Someday Worth Billions, but Now, They Need a Desk | Hacker News Reader

Someday Worth Billions, but Now, They Need a Desk

nytimes.com

33 pointssiculars45 comments

Even in the hot San Francisco market, however, RocketSpace appears to be making a 20 percent premium to current office rental prices, based on its 580 desks, leased by some 130 companies. Mr. Logan, who leases space inside two buildings near the old Pacific Stock Exchange, charges $700 to $800 a month for a “desk,” or table space.

Yet another example of "sell shovels, don't dig for gold".

Yes, and it's out of control. There are at least three different, huge co-working spaces that have popped up near my place. All were formerly businesses that were interesting and useful. Now they're just deadzones of douchebaggery.

Not only are these places generally providers of really lame office space (the people who congregate at co-working spaces are often the worst kind of wantrepreneur -- all talk and "hustle" and zero ability to produce anything of value), they drive up the rents for everyone else, drive out street-level retail and other businesses that help make a neighborhood livable, take up parking spaces during the day, and cause an urban flight problem, wherein everyone leaves the neighborhood when the sun goes down.

IMO, the city needs to change the zoning laws to make these sorts of office desk sublets harder to produce.

"IMO, the city needs to change the zoning laws to make these sorts of office desk sublets harder to produce."

The only reason these types of facilities exist is due to outrageous real estate prices caused by extreme regulation. The solution to regulation induced issues is rarely more tiers of regulation.

That's what hammer ownership does to the world's appearance.

"The only reason these types of facilities exist is due to outrageous real estate prices caused by extreme regulation."

Yeah, I was wondering how long it would take before someone corrected me that San Francisco's real estate prices were due to our zoning laws.

Kudos to you for not disappointing me. Now that you mention it, I'm sure that our real estate prices are indeed a byproduct of the evil, evil guv'ment, and have absolutely nothing to do with the fact that this is one of the most densely populated cities in the world.

No, it's not, and in fact it's not even close. Wikipedia quotes SF at 17,800 people per sq.mi. There are tons of cities that are double that, while Mumbai tops 80,000 and Dhaka, Bangladesh squeezes in 115,000:

http://www.newgeography.com/content/002808-world-urban-areas...

Not that I'm saying SF should aspire to Dhaka standards of housing, but there's way more to it than just population density, or lack thereof.

Yes, of course. Because it's absolutely fair to compare prices in a city in a first-world country to ones in third-world countries, based on population density alone. I'm sure there's nothing wrong with that approach.

But as long as we're staring intently at the bark on the trees, you should tell me: how much more expensive is co-working space in Mumbai than in rural India? Do you get a discount if you bring your own water?

The link includes the two US cities in the top 20, and neither of them is SF. And while density calculation is complicated, on any metric SF is way less dense than NY.

http://www.theatlanticcities.com/housing/2012/10/americas-tr...

And since you ask, the "unlimited" package at this rather swish coworking facility in Mumbai runs Rs.9000, or about $100, per month.

http://bombay-connect.com/space/start-co-working/

I like how you both disregarded my sarcasm, yet simultaneously ignored the substance of the sarcastic question: is it more or less expensive to rent space in Mumbai than in rural India? By what factor?

I'm not an expert on India, but I'm guessing it's a tad more expensive.

One of the most densely populated cities in the world by what measure? It's barely top 10 in the United States (depending on how you define 'city'). Hyperbole won't win any arguments here.

Back to the topic at hand, something's seriously amiss if you believe that San Francisco's Rent Control Ordinance and other regulations have nothing to do with the issue. I believe it's a perfect storm of undesirable rental conditions -- high population, high regulation, and high demand. I'm interested in hearing an argument to the contrary.

San Francisco is is pretty sparse, relatively. It's certainly not top ten or anything.

It's one of the most densely populated places in the US, (depending on how you count metropolitan areas). And, surprise surprise, it's more expensive than most other places in the US.

But hey...last I looked, real estate was pretty expensive in Tokyo, London and Paris too. Their governments must all be pretty evil with the oppressive zoning laws.

[I'm linking to this debunking of your population density claim for the benefit of joshu, who might not be reading all of this thread: https://news.ycombinator.com/item?id=6325649 ]

To be fair, I'm not reading it either. This thread has descended into self-parody.

"Kudos to you for not disappointing me. Now that you mention it, I'm sure that our real estate prices are indeed a byproduct of the evil, evil guv'ment, and have absolutely nothing to do with the fact that this is one of the most densely populated cities in the world."

I'm sorry, are you really so naive as to believe the reason construction costs (and resulting real estate costs) in SF being so high are not in part due to the egregious planning process and large number of zoning/etc regulations?

If so, talking to a commercial or residential builder should dispel that myth pretty quickly.

Rents are a result of demand and offer. San Francisco has seen an incredible raise in rent costs, because more and more people (with money, evidently) want to move to SF (from elsewhere in the country, or from the South Bay).

San Francisco's density is 6,800 people per square kilometre.

New York City's density is 22,200 people per square kilometre. In fact every borough, including Staten Island, is denser.

Tokyo's density is 35,600 people per square kilometre.

Manila is the world's densest at 42,900 per square kilometre.

San Francisco is the 20th most-densely populated area in the United States.

http://en.wikipedia.org/wiki/List_of_United_States_cities_by...

http://en.wikipedia.org/wiki/List_of_cities_proper_by_popula...

