
Venture Capital’s Answer to High-Priced Housing: Dorms for Grown Ups - prostoalex
http://www.wsj.com/articles/venture-capitals-answer-to-high-priced-housing-dorms-for-grown-ups-1458034201
======
ChuckFrank
I work next to their brand new WeLive on Mission in SF. And from where I sit,
I see trouble.

1\. Similar models are popping up all over the city, including the much more
sophisticated Panoramic just up a block. Beds starting at $1500. Yes Beds.

[https://www.youtube.com/watch?v=3LI0tqVmGtI](https://www.youtube.com/watch?v=3LI0tqVmGtI)

2\. They built the Panoramic in the time it took WeLive to do their interior
improvements. And when they were working on it, it was just a skeleton crew.
The whole time I was thinking ... how are they financing the building? This is
insane.

3\. WeLive has a main floor common space, where they've had two? events since
they opened. Both were modestly attended, but certainly had a college dorm
feel to it. Not anything anyone over 30 would be interested in.

4\. There appears to be value-added services in the common area, a cafe, a
juice bar, etc, but I hardly see it used.

5\. They continue to putter around the building, putting a whole new set of
scaffolding up, taking it down, putting it up again, doing some painting,
taking the taping down, putting it up again, and I wonder ... what on earth
are they doing? They had a year to get this right, what's the hold up.

6\. Compared to the huge number of apartments going in across the street --
1900? WeLive is a ghost town.

[http://www.sfchronicle.com/bayarea/article/S-F-planners-
back...](http://www.sfchronicle.com/bayarea/article/S-F-planners-back-bold-
original-vision-for-6845780.php)

(ps. the Trinity has major problems going in to this as well. I see it as a
huge bungle for the Planners. But I am waiting to see what the Market Street
retail looks like. If it's anything like the Mission Street side, it'll keep
that side of Market dead.)

So, in short, WeLive is some capital intensive problems, that a lot of smart
people are trying to solve, just up the block and across the street, and
nothing I see puts WeLive ahead of these guys.

Especially when landlords stop leasing to them at .5x, so that they can turn
around and dormify the building and get 2x for it. Not with Panorama and
Trinity right there.

~~~
rdl
Panoramic looks pretty awesome. Especially that they're actually doing testing
and research on making something that is optimized.

~~~
aidenn0
I like the naming of the target audience as "Garden variety hipsters"

------
SwellJoe
I have a wide variety of reactions to this. Some positive, some negative. On
the whole, I think it is approaching the problem from the wrong direction.

In order of appearance in my brain:

1\. So the infantilization (or at least very long childhood) of tech workers,
that began with ball pits and video games and three meals a day served in the
office, is complete. Tech workers may never become autonomous, functioning,
adults at this rate.

2\. This sounds kinda nice, actually. But, only for like a week. Then I would
hate everyone I share a bathroom and kitchen with. I'm too old for room mates.

3\. Oh! That's what's bugging me. Subtle age discrimination. People with
families cannot possibly live in these things. People with families cannot
possibly afford to live in actual housing in SF. So, older folks are pushed
out of valley tech companies, without ever having to make ugly hiring
decisions based on age. Younger workers are cheaper and will stay at the
office longer hours (probably not more productive by doing so, but that's more
difficult to measure).

So, yeah, this fits with what I know of the way a lot of VCs think about the
problem of tech workers, as cogs in a money printing machine. This is a more
efficient cog storage unit that happens to provide additional features, like
filtering out older workers and people who want lives outside of work.

And, back to why this is approaching the wrong side of the problem: NIMBYs in
SF and surrounding high rent areas keep housing prices astronomically high, by
preventing construction of dense new housing. All of the valley has single
family homes _everywhere_. Very tall buildings for housing are practically
unheard of.

~~~
jordanb
The VCs are also NIMBYs: they're in those $4 million bungalows in Palo Alto
and they're loving the appreciation, so you could say they're working both
ends.

I propose these dorms be called Nerd Storage Units (NSUs).

