San Francisco split by Silicon Valley's wealth
latimes.com
latimes.com
Then after a few anecdotes of assholes acting like assholes (as if that's representative of anything), Uber is of course targeted. I find this particularly hilarious because I would argue that ride-share companies are exactly the tech companies who are working on real problems. Go ride in a Lyft or Uber X and ask the driver how they feel about the company. Lyft is providing real jobs and making use of resources that would otherwise be notoriously redundant and misused (cars).
You ask me --- lots of really rich people moving into town? Great! Tax 'em.
My point in response to grandparent was that no matter how much money you throw at BART and Muni, political, jurisdictional and infrastructural issues will block further development.
The other possibility is that far more people would live close to work, in the South Bay.
I saw the latter happen. The buses enabled an exodus to SF. This puts pressure on housing cost.
I'm a capitalist whose fine with everything going on in SF to be honest, but I agree that Google is essentially solving a problem it is also helping to create with the buses, so while I don't think they should be criticized I'm also not sitting here cheering them for being environmentally friendly when it was evidently in their best interests to do what they did.
Here's the flipside, although I've never heard anyone actually make the first argument:
-Google the company actively dodges taxes, albeit through tactics common in the corporate world. So while it is pampering its own employees, it is undermining public transit by not paying nearly its fair share into the federal (and likely state) pools that help fund the transit for everyone else. Thus, Google is actively exacerbating inequality.
-Google's buses use public land intended for public transit to provide "stops" for its employees. Google can clearly afford to compensate for this, but, as far as I know, does not do so. This at a time when Muni and other transit agencies could really use the money. Free rent for large corporations is never going to be popular.
-Although there are environmental benefits to the buses, Google, Facebook, etc. are almost certainly not motivated primarily by the environmental benefits but by self interest. In other words, the freeways are full, and getting to South Bay each morning is a nightmare. And yet many desirable engineers etc prefer to live in SF vs South Bay. Hence, the buses, which make it easier for these companies to recruit. This competitive element then puts pressures on other smaller internet companies to run their own buses, even if those buses are not particularly full or if they are driving large distances within SF to pick up only a small number of people or single person at a given stop.
That their intentions aren't pure enough for some is not a reason to not celebrate what they're doing for their employees.
This is false. What do you mean?
http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_Sta...
http://www.bloomberg.com/news/2013-05-22/google-joins-apple-...
>if Google "avoids" taxes on its' income it will end up being paid (at probably a much higher rate) by the shareholders and employees
Also not true. Long term capital gains tax is 15%. Dividends are taxed at the same rate, unless you make over $400k per year, at which point you pay 20%. Corporate taxes, in contrast, are 35% at the federal level. Taken with state taxes the effective rate is close to 40% (http://www.kpmg.com/global/en/services/tax/tax-tools-and-res...). So it's a net loss when Google dodges taxes.
(And I didn't even get into shares held abroad or in retirement accounts.)
(Edits with slightly less confrontational language.)
You're dead wrong.
The corporate tax is 35% at the federal level and anywhere from 1-12% at the state level. Reductions in corporate taxes increase the net income available to shareholders. One easy way for under-levered companies to increase profits for shareholders is to go borrow a bunch of debt (interest expense is deductible). As a sidenote, Minsky thought eliminating corporate taxes might increase economic stability because it would remove the incentive for corps to increase leverage in order to minimize taxes.
You might be thinking of a REIT or a MLP where taxable income is passed through to the partners.
I agree though that they should pay for the use of public land for their bus stops, as they are solving a problem they largely created by making it possible for their employees to live there in the first place.
SF already has pretty high taxes, so the creation of a lot of wealth is not google or anyone elses fault. If SF can't do anything to alleviate poverty with the vast amount of funds it collects then that is the problem.
And if it't not possible anymore because SF is just overall too expensive, then that's life, some cities are wealthier than others, you don't see people moving into Montecito, Bel Air or other rich neighborhoods and demanding affordable housing? Perhaps if the city has become that desirable it just isn't possible anymore.
Not sure what this refers to but San Francisco funds come mainly from payroll tax, sales tax, property tax, and real estate transfer tax.
Payroll tax is levied on companies not people, and even then it's not being levied on the people using these buses as they work down in Mountain View (excepting the small number of SF Googlers who also use the bus, if they do).
