Stripe to move to South San Francisco | Hacker News Reader

Stripe to move to South San Francisco

sfchronicle.com

324 pointsCroaky419 comments

I am not in the bay area, in fact I've never even been to the West Coast. So I am going to ask what may seem like a stupid question to some of you.

I mean this in as polite a way as possible, but why wouldn't established companies like Stripe just fuck off to another city entirely? It's a successful company with a great product - that I'm sure many people would like to work for. They could surely lure talent from the bay area by moving to a lower cost of living area where mid-level employees can afford to buy an actual house relatively close to work? And they could pull a mini-Amazon and get some sweet tax breaks to boot. Is there some hidden reason that companies like this insist on staying in the same area despite the many potential advantages of looking elsewhere?

Stripe has offices in lots of places. But they also have their existing employees in San Francisco.

Fucking off to another city is functionally equivalent to laying off half the company.

Boeing moved, many companies based in NYC moved out of the city in the 80s, 90s. It’s not extremely hard, but it is disruptive. When the exodus happens it’ll start as a trickle and by the time people take notice half the cos will have reduced occupancy.

After certain stage it’s more about managing growth than about R&D, so you can find most of the talent you need in alternate markets.

In all fairness, significant HQ moves often have a major cut in headcount as a well-understood side effect if not an actual motivation.

But, yes, companies can and have moved their HQs a lot more than ten miles. It's probably harder in an industry and at a time when more people figure a job with a given company is pretty ephemeral though.

Maybe but I think people will figure out the talent deserts have more oases than people think. There are more options for talent than just SV. Remember much of the US talent in SV come from other parts of the country. Many would stay local if given the opp to stay local. So instead of drawing talent to SV, SV could seek the talent in those markets (where talent is growing).

Oh I agree with all that. I don't live in SV/SF myself and have no real interest in doing so. But so many people have the attitude that you can't have a tech career if you don't live in SV that it would probably be difficult for an existing company to move out of the area without losing a lot of people (or at least letting them work remote).

Maybe people in the abstract would, but at the level of individual people and companies talent isn’t fungible. If Stripe were to lose 100 senior engineers in a move to Salt Lake City, but could pick up 110 new ones at 90% of the price, it’s not obvious that would be a net win.

Not in that year, but long term it can be a win (obviously depending on their goals).

One perspective is that the exchange permanently hamstrings the company. You spent let's say 3 years on average, training those engineers to be the best people in the world at solving Stripe's problems, but now they're gone with (unless you're gonna do double payroll for a while) only an arms-length handoff to the new staff. That's 300 person-years of training, gone forever. Arguably even worse, it propagates upwards; there will be some number of valuable, important projects which can no longer get done because the needed expertise was lost.

Well, one option is to keep key people who don’t want to move remote and then through turnover replace them with new talent just as if the company had stayed. It’s not like key engs stay forever.

It is not about an oasis, it is about top of the funnel. To hire 1 eng, you have to interview 5-10, and have to phone screen 20-30, and have have hacker rank tested 100-200. Now scale that to a 1000 person eng team

That may be true but plenty of companies around the world that are nowhere near California somehow manage to hire technical talent. The Bay area has a higher density than many places but there's more competition for hiring too.

Thing is that top of the funnel is not composed of majority local people. Many are people who relocated and many are people who are not local now but if hired the company would move them. If they can move them to SF they can also move them to another major tech oriented city.

I feel like Boeing has far more of a monopoly on hiring the kind of talent they need than Stripe. They also seem like a place that has more "lifers".

Stripe engineers can just say "no thanks" and go work for SF company n+1 down the road. Does Boeing have competition in the same city that could reasonably hire Boeing knowledge workers? Honest question.

There are a few in the Puget Sound such as Blue Origin, Collins Aerospace, SpaceX and some other smaller ones. Your point is valid though.

Boeing moved their Corporate HQ, specifically the executive team. Their BU headquarters remained in the same locations.

> many companies based in NYC moved out of the city in the 80s, 90s.

This is the story of most American cities in the 80s and 90s, thankfully it has had some reversal this century, and I'm not sure it should be seen as a template or justification for present or future actions.

While the reasons may be different now, the process of relocating is going to be similar. Some staff will like it, some will resign, some will go with reservations, etc. and, with today’s communications this will be even easier.

Boeing's move seems to be working well for them.

Something companies will do to reset their salaries.

More and more companies are choosing to do this when they are created. But Stripe has, I believe, over a thousand employees. Expecting them to relocate far away (p.e. another state) is simply ridiculous (I believe the one example of a company doing something like this would be Zappos, when they relocated to Las Vegas). You'd just lose too many people. Now, opening another office somewhere else to keep expanding, a lot of companies do.

Thanks! I didn't consider this before posting

> I mean this in as polite a way as possible, but why wouldn't established companies like Stripe just fuck off to another city entirely?

To be totally blunt, I also suspect a large part of it is that the founders would like to be in the bay area.

I don't mean that as a slight either - I think if you're spending a good portion of your life on something, you might as well do it in a place you enjoy spending time in!

> To be totally blunt, I also suspect a large part of it is that the founders would like to be in the bay area.

At my firm, the founders wish they could go back to NYC or east coast in a heartbeat, but tied to Bay Area due to funding connections and employee pool. I work a lot with Europe so I'd love to be on the east coast as well.

A corollary to this well reasoned question would be: has Silicon Valley area peaked in terms of startup creation? On the one hand, you've got the talent there, attracted because the big tech is concentrated in the area; on the other hand, the living costs makes a ramen-profitable startup in SV way more expensive than a non-SV one.

How should I look at this issue from the perspective of an outsider? Should I join the crowd or run in the opposite direction?

I don't have data to back this up, except anecdotal, but I think spending a few years in SF, NY, or Seattle can boost your market value by a factor of 3-4. So it could still be worth it in the long run.

It's just my personal perspective, but... I'm still in awe of SV. I simply feel that the time to be there has passed, and I'm late to the party.

So where's the party now? It's happening somewhere. Someone is building the next big thing and none of us know yet. The eternal struggle of trying to predict the future.

Is Stripe's move a bad move? I guess that the execs are driven by the same fear of missing out what the future holds.

>So where's the party now?

Shenzhen.

If you create a walled ecosystem within a communist country that straight up bans other competing non Chinese products, you might think that this party is in Shenzhen.

SV still feels like a party to me. Sure, it’s not 2000 any more, and property prices are high, but there is still a lot of capital and talent sloshing about. Just staying at a top paying big co for 5 years or so, starting as a senior dev, can set you up with a lot of money

Actually, SF has increased its lead over other regions in startup creation over the last few years. See VC dollars invested and you will see how much of that is concentrated in SF

One issue is when the people who relocated with you start to leave. If you need 500 engineers you might be able to get them to move to a mid-tier city with you but when you start needing to replace those engineers it’s going to be tougher.

In most companies people who are in positions to make this decision have houses in the Bay Area and have a good life set up. They are not keen to upset all of that.

> bay area by moving to a lower cost of living area where mid-level employees can afford to buy an actual house relatively close to work?

Stripe is not hiring "mid-level" employees. Or at the very least that is not the type of people they are compensating to run critical roles.

Good luck telling a Senior Staff Engineer who makes $500k (plus probably a couple of million in RSUs) that they have to move to Albuquerque, NM.

The other reality is that people take jobs knowing that there are other jobs available if they themselves decide to "fuck right off".

TL;DR - Network effects exists in the physical world. Too many talented people live in the bay area for "quality of life".

> Albuquerque, NM

This is not the only other option. Imagine telling an engineer, hey I'll pay you $500k a year in Atlanta, Miami, Philadelphia, Chicago, or Boston? Rent is immediately cut in half and some states have no income taxes. Their disposable income essentially triples.

If you are still lying $500k, what’s the point of that move ? Also, network effect doesn’t change. I will never move out of SV/SF as I know I can walk down the street and get another $500k job

> If you are still lying $500k, what’s the point of that move ?

I think you mistyped here. The point of the move is that $500k in San Francisco vs $500k in any other city in the US (except New York) result in substantially different qualities of life. $500k a year income in Miami can get you a mortgage on a 3 bedroom house and a boat.

In SF, you get a mortgage on a 1 bedroom apartment.

SF is expensive, agreed, but it is not so expensive that you need to pull 500k/year to get a mortgage. That income is enough to mortgage a 2.5M home — well above SF’s median home price— with no downpayment

Yeah, but then I would have to live in Miami.

LOCATION LOCATION LOCATION!

The company wouldn't move if it still had to pay 500K.

500K in SF gets you a smaller place and plenty of discretionary income. Companies in other places can often give you a house, but not match the discretionary income.

Why not?

Pay your engineers 500k in a medium cost of living city and you will have the best employee retention of any company once they get used to their quality of life.

You probably won't be able to hire nearly the same quality of engineers. At least not at the same scale.

Atlanta compared to Miami, 500k can buy your 3 bedroom house and a boat on a lake.

> I will never move out of SV/SF as I know I can walk down the street and get another $500k job

This. Those salaries are basically correlative to cost living * demand for resources.

I wouldn't take it; I'd quit and go work somewhere else in the Bay Area. I have enough roots here in California that do a lot more for my quality of life than an extra two bedrooms in my house would. (And a boat? What a maintenance nightmare that would be! If I owned one, I'd pay someone to get rid of it.)

I remember when Stripe emailed me as a job candidate. At the time, I was sitting in the bar directly behind their office, and basically replied that they (one of the Collison brothers) could come right now and have a beer with me. (I was sitting in the Rose and Crown, and they were in the office behind the Wine Room on the same block.) *

> why wouldn't established companies like Stripe just ... off to another city entirely?

Because the employees they want to hire live and work in Silicon Valley. There's a lot of advantages to the area: Good weather, good cultural actives, good jobs...

Keep in mind that companies loose people when they move within the same geographic area. (For example, someone commuting over the Golden Gate bridge might decide to leave because now the commute is much longer.)

* By the time I screened with them, I had a job offer in hand that I really wanted. (This was long before Stripe became successful.) I lived a few blocks away, so I asked to screen in person, and then decided to take the job with the other company. I don't even know if they would have hired me!

> Good weather

The weather in San Francisco is overrated, it's always cold and windy and there are never any seasons.

Except its going to be 84 and sunny today. Summers are brutal but the rest of the year is pretty nice.

> Summers are brutal

Summers in the bay area are not even remotely brutal.

Maybe brutal in the sense of cold and foggy when people expect it to be sunny and warm.

84º days are brutal once you're acclimatized to 68º summers, especially in a city built for a cold windy climate.

Sorry, I know. It's a very spoiled statement. I mean they're just unexpected in SF (especially the western side of the City).

It tends to be cold, wet, damp, foggy and bone chilling early morning. Not like Winters/Summers in Chicago brutal, but definitely the time I struggle with most (as a new yorker who clearly has to weather acclimated here, I know it sounds ridiculous)

I grew up in the South, and worked in the Bay Area for 9 years, 7 in SF. Summers is SF are most assuredly not brutal.

Most of the microclimates in the Bay Area are disgustingly peaceful, but as the parent notes, there is a distinct lack of seasons (there's approximately two: dry summers, wet "winters") and real weather (I greatly missed thunderstorms when I was there).

Brutal is a bit overstated, but it can be very chilly (especially in the foggy areas) compared to what people expect of summer. You often need to wear or carry along warm clothing even in July.

A lot of sweaters get sold at Fisherman's Wharf during summer months to people caught unaware.

Scorchingly hot summer is just a few hour drive away though

you're making the case for Los Angeles then, not San Francisco.

Local weather is something you experience every day, not something you travel to. Same goes for snow and tahoe.

In the Bay Area, we have two seasons, brown and green.

Four: rain, green, brown, fire.

Bay Area is big and micro climates can vary!

We lived in the Sunset district which was manageable but later moved to Mill Valley and the summers were _very_ brutal, to me. A couple other office mates lived in San Rafael and I distinctly remember everyone complaining about the heat and sweating.

We all eventually bought air conditioners for our bedrooms just so we could sleep comfortably at night.

But brutal is all a relative term. Someone growing up in the south with no access to AC would not call it brutal while I and my other office mates who were used to AC were "dying" without it

You've reinforced the commenter's point that there are no seasons.

Depends on personality, but compare it to other climates where for parts of the year you can't comfortably go outside. Northeast you get snowed in regularly, 40 straight days of darkness and rain in northwest, 90+ days of 100 (ish) degree weather here in Austin.

Probably grass is always greener type thing.

I prefer to divide climates into two categories.

1. Places where during certain times of year, sitting on a bench for a few hours will cause you to die from exposure to the elements.

2. Other places where you can sit on a bench all day on any day of the year and walk away from it.

The Bay area is definitely in category 2 and that is a nice thing.

Yeah, this is my definition of good weather: I want to be able to go ride my bike outside without being cold and miserable (wet!) or uncomfortably hot. Even the best of clothes only go so far with the former and there's not much you can do about the latter besides drink a lot of water.

I'm sorry you're getting blasted for your opinion, especially since it's one I share.

I LIKE seasons. I LIKE snow. I LIKE watching leaves fall in the autumn and rebirth in the spring. I LIKE sweaterweather falls and, cold winters, and hot summers.

San Francisco's climate has "mild," going for it. It seems to be permanently pants and tee shirt weather (but don't forget your jacket). The summers (sept/oct) are nice, but limited for what you expect in California. It's frequently windy when the sun is shining, and the fog is constantly sitting nearby, threateningly.

The best you can say is SF's weather is different, but I certainly do not understand the hype.

And don’t forget face mask weather when the clouds of smoke engulf the city from yearly CA wildfires.

I also enjoy the seasons, especially as a way to subconciously tick off the years, but I also understand the appeal of SF.

SF's weather is a steady climate without much variance, where it typically only rains two weeks of the year. No freezing temperatures, no heat waves, just a cool climate that doesn't have much variance.

South Bay is similar, but warmer and almost perpetually sunny throughout the year too.

Based on the prices people are willing to pay to live there, it’s obviously highly desirable among those who are on the higher end of the wealth distribution.

>good jobs

This specifically. I think that for a lot of tech workers the valley is a great security blanket. They know if their current gig falls through there will be another one waiting just around the corner. No need to uproot and move. It's actually sort of strange on the surface. There are a lot of engineers in the valley who move around to various companies fairly frequently which looks on paper like they don't have a lot of stability, but in reality the sheer number of available jobs is providing that stability, even if their longevity of employment with any one company does not.

The Rose and Crown is in Palo Alto? So I guess they've already moved within the Bay before.

So many reasons:

- That effectively means those employees tied to the old location have to quit or be let go. Stripe isn't a public company, so that causes major issues for those with options who suddenly need to exercise into an expensive illiquid holding. For those w/o vested options in a company as successful as Stripe, you're leaving a lot of money on the table. What are the odds you find another Stripe with options deep in the money?