~~~
HeyLaughingBoy
Apropos of not a whole hell of a lot: I remember my wife laughing at the
neighbor who had his 11,000 sq ft house on 30 acres of land (fantastic view!)
for sale at $4M because it would never sell for that much.

I really, really hope the $4M bungalow is an exaggeration, but I suspect if
so, it's not by much.

~~~
shas3
Unlikely to be an exaggeration! I know engineers with 5-10 yrs experience
having little choice but to buy homes that cost $1-1.5e6. Can they afford it?
Probably so, but certainly at the cost of lesser savings.

------
downandout
_Unlike traditional investments in the real-estate sector, which tends to be a
slow-growth market with moderate returns, financial backers including Fidelity
Investments and consumer-focused venture-capital fund Maveron are betting on
hyper-fast expansion and startup-like profit._

"Startup-like profit"? So they plan to lose money for as long as investors
will continue to write them checks?

~~~
kordless
If I had to hazard, the profit being referring to is the type where the
company has profit potential on razor thin margins and requires massive cash
infusions to grow it to numbers where the margins are substantial and support
an exit. As long as those "curves" work for those who have money, their money
will flow.

I've hypothesized that technology bubbles are created by injecting large
amounts of stored work (causality) into a system. Stock market, dotcom bubble,
Bitcoin, fuses in your breaker box, etc. In some cases, this stored work
allows for the creation of trust channels. These trust channels are not always
trustworthy. Consider poker games.

I no longer trust VCs because I think their "game" is driven by a very small
set of limited partner's desire to make even more money than they already have
or need. That they are willing to stuff a whole generation into a dorm on the
"ifs and buts" of an exit is ridiculous.

This "gotta have more" strategy isn't holistic and isn't scalable. When it
pops, it's going to be messy.

Bootstrap it. Move home, if you must. Move to to a cheap Asian country and
build your dream. Whatever you do, do it with your eyes open and your mind
free of dissonance. And remember, profit puts _you_ in charge, not them.

------
cybette
In Finland, there's an initiative called "A home that fits", letting young
adults stay cheaply in the homes for the elderly:
[http://edition.cnn.com/2016/01/21/europe/helsinki-seniors-
ho...](http://edition.cnn.com/2016/01/21/europe/helsinki-seniors-home-oman-
muotoinen-koti/)

~~~
Aeolos
This is actually an amazing idea on so many levels. _Everyone_ wins in this
model: improved quality of life for the elderly, better housing for young
people than they could afford on their own, improved density for city
planners, increased social cohesion.

------
zaro
And here is another statement to confirm that no matter what sector VC is
"reinventing", "disrupting" or "whatever is the latest buzzword" greed always
comes first.

I live in 2 km² mansion, but you know guys I have these nice dorms for you to
squeeze in...

~~~
forgetsusername
I'm not usually one to appeal to classism, but it did make me laugh that Mr.
Zuckerberg is buying up neighbouring properties around his multi-million
dollar mansion, so as not to be disturbed by people in the vicinity.
Meanwhile, Facebook employees are jammed into 200 square-foot dormitories.

~~~
pests
That is not all the details.

Someone wanted to buy and then resell his neighbor's home with a selling point
of living next to Zuckerberg.

Zuckerberg also rents the houses back to the original owners.

[http://www.businessinsider.com/mark-zuckerberg-
buys-4-homes-...](http://www.businessinsider.com/mark-zuckerberg-buys-4-homes-
for-privacy-2013-10)

~~~
jsprogrammer
>Zuckerberg also rents the houses back to the original owners.

Sounds like a twisted reverse mortgage scheme where you get to pay rent on
your old property as well.

Is this what is called financial innovation?

------
djb_hackernews
This is related to a concept I've been thinking about for a while due to some
trends I've seen in Boston.

Suppose you work for Acme Co. Acme Co is a multi national conglomerate.