Sales tax is going to impact Googlers roughly the same as others in SF. Maybe even less since days are spent in South Bay (if you use the bus and don't work in SF office) and you're likely doing a disproportionate amount of online shopping :)
Property tax is relaively low in San Francisco due to Prop 13, so if you're renting it's not hitting you hard as the property has been held likely for a long time and is held basically steady under prop 13. If you're buying a home in SF you may pay some higher than average property tax but this is held in check by the fact that a 2/3rds popular vote is required for any property tax hike under prop 13. So they're not that bad.
>2-3x more than any of these hippy touchy-feely types who claim that SF is theirs and theirs alone.
Citation needed. This sounds pretty out of wack.
As a purely practical matter, payroll tax is levied on both sides of the employment transaction in the US [0]. Beyond that, diverse economic research in and out of the US suggests that the bulk of the tax incidence [1] of payroll taxes is on employees [2].
>> 2-3x more than any of these hippy touchy-feely types who claim that SF is theirs and theirs alone.
> Citation needed. This sounds pretty out of wack.
Here's some napkin analysis. [3] claims Google's average salary for a software engineer is 113k, and [4] claims that San Francisco / San Mateo's average salary is 64k. Since the 64k is dragged upward by the Google salaries, let's speculate that the Googlers on average make twice as much as the "touchy-feely" residents. It seems totally reasonable to think that someone making twice as much money will pay twice as much across the suite of payroll tax (they earn more), sales tax (they spend more), property tax (they own more property), and transfer tax (they exchange property more often). One would want to empirically corroborate this, but it doesn't sound unreasonable to me.
[0] http://en.wikipedia.org/wiki/Payroll_tax#United_States
[1] http://en.wikipedia.org/wiki/Tax_incidence
[2] http://www.nber.org/papers/w5053
[3] http://www.glassdoor.com/Salary/Google-Salaries-E9079.htm
[4] http://www.bizjournals.com/bizjournals/on-numbers/scott-thom...
Also, it doesn't make sense that Googlers would pay 2x property tax. Property tax does not scale with salary. You can make a ton of money but if you rent you pay (indirectly) the same property tax as your neighbor and the same as the tenant five years ago paying 1/2 the rent (since the same landlord has held the building the whole time and you can't re-appraise under prop 13).
If you buy, meanwhile, Googlers pay extra only to the extent property values rise. While they have gone up (~25% in a year), we have not seen anything close to a doubling. (And it's not clear that Googlers "own more property" as you suggest. While they tend to be wealthier, they also tend to be younger and more geographically mobile, which would encourage renting.)
As for sales tax, think about where that comes from. It doesn't apply to groceries or rent. We're talking about restaurants, bars, car dealerships, and discretionary retail. We're also talking about a population who can eat dinner and lunch and breakfast at work, and get free haircuts and laundry, who tend to order discretionary retail products online, and who live in SF and take a bus to work. Do we really expect them to spend 2-3x buying cars, patronizing local retail, and going out restaurants, and bars?
I do realize Googlers go out and spend big locally from time to time. My point is that the office perks, use of transit, and use of online retail are going to mitigate their contribution to the local sales tax base. They might still spend more on sales tax-able items than the typical San Franciscan, but 2x-3x?
You seem to be confusing SF rent control with California property tax re-appraisal rules. Prop 13 limits on the increase in tax basis value of property don't affect landlords ability to raise rents.
> If you buy, meanwhile, Googlers pay extra only to the extent property values rise.
And, because of Prop 13, not more than 1% more for that reason per year, unless they buy new property or do something else that allows an unlimited move to full market value.
Not confused on that. My point is that the guy paying 2x rent than his predecessor in the unit — rents can rise freely on vacancy under Costa Hawkins, so rent control doesn't play into this as you point out — is not contributing one extra dime in property tax, since the property tax on the building hasn't changed.
Good point on for-sale property, I didn't realize 13 held down those taxes even at sale.
The property tax will change each year as the assessed value can change year to year (but only, absent a change of ownership, increase no more than 1%/year.) The only time it won't change is if the assessed value doesn't change.
Also, as I've mentioned elsewhere in the thread, SF has no income tax (per state law), and the property taxes are held quite low by Prop 13, so saying Googlers make the city richer (compared to other residents) isn't really correct. They certainly do pay some nice sales tax, I'm sure, but it's not like a Googler who makes 2x median income is going to benefit SF 2x a median citizen.
2. Muni does not need more money. SF does not need more money. SF's budget is twice that of Idaho's, and we have far fewer people and far less space than Idaho ( http://www.sfweekly.com/2009-12-16/news/the-worst-run-big-ci... ). Look no further than the ridiculous extension of muni from China town to downtown to see a clear indication of how funds are being completely misused. No one wants to fix the budget problems in SF and its so much easier to just blame whoever happens to be successful at the moment.