- If your spouse is working in SF, if you move, now they have to quit their job and look for another one. If your spouse works in a non-public tech startup, see point 1.

- Moving isn't easy in the US if you own a home - the taxes, fees, expenses, commissions, etc alone will cost you ~8 or 9% of your sale. If you have 20% down you just lost half your equity. Easier of course if you have more equity in the home, but still -- fees/etc are a total loss to you.

- If the company re-locates you, they might cover some of the home change expenses, but those are often capped. It becomes quite expensive to the company to re-lo folks with homes (see above)

- Changing homes (and thus school districts) is a big issue for employees with children. Many school districts are not guaranteed by home ownership / lease, but rather by tenure in the district. You end up buying/leasing an expensive property in a new area and busing your child to a far off, possibly much less performant, school.

- I totally agree with SF being epensive, but for other cities, moving to suburbs isn't that much less expensive for young workers. Now you suddenly have to buy a car, pay for gas, pay tolls, registrations, etc. Also, for those early career w/o children, being in a one-company-town suburb is a career-killer. There isnt an ecosystem and it becomes harder to switch jobs. I had an employer move their office from Manhattan to suburban Connecticut with the argument that is was less expensive (yes, less expensive for the company -- but absolutely not less expensive for the employee)

You're assuming that people actually own homes in the bay area.

Good one.

There are other points the OP raised as well. If you disagree, provide a counter argument to all points vs. selectively paraphrasing to your benefit.

Spillover effects. https://en.wikipedia.org/wiki/Spillover_(economics)

Large metro areas are much more productive because people can learn from each other.

> Is there some hidden reason that companies like this insist on staying in the same area despite the many potential advantages of looking elsewhere?

the long term root is that there is a huge productivity advantage to clusters of workers. (or, at least many people believe so) Around here, if you strike up a random conversation in public, it's very likely you will do so with someone who does something relevant to what you do, and this is good for getting new ideas and really good for getting new contacts. Right now? there's a huge concentration of programming know-how in silicon valley and san francisco, and building that sort of cluster somewhere else would be really difficult. (I think Los Angeles has a similar situation, only with the movie industry.)

I literally found someone to buy my company at a (non-industry) party. (I mean, I did a bad job of it, I was drinking too much and complaining loudly about how much it sucks to run a company and how I had fucked up like three really good chances to sell the thing and generally being a downer, which is rude, I think, at a party, but also not how you maximize the value of the company you sell. Still, I got an impactful amount of money, and more importantly, I got someone else to run the damn thing so I could go get a job that paid without dumping my existing customers.) I've solved technical problems in similar sorts of ways; it's completely normal to go hang out with friends and actually solve problems over drinks or pizza or whatever. (which yes, is a culture some people hate, and I totally understand that, but some of us like it, and like it or not, it's certainly effective.)

Another bigger microeconomic factor that people who don't live here don't understand is that California laws and cultural norms are set up to privilege people who have been here longer. If you bought a place here in '08? Silicon valley isn't very expensive at all; our property taxes are largely fixed based on what we paid for the place when we bought it. This is kinda true (but to a much lessor extent) for rents; I know a lot of people paying under 2/3rds what they'd pay in rent if they moved in today, even without rent control. with rent control, paying under 1/3rd what they'd pay if they moved in today is not uncommon. This means that the sticker shock you get from the outside looking in isn't actually what most of the people who have lived here long term are paying.

Thanks for the insight, again I fully admit that I don't know the details of the housing/jobs market over there so it was really interesting to hear your perspective. I think the movie industry example is an interesting connection to make. For the last few years Atlanta has overtaken LA as the top producer of feature films in the country, largely due to crazy huge tax incentives for movie studios, and has earned the nickname "Y'allywood" or the hollywood of the south.

Maybe a big city elsewhere in the country will ever go "all-in" like Atlanta did and try to become the "Silicon Valley of the [South, Midwest, Rocky Mountains, etc.]"? I guess a place like Austin, TX could arguable lay claim to this title already, but their tech industry seems to be "home grown" because of the history of computing at UT and with Texas Instruments, NASA, Dell, etc. historically having strong roots in Texas.

But I wonder if a city could ever follow the model of Atlanta and try to build a "new Silicon Valley" from scratch with aggressive policies that lure companies/employees from existing tech hubs?

>But I wonder if a city could ever follow the model of Atlanta and try to build a "new Silicon Valley" from scratch with aggressive policies that lure companies/employees from existing tech hubs?

It's totally possible. I think the problem right now is that for profitable tech companies, right now engineers are still super cheap (like most of big tech makes rather more than 500K per employee, and pays less than $250K.) - from that perspective, it doesn't really make sense to try to save money on employees... the opposite, really. If they have to pay another $100K/head 'cause the cost of living is so high, that's a smaller bite than anything that might disturb the massive profit. (this is also the root of the argument that we should unionize, even though we make silly money compared to most other workers. Facebook captures a lot more of the surplus value created by labor, say, than Walmart does, even if by any other reasonable standard, we are treated so much better than a walmart floor associate. I mean, I'm not arguing for or against unionization, I'm just saying that's why some people want to unionize even though we already are better off than nearly any other class of worker.)

The other thing to think about is Detroit. Detroit was totally one of these cluster cities; it was the place to be if you were working with cars in a period when there was a lot of innovation to be had in cars. And then the industry changed (or rather, innovation slowed a lot... like, there just wasn't that much more you could do with cars; just small incremental improvements) - automobile manufacturing scattered to the wind and Detroit is kind of a husk.

Will that happen to the software industry? will innovations start being small and predictable? will the P/E of Facebook drop to match the P/E of Ford? I mean, silicon valley has already been through one of these changes; silicon valley is called silicon valley 'cause they used to make the silicon here, and they've really successfully switched to writing software.

I mean, I'm personally long silicon valley (and while I think it's overvalued now, I think it's a good long term bet) - I think it will turn out more like New York than like Detroit, but... who knows?

> But I wonder if a city could ever follow the model of Atlanta and try to build a "new Silicon Valley" from scratch with aggressive policies that lure companies/employees from existing tech hubs?

You might be surprised by how many "Silicon X" places there are. Most of them are trying to lure companies. Only a few - like Atlanta - seem to understand that they need educational and financial infrastructure first.

I think educational infrastructure is almost a trailing indicator... Silicon Valley is special 'cause it prizes the sort of education required to do this sort of work. Especially when I first came here in the '90s, it was amazing - going from the place I grew up, where reading in public felt like it was risking physical violence (well, that's not really fair, I was 17) - to silicon valley, where that sort of thing was the sort of thing to do.

Bear in mind that Silicon Valley sprung up, by sheer coincidence, in a place with two world-class universities close enough to loathe one another's sports teams.

Primary and secondary schools may well be training indicators.

Maybe... but can you get world-class universities without a culture that values education? I mean, I guess it's one of those chicken and egg things, as a world class university both requires and attracts people who value education.

But, I mean, could you greenfield start a world class university in a place where people see reading in public as something to be ridiculed? would that be easier than bootstrapping a major tech company in some low cost of living area?

>the last few years Atlanta has overtaken LA as the top producer of feature films in the country

I've worked in the film business a bit. I'd say it's more like colonization than relocation. Atlanta is a place for filming at low costs, most of pre/post production and the organizational aspects still happens in Los Angeles. Most of the talent is still in LA and flies out to Atlanta for a few weeks. They're saving a buck on shooting, paying a bit for local work (mostly infrastructure stuff) but they aren't really generating value for the city.

The issue with any other city becoming the "SV of the XX" in my opinion comes down to VC and business culture. I think California created something unique when it came to powering ventures and crazy ideas, whereas other parts of the country tend to be more risk averse. Whenever I see new initiatives to draw startups to new cities, the common thread is low amounts of seed money with draconian term sheets from people with very little experience and no network effects to speak of.

Adding onto this point, I think one thing to recognize about the future of LA as a big media hub is the fact that tons of popular Youtubers and other independent content creators will relocate to Los Angeles due to the agglomeration of talent that exists there.

This is much more similar to how things work with SF/SV in the context of startups.

I think there's a big social component, too. I personally would pay rather extra to live here in silicon valley - extra even net additional earnings, just because I fit in ways I don't fit anywhere else I've been. (I mean, I'm not claiming that silicon valley is more inclusive than other places; a lot of people say the opposite and I have seen some evidence corroborating that view. I'm just saying, for me, for who I am, I feel like I fit here; I feel like I'm treated better here because of who I am than I am treated anywhere else. I suppose you could say that I feel like I have 'privilege' here in ways that I don't feel like I do in, say, the place where I spent most of my childhood.)

(because of the things I described above about how california privileges long term residents, I actually don't pay much more here than I would in any other place of similar density, and net earnings, I'm way better off financially here than anywhere else because I have that granfathered housing deal. (of course, my housing here is a lot less flexible.) Nobody else in the world will pay what silicon valley will pay when you have my skills and no degree. But in theory I would pay a premium to live here.)

Before I die, I want to try living in New York, partly 'cause I really enjoy the car-free lifestyle, but also 'cause I think that it's good to sometimes go to a place where you don't fit in as well, where you interact with people who have dramatically different worldviews about what constitutes an interesting problem. But for me, someone who fit in really badly where he grew up? Finding a place where I fit in was supremely important, even if I don't think it's great to spend the entire rest of my life in that place. Just having that experience of fitting in is transformative, I think.

My guess is that actor/entertainer types have similar feelings about LA; I mean, I think there's a lot of stories about that; about young theatre types running off to LA to find themselves (which I assumed meant "find people who value you") I mean, people talk about shared values; and it's not about voting the same way, mostly, or anything like that, at least for me, as it is about finding the same sorts of problems interesting. I mean, acting and entertaining is a deep sort of thing. I certainly don't understand much of it, but I can at least see that there's a lot there to understand, and if that's your bag, it seems like going and living near other people who also find that sort of thing could be important.

Side topic, I've been in the bay area for a while but struggled to meet people, did you just go to random meetups? ie. how do I build a network here, I'm a transplant for context.

Start small- work on being more friendly with everyone - your yoga instructors, people in classes with you, your grocery guy, wherever you interact with people in the world. Fead How to Win Friends and Influence people and follow the instructions. It's dated and cheesy but really works. Work outward from your coworkers and say yes when people invite you to hang out outside of work. Reciprocate and invite them to do stuff as well. If you're dating anyone, make friends with their friends and their friend's partners. It can be a slow burn but slowly builds and suddenly the whole world is your friend- people you don't know yet are just friends who don't know they are your friend yet. source: I don't really "network" or go to meetups but never had to job hunt, ever- just keep getting referred and pulled upward by people who are better than me and bring me along to work under them

Oh- one other great tip- pick a hobby you like and join some clubs. SF running, Dolphin Swim club, crossfit and triathlon clubs are networking (and, to be frank, dating) hotspots. GL!

I think you can do a lot worse than random meetups. I have enjoyed the toastmasters debate club[1] though I haven't been going lately. I think work friends are good sources of friends, too. I mean, work friends are work friends, and that's a different thing, but once you leave that job, there's nothing wrong with sending a few texts, and heck, work friends can be a lot of fun even when they are still work friends.

Back in the day, the Hacker Dojo was really great for meeting people. I personally think it's not nearly as good as it was (social stuff, I think, isn't going to be as good during boom times. a lot of the interesting people are just too busy and/or schmoozing less randomly, and we're in a boom time, so the hacker dojo looks like a regular co-working space rather than the coolness it was in the late aughts.) - I mean, I think it's still pretty neat, and still a good place to meet people, just not as good as it was.

A lot of it takes time; I mean, I've been here, more or less, since the late '90s. And a lot of it is just asking. After you leave a job, pick one of your work friends, send them an email and see if they wanna get drinks or something. Like, my experience is that it's okay to be a little weird. just make sure you go away when people tell you to go away. I mean, I know one guy who was my roommate and business partner like fifteen years ago, who is a super introvert. Maybe once a month I send him a text and see if he wants to get pizza. Maybe twice a year he responds in the affirmative.

doing projects with people is... super expensive, but in my life, doing a project/business with someone has been a little like how combat is in the stories, like you have gone through heck with that person and so you will forever have a connection.

[1]https://www.meetup.com/Agile-Articulators-Toastmasters-Club/

> I think there's a big social component, too.

Agree with this. At my company, top brass is basically a cabal of baby boomer LGBT+ scientists who moved here in the 1990s/early 2000s to escape living in the closet in small minded bible belt towns. I'm not LGBT but it's pretty inspiring every day to work alongside them.

When I first started I happened to sit near our top QA exec and over the years as I got to know him he was telling me how in the 1980s his team at MD Anderson used to smuggle blood across the border from Mexico in briefcases before the FDA finally bowed to building pressure and got around to mandating screening for antibodies and accepting INDs.

> I know a lot of people paying under 2/3rds what they'd pay in rent if they moved in today, even without rent control.

Wouldn't this mean that landlords are effectively leaving money on the table? If it's not rent controlled, couldn't they just jack up the rent whenever they felt like it?

>Wouldn't this mean that landlords are effectively leaving money on the table?

Yes.

>If it's not rent controlled, couldn't they just jack up the rent whenever they felt like it?

I was talking with a guy who I work with who is a landlord on the side, and he seemed to have this real labor-theory-of-value sense of fairness, like he says he jacks up rent every time his taxes or insurance or what have you goes up, but it sounds like he's like 5 years behind market (which is a huge amount)

And this is super common in California, small-time landlords, if the tenant is not causing issues, tend to raise rents rather less than market.

I think some of it is that the vast majority of your ROI, in California, comes from property appreciation, (while in many other markets, as far as I can tell, you usually get a lot more cashflow; all the places I looked at in cleveland or in new mexico would be positive cashflow out the gate; all the places I've looked at buying in California only become positive cashflow once rents go up rather a lot) - so I guess maybe some landlords feel that if they don't jack up rents too much on easy tenants, they won't have to do as much work, and as most of their income is actually appreciation on the property which happens either way, they don't see giving up some of the rent as that big of a deal?

I can tell you that if you rent from a professional property management company, your rents will go up way faster, but they are also way more responsive when it comes to fixing things, and there is a strong feeling that if the rents haven't gone up on you in a while, you want to deal with any problems yourself; you don't want to call the landlord, which is evidence in favor of the "landlords avoiding work" theory.

The thing that this theory doesn't explain is that a lot of these landlords seem to be below market by a lot more than what a property management firm would charge. (I think. around here property management companies charge more than usual and usually have really big fees for replacing a moved-out tenant)

> And this is super common in California, small-time landlords, if the tenant is not causing issues, tend to raise rents rather less than market.

