years ago has a substantially different net income after housing and taxes from a similar dev who would be moving to the area.
So there's some merit to the idea that SV/SF have a fixed number of developers for whom salaries in the $150k-250k range are excellent, and another pool of "new arrivals" for whom that salary is decent/good, but results in a substantially lower quality of life. Further raising salaries distorts the real estate market even more.
Since SV/SF/California seems uninterested in the political moves necessary to improve the housing supply (sensibly, as these market changes would negatively impact the voters who have bought into the current system) the natural result is to move to other geographic markets for talent.
For a place to rent you can find 2500 sqft higher end apartments relatively close to work for 3000-3500 a month. The total income of a senior engineer when you factor in the stock compensation (and not just the base salary) should more than cover for that. On top of it, many other things cost the same across the country (ex. gadgets) while your salary is much higher than other places.
Now if by "cost of living" you mean that you must _own_ a single family home, then things definitely start looking a lot more grim. But I think it's unfair to make that as some sort of basic requirement for moving somewhere, it's a very American attitude to begin with.
I know of some in the 1500' range, which is huge, on the peninsula, but I'm not telling anybody.
I would assume that the best real estate speculation would be to buy land with higher margins.
https://www.newyorker.com/magazine/2002/07/22/the-talent-myt...
Labor costs are high and growing in the SF Bay Area but there are many other areas that would work just fine for a tech company HQ.