3. I'm not sure I disagree with your third point at all but also don't understand how its a negative thing. You are describing normal competition between companies. I can at least provide one piece of information: I used to work in the South Bay and hated the commute and would do everything in my power not to ever do it again, bus or not. So there's plenty of incentive to stay and work in a small company here, I assure you. Do you see lots of small companies running buses (honest question, I'm simply not familiar)? I seem to just see the flipside happening: more small companies simply being in SF.
The broader point I was making isn't Google Is Evil For Not Paying Taxes. The point was, if you're going to not pay taxes, you don't get to play the "I'm a benevolent corporation helping make society a better place" card when you run enormous luxury coaches all over town and use sketchy pick up locations. People will assume the worst intentions.
I actually lean Google on this one. But that doesn't mean I have to buy the argument they are doing this out of the kindess of their Googler hearts. I say make them pay through the teeth for these stops like any red blooded capitalist would. (Like, say, Milton Friedman.)
This is a false dichotomy. You are assuming they would drive instead, when in fact most would not live in SF in the first place. I know plenty of people who bus down to Google/FB/etc and I'm fairly confident in saying the vast majority would not live in SF if the buses didn't exist - its a long grueling commute that is expensive to boot, regardless if you drive or take Caltrain.
I doubt that SF will get its act together regardless of how high it raises taxes. But we can run the experiment to try.
San Francisco CAN have a payroll tax, levied on companies based on pay to employees, a sort of shadow income tax. And indeed it does have a payroll tax. But you'll notice Twitter, Zynga and various other tech companies have gotten themselves exempted (for new hires, after moving to certain downtrod locations, at least in Twitter's case).
(There was a brief political battle between the left and unions like SEIU who opposed these tax breaks and a tech coalition involving Ed Lee, Ron Conway, Twitter and many others who support the payroll tax breaks. Obviously the latter group won.)
I always chuckle when I read comments buying into this notion that all of the "perks" offered by Google et. al. are pure employee luxuries. From the plush buses with WiFi to the cafeterias with restaurant-quality food (whatever that means), the vast majority of these "perks" are designed to maximize the amount of time employees spend at work (or working) and/or increase employee dependence on the employer.
Most of the folks promoting these nonsensical arguments that portray the Bay Area's legions of high-paid tech employees as a pampered, care-free gilded class apparently fail to recognize just how subservient most of these individuals actually are to their employers. They may not be wage slaves, but when your employer picks you up in the morning, takes you home at night and seeks to provide literally everything you need in between...
In any other developed country in the world, it would take less than 30 minutes to go from SF to Palo Alto with a modern train.
It's just a tipping point. The disparity is becoming much more obvious and in-your-face, and busses some people can ride on and others cannot (while in reality totally reasonable) really serve to highlight the feeling of divisiveness.
The funny thing is it seems like this is nothing we haven't seen before- it's gentrification, except some sort of ultra-gentrification where the middle-class are driven out by the upper-middle-class.
What I don't understand is why people don't go where the jobs are. Historically if there was a market boom in a certain industry, people then sought out those skills and went for those jobs. I realize programming is computers and computers are a foreign language to a lot of people, especially middle-class people, but that doesn't mean it's impossible to learn if you just take the time to learn it and maybe some classes or training.
I feel like non-techie middle-class people never even consider a programming job, because it requires doctorate level education or something. It's a total misconception. Anyone can learn Ruby in a couple months if they put their mind to it and get a decent job.
But most of these issues aren't nearly as viscerally visual and high-profile as an exclusive "you can't get on" bus fleet. It's simply an incredibly in-your-face reminder of everything else that is wrong with San Francisco.
> "I find this particularly hilarious because I would argue that ride-share companies are exactly the tech companies who are working on real problems."
As someone who lived in SF, and now lives in NYC, I find this statement sad yet hilarious.
Uber and Lyft exist because of a fundamental dysfunction in Bay Area transit. Lyft isn't even a thing here in NYC, and Uber is barely on anyone's radar - because we have working mass transit. These are only "real problems" because MUNI and BART represent the transit savviness of a wet paper bag. I used to spend more than a NYC subway monthly pass's cost on Ubers when I lived in SF every month, because the transit in that city is so utterly and completely fucked. Even among my social circles of relatively-highly-paid tech-workers, none of us have used Uber more than once or twice.
To be blunt, Uber and Lyft are solutions to the problem that San Francisco can't get its shit together to save its life.