A landlord is renting out a long lived expensive asset. Small time landlords I've talked to all mention that you make money on tenants that pay their rent and don't cause issues. Bad tenants easily cost you more than it would to just leave the unit empty. A tenet can easily do $100k worth of damage in less than a year.

> A tenet can easily do $100k worth of damage in less than a year.

A whole lot of the housing stock in silicon valley (and it seems most of what is owned by this type of landlord) is essentially teardowns; stuff built more than 50 years ago to working-class standards. the structure itself represents the right to 'remodel' into something someone willing to pay a million bucks for a house might actually want to live in; and by 'remodel' I mean to leave the 'minimum legal structure' standing (I think paul graham made some joke about it on twitter some time ago, with a photo of a remodel that had one interior wall standing and the rest demolished. The joke was thought to be problematic, if I remember, for some reason I don't remember.)

I mean, sure, if the landlord wants to keep renting out a shack built in the '60s, the wrong tenant can make that quite expensive, but it would be difficult for the tenant to devalue the market value of the asset by 100K.

I suppose that might be another part of it; there certainly is some demand for these older units at market rates, but certainly for people willing to pay full freight, the nicer units go first.

Maybe they are not maximizing only on rent

> I literally found someone to buy my company at a (non-industry) party. (I mean, I did a bad job of it, I was drinking too much and complaining loudly about how much it sucks to run a company and how I had fucked up like three really good chances to sell the thing and generally being a downer, which is rude, I think, at a party, but also not how you maximize the value of the company you sell. Still, I got an impactful amount of money, and more importantly, I got someone else to run the damn thing so I could go get a job that paid without dumping my existing customers.) I've solved technical problems in similar sorts of ways; it's completely normal to go hang out with friends and actually solve problems over drinks or pizza or whatever. (which yes, is a culture some people hate, and I totally understand that, but some of us like it, and like it or not, it's certainly effective.)

I love your story, I thank you for sharing it and your candor because this sounds exactly like something I would do and feel sheepish about afterwards. They way you describe this happening I can feel in my soul reenacting the exact same scenario. Well done!

Me too! I always have the feeling while in the bay that "the grass is greener on the other side". As in I think I don't want to talk about tech all day everyday, and only be surrounded by other engineers.

Then I go visit the "other side", and man do I miss conversations around the newest framework, or latest VC investment bust. It's very much a love hate relationship; which I have no plans on leaving.

To be fair, South San Francisco is not a region within San Francisco, but an entirely separate (yet adjacent) city.

At least in regarding to move to somewhere out of state, CA has one advantage:

CALIFORNIA CODES, LABOR CODE SECTION 2870-2872

https://leginfo.legislature.ca.gov/faces/codes_displaySectio...

Moving offices is really disruptive to people's lives, and causes a huge amount of turnover in your workforce. A brief excerpt from Peopleware[1]:

"The typical person being moved today is part of a two-career family. The other half of that equation is probably not being moved, so the corporate move comes down hard on the couple’s relationship at a very delicate point. It brings intolerable stress to bear on the accommodation they’re both striving to achieve to allow two full-fledged careers. That’s hitting below the belt. Modern couples won’t put up with it and they won’t forgive it. The company move might have been possible in the 1950s and 1960s. Today it is folly."

They also cite a case study of a major project at Bell Labs which was moved from New Jersey to Illinois. The authors interviewed the former manager of that project:

"I asked him what he saw as his main successes and failures as boss. “Forget the successes,” he said. “The failure was that move. You can’t believe what it cost us in turnover.” He went on to give some figures. The immediately calculable cost of the move was the number of people who quit before relocation day. Expressed as a percentage of those moved, this initial turnover was greater than the French losses in the trenches of World War I."

(FWIW, that's just one of many insights from that book - I highly recommend it.)

[1] https://amazon.com/dp/B00DY5A8X2/

That's all true, but assumes a quick move.

A move strategy could be as simple as, opening up an office in a cheaper location:

1. New teams are created at the new location.

2. New hires on existing teams are placed at the new location, with exceptions if teams have a strong need to be in the same place.

3. Make it clear that you'll help people relocate to the new office if they choose to--some people will take you up on it.

Eventually, the original office will shrink and remaining staff can be allowed to work remotely (which should be a big part of a culture anyway, IMO).

Turnover is already high at tech companies, but in this case your turnover facilitates the move--as people leave at the old location you replace them at the new one. There will still likely be some turnover caused by even the slow move, but that turnover already exist with any move--even the move to south SF will probably cause some turnover because the location is just less convenient for some people.

Any examples of a big company actually doing a gradual move this way? It doesn't seem like it would work.

Satellite offices are tough to do right. It's very hard to build trust between individuals at the different offices without regular face-to-face contact. In the absence of this, you end up with negative relationships between teams at different sites: "The team in Springfield doesn't care about quality" vs. "Those Shelbyville engineers are always dragging their feet and never launch anything". Communication bandwidth between sites is also much more limited - you need to minimize how much a team at site A needs to communicate with teams at site B to get their job done.

Another issue is how to get the satellite office going from a cold start. Do you re-assign projects that are already being worked on in your existing office? Most of those employees aren't going to move, and they're going to be upset that their project was yanked away from them. You've also set the project up for failure because everyone on the new team has to ramp up on the necessary domain knowledge from scratch. So you think "Ok, I'll leave existing projects at the current office and start new efforts at the new office." Now you have an office exclusively working on things that were deemed to be either too low-value or too risky to work on before - not a recipe for success.

Leadership is another major issue. If your senior leadership moves to the new office, they're going to be constantly flying to the larger original office to supervise things there. More realistically, they're going to stay in place, because their time is better spent at the bigger office. This creates problems as leaders move up the ranks at the satellite office, because eventually they hit a point where their career stalls unless they move to the "head office". Teams at the "head office" are at a permanent advantage in project selection, etc. due to proximity to senior leadership.

In short, it's not as easy as your list makes it sound, and it's particularly difficult to grow a satellite office to a similar scale as the original office.

Almost every successful medium- or large-sized company has done this. As they grow, they open new offices, which they seed with existing staff who are willing to either permanently or temporarily relocate. Most of the time those offices have specific areas of focus, at least when they're starting out. That way they minimize cross-geographic dependencies. To pick a totally non-random example, Stripe has followed this model. It's evident when one looks at their job listings: https://stripe.com/jobs/search

By growing any one of their regional offices, they could move their headquarters. Toyota recently did this over the course of several years. They announced the relocation in 2014, but didn't officially move the HQ until 2016. The planning and execution spanned years before and after that timeframe as well.

Yeah, I specifically meant the "grow a new satellite office into a new HQ" transition. I know companies open satellite offices all the time, but moving your HQ to one of them is much less common.

They did it, and they lost 25% of their of employees doing so: https://jalopnik.com/toyota-loses-25-percent-of-its-american...

A sizable portion of that 25% were people who decided to retire (early), but yeah...it was massively expensive. They also offered very, very generous moving packages to everyone who did relocate along with early retirement packages for those who stayed.

Lots in the financial industry over the last 3 years in London, due to Brexit. Soft moves by letting one office shrink due to natural decline from people moving on and not rehiring in that office, but in another elsewhere.

Bay Area companies are actively trying to do this. Stripe's Remote HQ is an example, but so are the emerging second HQs in Seattle. But the fact remains that there is a huge glut of talent in the Bay Area, and if you want to recruit from the FB/Apple/GOOG HQs, you need a strong Bay Area presence.

There're network effects between teams in a big company just like there're network effects between startups in a big city.

As others have mentioned, the big tech companies are all actively doing this. Nevertheless, it's not really taking. I know 3 people who moved from Google's NYC office (the 2nd largest) to Mountain View because all the top-priority projects were in Mountain View. As a general rule of thumb, you want to be where the executives are, and the executives are going to be at headquarters because a.) that's where their home is and b.) that's where all their most productive people are.

There's a steady conveyor belt where young single folks move from satellite offices to headquarters when they want to advance their career and then older folks move to satellite offices when they have kids, to be with their families or enjoy a better quality of life. This is healthy in the sense of maximizing happiness for everyone, but it means that the most ambitious, highest priority projects and most talented people are going to cluster at headquarters.

(As a side note, I feel like not enough people understand that the cost-of-living in SF is an effect of the wealth that's been brought into the area by the tech industry, and isn't just a random fluctuation. If some other metro area suddenly had a large concentration of successful companies that paid high wages, the cost of living would go up there too, until COL-adjusted salaries equalized peoples' preferences for living there.)

A side not to your side note, I think you’re only half right. zoning and nimby-ism are largely creating artificial scarcity in terms of housing supply. SF cost of living gets squeezed on the supply side and demand side. If some other metro area got hit with high demand, presumably it would not have the issue creating supply that SF faces, and thus overall COL wouldn’t be as high.

This is an excellent summary of the situation, and reflects on my own career path. I moved from Austin to SF cuz I'm not-married and thus can keep my COL reasonably low while working on high impact, high visibility and frankly, high fun projects. But, its not a lifestyle I would want to keep when I will get married and have kids... a less demanding job + lower COL seems incredibly reasonable to me.

> That's all true, but assumes a quick move.

Or a required move.

Isn't South San Francisco just 10 miles from San Francisco?

For some cities this would equate to moving to another part of the same city.

South SF is far less accessible than Stripe's current location in Townsend St (Soma, SF).

I'm curious to see how many people leave because of this move. Tech workers in SF tend to live in Soma or the surrounding neighborhoods (FiDi, Mission, Dogpatch), which means for a worker without a car, their commute was previously a short bike, Muni, or Uber Pool, whereas to get to SSF they'll be looking at this (to get to a BART station), a BART ride, and probably a shuttle at the far end, because Oyster Point isn't near transit.

I worked for a company that moved its HQ (due to an acquisition) to Brisbane -- slightly closer than South SF -- and ended up buying a car to commute, because the walk + BART + shuttle combination took so long.

This. The major reason why I live in SOMA, and put up with all the significant downsides of that neighborhood, is because it means my commute is very short. It also means I have significant job and networking opportunities within a 30 minute _walk_ from home.

When I was last looking for a new role, I didn't even consider anything outside of SF.

I mulled over this for a while and figured that I should be grateful.

This whole situation appears to be lifting IT salaries all over the world. I'm currently in the middle of switching jobs and found that I sneer at positions that pay less than ~$50k (in Poland at that) or don't offer fully remote work.

So, I guess, thank you?

Polska! I am Polish (3rd gen removed) and was recently in Krakow for a work/fun trip and fantasized about moving there for a year or so and working remote for a while to learn the language and explore the country. Could keep my Bay Area salary as long as kept US hours for conference calls etc. We hire remote IT as well- lmk if you're interested in connecting!

Sure - how can I reach you?

If you want to reach me try:

hand at wringing.it

My GitHub handle is the same as my HN handle.

Hey! I'm in Krakow, personally I'm React/C# guy, buy have couple Java friends that would love to work fully remotely. Can give you my contact www if ur willing to network

Stripe is just opening a NYC office.

https://stripe.com/blog/nyc-office

Of course NYC has its own housing problems, but they're cheaper than the valley.

Your assumption that people would want to move is one I would have made until I saw the reality.

You can barely get people to move to Denver while keeping an SF salary.

I tend to think of it this way: "can I get the same or better compensation if I lost this job after the move?" If the answer is no then I'm probably not moving.

Also, there are reasons why people would prefer the bay area over Denver for non cost related stuff. (And vice versa)

Some employees would be afraid to live in a non-California state where non-compete agreements can be enforced. Even if Stripe eschewed them, their next employer might not.

I can’t picture a single tech company I would be attached to enough to follow through any geographic move, unless I were a founder of that company. There are plenty of opportunities in the ocean for the average software engineer and company loyalty rightfully doesn’t exist.

California has too much going for it for engineers to abandon it over a company that can’t event afford to keep an office open there, and I’m saying that as an outsider, I much prefer the east coast or Colorado.

This is a concern I'd have, and a major point of tension in my job search.

1. San Francisco is really nice. It's 87 degrees today at the end of October. There is good food, decent public transportation, culture, ocean, forests, etc. It doesn't snow here or get blistering hot, so productivity is very steady year round.

2. Because San Francisco is very nice (perhaps) and we have good schools around here. A lot of hires come from UCB, Stanford, UCLA, USC, and other UCs. Those account for several of the top engineering schools in the country/world.

3. Silicon Valley has hit an inflection point where we're now the best place in the world to find TOP talent in tech. It's not a great place for mid and junior level talent, but if you need top talent for an opportunity that is high growth and high per employee leverage, there is no place better in the world.

Ultimately, the main issue is that everything is too nice and worked too well so the cost of living has sky rocketed. And that is driving out everyone that isn't a top tier talent (engineering and opts). It's really sad, to be honest, I love San Francisco and Silicon Valley, and I wish we could find a way to solve the living cost issue and continue to grow as a hub for innovation.

SF has always been expensive. When I moved here, my grandfather who was an actuary for an insurance company (i.e. walking financial database) told me that back in the 1930s, they had to pay 2-3x salary for people based there due to the high cost of living. If you read old issues of the SF Chronicle, you'll find the same story repeated across generations.

The only time SF was every really cheap was during the 70s into the late 80s, which was due to a combination of white flight, the Loma Prieta earthquake, and the AIDS plague depopulating the city. Apart from that anomaly, it has been super pricey ever since the Gold Rush.

And the Bay Area as a whole wasn't cheap in the late 80s. (SF may have been cheaper because, as you suggest, upper middle class people weren't rushing to move to SF or most other cities in that period.) But I turned down recruiting from the Bay Area during that period in part because the cost of living was too high relative to where I lived on the East Coast.

i often wonder to what extent these are rationalizations about the apparently unbeatable availability of capital

> decent public transportation

Nope

It's better than LA's, although that's not saying much. And it's better than most US metro areas.

It's not hard - just build more housing. Prop 13 and local politics make this so much harder than necessary.

Companies are. Whole industries have left Frisco. The void was replaced by tech but tech too will leave.

this is a great question, I've always wondered it myself as well.

I'm going to predict that even the move to South San Francisco will be highly disruptive and will result in major turnover. If you live in the city and are taking public transit, a move to South San Francisco is going to be extremely painful. If you own or on rent control, its probably time to start looking for a new job.

There are many people who work in tech who highly value location and quality of life. I've lived in the Midwest, the South, and now Seattle. If you enjoy the outdoors, hiking, skiing/riding, sailing, mountain biking, kayaking, etc., but you want to earn strong compensation with the security of having many employment options there are relatively few good options.

There are other chicken and egg dynamics such as a large city is likely top have a large airport with lots of direct flights which is helpful for business and leisure travel.