\- One of Acme Cos subsidiaries operates the public transportation you use to
get to work (The commuter trains in MA are operated by a private company)

\- One of Acme Cos subsidiaries owns the building you live in (this is
particularly interesting because the trend in Boston has been for real estate
investment trusts to buy up large swaths of smaller multi family homes for
their portfolio, homes that were typically used as owner occupied means of
wealth generation)

\- One of Acme Cos subsidiaries is the energy supplier you pay for electricity

\- One of Acme Cos subsidiaries is the cable company you pay for TV and
internet

\- One of Acme Cos subsidiaries is the insurance company you use for your
car/property/health insurance

\- One of Acme Cos subsidiaries is the charter school network you send your
kids to

\- etc

Anyone else see this trend? What's the end game?

~~~
Delmania
That we are very bad at remembering our history. Another post mentions the
company town. As a resident of Rochester, NY, I can not help but think of the
housing developments that were built by Kodak for employees in the company's
height.

Being completely dependent on a single company like this for everything is not
something I'd want to be a part of. Not unless the company had a strong
commitment to its employees. My grandfather was a clothes washer repairman for
many years, but eventually, his job became obsolete. In today's economy, the
company would have "thanked him for his life" and then seen him to the door
like a robber. In his case, the company invested in training him for another
position. Without a strong commitment, this situation sets up a dependence
that reduces a person's ability to handle transitioning when he leaves the
company.

~~~
mattlutze
The self-named village that the Kohler Company (you've probably used their
toilets or back-up generators at some point in your life) headquarters resides
in is a good example. From what I understand, even today if you move there,
you rent the property your house is on from the company, and the company has
authority over aesthetics of house and business changes/renovations.

------
jarman
>coliving experiments in big cities, targeting young adults

I think layman translation of this marketing bullshit is "barrack"

[http://i.imgur.com/UB56u0G.jpg](http://i.imgur.com/UB56u0G.jpg)

~~~
talideon
Or better yet: tenement.

~~~
masklinn
I don't know, don't tenements generally have "familial unit" rooms? The rooms
are shared, but usually not with strangers or on a large scale. Barracks or
"worker dormitories" fit better.

~~~
dalke
I like your "worker dormitories". Alternatives include rooming house, single
room occupancy (SRO), flophouse, communal apartment, and cohousing, depending
on the details.

------
ChuckMcM
My favorite quote from the story: _" Variants include rooming houses,
boardinghouses and single-room occupancy hotels, all of which offered housing
for new arrivals and others in the working class, often with common facilities
like shared bathrooms and in some cases ground-floor dining rooms."_

Think about that for a moment. This isn't a new idea, it is a recurrence of an
idea that existed before when there was a huge gap between the "working class"
and the "middle class". Think about all of the variables that make the system
work that way, first you have to have a weak enough government that a small
number of people can shut down the production of market rate housing, then you
have to have a growing income disparity that can "freeze out" and separate the
existing housing that spans the gap.

If I were a city supervisor I'd see the success of "rooming houses" as a
failure of city management.

------
Spooky23
This is insane. You could literally live palatially in any of a number of
different locales for a fraction of the cost. I probably make half of what I
could make in SFO, but my cost of living is 80% less.

I've never lived in SFO, but I've visited. It's a really nice place. But not
nice enough to need this sort of nightmare.

When the economy yo-yos, these will turn into nasty SRO units for
crazy/addicted people and blight the neighborhoods. I can't believe the zoning
people let this go through. It took NYC years and years to clean these types
of units up.

------
anexprogrammer
"The wager is that 20-something residents moving to new cities will pay a
premium"

I may be stupid, but how is charging a premium an answer to high prices?

Most will do what they've always done - house or apartment share.

~~~
w1ntermute
The VC model necessitates throwing things that seem insane but have huge
potential against the wall and seeing what sticks. On the off chance that
they're right, everyone involved will profit handsomely.

------
cookiecaper
Hey VCs, I have another idea for you: spread out a little. I'd have to get
paid a completely ridiculous sum of money before I'd be willing to move to San
Francisco. People are over it.