Others in this thread mention that if the investment made in private company shuttles were poured into the public transit system then everyone could benefit. It would be nice, but I don't think this is actually true - the problem with MUNI, Caltrain, and BART isn't due to lack of funding, it's due to extensive corruption and mismanagement. At the agency level, at the municipality level, and at the regional level. Google could've thrown truckloads of cash at them and it would've disappeared into the ether with little to show for it.
I don't blame Google, Facebook, and Apple for running their own shuttles. It was the most rational, least evil choice in response to a fundamental governmental dysfunction. The protest against the growing divide is a red herring - the divide largely exists and is perpetuated by a woefully incompetent and corrupt city government.
There is a growing collection of startups whose primary purpose is fixing SF/Bay Area dysfunction - Uber and Lyft being among them. I'm disappointed at how revolutionary people seem to think they are, when they seem more like they're solving problems that shouldn't exist in a competent, working city, in a highly exclusive and upmarket way. Transportation is horrifyingly broken and people can't get around? Solution: upmarket shiny black sedans priced completely out of reach for everyone except the monied techno-elite. It may be necessary, but forgive me if I don't cheer loudly.
At the risk of making a crappy analogy, the roof is leaking and you're congratulating the guy who came along and put some buckets on the floor.
Are people really envious and want to ride a bus that goes to one place in effectively the middle of nowhere where there is a business park they have no business being at? A lot of things are exclusive, people's cars and residences are some of those. There may be a divide, but no one is complaining they don't get to go inside someone else's house whenever they want, and if they did, they wouldn't be taken seriously.
I'm not sure this is the actual reason or the message you mean to portray.
The majority of NYC subway development occurred prior to the introduction of environmental policies such as NEPA (1970). In fact since 1956, NYC has only constructed 2 additional subway lines (1988, 1989) and currently has one more under construction.
Meanwhile SF BART didn't start operations until 1972. In fact I believe if BART didn't start planning and construction prior to national environmental policy implementation, BART may have never been built.
If we look overseas, since 1970, Tokyo opened 6 subway lines (4 Tokyo Metro, 2 Toei subway--Tokyo has two subway companies). While that doesn't seem like much of a difference, consider that those subway lines directly compete with surface rail transit systems operated by 8 different companies which are "feeder" lines and additional JR which not only is a feeder system, but also operates the main loop line for Tokyo.
It should also be noted that NEPA was actually a direct response to the Interstate Highway project where a common complaint was residents losing their communities or properties due to highway being paved right through the city. But NEPA requires environmental reviews for any new development so mass transit systems were affected as well.
So I would say the dysfunctional is not just at the city or state level, but also at the federal level as well.
1) The busses displace the attention and money of a lot of motivated and well-off tech workers who might otherwise demand improved public transit systems.
2) The busses artificially distort the housing market in SF. Previously the number of people who wanted to live in SF was limited by the number of jobs available in the city - now that number includes anyone with access to a shuttle. And the people with jobs in SF now can't afford to live where they work.
I think the fallacy here is that without the busses, you'd have 10,000 (or whatever the number) tech workers driving 1+ hours from North Beach to Mountain View in their own cars. In reality, most of those people would just move closer to where they work.
These articles frustrate me because they rarely manage to mention obvious factors like, say, supply and demand—a problem that I wrote more about here: http://jseliger.wordpress.com/2013/04/08/connecting-the-dots... . If you're unhappy about rapidly rising housing prices, the simple solution is to build more of it. We have the technology to do so and have for a hundred years.
One can argue that high prices are a reasonable cost for low density, but to do so at least requires some basic knowledge of how supply and demand work.
On a separate note, articles like this also show why newspapers are having so many problems: if a random commenter like me knows more introductory-level econ than the reporter writing about such issues, the reporter has no business writing about business.
And that's the point of the article. How can developers possibly respond to this demand?
Getting an office for your tech startup isn't trivial nor cheap. A lot more of these companies in the south bay along the Caltrain could be in SF if there was more commercial real estate available.
In the Middle East, you have Sheiks creating gigantic palaces that rival wonders of the world, all for their display of wealth and power.
In the Balkans, you have rich gypsies throwing money on women at their weddings and carrying more bling on them than you will ever have in your lifetime.
I just left SF for a bit after living in SoMa for a year. People should understand that spending YOUR money on YOUR wedding to make it special is not an exorbitant display of wealth. Neither is having a corporate jet area at an airport or a charter of private buses for that matter.
It could be worse; much worse.
From my understanding, the throwing of money during a wedding is a tradition in some cultures. It's either used to pay for the wedding, or the money goes around and is used in another wedding.