Employers, especially startups and growth companies, want to hire top talent (and poach top talent from similar firms). That means they want to be located where there is a baseline of other similar firms.

Remote work is slowly changing that dynamic but the gravity of the city is strong.

> They could surely lure talent from the bay area by moving to a lower cost of living area where mid-level employees can afford to buy an actual house relatively close to work?

Nobody wants to take a huge paycut regardless of house prices - there are lots of other things in the world you can use money for (including saving for retirement, if you're practical) that aren't particularly regionally inflated.

The people who've been at successful companies for longest also tend to have been pretty well compensated overall, so ownership of something nearby isn't always so out of reach for them. So your most important contributors are the least motivated for this move. Doesn't seem like a good recipe.

> I mean this in as polite a way as possible, but why wouldn't established companies like Stripe just fuck off to another city entirely?

People have mentioned the dual-income problem, but even without that, people have friends, and schools, and communities, and lives that they've built up where they live. When I moved cross country, it took two years after we arrived to develop our first close friends, and probably five years before we felt that we were as connected to our new home as we were to the one we left.

Moving across town doesn't disrupt these connections and communities for your employees, but moving across the state or country does.

People in tech used to accept being relocated as part of the job. From what I read on HN, that doesn't seem to be the case anymore.

It was common to joke in the 80's that IBM stands for "I've Been Moved."

Yeah, and IBM in the 80s and 90s was a paragon of success.

Yeah, singlehandedly transforming the computer industry. So terrible.

https://en.wikipedia.org/wiki/IBM_Personal_Computer

1) They raised money from VCs which demand companies be close by. It's hard to leave when you're growing fast.

2) It's cultural and political signaling which is required in the SV atmosphere.

They can't move their HQ at this point for reasons others have mentioned.

It does seem like they are taking a balanced strategy, however. I remember a story a few months ago about how their latest team is all-remote. They might have better incentives to open more offices in lower-cost locales after going public (see Uber's new Dallas plans for example).

it's simple.

The employees are a self-selected population for the area.

The employees that work for a company have already decided that is where they want to live and work.

They could just open an additional office in a more "reasonable" place, say somewhere with lower taxes, lower cost of living, shitty weather and fewer qualified employees...

Also, I've often wondered if locating a company in somewhere with a nosebleed cost of living like SF is a way to exclude employees that are not young, single and/or without families to distract them. SF is great for single people.

The tech sector as a whole is in a period of massive expansion. It is basically assumed that any well-run tech company needs to be perpetually hiring anybody sufficiently qualified for the endless business opportunities that lie just on the horizon, and there's a small number of expensive cities where it is prudent to do so.

Some day the business climate will cool and the realm of new tech growth won't seem as limitless. When this time comes, big profitable tech companies will continue their drive for bigger profits, and they will turn to cutting costs rather than driving new growth.

When cutting costs comes to tech, plenty of established companies will decide it's time to head off to a smaller city with lower rent and lower wages - or atleast some of them will, and eventually wages and rent in silicon valley will start heading downwards from its current place in the heavens.

What a completely unexpected consequence of the restrictions on office space, spearheaded by John Elberling of TODCO. /s

He is now trying to make office space even more restricted, and his allies are working to reduce office space alternatively by raising the fees on office construction. https://www.sfchronicle.com/business/article/SF-Mayor-SoMa-n... https://www.bizjournals.com/sanfrancisco/news/2019/10/22/sf-... (More about John Elberling: http://sfbamo.com/news/tenants-in-todco-property-allege-abus...)

San Francisco prevents office space from being abundant and cheap, and therefore the office jobs are being moved to counties with even worse jobs-housing balance, turning San Francisco into a bedroom community for (the richer individuals working in) the peninsula.

> working to reduce office space

That's a rather uncharitable characterization. SF is just trying to tie jobs to adequate housing construction. We already have way too few houses, especially low-income housing.[1] Which is what makes Stripe's move here particularly low integrity: they'll have all the housing impact on SF without paying any of the corporate taxes.

From your own source: "A separate economic feasibility study from the City's Office of Economic and Workforce Development found that a range of office projects are 'currently infeasible,' even without a city fee increase. The study did contend that an improvement in market conditions could make a modest fee increase viable."

[1] https://hoodline.com/2019/10/report-sf-adding-equal-numbers-...

>SF is just trying to tie jobs to adequate housing construction

If that was the case wouldn't a tax by number of employees be what to push through?

It actually used to be that way (payroll tax) until the tech industry pushed through the gross receipts tax. But taxing office square footage is also a reasonable approximation for headcount.

It isn’t. This encourages companies to pack people in like sardines.

I’ve worked, for instance, in two or three offices that were right as the OSHA limits for bathrooms per capita (I’m still pretty sure Amazon was in violation). These are not pleasant working environments.

> SF is just trying to tie jobs to adequate housing construction

And also making the assumption that only people who work in San Fransisco will live in San Fransisco? Because those Stripe employees who live in SF right now are likely not going to change their apartments. They'll continue living where they are, except now SF now longer benefits from the taxes that Stripe would otherwise have paid.

That's exactly why this tax dodge is such a low integrity move for Stripe. All their SF employees will remain in SF, but Stripe won't pay the corporate taxes to offset their impact on the housing market, transit infrastructure, etc.

Doesn’t SF have some kind of municipal tax that the employees pay?

I work in a different city where I live. But pay ~20% municipal tax (not US) that pays for infra etc that I use.

The employees who continue living in SF would continue to pay property taxes (through rent or directly) and sales taxes.

Yeah. So they would pay for their impact, assuming the amount is enough.

Here municipal tax income is ridiculously higher than the corporate tax for municipalities. But the reason is that a corporation does not require healthcare, the person who lives in a municipality does and receives it from their own municipality etc.

What alternative solution actually fixes this, though? All you can really do is build more housing (to fix housing undersupply caused by the excess office space) and limit growth of office space (to prevent the imbalance from getting worse).

The fact that companies can open up offices somewhere else shouldn't be very surprising, and it shouldn't be shocking that people will choose to live where they already live unless their commute gets too long and they can afford to move.

I just don't see what you expect SF leadership to do about this that doesn't fit into the two categories I mentioned, other than give up.

> What alternative solution actually fixes this, though?

Lower the cost of building housing. Streamline permits, zoning, and environmental review. Publicly commit, in other words, to driving down housing prices over a decade. (Note: not land prices! That’s the compromise.) This makes it cheaper to...

Build enough shelters for the transient homeless population. Now that they’re a stable problem, we can focus on the gritty bits.

Fund mental-health intervention for the permanently homeless so afflicted. And there has to be an element of coercion. Leaving the mentally ill to waste on the street isn’t compassion, it’s dereliction.

Fund drug-addiction intervention for the permanently homeless so afflicted. Carrot is clean places to use, seek counselling and get preventative medical care. Stick has to be arresting (and preferably transferring to clinics, not prisons) public users of hard, illicit drugs.

With the above in place, encampments can be humanely cleared and/or relocated. It also lets law enforcement tackle the minority of the homeless who are threatening, violent or thieving, a minority that creates most of the problems for other San Franciscans.

(Oh, and regional transit co-operation. If you make it easier for people to get around the Bay Area, they don’t have to stack up on each other. Why is the Caltrain a single trunk? Where is the network of every-fifteen-minutes ferries? Why is the BART so loud and expensive?)

I’ve lived in the SF Bay Area pretty much my whole life and I just want to say you hit the nail on the head. Do you know of any politicians who are working to make this happen? I’m pretty liberal, but I sometimes feel we live in such a bubble here that even ideas like these are a third rail...

Permit streamlining (in order to make affordable and supportive housing more tractable), increasing regional transit cooperation, these are projects of sub-groups of YIMBY Action. https://yimbyaction.org/join/

These are all great ideas, but the point is that they don't solve the other problems at hand directly, and the problems at hand interfere with executing on these ideas.

How are we going to fund mental health interventions and housing cost reductions if businesses refuse to pay taxes and housing costs keep going up? How are we going to expand on transit and cut transit costs if transit revenues are bad and high housing prices result in land values so high that the state can't buy land up to expand transit infrastructure?

I'd love to see that stuff, but it's been necessary for decades and isn't happening. We can't blame it all on NIMBYs, and getting rid of them won't make it suddenly happen.

Some of this is due to other state-wide and city problems, like taxpayers being unwilling to approve funding for transit and other measures, but that's not the only problem either.

A law or regulation relying on corporate integrity in order to work well is a law or regulation that is poorly constructed.

SF'a govt is the cause of lack of housing construction: they forbid it.

And they've ended up with an endless number of one off, inefficient policies to try to address the problem this has created without addressing the actual cause of the problem.

> That's a rather uncharitable characterization. SF is just trying to tie jobs to adequate housing construction.

I’m a San Francisco native. I’ve learned to be uncharitable when it comes to the Board of Supervisors. They are masters of saying one thing and doing another.

Increasing the fees on office space is going to make even more projects infeasible, which would lead to fewer offices being constructed. Which, in their minds, will justify the fees. For the longest time, the self-styled “anti-corporate” faction in San Francisco politics have said that the cap on office space construction that Elberling helped to pass back in 1986 is not a real burden because so few offices have been built that the cap has rarely been the limiting factor.

Limiting offices in San Francisco isn’t even going to help with the jobs-housing imbalance. As we see here, the limited office supply in San Francisco is driving companies to move to other Bay Area cities that don’t pretend to care about the jobs-housing imbalance.

The workers still need somewhere to live, and many of them will live in San Francisco. But instead of using our extensive investment in transit to downtown San Francisco, they will use the more limited transit and freeways going to the outskirts of South City.

Enough with this every-county-for-itself race to the bottom. If the San Francisco supervisors were serious about the jobs-housing balance, they would not be making offices harder to build in San Francisco. They would be ceding local control of land use to a regional authority, in exchange for the rest of the Bay Area counties ceding their control, too, so that we could build an integrated and equitable region. Solve the jobs-housing imbalance for the whole region by building a lot more homes. https://cayimby.org

South SF office parks are carefully managed medium to high density facilities while South SF residential land is mostly restricted single family zoning locked up hard by prop. 13. The burden to make room is clearly with residents.

I hope Stripe and similar companies that are mostly SF-based plan on more expansion to San Jose. There is an article practically every day in the Mercury News about some new office or residential site that is coming soon.

Stripe cofounder here. Quick comment to say that we're excited about the move. South San Francisco is a cooperative and open-minded city. In being an infrastructure company, we have to take a long-term view, and we think this can be a good for many years. And while the Bay is tricky from a commuting standpoint no matter what the location, the the presence of a marina right beside this site opens up a lot of interesting new transportation options for us throughout the Bay.

Having lived in Alameda (ferry to work daily), gotta say nice location.

I only apply for jobs which I can ferry to and it'll definitely enable employees at Stripe live in more affordable locations.

Perk of the Ferry: donuts and beer...

No donuts on the 7:35 from Oakland this morning, tragedy.

South City is also one of the worst cities in the Bay Area in building offices and rejecting homes. The long-term view is that we need more homes near jobs. What are you doing to get South City to build more homes?

IIRC, he/they have funded political efforts in that direction.

PC extremely vocal and active in advocating for better housing solutions in the Bay Area, particularly within SF proper. That doesn't mean he doesn't have a company to run, and to look out for its best interests given the existing state of regulations.

That said, South SF definitely seems like trading a worse commute for anyone in SF or the South Bay who rely on Muni/BART/Caltrain (presumably the majority of current and future Stripe employees) for improved commute options from parts of the East Bay (ferry) & the Peninsula (driving). This seems like a bet on a future tech flight from SF proper (to the Peninsula and East Bay). As someone hitting the point where I'm thinking about where I'd like to raise kids, this doesn't seem like a terribly bad bet to make, particularly as I see places I wouldn't have considered living at 24 evolve towards what I originally preferred about city life.

> interesting new transportation options for us throughout the Bay.

This sentence made me think - I wonder how expensive it would be for a startup to run a private boat commuting service. Google has their buses, but obviously they have near-limitless resources.

Google and Facebook have both contracted ferries (water taxis, technically) in the past.

> And while the Bay is tricky from a commuting standpoint no matter what the location,

As someone who lives in the area, I like the fact that both BART & Caltrain cross-over right around the airport (I commute to Palo Alto and SF downtown). The addition of a Milbrae to South SF shuttle would cover both options with a single pickup (& even the folks who drive there to take BART to SF).

The Oyster pt marina is connected out of only Alameda & Oakland, but that does beat trying to get to either bridges in general particularly the 8:10 AM ferry out of Oakland / 5:10 out of Oyster pt.

And it is not just 101 northbound for this, taking 280 through 380 isn't too bad either - the traffic jam pretty much starts northbound at Sneath lane.

I'd say that this puts Stripe in a better location for commutes, though far away from all the other offices.

curious in what way the city is 'cooperative'

In the way of not having a payroll tax.

are shuttles planned? Asking as someone who was planning to interview at the current location in part for a better commute without needing a car.

I know your compliance issues are complex compared to most companies and not everyone can work remotely, but why not keep the smaller office and rely more on remote workers?

Hey Patrick. I drive past the current office quite frequently at night and notice most of the TV screens in the meeting rooms are left on (on a dark blue idle screen). For the sake of the planet, can you switch these off at the end of the day? It's frustrating to see such an innovative company wasting energy on something so easily fixed.

> the presence of a marina right beside this site opens up a lot of interesting new transportation options for us throughout the Bay.

What specifically are these options?

I live in Burlingame and the very large number of Genentech folks in the neighborhood suggests that a simple shuttle service to Millbrae BART and Burlingame Broadway can lead to an enhancement in quality of life for workers, particularly those with kids.

I live in inner richmond, and checked the difference in commute by public transportation, and it's sadly an hour longer. Even by car, during rush hour, it's likely over an hour from that area to your new location. Does stripe allow folks in San Francisco to work remotely?

I really like what Stripe have done, and I think they're one of the few great startups from the last decade.

I'm surprised to hear that you didn't support Prop C. I've visited SF and was horrified by the homeless problem there, particularly in the face of huge inequality. Didn't you want to do something about that?

Articles misses that this is in response to SF's gross receipts tax. Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.

Payment processing rates in China are ____

Payment processing rates in USA are ___

Can somebody help me double check something? I don’t know the answers to those questions

I feel like I read WeChat processes payments at 0.1% while Stripe/PayPal are still around 2%

I have a credit card that gives me 1.5% cash back on every transaction. I'm reading that Visa typically charges 2.3% to merchants, and Stripe charges 2.9%, ignoring per-transaction fees. So Stripe itself probably gets around 0.6% of each transaction, and at least on average 1% of each transaction goes to cardholder bonuses, and the card issuer gets around 1.3%. Of course both Stripe and the issuer have some fraud prevention built-in, I don't know how much that amounts to (and how much more effective China is at combating fraud, though it's possible WeChat simply doesn't accept as much liability as American payment processors do.)