This country is massive and has plenty of open land. The U.S. is the 3rd
largest country by land area (behind Russia and Canada), but excepting Alaska,
virtually all of our land is quite habitable, something neither Russia nor
Canada can say. There is no reason anyone here should be paying $4k/mo to live
in a tiny apartment.

On top of that, California is one of the worst states for business in the
country.

There are ~40 states that have a totally untapped pool of resources including
people, housing and land and a business-friendly legislature. Get out there
and use them. And developers, push back against companies that want to enforce
an SV-centric working methodology.

~~~
ebiester
This is always bizarre to me. California is the biggest economy as a state in
the country. As such, for as many people say it's "bad for business," there
are a lot of businesses choosing it for a destination.

~~~
cookiecaper
California is the most populous state in the country; it has about 12 million
more people than the next-biggest state (Texas). In general, people aren't
really actively choosing it as much as they're either a) already there and
using it by default or b) forced to be there to more easily access the market
of almost 40 million people that reside there. This is in fact the only reason
that California _can afford_ to mistreat business owners -- they have a great
deal of leverage.

However, tech hubs are draws in and of themselves, and they could easily be
located in friendlier states. People will come out to them.

~~~
st3v3r
Again, California is NOT mistreating business owners. Not in the least.
They're simply not screwing over workers.

As for those other tech hubs? Most are located in places where workers don't
have basic rights, like the right to switch jobs (non-competes aren't
enforceable in California) or the right to own the work they do on their own
time (Employers in most cases cannot lay claim to work that someone does on
their own time without company resources). Hence, they will never be popular
as tech hubs or see the ecosystem of startups that Silicon Valley has.

------
jackcosgrove
I wanted to live in a dorm after college mainly for the social aspects, but
now that I am in my thirties it would be miserable. I care more about peace
and quiet, being settled, and privacy than about mobility or socializing. That
said I think there's definitely a market for this, although there are
apartment buildings in certain cities that are mostly filled with young
college grads and I don't see how that's different. If competing on cost, then
there's definitely a market for this.

I would worry about the safety and quality of such living arrangements,
though. Buildings like this were built many years ago called single-room
occupancy (SRO) residences. They eventually became havens for vagrants and
other hard-luck elements. As a result, SRO residences were outlawed in many
cities.

------
cheriot
I've lived in houses with up to 4 other people. When I travel, I frequently
use hostels. This sounds like an interesting concept if executed well. The
main reason I eventually moved into a two bedroom apartment was more to have a
better location and nicer place than to get away from people.

How many resources do we waste on underutilized space? The US is more extreme
here than any other country I've heard of.

~~~
randomgyatwork
I've always preferred my own space, even when I lived with 3 other people I
was in the basement by myself.

------
theinternetman
Calling this dystopian is giving it too much credit, it's just plain grim.

~~~
knughit
Funny how people call college dorm living "the best time of your life" but
post-college is "grim"

~~~
iamnothere
They usually call _college_ "the best time of your life," not dorm living.
Most college kids don't stay in dorms past their freshman year, and the ones
that do don't have nearly as much fun as the ones who find off-campus
accommodations. (Dorms in many schools, especially state schools, often forbid
alcohol.)

------
alanmeaney
A bit like the problem dating apps have, the more successful you are, the more
churn you create.

Once a group of friends come together they'll get a house share of their own
instead of sharing with strangers. Probably be cheaper too. Have they modeled
for high churn rates in their already thin margins?

A premium service leaves your very vulnerable to the tide going out on
disposable income. The co-living space will be left with higher long term
leases they can no longer service. I really want to figure out a way to short
services like WeWork at a 16b valuation.

~~~
rm_-rf_slash
Speaking of dating apps, the worst part about dorm life was hearing people
have sex or making sure your roommate knows not to walk in when they see a
sock on the door.

If I were single and working 80 hours a week so my boss's boss can make
billions on an IPO while I end up with barely enough to afford a Bay Area
house, then maybe I would consider these arrangements for a little while. But
instead I have a girlfriend and we value certain things more than money.

~~~
yarou
> Speaking of dating apps, the worst part about dorm life was hearing people
> have sex or making sure your roommate knows not to walk in when they see a
> sock on the door.