I've given money at weddings, in an envelope instead of throwing it, but I wouldn't call that a display of wealth. Not if spending YOUR money on YOUR wedding isn't, at least.
SF seems like one of the only places on earth where the general mindset is "I have a absolute human right to live in San Francisco". Good luck trying that attitude in Aspen or Greenwich. The bottom line is that so long as SF is one of the most desirable places in the US to live, people are going to flock here and capitalism will take over (SURPRISE)
Its really just simple supply and demand. There is a lot of people wanting to live in SF (demand) and lots of low paying tenants who dont move causing little vacancies (supply). The end result is astronomical prices.
I don't think that some people asking for some other solution than pure supply-and-demand is untoward. Understanding how they feel: that their home (meaning both the place they live in and their neighborhood) might be more important to them than most other things. There's a certain amount of suffering we cause them with our exercise of simple capitalism. While we can't measure pain in dollars and cents, that doesn't mean we shouldn't care about it. Not everything should be measured in dollars and capitalism is not the only moral system, nor is it inevitable.
I don't have answers (well, actually, I have plenty of opinions on answers but none that are radically different than any other answers already given) but I also don't think that the brou-ha-ha is useless: it's always useful to have these discussions. The end result of this kind of public pressure is often compromise.
Gentrification doesn't mean pushing all residents and culture out of a place - but it typically flows to areas with the least resistance (and location/ proximity).
So if you have an economically desolate area, and gentrification is at one end of the scale with 'detroitification' at the other - what is in the middle?
Increasingly, you are either rich or poor. A have or a have not. Most HN readers are haves or (because you are still young) think you will be haves. But life doesn't always turn out according to plan.
The most worrying thing is that if you put 95% of the people on a ship's back, it's going to sink; together with its front.
http://en.wikipedia.org/wiki/2013_Stockholm_riots
Sweden. Not exactly a bastion of savage Randian individualism.
Not to say that generous welfare states are of no value, but the available data suggest they are far from a panacea
http://en.wikipedia.org/wiki/2005_civil_unrest_in_France
and London riots/flash mobs:
The European riots are only significant because they're unusual against such comparatively low levels of background violence.
The main difference w/ Toronto vs SF is that Toronto has a liberal condo building policy so more affordable housing is being built by a (relatively) booming real estate industry. Whereas SF's property development growth has nowhere near reflected its population/income boom.
I can still see some seniors living in older neighbourhoods in Toronto but most of them have moved to the suburbs.
What would probably be reasonable is 1400/mo studio, 2000/mo 1BR, 2800/mo 2BR. What would be ideal is more like 1200/mo, 1700/mo, 2400/mo respectively. Yeah, that's still expensive, but it's a newer building and hopefully older buildings would be around 80% of that. But that's not going to happen.
Some additional policies like penalizing companies for letting new places be unrented for some amount of time, or allowing developers to (temporarily) displace SRO occupants while they demolish and rebuild higher density buildings in the Tenderloin could possibly help change behaviors towards increasing the supply of more modest housing, but that's not going to happen any time soon. In the meantime, the city is fine letting people do what they want at top as long as it benefits the people at the bottom, with no plans to do anything for people in between.
http://sfbay.craigslist.org/search/apa/pen?query=&zoomToPost...
It's not as simple as you make it out to be. The laws being renter friendly are helpful but they don't solve anything. If I hadn't had the time and money to try to fight this I would probably be looking for a new place right now.
The idea that you actually get to perpetually live in an apartment even if the owner doesn't want you there is quite generous. The idea that it's socially deemed "the right thing to do" is rather progressive.
If those tenant friendly laws are de facto easy to work around - and they are, particularly for poorer tenants - then they are significantly weaker than they seem. That's what the fuss is about. Poorer people get driven out because they don't have the time and money to fight their landlords trying to double their rent, whether legal or not. Richer people like me are able to fight it and win.
I don't think you understand California or San Francisco rental laws. They do not say you get to perpetually live in an apartment even if the owner doesn't want you there. They control how much a landlord can raise rent, and limit some forms of eviction. But they also have many exceptions, and the burden can be on the tenant to prove the landlord is wrong.
I agree with the sentiment that rent control can result in an increase in market prices. But it's not as if the landlords are getting completely screwed, they still have avenues in which they can evict tenants, profitably upgrade the building, and achieve close to market rents. Additionally, a major factor that gets overlooked in the rent control debate is that the 'secondary market' (rooms for rent in rent controlled units) provides fairly affordable housing for young newcomers. Almost everybody I know who lives in SF does so by renting a room in a rent controlled unit that they found through friends or through craigslist. These rooms are significantly cheaper than market rates (rent control by-laws actually require that any rooms in a rent controlled unit must be re-rented at an evenly split price, or normalized price based on square footage, not that everyone abides by those rules), and probably the only reason people with marginal means can afford to live here. So, while rent control may result in an increase in market prices, it also creates a secondary market that allows for economic diversity to continue to exist in SF.