That's a pretty ridiculous list of US places to try to argue against SF being dense for the US. Not all of them are as absurd as the 362 people near Louisville, KY, bit, but basically that list says "NYC is denser than SF, as are a few relatively small parts of LA, but SF is easily the second densest large city in the US."

I agree, the US list is skewed by the effects of county size. However, the 5 boroughs of NYC are geographically large in a human scale. All of them are more densely populated than San Francisco, including the ostensibly suburban Staten Island.

Meanwhile, Tokyo is vast and, until recently, could not have Manhattan-esque skyscrapers. It is substantially more densely populated.

San Francisco is more densely populated than a suburb. But the idea that it's amongst the most densely populated places is just not true, either in the world at large or the USA in particular.

OK. And?

And you are wrong about it being one of the most densely populated areas in the US? 20th isn't that high.

Many of those listed above SF on that list are tiny areas within a large continuous dense urban area. They don't really have much independent significance from the surrounding area economically. They are basically historical artifacts, from a time before they all grew and merged together in all but city government.

Real estate is expensive here in large part because it's very densely populated. Whether or not it's #1 or #1,000 on that wikipedia list is almost completely irrelevant to the point I was making.

So the fact that construction cost per square foot is ridiculously high in SF (as are planning expenses as a percentage of overall construction cost) has nothing to do it ?

Exactly. That's why I said "in large part". Because I meant "entirely explained by".

In my experience, when people say "x is caused in large part by y", they then provide some form of evidence to back this statement up.

Instead, you haven't. In fact, when presented with contrary data as has happened in other parts of this thread, you have told people:

1. They are interpreting it wrong

2. Despite the fact that it contradicts your point, it in fact supports your point.

Given that, i'd suggest either

1. You become an economist

2. You realize you need to explain yourself better if you want to actually convince people your opinion is right.

So far, you have convinced no one that I can see, nor actually responded substantively to any point raised against your argument.

OK, ceteris paribus, how does higher density drive up prices?

It would seem to me that the arrow of causality points the other way. Higher prices --> higher buildings --> higher density.

"It would seem to me that the arrow of causality points the other way. Higher prices --> higher buildings --> higher density."

Right. Land was just expensive here before all those people moved in and started competing for it.

Right. So what happens when the arrow is broken at the "higher buildings" point?

How can people "talk to customers" when they're packed in so closely? The proximity of those desks looks like phone calls would be awful for nearby developers' productivity. Well, it would kill my concentration -- headphones just don't cut it. Even movement in my peripheral vision is distracting (thankfully our cats sleep most of the time!).

"How can people "talk to customers" when they're packed in so closely?"

Heheh. They're busy talking to you, potential customer and incidental coworker!

Seriously: hate these places. Hate.

> Charges $700 to $800 a month for a “desk"

Wow. Not even the Hub charges that much and IMO, the Hub has a far better community and workspace.

The Hub has a better community because it has set criteria on who gets to rent desks there, which seem to generally boil down to "do good".

This doesn't describe most startups. Most startups wouldn't be able to work out of the Hub unless rules were bent so far you'd risk creating a black hole.

I worked out of RocketSpace for a while while the company I worked for was still shopping for offices in SF. Nice space, good location, lots of room. I trialed some other coworking spaces and found them wanting - extremely short supply of dedicated desks or poor locations (two were in the glorious section of SOMA where you'd get to play dodge-the-crackhead at all hours of the day).

Space was good, amenities were good, location was convenient, just pricey.

Culturally though somewhat wanting, but that seems par for the course when is comes to modern startups, coworking space or no. A lot of people who are perennially there but you never see them launch anything. A lot of parties after hours where you'd meet hear the most disingenuous pitches known to mankind.

If I can count the number of times I've been pitched to join someone's hot startup that's going to be "worth $1bn a year from now!" while I was working out of that space...

Now that I think of it, I have a pretty cynical view about startup culture that probably traces mostly back to that place. Ah well, the offices were genuinely pretty nice, we got a lot of work done there before the actual office firmed up.

Have to comment anonymously, as I still work in PR.

Quentin has a reputation for being easily pitched by PR people... and well, you can see for yourself:

http://topics.nytimes.com/top/reference/timestopics/people/h...

Stories that are just pitched by flacks, and written up.

This "trend" piece reeks of the same.

This could be optimized. Catheters. Feeding tubes. Keep everybody naked and shaved. Daily sponge baths.

There's no reason to hire extra employees for the sponge baths. Just put a drain in the floor, a shower overhead and a pull cord to activate it.

As for the feeding tubes... soylent. :D

Well this is what you get for wanting to live in the cool city. I get that more and more startup activity has moved up from the valley to the city but you also get far more of the folks with money to burn who want to play entrepreneur who sit around these places chatting with each other more than doing anything.

Down the peninsula we have the hacker dojo for a $100 per month membership with great space and a nice atmosphere. Very rarely do you have to put up with overly loud frat boys playing entrepreneur for show.

You could live and bootstrap from SE Asia for the $700-$800 rent that's being charged for 1 desk.

You are making your money on the internet[1], leverage it into not paying premiums for location based stuff...

[1] Of course, this is the step that may be lacking for a lot of companies that pay these kinds of rents.

You could live and bootstrap in SE USA for that rent too...no sense moving across the planet.

Oh, but the food is better here.

My $100 Hacker Dojo membership sounds like a steal in comparison to their rates.

Yearn for privacy? “Headphones are the new cubicle,” he said.

Milk jugs are the new bathrooms.

> “Headphones are the new cubicle,” he said.

What will be next to go?

Pure insanity.

Reply on news.ycombinator.com