Wait, what? I always thought the sock on the door was the signal to join in.

~~~
rm_-rf_slash
That was if the sock was _under_ the door.

You were one of _those_ roommates, weren't you?

------
klunger
Thanks to the paywall, I cannot read this article.

But, it seems like VC's have rediscovered that cutting edge Victorian
technology, the boarding house.
[https://en.wikipedia.org/wiki/Boarding_house](https://en.wikipedia.org/wiki/Boarding_house)

~~~
ash
> Thanks to the paywall, I cannot read this article.

Click "web" link below this thread title to open up Google search. Then follow
the first link.

~~~
bluehazed
This doesn't seem to work anymore for a good number of people.

~~~
bbradley406
I've noticed that it won't work for most sites (for me, in Chrome at least)
unless I open the web link in an incognito window. I assume it's related to
cookies / referrer in some way

------
crispyambulance
I am skeptical that anyone will "disrupt" the low-cost housing market while
make anything remotely close to an ROI that a VC expects.

20-somethings are miserable enough already, no need to commoditize their
misery.

------
efaref
Perhaps companies like Apple can get tips on worker dormitories from their
business partners in asia:

[http://www.theatlantic.com/international/archive/2012/10/ins...](http://www.theatlantic.com/international/archive/2012/10/inside-
foxconn-3-some-dormitories/263900/)

~~~
lior9999
You mean every single company building electronics in China? "Companies like
Apple" includes effectively every single company making electronics at a large
scale.

------
Apocryphon
I've always wondered if there's something inherently collegiate to the culture
of tech, at least in SV startup culture. The veneration of youth, the alpha
geek posturing, religious wars over languages/platforms/methodologies, work
benefits being things like onsite bars and foosball tables, and the gender
issues. I'm not saying that the media hysteria is accurate, but it seems like
for whatever reason, software seems to have more of an arrested development
culture than say, electrical engineering. Or other scientific and
technological industries.

Could it be because software has a lower bar of entry, and with many young
programmers starting work during college, right out of college, or dropping
out entirely to start their own companies, there's less social development and
growth than in other fields? In any case, having dorms be the solution to the
housing crisis seems to fit with that college culture.

~~~
fapjacks
My personal opinion is that it has to do with the kind of people starting and
running the companies (startups) that hire programmers in the first place.
Company culture, after all, obeys the law of gravity like most things in a
company. And I think it would be a useful exercise to study the source of the
culture propagated in the stereotype you mention.

~~~
Apocryphon
Given that the last few iterations of the computing revolution (Gates & co. to
the Steves for PCs, Page & Brin to Zuckerberg for the web) have been shaped by
bachelor university students or dropouts, all of whom embodied the code-until-
burnout all-nighter lifestyle, I see what you mean. It's not just the people
starting the companies- it's the people who started the fields!

------
chtujdd
Welcome to late stage capitalism, please enjoy your stay!

It's truly wonderful how the financial industry makes their money by inflating
the price of things we need to live, through the mechanism of speculation, and
then turns around to offer dystopian "solutions" like this.

~~~
eldavido
I think 10 yrs of zero interest rate policy by the Fed has as much to do with
it as the "financial industry".

I, for one, can't wait for a return to a more normal 2-3% fed funds rate.
It'll give pensioners a chance at a reasonable retirement, and bring house
prices down a bit, but we won't get it until the fed starts to see a bit of
inflation.

------
S4M
Now I see why VC funded startups don't like to hire remote workers.

------
mathattack
In Japan's 1980s real estate bubble Corporate Dorms were a thing too. The
major difference was that they were company-specific.

As long as the locations can be reused for other housing, I'm perfectly happy
to watch VCs invest money in the area. More housing stock is good. If
investors make money, great. If they lose money, that's part of the risk. If
the price point is wrong, the place will go belly up, someone will buy it out
of bankruptcy and make a go of it at a lower price point.

SF will never have a shortage of young people in dire need of cheaper housing.