I am somewhat split on rent control, but my gut feeling tells me it is the right thing to do. Allowing landlords to arbitrarily raise rent or randomly evict tenants is unfair and disruptive to people's lives. Rent control allows for a secondary market that lets young and lower income folks get a foot in the door. I think the 'lazy rent controlled tenant who pays nothing because they lived there for 30 years' is largely a myth (or such a rarity that they have only minimal impact on the macro trends) because rent control still allows for evictions, just with a bit more red tape. Also, another factor that doesn't get discussed is the effect of rent control on a downward market. Because rents aren't ruthlessly increased to market rates during the boom times, it means people who get laid off in the bad times can actually afford to stick around and look for a new job for a while, rather than having to lift anchor and move somewhere cheaper. From what I recall, the vacancy rate in SF rose a little bit during the great recession, but no where near as bad as other places.
this concept confounds me (and I stayed in a nice rent controlled apt in SF last week). still, someone else's property, which they invested in/ care for, which they no longer get to control.
IMHO - these are all symptoms of problems that have more to do with astronomical salaries - a symptom of a perceived labor shortage - a symptom of the 'gold rush', et al.
That depends what you mean. Rent control, for example, can be viewed as extremely friendly to the current renters but extremely unfriendly to would-be renters and the rental market as a whole.
NYC isn't cheap, but it isn't quite the level of insanity as San Francisco.
I think everyone's just trying to make sense of the SF real estate market, tech industry workers included. The average rental unit price in SF is now higher than Manhattan, last time I checked.
Hopefully, talking about the craziness of the SF real estate market will lead to more solutions, e.g. public pressure to make commuting from the East bay more feasible ala Brooklyn and Manhattan.
I should just save them and forwarded them to the Google recruiters that contact me 1-2 times a year. Not going to work in the bay area. I like living in a place where my neighbors do not work in tech. I like SF, but what made the city truly extraordinary is gone.
Out of curiosity, why? Where I live, finding real life interactions with people in tech is quite rare, and I wish it were different.
Grass is greener.
I am in agreement that having some interaction with others in the tech industry is important. There should be a happy medium somewhere since living next to nothing but tech workers and lawyers is boring. My current neighbors are teachers, photographers, small business owners, but I wish there was a techie in the mix.
Meeting a lot of people who share your field and passions is really cool. For a little while. Then you realize you can't get away from it - everyone works in tech. You go to a party and end up talking about tech esoterica. You go to a bar and end up talking about tech esoterica. You sit down for a cup of coffee and end up talking about tech esoterica.
It's exhausting after a while. Personally I'm much happier now in a city where there is a substantial tech presence I can seek out, but I can just as easily get away from.
Tech people also don't want to pay 40% of their net income to some rent seeker for a studio appartment. This level of prices will ultimately be toxic to the economy.
People seem surprised by this.
As long as we are adding CS to school curricula, maybe we should add some Econ 101 as well...
I think the real issues are these:
1) Economics is a science, it helps you build a mathematical model of ``what happens if''. It doesn't immediately follow that even if rent control has drawbacks (lowered mobility, gradual conversion of units from apartments to TiCs or condos, higher rent and lower ability for those who move into the city) that they aren't socially acceptable due to perceived benefits. I am not making this argument myself here, by the way (I don't think social benefits of rent control justify the costs); I am merely stating that it isn't as straightforward (going from "rent control has unintended consequences" to "rent control is a wrong policy" is an example of Hume's is-ought fallacy).
2) There are other legal/economics issues besides rent control. There are certain tenant right laws that currently making it very difficult for one-property landlords to rent their property out. In other words if you're moving to South Bay/Fremont or Pleasanton for the next 12 years to better schools (more on this later...) or to New York/London for 5 years to work in finance sector it may be more monetarily advantageous to you to sell or AirBnB the place. If you're an individual with a single investment property it makes all the sense to sell now (or again, to AirBnB) as opposed to continue renting out.
Tenant’s rights is a great concept and undoubtedly tenants should be protected from unsafe conditions, predatory practices, eviction without any notice, harassment, etc... However, some of the laws (e.g., difficulty of eviction for legitimate reasons, bizzare laws that can require a property to wait for 10 years before being rented or sold again after an eviction in some cases, etc...) clearly make things easier for slumlords (individuals/families with more than a single property), large property management companies, and apartment complexes.