Card not present transactions (the type primarily used by Stripe) are charged at a significantly higher rate due to the higher likelihood of fraud.

To use square as an example, card present is 2.6% whereas card not present is 3.5%.

Your conflating fees charged to Merchants (by processors) and rewards offered to Card Holders (by issuers).

While often the same bank performs, or is a partial owner involved in, both processing and issuing, the percentages you quote are largely disjoint.

> I'm reading that Visa typically charges 2.3% to merchants ...

The Discount Rate[0] a Merchant pays varies significantly based on the line-of-business, charge-backs, processing contract, and a bunch of other things.

> ... at least on average 1% of each transaction goes to cardholder bonuses ...

Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

0 - https://www.creditcards.com/credit-card-news/glossary/term-d...

Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

If this is true, then where does the cash back come from if not as a cut of the merchant fees?

> > Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.

> If this is true, then where does the cash back come from if not as a cut of the merchant fees?

Interest rates + membership fees charged by issuers to Card Holders.

I don't think that is correct. Merchants are charged different rates based on the cash back rates of a given card. Merchants have to eat most of that cash back being given to the card holders.

Interchange fees are higher on premium (rewards) cards. The merchant may contractually pay a fixed percentage that accounts for the expected mix of cards, but those rewards absolutely come from merchant fees.

There are entire organized crime rings and many, many individuals that specialize in merchant account fraud. In the early 2010's people were creating stripe accounts and processing up to $100,000 fraudulently. I'm not sure who ate that, but it surely had an impact on their bottom line. I had screenshots from Alphabay of over $5,000,000 in fraudulent charges on merchant accounts. If Stripe only makes 1% of transaction cost and has to eat the fraud then they'd have to charge $500,000,000 to just make up what was posted in a single "mastermind group". That is crazy...

From a quick Google, I think the difference is that WeChat is bank-to-bank, therefore the rates are 0.1%

> I have a credit card that gives me 1.5% cash back on every transaction

Some of this is paid for by people carrying balances. The bet is that cash back will attract enough people to get and use the card that, in aggregate, interest will make up for cash back.

Also, the tax oddly targets Stripe and Square.

People don't talk about this very much. But it seems extremely unfair that Stripe/Square pay way more tax than Saleforce in terms of ratio to their revenues. (I don't recall the numbers. Anyone?)

Jack Dorsey tried to raise this point multiple times. But people just kept screaming that he didn't care about homeless :S

Neither does San Francisco. They just pretend they do.

> But people just kept screaming that he didn't care about homeless

JFC, it's not because of a lack of money that SF has a problem with homeless people, and it's not that more money would make the problem magically go away.

I’ll be honest though. I’m not sure new housing can actually work to lower prices, with all the incentives for real estate locked towards ever increasing prices. Maybe over decades, while losing the entire feel of the city?

They'll be plenty house as talented people continue to flee. Meanwhile juniors flock. If a CEO of a sizable Corp can't get by without a roommate something is wrong. I certainly wouldn't work there for less than a half plus million a year. Shit weather and fog I'd rather work in North Dakota.

This is surely exaggerated right ? I know CEOs of large startups who live in mansions in Woodside, Berkeley, Mill Valley etc

My sample size is small but a company that raised 40 million and the CEO is considering leaving sv because his wife need to make rent with a roommate is not a great sign of the real estate. Sv isn't special. People are going to other tech hubs which are sprouting like crazy. Sv was when it made products. But sass can be done anywhere.

People are leaving sv and housing prices are the reason. It's going to lead to brain drain. Why bother with that congested hell hole when you can live anywhere else and cut your cost of living by 50 percent. Your average founder is 30 and they are not into partying. Sv is for 20 year olds

I doubt that prices lead to brain drain. Sure there is a guy or two who will walk away. But I know more then a few people who are like: more then 2/3 of my pay to live in the city? No. Problem! Living in the city is super important!

I've seen it first hand with incredibly talented people that hated living in the city. There are plenty of tech hubs elsewhere. Sv isn't special. 2/3 of your pay is a bad decision unless you are being paid 600k+

Sounds like that CEO might be paying himself too little.

Fwiw, housing prices (rents) have barely budged in much of the Bay Area for the past 4 years. If the exodus hasn't already happened, I doubt it will.

I have a hard time believing this story. You can get 1-bedroom apartment around 3k in SF or neighboring areas. You can afford that with entry level wages

Well it's true and why he wants to move out of sv. There are plenty of better and cheaper places to live. Sv is no longer special.

I would believe that a random startup employee might be considering leaving SV due to rent.

I wouldn't believe that a CEO of a company that has raised $40 million is leaving because his wife needs a roommate to make rent. His wife should probably live with him if she needs to save money.

I'm sure there are "startup CEOs" in that situation. I doubt there are many whose firms have office space and employees.

In my experience, the serial startup execs mostly don't live in the city. In the 90s, I knew several who also had an apartment near the office, but that's much less common now that the sort of place they'd want is going for $8K/mo.

The feel of San Francisco is already lost, when a small single apartment runs $3000 a month.

And homeless are everywhere.

> > The feel of San Francisco is already lost, when a small single apartment runs $3000 a month.

> And homeless are everywhere.

Maybe a $3k per month "small single apartment" contributes to "homeless are everywhere."

When people say “homeless are everywhere” regarding SF, they’re probably referring to the extremely troubled people who are conspicuously doing drugs or screaming incoherently on the streets. I don’t think those people would suddenly be fine if only the SF apartments were $500 a month instead of $3000.

Of course, there are a lot more homeless people in SF than the very conspicuously unwell people I mentioned. There are also probably larger scale effects that together contribute to high rents, high income inequality, drug abuse, lack of medical care, etc. But there’s a lot more to say than that SF’s homeless problem is because rent is too high.

Homelessness is a very complicated issue, but it would absolutely be better for all people currently without homes if rent was that cheap. Many people who currently are living on the street or in shelters would be able to find stable housing. This would free up resources and care which could focus on those people who need it most.

I'm curious about the ratio of those unwell folks who are native to the area compared to those who are transplants.

I can certainly imagine a 'homeless pipeline' where the children of the parents who get priced out of housing end up doing drugs on the street, but I also know about bussing the homeless and homeless moving to SF because they don't want to deal with a serious winter.

According to Wikipedia: As of 2014, the city is believed to have approximately 7,000 homeless residents. As of 2015, approximately 71% of the city's homeless had housing in the city before becoming homeless, while the remaining 29% came from outside of San Francisco

I'm not from US and I'm not very informed about the homeless problem.

But I wonder why homeless people don't move to another city. If I'd be in their situation (living in a city where I can not afford to rent a house and live a normal life) I'd go to another city where with a regular job I can afford a normal life and just build my life there.

Sorry if it's a stupid question.

They get free services in San Francisco that they wouldn't in other cities. Also, many of the folks on the street during the day are actually housed, in public housing, and leave to do drugs since they will loose their housing if they do drugs at home.

> But I wonder why homeless people don't move to another city.

Because there are few cities in the country that are as accommodating to the homeless as SF. And I'm not talking about weather, I'm talking about services, aid, lack of police harassment, etc.

If you're homeless it's certainly the best place in the country to live.

Oh, they do move to another city. They move from homelessness in their original town, to homelessness in San Francisco, often with transportation paid for by their origin city/state's government, because SF has extremely lax drug and vagrancy enforcement, a mild climate, and easy access.

As mentioned elsewhere, this is simply not true, and you can do some very quick research to learn that it's not true. The vast majority of homeless people in SF are from SF. Stop being part of the misinformation problem.

People who tend to think like you, who can plan in advance, are willing to get a regular job, don't do drugs etc, rarely end up homeless, even in the US. Most of the visible homeless on the streets of large US cities are deeply dysfunctional people, and lower rents or public housing won't make them more functional. Getting them out of public sight would be improvement for the public, to be sure, but the policies of the US cities ran by liberals tend to be extremely ineffective with respect to getting them out of public sight.

It’s a national issue and SF is a symptom. Instead of pushing for healthcare, housing, more aids, and so on, people are just blaming it on mental health.

Your premise doesn't align with the facts.

Poverty and homelessness are near all-time lows in the US right now, comparable to Canada. You wouldn't know that by looking at the streets of San Francisco (or Los Angeles for that matter).

At a national level homelessness has declined dramatically since 2000. While San Francisco's problem has only kept getting worse. The US as a whole isn't seeing the homelessness problems that San Francisco is.

While San Francisco was doing nothing, the US implemented the Housing First program under the Bush Administration. That policy was continued and amplified by the Obama Administration, to extraordinary results: homelessness declined through the great recession, rather than skyrocketing as would have been predicted (especially coming out of a housing bust).

Unsheltered homelessness is down 20% since 2007. Total homelessness is down by 15% since 2007.

https://www.hud.gov/sites/dfiles/Main/images/hudno.18-147.jp...

2010 > Obama builds on Bush success to help the homeless

https://www.csmonitor.com/Commentary/the-monitors-view/2010/...

2013 > The federal Department of Housing and Urban Development reported that the number of the chronically homeless declined by 30% between 2005 and 2007. You might have expected the numbers to spike again when the financial crisis hit but no. Since 2007, the number of chronic homeless has dropped another 19%.

https://www.cnn.com/2013/04/29/opinion/frum-less-homelessnes...

2008 > On a cold January morning in 2001, Mel Martinez, who was then the new secretary of housing and urban development, was headed to his office in his limo when he saw some homeless people huddled on the vents of the steam tunnels that heat federal buildings. "Somebody ought to do something for them," Martinez said he told himself. "And it dawned on me at that moment that it was me." So began the Bush administration's radical, liberal — and successful — national campaign against chronic homelessness.

https://www.mcclatchydc.com/news/politics-government/article...

2013 > The Astonishing Decline of Homelessness in America

https://www.theatlantic.com/business/archive/2013/08/the-ast...

There's a lot I disliked about the Bush administration, but the HUD programs changed homelessness immensely. You wouldn't know it in California, but they arrive there by the busload daily. It's unfortunate. The SV echochamber of HN isn't exposed to the massive changes of the last 20 years.

Very oddly doesn't align with my eyes.

Along the i5 from Seattle to San Diego the encampments have been growing. There are a few places where it goes away but mostly because of individual city efforts to do something. Source - been driving the route very actively last 5 years.

Your missing the part where many states chose not to accept the housing funds, like Texas under Rick Perry, and instead just bought their homeless bus tickets to California.

Texas still just buys their homeless bus tickets to California. When I ask homeless people in LA where they are from, Texas is the #1 response. The LA Times just ran an article this week about people who to come LA seeking stardom and are homeless within a few weeks because they didn't bring enough money to pay rent because they thought they'd be a rich megastar within a few days.

It's truly fucked up for LA and SF to get blamed for having a homeless problem when most of the homeless in CA aren't even locals.

Please do some actual research here. Busing occurs, but everywhere does it (including SF) and it doesn't largely affect homeless population level in cities (because everyone is doing it). The vast majority of the homeless population in SF is from SF.

What you're portraying is a myth.

There are different homeless populations which comprise the greater phenomena, and the mentally ill population is absolutely part of it.

I agree with you that homelessness isn't as simple as just saying "mental health".

However, when people talk about homelessness being such a big problem in SF, I think a lot of what they are talking about is the subset of homeless people who are "violently mentally ill". That's something that I saw a lot more of in SF than in cities in the Mid West. By "violently mentally ill" I mean things like:

- Yelling at pedestrians that they are the incarnation of Satan and were going to use their demonic powers to strike them down.

- Using racial slurs for minorities that walked past.

- Purposely invading people's personal space.

I don't know why this would be a greater problem, or a more visible problem, with the homeless in SF compared to other places. Maybe in the Mid West it is difficult for people who are too mentally ill to survive the winter. Maybe other cities use anti-vagrancy laws to round them up.

It’s not “national issue.” Aid and housing are local issues. San Francisco and California in general have much worse homelessness problems than many other places in the country. (For example, Mississippi has one of the lowest homelessness rates in the country.)

Mississippi just throws them in jail.

It’s a national issue because people are mobile and will go to wherever the services are best. If San Francisco decides to house every homeless person who appears on its streets, it’s going to have to house every homeless person in America.

Coordination at the federal level could even out geographical imbalances in services and also prevent all services from having to be delivered in the few places where it’s most expensive to do so. Doing all the free housing in the most expensive market is crazy.

I used to live in Chicago and it’s huge problem there too. It’s national.

It's a national issue. That many states solved by shipping their homeless to California (like Texas, Oklahoma, and most of the Midwest do) or to their own local private prisons (like Mississippi and the rest of the South do).

Benioff knows exactly what he’s doing.

The gross receipts tax was Jack Dorsey's idea. As CEO of Square he lobbied for and received a switch to the gross receipts tax in 2012.[1] He only started complaining about "fairness" when it became about helping the homeless.

[1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-...

You merely mentioned fairness, but you didn't mention which aspect.

Jack has been vocal about wanting to pay tax by revenue (or whatever way) to the city. The point that he objects is that Square pays tax more than Saleforce, when Saleforce's revenue is way way more than Square's.

This is an example of US political debate.

Everyone immediately accuses the person of being evil (i.e. not wanting to pay tax and of hating homeless). But nobody actually answers why it makes sense for Square to pay more tax than Saleforce.

It makes perfect sense.

Square has the one office in SF, so essentially all of its gross proceeds arise from that office and are subject to the tax.

Salesforce has offices everywhere and a substantial amount of its revenues come from the work of employees outside of San Francisco. This revenue should not be subject to the SF gross revenues tax (and it would be illegal for SF to tax such income).

The question boils down to this: is the disparity in taxes reasonable given the SF-based gross proceeds generated by Square and Salesforce?

You're incorrect, Square has non-SF offices, too. I think @nrp has put it well in his comment https://news.ycombinator.com/item?id=21342101. Square is categorized differently than Salesforce by SF tax law and pays a different proportion of taxes than Salesforce.

EDIT: corrected username

What are you talking about? It specifically talks about it and even provides 2 quotes with contradicting points of view:

“Alex Tourk, spokesman for sf.citi, a tech business group, said San Francisco needs to consider changes to its business taxes. The city is currently reviewing the tax system, which brings in a total of $1 billion annually. But those taxes could climb higher under the revised system.

“Unfortunately, Stripe choosing to leave town is not an anomaly,” he said. “The membership of sf.citi would prefer a more holistic strategy per the mayor’s suggestion that we work together as a collective business community to fix the gross receipts tax once and for all and establish a fair and equitable tax system that we can all rely on.”