------
SixSigma
Good idea. Bathrooms are under utilized, same for kitchens.

But it's a nightmare sharing with people who are strangers without some sort
of authority to appeal to for noise / filth / shitty behaviour.

EDIT: seems people disagree. Well I've spent 2 years as a mature student
living in that exact sort of housing in two different places. One with en-
suite and one with shared bathroom.

Getting stuff clean and not having noise are constant irritations. Good luck
getting the 6 friends sharing a dorm below you to keep the noise down.

~~~
touristtam
Sure but it is the same challenge that exist with Road Congestion, Public
Transport and countless of other services where there is a recurrent rush of
influx at precise time. Trying sharing the same bathroom with three other
adult working 9-5, whom aren't your friend or family members.

~~~
SixSigma
Yep, that was my point.

From experience I would say a room + en-suite bathroom is the only way to stay
sane.

The grind of the kitchen wears you down. Where I am now my roommate cleans his
plate when he is preparing his next meal so there is always one dirty plate on
the side in the kitchen. The stovetop always has bits of food on it.

One gets tired of saying "Can you not?" because it is petty and you become a
pain in the ass.

I've stayed in plenty of hostels too. People there will leave what they can
get away with but the occasional member of staff is enough to keep things in
check.

I would be all for this kind of living arrangement if the "can you not" was
externalised to an authority figure to whom you could complain anonymously.

I also sleep with foam earplugs in. Thank goodness for health and safety at
work :) The noise isn't enough to warrant real complaint - just people living
and having fun. I guess plenty of people live with that. My actual home is
silent so when I'm on the road I notice the bustle.

------
puppetmaster3
Top comment on the article: FRANK DEUTSCHMANN "Ah, the return of the rooming
house - a fitting capstone for the Obama presidency. Yeah, he caused that."

~~~
cafard
I didn't know the rooming house had gone away, for one thing. For another,
this sounds less like the boarding house my father lived in than the group
houses my friends I lived in. Obama wasn't born in my father's boarding house
days, and I don't think he was out of college when I lived in group houses.

------
rboyd
I thought this was going to be about the Draper University of Heroes [1],
which looks like a competing space for wantrepreneurs fond of close-quarters
living spaces. That one looks even more prestigious, but apparently you also
have to take an oath to gain entry. Maybe a great option if you're within the
age limit (18-28) and you're long on dreams but short on self-respect.

Seriously VCs, what are you guys thinking? These poor kids.

[1] [http://blog.sfgate.com/pender/2013/07/28/tim-drapers-
boardin...](http://blog.sfgate.com/pender/2013/07/28/tim-drapers-boarding-
school-for-heroes-in-san-mateo/)

------
shoyer
Anyone else bothered by the misleading chart "Rent as a percentage of income,
people age 22-34"? It claims 78% for San Francisco and 65% for New York, which
is absurd considering that people pay taxes.

I suspect the graphic is really showing the ratio of "median rent in San
Francisco" to "median income income in San Francisco for people aged 22-34",
which is much less meaningful (though it does say something about how
expensive housing is).

Does anyone have actual statistics on the percentage of income that young
people pay on rent, i.e., "median ratio of rent to income for people aged
22-34 in San Francisco"?

~~~
a_c_s
As a percentage of take home pay, those figures are quite plausible at least
for NYC.

Looks like StreetEasy agrees, putting the figure at 58.4% for all renters:
[http://streeteasy.com/blog/new-york-city-rent-
affordability/](http://streeteasy.com/blog/new-york-city-rent-affordability/)

------
Johnie
NYC recently changed regulations around apartments to allow for Micro
Apartments. It reflects the changing demand from millennials (ownership vs
rent, suburb vs urban)

[http://www.nytimes.com/2015/11/22/realestate/leasing-
begins-...](http://www.nytimes.com/2015/11/22/realestate/leasing-begins-for-
new-yorks-first-micro-apartments.html?_r=0)

------
moistgorilla
I can't wait to live in a tenement with my coworkers and getting my daily
rations of soylent and coffee from a dispenser in the wall.