3) Non-rent related political/economic issues: namely schools, transportation, and safety. First, there is whole Western half of SF (Sunset, Richmond) that's simply an amazing town: walkable mixed-use neighbourhoods, slightly larger homes, lower rent, less crime. "Small" problem: it takes as long to get to SOMA or FiDi from Inner Richmond as it does from Mountain View or Palo Alto. Sunset is slightly better when muni is on-time (that's like saying "JVM is fast when you're not having a full GC" -- at-grade transportation will enviable suffer delays), but it's still a longer (and more exhausting) commute than driving from, e.g., Daly City.
Second, schools are (literally) a lottery ticket. The known-good public schools (e.g., Lowell) are magnets that are extremely competitive admissions wise. Private schools would be fine, but become unaffordable when there's also rent/mortgage to pay in SF. Child friendly neighbourhoods (likes one I describe above) are generally removed from work areas.
Essentially this leaves only one option: if you're a family, due to safety/space reasons you'll probably have to commute[1] anyway to get to work; since you can commute from somewhere with either cheaper housing (East Bay) or great public schools (South Bay, Fremont area, Pleasanton, etc...), or take a job in one of these areas and have a shorter commuter, the costs of living in SF proper outweigh the benefits...
4) Non-political factors: SF is at the end of Peninsula, with mountains in the middle, and on its south side. It's also highly in demand. You can build up as in Manhattan (and SF should) but even though SF is now cheaper than Manhattan, Manhattan real estate is still unaffordable for most Americans.
In other words, imagine you've an NP-complete algorithm. You can apply every optimization possible, but in the end you either have to throw a core with more transistors at it (where you're limited by physics), throw more parallel cores/distributed CPUs at it (_if_ it happens to be easily parallelizable), or find a heuristic that doesn't give you a complete answer but is good enough (like Miller-Rabin primarily test).
Ultimately I think (but may as well be proven wrong) that a combination of these is what will happen here: reform of housing laws ("optimization") and smaller housing in SF proper ("more transistors on a core"), more SF-like dense urban cores in Bay Area, e.g., more jobs in Oakland/Berkeley, revival of Downtown SJ ("more cores"), and "densification" with a move towards mixed use residential/light commercial in suburbs/exurbs coupled with better public and private transportation options ("heuristical solutions").
[1] To out of towners, here are some numbers from personal experience/experience of friends:
Mid-Richmond to SOMA by bus -- 40 minutes Inner Sunset to SOMA by Muni without delays ~20 minutes
Menlo Park to SOMA -- 35 minutes Daly City to SOMA -- 20 minutes at most Saratoga to FiDi - 1 hour 5 minutes Saratoga to Palo Alto California ave area -- 20 minutes Saratoga to Menlo Park - 30 minutes Mountain View to Menlo Park -- 15 minutes Mountain View to Sunnyvale/Santa Clara - 5-15 minutes
Driving commute in SF proper is not a good option. First, you lose out majorly on the savings of living in the city by having a car (the car itself, insurance, gas, parking, maintenance. Second, there's very little freeway in SF proper, but major job centers (SOMA, downtown) happen to be near freeway exits -- driving on SF surface streets is simply not worth it in terms of gas costs from idling/stop-and-go traffic, damage that happens to your car (with a manual car it means having to replace a clutch more often; with an automatic I can't imagine the stress put on the torque converter), and most importantly the stress/discomfort.
"The number of properties renting for less than $1,772 within a mile of Google shuttle stops declined sharply between 2010 and 2012"
http://www.latimes.com/business/la-fi-silicon-valley-backlas...
So, the real problem is that people want to live conviently to work. If there were only some other way to solve this problem. Unfortunaley, that might would urban planning.
It's great that we're all thinking about the Hyperloop so we can travel 400 miles in 30 minutes. How about crossing San Francisco and into the valley in 30 minutes?
I'm not sure this graphic really contains any information.
Granted, I think it would be nice if San Francisco wasn't left in the dust so to speak... But I can't think of how keeping the city propped up in a certain way aligns with people's and corporations' natural inclinations.
It doesn't add up any other way, I don't think. What is happening is perfectly logical. Maybe unfortunate. But logical.
While buses clearly reduce roadway commuting loads, and are convenient for those inside them, they are also highly visible at pick-up/drop-off points in the City, and in HOV lanes on the freeway - especially visible to people who are waiting for a Muni bus, or who are in heavy traffic watching buses go past in an HOV lane.