Chris Thornberg, founder of Beacon Economics, said businesses leaving San Francisco has more to do with real estate costs and high wages than taxes.

“Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years,” Thornberg said. Stripe is staying in the Bay Area, so its departure isn’t a blow to the region, he said.”

Neither of these two quotes in the article provide a compelling counterpoint to the outsized impact that Prop C would have had on Stripe's business.

Yeah. Salesforce probably has north of 50% margins. Eating 1% is annoying but livable. A Square or Stripe type business probably has under 5% margins, making this a tax of 10 to 20 percent of profit.

Unless things changed over the summer, Square is not profitable, so this is just an additional major expense that makes profitability harder to achieve.

I doubt the wages are going to be appreciably different in South San Francisco. Office rents is probably one reason, but the gross receipts tax is almost certainly the biggest reason for the move.

There’s also the impact of Prop M, which caps new office square footage created yearly. Stripe may not be able to find contiguous space big enough for their expected growth even if they wanted to stay in San Francisco.

> Taxes don’t have a lot of impact on business decisions.

Said nobody involved with any big business. Amazon in New York, Apple’s avoidance of repatriating cash, etc. Taxes have a massive impact on business decisions all of the time.

This kind of ignorant thinking is what destroyed the yacht manufacturing industry in the US. “Oh, what difference can a small tax make? Whoops, doesn’t matter because I’m a politician and I’m immune to consequences.”

Businesses say that taxes make a huge impact because they don't like paying taxes.

But they do business where they need/want to do business, regardless of the tax situation. Complaining about taxes is just an attempt at leverage to get tax rebates/concessions/exemptions/etc or to structure the final holding company in a way that artificially shields profits so the executives can pay themselves larger salaries and bonuses.

Source: I was a former tax/legal advisor for a number of multinational companies. Out of a few hundred tax structurings, I can count on one hand the number of times that tax rate differentials affected material operational decisions.

Nope. Taxes are treated equally as every other cost. Any opportunity to eliminate is treated just as seriously as anything else.

It seems like raising prices from 2.9% to 2.93% would cover the tax. (I assume they don't want to go to 3% because that looks like a huge jump.) The real question in my mind is why does Stripe bother to exist if they're barely breaking even.

Low margin, high volume.

> The real question in my mind is why does Stripe bother to exist if they're barely breaking even.

Stripe has a valuation of $35,000,000,000 USD[0].

The real question I have is how anyone thinks Stripe is "barely breaking even."

0 - https://www.forbes.com/sites/donnafuscaldo/2019/09/19/stripe...

Valuation and profit or loss are not connected (see Uber).

...WeWork, Theranos,...

It doesn’t miss that...it actually says it wasn’t a big factor (though take with grain of salt). I can buy that they needed more space, and that it would be cheaper there then elsewhere.

I believe it is gross receipts within the City. The impact is surely negligible

San Francisco has probably the most complex payroll and gross receipts tax system of any city in the world. The calculator you're supposed to use is: https://sftreasurer.org/sites/default/files/2019-08/BT_2019%...

The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their payroll location and 50% based on their sales location. So while their portion of sales in San Francisco is negligible, most of their payroll is there.

I have a hard time believing most of their payroll is here. Strip is fairly disturbed and probably has huge ops and customer service teams in low cost locations. Their payroll footprint in the city, while significant, will not be burdensome when it comes to gross receipts

Payroll tax is based on apportionment of payroll expense, rather than headcount. It also includes stock based compensation. I'd guess most of their payroll expense is in San Francisco.

This is significant information, because there’s a whole conversation upthread assuming the gross receipts tax applies to their full business.

> Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.

Stripe charges %2.9 + $0.30 per transaction.

That is not an "ultra low margin" by any means in the CC processing domain. Actually, that is a massive markup when compared to other ISO's and VAR's.

Depending on the Merchant's processor and their volume, significance, and sophistication, their Discount Rate[0] is often well less than the %2.9 Stripe demands. The fact that Stripe also tacks on another $0.30 USD on top of the top-end Discount Rate for their transaction fee is insane (see here[1] and here[2] for some context and these don't even account for fee negotiations).

And to suggest "no way can they compete while paying ..." is to ignore Stripe has a valuation at/near $35,000,000,000 USD[3].

0 - https://www.creditcards.com/credit-card-news/glossary/term-d...

1 - https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...

2 - https://www.mastercard.us/content/dam/mccom/en-us/documents/...

3 - https://techcrunch.com/2019/09/19/stripe-is-raising-another-...

Regarding their pricing to low-touch customers, like anyone just signing up on the website, yes, it's a very good margin for a payment processor. But the trick is that nobody processing a million a day + is going to pay that. They'll negotiate, hard, or change providers. I suspect most of them are in more traditional cost plus contracts: 5c-50c take per transaction, even though the entire bank processing fee is counted in revenue. In those cases, the local tax would put SF companies at a major disadvantage vs Adyen, which doesn't pay a tax on revenues.

Given that Stripe is already not a major player for those very large companies, 1% of revenues on merchants that have high average transaction sizes means they might as well not show up to the negotiating table, as their break even point will be more expensive than other's best offer.

> Stripe charges %2.9 + $0.30 per transaction. That is not an "ultra low margin" by any means in the CC processing domain.

That's revenue, not margin.

And not all of that 2.9% goes directly to stripes account, most of it is going to visa/mc/amex

Hypothetical: Item costs $100.

Stripe's fee is $3.20 (2.9% plus $0.30).

The question is how much of that is gross revenue? Many take the position that the portion that Stripe pays to Visa/MC is not gross revenue to Stripe because it was never their revenue; they were just collecting money the merchant would have owed to Visa/MC. If so, then Stripe's gross revenue is only the $1 they have left after paying Visa/MC on the merchant's behalf.

But others take the position that the entire $3.20 is gross revenue to Stripe, and that the amount they pay to Visa/MC is a COSS of that revenue.

If Stripe pays Visa/MC less for that $100 transaction than the merchant would if Stripe weren't involved, than it's clear that the $3.20 is gross revenue to stripe and the Visa/MC fee is a COSS. But if Stripe would owe Visa/MC the same as the merchant would, then arguably the Visa/MC was never revenue to them in the first place. It comes down to the terms of the contract--is Stripe merely forwarding on the merchant's Visa/MC fee or is it assuming that liability on behalf of the merchant?

When it was growing, Stripe took the position that the entire $3.20 was gross revenue, because it made them look good. (See also, Groupon, Uber.) Now that they're a very big company though, it makes them look too good for tax purposes, even if the financial reality is very different. But having chosen their accounting method, they're stuck with it.

Lol, what? San Francisco taxes revenue of businesses that are there? I had to google it to check because I couldn't believe a city would actually do something that stupid. But it seems its real:

https://sftreasurer.org/business/taxes-fees/gross-receipts-t...

This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?

> This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?

You might want to ask sf.citi, the SF tech industry lobbying group who came up with it in 2012. Here's a video of Jack Dorsey campaigning for the gross receipts tax as CEO of Square.[1]

The argument then, of course, was that we shouldn't tax early stage pre-revenue tech companies based on their payroll because it increases their burn rate. Better to wait until they generate revenue and tax that. Help support the growth of new companies so they can bring in more tax revenue in the long run. Or so the argument went.

Now that they're making money and it's time to pay up, of course, they've changed their tune. Suddenly they've discovered that the system they lobbied for and got is "unfair" and they still shouldn't pay taxes.

[1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-...

It's unfair because Square pays more tax than Saleforce. Not because they have to pay tax.

It would be great next time if you can mention the whole reason around. unfairness.

Here's the tweet: https://twitter.com/jack/status/1053312151136362496

Do you think that's fair?

I haven't researched this issue much, but I think it's fair to expect that the CEO of Square could have anticipated this becoming an issue if Square succeeded.

abalone's comment that "they've changed their tune. ... and they still shouldn't pay taxes" could simply be hyperbolic, depending on how charitable people are in their interpretation (e.g. "shouldn't pay [the full amount of] taxes").

I think the main thrust of abalone's comment stands: the CEO of Square pushed for a tax that many think is absurd (e.g. darawk), and now that Square has grown and the tax is unfavorable for them, Square wants to change the tax that it seems to have lobbied for (and presumably thought was fair back then) -- that makes Square seem opportunistic [and not having the community's best interest in mind when the CEO lobbied for the tax]. At least, I think that is abalone's implication.

I don't really see any problem with how Jack behaved.

Jack wanted companies to pay more tax to the city. He helped lobby it.

But this part where Saleforce pays less tax than Square is absurd. So, he's against it.

I don't really see any problem with this line of thinking.

To give the exact number, Square pays 20m, and Saleforce pays 10m. But Saleforce is 2-10x bigger than Square. No matter how you cut it. It's not fair.

I want people to pay more income tax as well (to fund other initiatives). But would I want to pay tax MORE than anybody else? Probably not. Does that make me a hypocrite? Hell no.

It just feels like people are being obtuse at this point :S

> Jack wanted companies to pay more tax to the city.

Uh, no. Jack has specifically and consistently lobbied against paying taxes (see: previous link). In 2011 he threatened to threatened to move Twitter to neighboring Brisbane unless he got the now infamous mid market tax break.[1] Exactly what Stripe just did. He greatly exaggerates the impact of a hypothetical $10M extra towards fighting homelessness on a $26B company with $3B in revenues.

The best response to this “fairness” line was from Marc Benioff himself, who said to Jack, ok, tell us how much you or Square or Twitter has given towards addressing homelessness in any other form. Crickets from Jack. He really doesn’t like paying taxes or giving.

[1] https://www.sfexaminer.com/news/square-ceo-jack-dorseys-tax-...

Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question.

Even Benioff merely said ~$10m was nothing to Square. He implied it didn't matter that it wasn't fair because the amount was so little. Like Wut?

Because Square doesn't help homeless much (I don't really know how much compared to Saleforce and other companies), so we make a law for a smaller company to pay tax more than a bigger company? We can simply disregard fairness? Really?

Also, Jack explicitly said that he has no problem paying taxes to the city; he wants to pay tax fairly when considering peer companies. We just gonna need to agree to disagree on whether jack is willing to pay tax.

>> It just feels like people are being obtuse at this point :S

Maybe -- just maybe -- people understand your point but are bringing up something else that they think is relevant.

> Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question.

I don't think people are saying that the tax situation is fair. Rather, I believe the claim is that Square's CEO is likely not exclusively focused on the unfairness of the situation when he is complaining about the tax situation, but complains about tax in general. I think abalone wouldn't be giving Jack grief (or at least much less), if Jack did not lobby for that tax earlier.

To spell this out further with an extreme example, imagine a recent college grad who's super smart and has the attention of the world. He says "It's crazy that recent college grads are saddled with student loans. Instead, we should soak the rich and heavily tax everyone making $1 million or more." People agree, and the tax is instituted. A few years pass, and after his college debt is forgiven, this recent college grad is doing really well and finds himself making $2 million a year. At this point, he says "It's crazy that higher income workers pay such a high percentage of their income relative to others -- everyone should pay the same percentage." To which people respond "but then we can't forgive student debt with the reduced tax revenue," and yet the recent college grad persists. Do you see the problem with the behavior of the recent college grad?

It might be that the grad sincerely held his conflicting positions when he proclaimed them, but it's also possible that he was always advocating for what was advantageous to himself. Given the short time period (and that the grad makes no offer of accepting his college debt back), people generally guess that he using a sense of fairness to advance his own interests.

Again, I'm not very familiar with the situation, but it seems that the current tax is not a good one, and the CEO of a payments company could have foreseen that it would not be good for his company once his sales got rolling. Why didn't Jack advocate for some other tax scheme earlier, such as one that is based on net income?

I mean, taxing payroll is just as stupid. You tax net income, because it's normalized across businesses. Taxing payroll or revenue is just economic nonsense.

Net income isn't normalized across businesses.

Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.)

And that's the basic reasoning behind SF's gross proceeds tax. It's a uniquely SV tax that only works because so many unicorns built their house of cards out of claiming revenue for things no other business would claim as revenue.

> Net income isn't normalized across businesses. > Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.)

Why would you want to tax a startup that isn't making any money? The whole point of government taxation is to generate revenue from profitable business activity occurring there. Taxing businesses that aren't even making money is ridiculous.

And sure, you can shift where profits are generated. But you can also just not be in SF. Which is exactly what's happening.

how much tax should Amazon pay?

Net income isn't normalized across businesses.

Yes, it would be great if we could have some kind of Generally Accepted Accounting Practices that would specify what counts as net income and what doesn't.

Sure, a net income tax doesn't tax the VC fueled companied sending people $2 for $1. But it would tax the owners of the fancy office they're renting for an absurd amount. And it would tax the catering service that's coming in 3x a day. And it may tax the office supply firm that's selling them the fancy chairs (maybe, not sure if office supply warehouses are in SF or on the peninsula).

> Lol, what? San Francisco taxes revenue of businesses that are there?… This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?

I don’t think anybody thinks that either the gross receipts tax (with different rates depending on industry) or the payroll tax (which included stock exercise in payroll) were good ideas. They are inferior alternatives to property taxes (which are capped and distorted by Proposition 13) and income taxes (which RTC 17041.5 prohibits local governments from raising).

Ah, that makes sense then. Thanks.

Exactly, 1% is half or possibly all of their margin. They would have been crazy NOT to go.

Literally Stripe wrote a blog post on this on how Prop C will really hurt companies like them which have high gross receipts but very thin margin. But at the time, half the people accused them of being intolerant to homelessness and the city that supports them. Marc Benioff, the sponsor of Prop C, can do this given he has a SaaS company with high margins and the fact that he has political ambitions.

This is an expected outcome given that. What this means is more cars on streets as South San Francisco has pretty bad infra and driving/taking shuttles is the only way to get to the new Stripe office.

For a payment processor, does "gross receipts" include the full amount of the purchase, or just the amount that Stripe takes (e.g. 2.9% + $.30).

If it's the full amount of a purchase, not only is that insane, but it really feels like double dipping, as the seller would have to pay the tax on their receipts as well.

I can tell you recruiting for South San Francisco was way harder than recruiting for SF. If I lived in SF without a car, that'd be a deal breaker for me. They're going to start losing people, or see a huge spike in chronic working from home. I guess they have to move somewhere at some point, and no move is without trade-offs.

Regarding the gross receipts tax, couldn't they just move their HQ-on-paper to any place that doesn't have a gross receipts tax?

I'm curious about it. But there must be something illegal about the mismatch between where most employees are located and the hq location.

> But there must be something illegal about the mismatch between where most employees are located and the hq location.

How would that be illegal? Employers can't tell employees where to live, and a law that told them to do that is insane, even compared to other crazy laws of the Bay Area.

Stripe is already a pretty remote friendly company no?