------
mstade
So, what you're saying is the hippies were on to something? Legalized pot and
communal living – what a time to be alive!

~~~
yolesaber
People associated with the hippie movement / sympathetic to its ideals have
made massive, massive contributions to the history of personal computing.
Check out
[https://en.wikipedia.org/wiki/What_the_Dormouse_Said](https://en.wikipedia.org/wiki/What_the_Dormouse_Said)

That being said, both legalized weed and communal living are perfect examples
of how counterculture ideas can become co-opted and corrupted by establishment
greed.

~~~
acheron
_People associated with the hippie movement / sympathetic to its ideals have
made massive, massive contributions to the history of personal computing._

As the old joke goes, "the two biggest things to come out of Berkeley are LSD
and Unix. This is probably not a coincidence."

~~~
yolesaber
Two of my favorite things :)

------
nathan_f77
> to live in what is essentially an upscale college dorm or a retirement home
> for the young.

I take offense at this sentence. The author is criticizing co-living
arrangements as if they were only for the young and poor, or the elderly who
can't take care of themselves.

I think human connection is the key to happiness, and I hate the idea that a
responsible adult must live alone, or only with their SO and family. I think
living in a community can make life so much better. Whether that's a dorm at
college, a retirement home, a coliving space in an expensive city, or an eco-
friendly housing project where families live together and share common areas.
They're all great. Don't bring in this ridiculous stigma against a new idea,
when people living in the suburbs don't even know their own neighbors.

~~~
JoeAltmaier
For some of us, the dorm life wasn't rainbows and sunshine. We were the ones
who moved 'off-campus' as soon as possible. I'm sure there're better
arrangements, but once burned twice careful.

------
supergeek133
Every time something like this comes up I keep asking.. which will happen
first: 1) People with ideas will start refusing to move to that area, because
of expense. 2) The capital will FINALLY start seeking other locations where
they get more output for their funding. 3) With #2 the capital can come from
SF, but allow the company to 'live' outside the valley, or even outside the
state.

I've been seeing recent articles comparing the dying/aging VC scenes of
Austin, Seattle, etc.

I just don't get why the head isn't being removed from the sand on this. It
feels like when a founder gets funded their first concern is living expenses
and food, not "how many people can I hire".

It's getting crazy, it's a race to the bottom it feels like.

~~~
eldavido
I think the endgame here is having the business end of your company near
capital/partners/customers and the operational/R&D end in a lower-cost area.

I'm all for moving to a lower-cost area, but you can't deny the huge benefits
that come from being near hundreds of funding sources and partners that SF/SV
of today offers.

In time I believe innovation will follow the innovators (not the money guys)
but that day isn't today.

~~~
Maro
This is already happening for SV startups founded by foreigners/1st gen. It's
much cheaper to keep engineering in India or E.Europe, save about 50-75%. I
worked at Prezi, founded by Hungarians, and 2/3 of the company is in Budapest,
with a smaller office with mngmnt/marketing/finance in SF. I believe GoodData
(founder is from Czech Rep. I believe) is doing something similar.

------
Eric_WVGG
I’ve been trying to figure out some kind of way to get out of New England
every winter — I have wicked bad seasonal affect disorder, and lack the kind
of funds to do a long term AirBnB or hotel. If this is available for short
periods, I would totally try it.

------
im_down_w_otp
Um, most Soviet-era apartment buildings in Russia are setup like this. Many
isolated bedrooms sharing a shower-room/bathroom and a kitchen.

I have to give it to VC's in the Bay Area. If anybody can take Soviet-style
housing arrangements and sell them as "the next big thing", it's these guys.

I mean, it's terrible. But it is impressive.

~~~
medymed
So the soviets were short on industrial building/transportation resources and
had plenty of space versus the san franciscoans who are 'short' on space and
have plenty of industrial resources. the soviet constraint was about as or
maybe less centrally imposed as the san francisco constraint...

~~~
nivertech
I think Soviet functioneers understood that when everybody earns more or less
the same tiny salary, they needed to create some other stimulus to control
masses.