Activists who understand this keep talking about buses rather than about people, or about the failures of the City to provide more competitive working environments for tech companies and their workers.
> Fueling the growing rift is a common belief that the vast wealth being amassed by the tech industry is not spilling over into the community.
This is a deliberately naive view of economics. Unless tech workers spend nothing they consume local goods and services and money flows through the economy that way. If you profile tech workers who live in SF you'll tend to find they're young (20s) and tend to spend a lot of their money on "entertainment" (bars, restaurants, etc). How exactly does this not benefit the SF economy?
> Instead, activists say, the high-tech invasion is driving up the cost of living to levels that more San Franciscans cannot afford.
No, ignorance of supply and demand, archaic zoning laws and other artificial constraints on supply drive up the cost of living in SF and the rest of the Bay area.
If, for example, you had high density housing along the Caltrain corridor you'd probably find that a lot less people would feel the need to live in SF.
> She has seen a sharp uptick in evictions under the Ellis Act, the state law that allows a landlord to evict all tenants of a building if it is being taken off the rental market. And now she and the other tenants in her building
This is inevitable when you create artificially low rental prices. If you want to avoid this sort of thing the only way to do it is either a) have a government authority own the buildings or b) subsidize the rent paid on the private market. Rent control is always going to leave owners looking for a way to get out of it.
> So he's hunting for a job as a recruiter in the tech industry.
And who said this isn't benefiting the SF economy?
As for the private buses, I don't recall the cost per worker for the system but I believe it's actually pretty low. BART/Muni/Caltrain/VTA/etc is actually pretty expensive and government subsidized. The real problem here is that public transit in the Bay Area is appallingly organized and run so companies have no real choice but to go private.
But I bet the politicians love all this finger-pointing at tech companies. It certainly takes the heat off them.
What are you talking about? There's plenty of housing by Caltrain. I myself live within bed-shaking distance of Caltrain.
A shortage of residences near Caltrain isn't the problem. The problem is ... all these cities SUCK. They are homogeneous culturally barren wastelands. THAT'S why people want to live in SF.
But by moving to SF in such large numbers, with tech millions burning a hole in their pockets, they are driving up rents and home prices to such a degree that non-techies cannot afford to live there.
As this continues, SF itself will turn into a homogeneous culturally barren wasteland - more like San Jose. And the yuppie bars and overpriced restaurants that remain will be staffed by workers bussed in from somewhere else. The art and music and quirkiness will be long gone.
Too many techies ignore this reality and soothe their conscience by an almost religious belief in meritocracy and that anyone can do what they do, they just need to retrain. I'm not trying to assign blame or say that we should feel guilty about our relative success, but we need to acknowledge the structural problem and think about how it can be solved before it turns into real class warfare.
Were it not for these buses, there would be more cars on the road (and jostling for parking spots, and more pollution) and more people piling into Muni, Caltrain and BART during rush hour. These buses, like the bathrooms in Starbucks, are a private company providing a public good.
I work for a company that doesn't give me these buses. I wish they did. I'm plenty envious. But I am under no illusion that these private bus systems owe me anything more than the lightened traffic burden they already gave me.
Even if the shuttle is convenient, it is still 2-3 hours of your day gone, every day.
I do think they should be paying some sort of fees to use public bus stops etc., but everything else I disagree with in the article and think it's bullshit.
This is true even outside Silicon Valley. A techies community is the Internet. GitHub, Reddit, Hacker News, forums, etc. This trend will only get more prolific as the Internet becomes more immerse.
Not to be dismissive of the impact to those who have up to this point been able to afford it and now must change their lives.. but I don't know if there's any 'cure' for people wanting to sell a scarce resource to the highest bidder.
There are so many reasons for SF's growing wealth gap and housing costs. This is just an article with all the same hate-speech as one blaming a minority.
Plus, who is to decide who is and is not an intellectual. You're characterization probably applies to a greater percentage of the non-techie population than the techie population.
The amount of money the top tier people are making around here should be illegal.
From my years of spending time on HN: being involved in banking or finance means your wealth is undeserved and ill-gotten. When your business fails, you should go to jail.
But the excesses of the technology world are lauded. Because, you know, Napster.
It's some interesting hypocrisy.
And I write "they/we" because I sometimes have the same "hate" towards the banking/finance industry. But sometimes it's well-fed by its methods. Of course I wouldn't demand a clerk to go to jail but I would like to see a few bank bosses that always get away by bribing (or blackmailing) politicians treated the same way a small store boss would be treated.