Yes, to a very large extent

I'd say that's an exaggeration. I know tons of people who commute from the city to south bay and vice versa. Plus South SF is pretty well connected by transit.

I've never heard anyone in SF say that South San Francisco is well connected by transit before. BART takes a rather circuitous route to get to the city's western edge and most Caltrain service skips its (rather sad) station.

Is that the station where you might exit onto the tracks of an oncoming (but waiting) train?

It is. They have a holdout rule though, trains only pull into the station and open their doors when the track is clear for obvious reasons.

I live in SF next to a muni station and to get there I would need to take the muni, then the bart, then the bus. For a total of one hour at least. Driving in no traffic would get me there in 20min.

Same, but from my SF house it'd be 1:40 by public, and at least 30min driving. They're lucky that commuting anywhere in SF tends to suck.

No where in the Bay Area is ‘well connected’ by any kind of transit.

Getting to downtown SF isn't too bad if you optimize for it, but in general I agree that getting around takes quite a while.

Not if you live in Sunset or the Richmond.

The law has you pay taxes of 1% of gross revenue * percentage of global employees working in an SF office. Even if the headquarters moved (and I'd guess it is already a Delaware registered company legally), they'd still have to pay.

Wouldn't this allow another tax dodge, where hiring employees to do nothing in the lowest-cost area you can find winds up saving more money in SF gross receipts taxes than they cost in salary?

For example, if you have $10M/yr in tax incidence and 100 employees all in SF, you could have an on-paper workforce of 1000 Nigerians at the national median wage of roughly $1k/yr, saving $9M/yr in taxes.

It's based on payroll cost (including non-cash compensation), not headcount.

First thing I ask recruiters is the actual street address for companies they want me to be passionate about.

If a company has multiple locations in the bay area, I already know the San Francisco location is not headquarters and I'm not interested.

This is mainly for leadership roles, companies always find it more practical for any lead to be at HQ compared to their trendy satellite/remote experiment.

Google Maps tells me this is a 14 minute drive (old HQ to Oyster Point Park). 16-30 minutes if you want to arrive at 8am. Is that correct? Is that such a game changer? Do that many people not own vehicles or can't carpool to work?

It's a major problem if you don't already commute by car, which is a lot of the City. Don't forget that driving to HQ often is slower than however people currently get there.

When I commuted into the Stripe office by car from Oakland, it would take me about 45 minutes to get there, and well over 60 minutes to get home. With this move, you can add about 30 minutes, at least, on to each end. And that's on a good day and assuming you are already commuting by car.

From Oakland/the East Bay, there is no good way to get to South San Francisco by public transportation. You are looking at a 2+ hour commute in each direction to go < 15 miles

>From Oakland/the East Bay, there is no good way to get to South San Francisco by public transportation.

Is the ferry considered public transportation? I don't live in the area at all, so I'm just poking around on Google Maps to see what the situation is like, so I'm geniuingly asking.

Yup, lots of people ride the ferry.

Google maps work commute estimates in CA are not accurate at all. Probably looking at 30-45mins during rush hour which would be soul crushing if you've previously fought 20 other applicants for a year long lease at a place in walking distance of the old HQ

I work in CA and the estimates are usually accurate to ±10%. There are some rare exceptions for rapidly evolving situations.

Of course, if you do a driving estimate outside of commute hours, it won't match a commute time estimate, in many places.

Where are you guys living that you have to fight 20 people for a lease?

San Francisco is not an easy place to get an affordable apartment, especially one that is located near work and/or good public transportation options.

They'll probably just start running shuttle buses, like every other big company with offices outside the city. It will be a bigger problem for employees who live in the East Bay, but not near the ferry terminals.

It's a fairly easy commute from the city in my experience. BART -> Millbrae or Balboa Park + 15 minute shuttle to the office. Just about every company in SSF that I saw offers some sort of shuttle, and I was at a startup with a much lower cap.

even better: it was mostly against traffic == half empty train (as of 2 years ago). makes the commute sooo much nicer, both ways. felt comfortable enough to get work done on the way in, and read a book on the way back.

As someone who has worked in South SF for years, it is pretty bad for employees. It is a cultural wasteland with few restaurants or interesting things to do. Transit is also poor as both BART and Caltrain are in awkward locations. And the fog is worse. This will be like Uber’s move to Oakland, which got rolled back pretty quickly

Fog is worse than where? I work in SSF as well... A) its where businesses like Stripe should be in the coming years (it wont be creative, it'll be internet infrastructure) B) there is a ferry to Oakland (to help alleviate the absurd traffic jams over the bay bridge) and C) bring some variety (right now SSF is all pharma and med device) into SSF.

There is no reason why SSF couldn't be a thriving, cool place to live and work. It takes companies like Stripe to take the lead and have a vision.

Right now downtown SSF is totally boring but add a good grocery store (ahem, Berkeley Bowl) a couple cool coffee shops, wine bars and great restaurants and it would be a perfect fine place to live and work - half way between the south bay and SF.

Buy, renovate or build a place or open a restaurant in SSF now while you have than chance. It will be corporate, funky but potentially cool in 5 years with your creative and financial energy in it.

Is SSF still a large city in terms of cost of living and owning a home?

Personally, by living in a large city I'm giving up the ability to own a home in exchange for access to niche resources such as ethnic enclaves, bohemian artist communities, cultural events, groups dedicated to uncommon hobbies, etc. Just having trendy restaurants and coffee shops wouldn't do it for me.

I think you’ve nailed for me the difference between superficial trendiness and rich culture, in an urban setting

|bohemian artist communities Do bohemian artist communities still exist in San Francisco? How can they afford to live there?

*65 year old bohemian artist communities that bought their property in 1972

trust fund kids with their MFAs playing at being bohemians, more likely. These days a lot of people who would have been bohemians are drawing porn of cartoon characters on Patreon to pay the bills. Art is a rich man's game now.

The ferry terminal with 12 bike spots (like downtown Oakland BART station which has 8) and no current ferry service to Pier 41? Why doesn't Stripe fork over some $$$ for that if they're so serious?

North of the GG Bridge has great restaurants and plenty to do. More tech companies should move up there, I don't understand why they usually go south of SF. Also, real estate can be found that are still within a range middle class can afford.

Marin is over an hour away by bus from SF, with no train or BART. Basically to work in Marin you have to live in Marin, so any company that moved there wouldn't be taking advantage of the SF/South Bay labor market.

You're looking at closer to three hours depending on where you're coming from. There is a ferry from Larkspur but transit connectivity and parking are limited. The Tiburon and Sausalito ferries are worse.

North of the GG Bridge has great restaurants and plenty to do.

Thanks, I needed the laugh.

Also, real estate can be found that are still within a range middle class can afford.

Compared to what? A tear down in (an OK part of) San Rafael went for around $800,000 a few months ago. Marin is consistently one of the most expensive counties in the Bay Area and there's relatively little public transit and bridge toll to contend with. Marin is also strongly anti-development.

Marin is inaccessible for people who live in South Bay. They will lose out on a lot of senior talent

Maybe someone as large as Stripe can help bring money into the area and fix some of those problems?

Meh. I’ve worked there as well and I think SSF has a lot of potential and it’s clear why:

- SSF has been welcoming new housing (see multistory apartments going up along highway)

- SSF has been welcoming businesses. The new biotech clusters are truly shocking, I’d guess another 5 million sq ft of office/lab space is new or under way. Genentech just submitted a plan to double their foot print.

- it has a decent commercial strip, obviously nothing compared to SF, but how could it be

- it has both a Caltrain and BART station, but your point is true about the locations not being ideal

If you’re a 20-something looking for cool restaurants and an ideal car-less life, then yeah, SF is better, but for the remaining 80% of the population, SSF offers a lot.

> Transit is also poor as both BART and Caltrain are in awkward locations.

How many cities have Both Bart and Caltrain?

> Though Stripe also strongly opposed last November’s Proposition C, which raised business taxes to fund more homelessness services, the company said that wasn’t a major factor for the move.

It would be PR suicide for a company to admit that the increased tax to fund homlessness was a major factor for the move. To accounting though a tax is a tax.

Yeah, I don't really get the point of mentioning something like this. Does anyone expect them to say, "Yeah, we moved because we don't want to pay to help the homeless." PR 101.

I find myself confused about the new tax and unwilling to invoke Cunningham’s Law to get clarity.

So I went to the source (I think) and it appears Stripe would have been taxed at 0.560% on its gross receipts. [0,1]

Assumptions: 1) Stripe would be classed as a “financial services” company per the law and subject to section 953.6 of the law 2) Stripe has gross receipts over $25 million

My confusion is the discussion of a 1% tax rate on gross receipts. I don’t see any business taxed at that rate and on this case neither Stripe nor Square would be.

[0] https://sftreasurer.org/business/taxes-fees/gross-receipts-t... [1] http://library.amlegal.com/nxt/gateway.dll?f=templates&fn=de...

I'm surprised to not see any current Stripe employees in here commenting on the move. Usually you'd see one of The Brothers Collison in a HN Stripe thread.

As a former Stripe (ex-Stripe?), I do buy the story of running out of room. That office is lovely, but they keep growing on a pretty steep curve, and the floors weren't as dense in there as you might imagine. Decidedly cool interior design tho!

It’s sort of late, I’m sure we’ll hear from them eventually.

These days I was thinking about San Francisco and wondering how it had come to that. There’s so much demand, so many people want to move to SF, yet its population has barely moved in the last decade. Why is that?

If anything had gone right, SF should be a HK-like dystopian city filled with electronics and high-tech.

But instead we have a horizontally limited place, that is filled with homeless and restricts new advances like shared kick scooters.

It’s sad.

I suspect that they're paying a dear price for it. The growth that would have contributed to a HK-like metropolis has been displaced to everywhere else: Seattle, Austin, Boulder, LA/NYC, etc.

>If anything had gone right, SF should be a HK-like dystopian city filled with electronics and high-tech.

Do you know what dystopian means? Generally speaking it's not something people pine for.

ADDED: Opinions will of course differ as to whether SF should have more aggressively transformed to be more like Hong Kong. (Which is an extremely expensive city with serious housing problems BTW.)

Turns out if you don’t build new buildings, there’s not really anywhere to put new people. You just start losing quality of life as rents go up and people start doubling up in rooms, families move out (because you can’t afford roommates who don’t pay rent), etc.

This is what the voters here wanted and have been voting for the entire time. Not that I like the outcome either, but considering SF is a pretty wealthy and culturally influential place, I don’t feel sorry for them in the least. It’s just the outcome of decades of policy with public support.

Kilroy Oyster Point is a pretty inaccessible area from San Francisco, you would need to take a limited train via Caltrain that's around 40 minutes to get there. I'm pretty sure this is definitely a blowback from the gross receipts tax and nothing more, even for commuters from the Peninsula would still have to get to the really strange south SF station which is also only accessible via limited express...or commute into one the worst traffic corridors in the Bay Area.

It's right on the freeway, and there's a ferry. I think it's probably about as good as where the AirBnb and GitHub offices are, which are half a mile from BART. I think a lot of their employees are going to be driving in at times that avoid rush hour.

Airbnb office is in SF proper and walkable to Caltrain and BART. South Sf is not remotely comparable.

Wat. Airbnb is super well located in soma. Unless Stripe has shuttles it’s going to be rough.

Stripe will definitely have at least limited shuttles from public transit.

I assume they'll also run commuter shuttles like Genetech.

Yeah I'm wondering why not san bruno, which has fairly accessible caltrain and bart stations in close vicinity of each other, and youtube is there which makes it a more attractive location commute wise.

South SF only get one train an hour, yes, but it only takes an on schedule train 15 minutes station to station.

The gross receipts tax was ridiculously misguided and is going to cause irreparable harm to the city's economy if not fixed. Square and other FinTech companies are most definitely next.

This is what the voters of San Francisco want

Make San Francisco Great Again lol

No, it's a very good move as many digital economy businesses are great at creative accounting making their net receipts look ridiculously small or negative.

And what about companies whose net receipts are actually small?

I think the current binary law (either gross revenue or net receipts for everybody) is flawed. We have to acknowledge different kind of companies exist. One method of taxation cannot be applied to all. Specifically if you engage in activity like trade and your margins are low, gross revenue taxation is clearly unfair. But devising a balanced and bulletproof taxation system that would protect honest companies while preventing abuse seems extremely hard.

Yet almost every other city in the US has managed to do it. Complete incompetence or just willful negligence?

> “Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years”

What a laughable comment, as anyone can just look at the overseas behavior of large companies to see how this is false.

Thornberg skipped ECON101.

"Taxes do not drive business decisions" as a company leaves a city immediately after said city passed a massive tax increase on said company for a city with demonstrably lower taxes.

"Real estate prices drive business decisions, not taxes" as though business are not capable of understanding that real estate costs should take into account the tax implications of said real estate.

They spent a couple of years building a shiny new building, only to move out of it after a year?! What a waste...

This is described as somehow bad news for San Francisco, but I don't see it. Load balancing can be good news both for the old location (less crowded, less competition for housing) and the new one.

Maybe it's counterintuitive for some, but San Francisco is nothing like a old Midwest factory town where reduced jobs and economic activity would be a serious issue. It would be even better if they had moved somewhere further away that needed the jobs and economic growth more, but this isn't a bad result.

This absolutely is bad for San Francisco. South San Francisco is building lots and lots of offices, but not building nearly as many homes. While San Francisco is harmfully negligent at building homes, it is at least building more than its (painfully low-ball) estimated need for high-priced housing. The rest of the peninsula isn’t even building that much. All the counties are far behind at building less-fancy housing.

The effect of moving these high-income jobs to San Mateo County is that Stripe employees will now live in San Francisco and commute to San Mateo, increasing the pressure to gentrify communities near the transit infrastructure, while freeing Stripe’s former office space for another high-tech company that can make even more profit per employee.

Maybe in the short term, but I would expect Stripe workers would now find the peninsula more attractive and gradually move there. There is also the Marina, which might make some ferry commutes from the east bay reasonable and even pleasant. (I still remember commuting from Alameda to Market Street by ferry to be quite nice.)

More density near transit seems like a good result.

More density near transit is not a foregone result. It has to be through political will. This is the YIMBY movement.

The peninsula would absolutely be more attractive for Stripe employees. But as I said, the peninsula is building a tiny fraction of the housing as opposed to jobs. The richest executives can move to the few vacancies that open up, but unless something changes, the rest of the employees have to live elsewhere. https://yimbyaction.org/join/

“Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years”

If I'm paying 50% in taxes as opposed to 10%, I will be making different business decisions.

Most SF startups incorporate in Delaware because of the low corporate taxes.

> Most SF startups incorporate in Delaware because of the low corporate taxes.

That is not true. Most startups everywhere incorporate in Delaware because Delaware has the most robust legal system (e.g. the Court of Chancery) dedicated to handling corporate disputes. More info: https://whyy.org/articles/why-do-so-many-corporations-choose...

This sounds like something a VC would tell the press as an excuse.

It's no coincidence that Delaware has very low corporate taxes:

https://www.investopedia.com/articles/personal-finance/09251...

I find it disappointing that Stripe is moving to a development that is a housing wasteland.

Oyster Point was slated for 1,200 housing units, but biotech opposed them.

> The residential development proposal was met by resistance from representatives of the life sciences industry though, with claims residents living in the area could make it less attractive to businesses.

https://www.smdailyjournal.com/news/local/new-builder-buys-o...

You know, the more I read about this sort of thing, the more I appreciate working for a company with a strong remote-friendly culture.

It's not universal within the organization, but _very_ common in the tech groups I interact with. All this talk about whether one can have pleasing weather vs cost of living highlights that for some, having both is quite possible.

I'm on Canada's west coast, so Vancouver (with crowding, culture and cost) is my nearest approximation to the Bay area. Being at or near HQ is irrelevant when remote work is common-place, and very occasional travel ceases to be a big deal.

Expect this to add at least an hour a day to the commutes of those employees living in East Bay. Oyster Point is a long way from the Bart station. The fastest option will be to change to the shuttle at Glen Park. The ferry is nice for those who live near the terminal, but slower than Bart and shuttle for everyone else.

On a more positive note the Caltrain station is closer, so the East Bay commute could improve significantly in 20-30 years if the Caltrain to Oakland tunnel is ever built.

Stripe CEO was actively against paying taxes to support SF homeless through Prop C. This isn't suprising.

https://www.sfchronicle.com/business/article/Tech-moguls-wor...

This blows, not so much because Stripe is leaving SF, but because it's going just over the border for tax purposes so 100% of employees who live in SF will stay in SF. The company just won't pay their fair share to the city to offset their impact.

The line about this being about space and not taxes is hard to believe.[1] And for good reason. Last year Stripe funded an anti-homeless campaign just $1 shy of the reporting threshold, initially, until they were exposed.[2] That's not something you do if you're proud of sharing your true motivations.

[1] https://www.sfexaminer.com/news/affordable-housing-fee-hike-...

[2] https://missionlocal.org/2018/10/orgy-of-big-money-donations...

> The company just won't pay their fair share to the city to offset their impact.

The company's impact on what?

> Last year Stripe funded an anti-homeless campaign just $1 shy of the reporting threshold

I don’t get the sense that San Francisco’s homeless problem can be solved by throwing dollars at it. San Francisco chooses high housing prices by restricting construction. Its NIMBYs block tackling its homelessness problem.

Money won’t change those choices by San Francisco’s voters. It will just swell another city bureaucracy.

Both things can be true: NIMBYs are contributing to skyrocketing housing prices (and thus a growth in homelessness), AND essential city/county/state services require tax dollars.

I can think of plenty of things that SF locals complain about when I talk to them that would be mitigated by more tax dollars spent by the appropriate agencies. If your argument is that SF local government is a black hole that spends 0% of its tax income on important programs, then that's another matter but requires a bit more support...

> NIMBYs are contributing to skyrocketing housing prices (and thus a growth in homelessness), AND essential city/county/state services require tax dollars

Until the NIMBYs are confronted, throwing money at the homeless problem, best case, randomly burns cash. (More likely, it enriches the politically connected i.e. those same NIMBYs.)

You can’t build enough shelters, nor build them or staff them economically, without solving that problem. You can dance around the permanent population, but you run into the same issue with mental-health and drug clinics. The NIMBYism makes the whole enterprise less effective to the NIMBYs’ benefit.

TL; DR This tax looks like another way for San Francisco to dodge confronting its landowning elite.

(Note: this isn’t a broadside against local taxation. It’s a complaint about this specific tax. San Francisco’s root problem is it refuses to build.)

> NIMBYs are contributing to skyrocketing housing prices (and thus a growth in homelessness)

My impression was that the homeless there cannot afford a home at any price due to life circumstances.

Yes but let’s assume we built free or nearly free housing. We can’t even do that in SF with any speed.

Considering the city already spends around $30k per year per homeless person it's pretty obvious money is not the solution.

That number is a myth. An intentional butchering of the homeless stats and spending numbers for political purposes.

https://www.sfchronicle.com/bayarea/article/Myths-like-homel...

The number is more like $3800 per person per year:

https://www.sfchronicle.com/bayarea/heatherknight/article/Bu...

> That number is a myth

The article [1] posits reasonable hypotheses for why the number might be lower, but doesn’t attempt to calculate it, ending with “math...always making things confusing.”

San Francisco spends a lot on its homeless problem. (Using the article’s numbers, stripping out eviction prevention, about $200 million a year.) It has little to show for it.

[1] https://www.sfchronicle.com/bayarea/article/Myths-like-homel...

> San Francisco spends a lot on its homeless problem with little to show for it.

$241 million from a budget of over $12 billion from a city that with businesses that collectively make hundreds of billions every year. Doesn't seem like that much. Same as 1 SoftBank funded startup that inevitably wastes it.

Little to show for it? The money is going to help people in a awful situation. Just because they haven't disappeared from the streets doesn't mean it's wasted.

The number is more like $3800 per person per year.

https://www.sfchronicle.com/bayarea/heatherknight/article/Bu...

I'm happy for stripe, they made the logical decision.Now hopefully the incompetent administrators of San Francisco will feel some consequence for their actions.

Good. A gross receipts tax is absurd and businesses should move out of the city in protest.

> The company just won't pay their fair share to the city to offset their impact.

I'm not sure what you mean by "offset their impact", but regardless, employees living in SF will still pay local taxes.

[I'm a Stripe employee, but I'm remote from NC and speaking entirely for myself.]

Can't wait until we learn how to work remotely. Would save a ton of resources.

Or you know they could move to a much more accessible and cheaper city like Oakland

Are there good bike paths in San Franciso? It seems like the weather is good enough for year-round biking, which would be a big plus.

Well... their new office is on the SF2G Bayway route, but the whole area is absolutely unfriendly to bikes. Use Google Maps and look at the intersection of Gateway Blvd and Oyster Point Blvd. It's special.

SF won't care as it is the only major American city that seems to want fewer high paying jobs.

> The company will move more than 1,000 employees just 10 miles south of its current South of Market headquarters, which it plans to vacate.

Click bait. They're moving ten miles south of their current office ...

Ehhh.... it's true that this is unlikely to have much impact on Stripe or most of the employees who used the South of Market offics.

But it seems fair to speculate that it could be part of a slippery slope.

And it might have pretty substantial impact on the city of San Francisco (the governmental entity).

  Click bait. They're moving ten miles south of their current office .

Their new location is not only outside SF but is in a different county. SSF is a distinct city in San Mateo county.

All locations south of the City of San Francisco are in a different county!

Hmm, the airport is technically part of the City and County, while distinctly being south of it.

Actually it is in San Mateo county. Wikipedia: "the airport is owned and operated by the City and County of San Francisco, despite it being located in San Mateo County."

Pretty sure that was covered by the 'technically' part

That's not what "technically" means. From the Wikipedia quote, it's literally not in the City and County of SF and is just owned by the government. It's very much south of the city because it's technically not in the city.

Is Hetch Hetchy technically part of the city and county of SF, even though it is in Yosemite?

Thanks then for the correction.

It is a little confusing for me that the city owns or administrates a number of sites outside of what we think of as "San Francisco". It's not been clear to me if you "re-enter San Francisco" when you go to those places. I figured yes. A number of them have signs posted at entry that the city owns it, so it feels like a natural conclusion to make, as if a "now entering..." sign.

I mean, it eliminates the entire East Bay from its pool of possible employees, so that sucks for anyone who lives out there. That’s a pretty big deal for their quality of life.

There is a ferry from Alameda to SSF, so that would at least allow some people to make the trip. Otherwise you’re right, that’s a 1.5 hour commute each way from major East Bay locales.

Agreed, but at the same time BART needs to run more trains to Millbrae for this reason.

BART is more than 4 miles from where Stripe is moving to.

I'd agree with it being bad for the quality of life, but eliminates is a bit of an exaggeration. It makes it more difficult, to be sure, but there's a BART station in South San Francisco and a free shuttle that runs between there and Oyster Point. For anyone coming up from the Peninsula or the South Bay, though, this might be a commuting improvement.

Of course, the big difference is that Stripe's current office is at the edge of SOMA and Mission Bay, within pretty short distance of the Embarcadero and Financial District. Their new office will be...a business park. No offense to business parks -- Bishop Ranch in San Ramon is unexpectedly lovely -- but they're rarely known for their vibrant cafés, restaurants and nightlife.

Do you ride Bart?

You're going from a local commute to bart -> walking to the office, to a local commute to bart -> going to a station that is skipped by 3/4 of bart lines (ie requires an xfer for Antioch, Pleasanton, or Fremont) -> a shitty bus. NB: Bart is ass and generally is too incompetent to align train and bus schedules.

This adds probably at least 45 minutes each way for anyone coming from SF or East Bay locations and using public transit. It's an enormous downgrade.

Before claiming incompetence consider there are at least 23 different transit agencies in the Bay Area BART has to coordinate with. Yes, we need a system that integrates seamlessly (I personally feel it, I ride BART from Oakland to Caltrain in Mountain View 10-12 times a week). But blaming BART alone for this problem misses the root cause: fragmented transit operators. We need a lead or unified agency like the MTA in NYC or WMATA in DC.

Do you ride Bart?

How do you think most East Bay commuters are getting to San Francisco?

This isn't a very helpful argument. I live in Oakland and commute to San Francisco and rarely take Bart because there are many other options that don't involve me breathing directly from someone else's exhalation like we all are forced to on Bart.

Personally, I take casual carpool, https://sfcasualcarpool.com/, to work and a transbay bus home. Total cost is $6.50/day, which is cheaper than commuting by Bart, and because I live 30 mins walking from Bart, it is also much faster.

Yeah I couldn't give you stats on how many people do that commute via car, but bus vs BART is a no brainer. A 10-car BART train can hold about 1,000 people. Bus service can't scale like that (especially not on shared right of ways) which would definitely put you in the minority.

South city may as well be the middle of nowhere transit-wise but the difference between taking BART to Market St vs SSF isn't all that big.

it's 19 minutes each way if you ride the train, and roughly 30 minutes each way if you require a transfer. Plus more waiting time heading north due to worse service intervals.

I'm struggling to figure out how a one hour increase in commute time isn't a big deal. Without even discussing the local bus.

I'm not sure it matters why I'm in the minority in my commute. And if I am in the minority in some populations, I might not be in others. It would seem that quite a few people that live in my neighborhood use the same transportation options that I am, although this is obviously anec-data.

I disagree with your last statement. BART is 4 miles from oyster point, so you would have to take a shuttle. I'm going to assume that is at least 20 minutes more, if I'm being generous. So, for me, that would equate to about a 90 minute commute each way, at a minimum, where as a commute to Market street via BART would be about a 50 minute minimum. 80 minutes per day is not a trivial amount of time for me.

Overall, I'm not sure what the argument here is. That a lot of people take BART? That we should be ok with more commute time?

Most all of my coworkers from East Bay drive in, but my office is in Mission Bay and BART doesn't go there. People used to take BART to the shuttles but so many people were quitting as a company retention thing they started letting everyone wfh during rush hours, commute off hours and gave people free parking instead. I like the flexibility but it's still a pita.

Bay Area needs more robust interconnected public transit, and higher density housing near transit hubs.

I have ridden BART and Caltrain in the past for work. I've had commutes that involve transfers, too -- usually Caltrain to MUNI.

I don't think what you're saying contradicts anything that I said -- I said that the move to SSF makes it more difficult to commute via BART, but that it was too strong to say that it "eliminates" the possibility of doing so.

In any case, I really suspect that if companies keep moving to the SF Bay Area and keep growing, they're going to have to start moving to places that are out of the city. The rent per square foot in SF is approaching $85/ft^2, the highest it's been since the original dotcom boom; downtown San Jose is around $60/ft^2, better but not that much better. But places like San Ramon, Fremont, non-downtown San Jose, and yes, South San Francisco are around $30/ft^2. Some would argue that staying in the Bay Area at all is silly for tech companies at this point; while I don't think I'd make that argument, if I had several hundred employees to find space for, I just don't think I'd do it in the City.

I commute by public transit from Oakland to Mountain View every day, so claiming elimination is a bit extreme.

Sorry, but that's a brutal commute, and I spent 5+ years commuting from Mountain View to SF...by car.

Doesn't Stripe have remote workers?

Anyone in west Oakland or Alameda will actually have a fantastic commute, the new office is steps away from the ferry which is by far the best way to commute in the bay. They'll need to step up service though, earlier boats are already pretty full.

SSF is much less accessible by public transit - going from a major Caltrain station to a minor/local station is a big step down.

The travel times between these two locations can be 60+ minutes depending on mode and time. It is a Big Deal.

"Ten miles South" in the Bay Area might as well be "30 minutes added commute each way, if you are lucky". And that's if you already have a car, which is not really a thing with most people in San Francisco.

Just to give you an idea, according to Google Maps from where I live (Hayes Valley, a pretty central area) it'd take me right now 11 minutes on a car to get to Stripe's headquarter or 33 on public transit. At the new location it'd take me "between 30 minutes and 1 hour" or 1 hour 9 minutes respectively. The driving estimation is super variable because commuter traffic in that corridor is a nightmare.

So no, this is most definitely not click bait.

Why comment if you are obviously ignorant of the situation? To you, 10 miles might mean 10 minutes or less. In this situation, it could lengthen an already lengthy commute for many employees by 30 minutes or more in each direction. I know this because I worked at Stripe and commuted from Oakland to their office South of Market by car.

Why are all these companies in San Francisco?

Because that's where it was the place to be for cool tech companies, start-ups, and venture capitalism.

Now that companies realize they can just move to Witchita, Kansas or wherever else they want, they will.

It's a disappointingly boring corporate campus (the second photo in the article) for a well run company with lots of smart people.

The rendering shows a sad 1990's office park, complete with a path winding artificially along the water, office windows overlooking parking lots, and useless lawn accents that no one will ever play on. Imagine the desolate dystopian feeling when you came in to do a few hours work on a Saturday.

We should have the will, talent, and state capacity to build more San Francisco style urban landscape. High prices cause San Francisco's worst problems. More high quality urban areas would make these areas cheaper and more people could enjoy them.

Come on, that's slightly unfair... "office windows overlooking parking lots" - but with a pretty nice sea view. And the path seems like a nice place to jog at lunch. Maybe even go for a swim?

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