Although USSR had a lot of free space to build, I think new apartments made
artificially scarce, especially with the start of the industrialization, when
many people migrated from a villages to a cities.

People had to work many years at the same workplace in order to advance in a
queue for a new private apartment.

~~~
emp_zealoth
I live in Poland, was born in 91 (pretty much right after the soviets fucked
off), but my family grew up in those times. I think you don't realise just how
ineffective and broken the system was. Housing shortage came from shortage of
everything else, the workfoce didn't give two shits what they made (horror
stories about freshly built budings needing an overhaul, etc

------
ilaksh
Replace suburbs with smaller plots and just accept there is a density limit.
Take advantage of video conferencing to merge areas.

[http://tinyvillages.org](http://tinyvillages.org)

~~~
cookiecaper
In most places, suburbs are not the problem. There is plenty of land open for
sprawl and with modern telecommute technologies, there's no need to clog up
the roadways with traffic. TinyVillages looks like a well-meaning concept but
it neglects the key reasons suburbs exist: people really like having a lot of
space to themselves. Things that ignore what people actually want usually
don't do well.

~~~
ilaksh
You are ignoring the big issue of over-priced urban centers. In cities people
live in apartments happily. So not everyone needs a large home.

There is plenty of room for suburban sprawl, but many cities desperately need
an alternative to large houses and suburbs. I have provided it. You and others
are not able to recognize it because it is actually a novel idea.

~~~
cookiecaper
_Some_ people may live in apartments happily forever, but most humans intend
to pair off and reproduce at some point or another. Units like this may be
suited to the types of people who already live in dorms, but _on top_ of the
fact that people prefer to have a lot of space, they're not a good solution to
the type of housing that's needed to accommodate most human families over the
long term. That means the populations that rent will be transient, making it
even less desirable as no real sense of continuity or community history will
exist there. Now there are 3 big factors working against it: it's too small to
start with, it won't accommodate people as they form families, and because of
1 and 2, it will have a high turnover rate, which makes for disinterested and
fatigued neighbors. It doesn't work.

As many other commenters in this thread have indicated, this is not a new idea
by any means. There are many examples of tiny units and condensed urban spaces
all over the world, and they're not popular.

~~~
ilaksh
Some 3 person families will be fine living in a 512 square foot home. That's
not too uncommon globally. For a family we could also have double or triple
sized units if that's what people want.

The units I portrayed are nothing like dorms and they are not apartments, so
you probably didn't actually read it. Anyway it really doesn't matter what you
think. Since this whole concept is in fact a new idea, it will be quite hard
to market and easy for the average person such as yourself to dismiss.

~~~
cookiecaper
I think you need to work on taking criticism on your project. No matter how
right you may or may not be, dismissing the average Joe and claiming that he's
just too simple to grasp the concept is only going to keep things difficult
for you. If you want to be successful, your average customer is going to be an
average person, and you'll have to meet that person where they're at, not yell
at them for being too dumb to understand your brand new concept. Doing that is
a stereotypical sign of severe self-delusion.

If your site cannot explain the concept in an approachable way, saying "you're
just too dumb to get it" isn't going to help. If you find that you have to say
this to someone, it means that YOU'RE the person with the communication
problem, not them. This is a very important principle to understand as you
seek to gain traction for your concept. Instead of blaming people for their
opinions, understand that this is a real, organic impression of the project
and that it's likely representative of what at least some random segment of
the population is going to think. You'd be wise to note the concerns and work
toward addressing them.

I didn't read the full page word for word, no, but I did spend a good 3-4
minutes skimming it, and I watched the embedded video, which is much more than
most people who come across a random website do. Please find a good mentor who
can help you take criticism without being dismissive of a potential customer
who is providing feedback.

~~~
ilaksh
You didn't take enough time to really understand it as evidenced by your
comments. You were dismissive and disrespectful, and have continued that in
all of your comments.

You were never a potential customer.

------
mason240
When I moved out of home I was renting a small, 1BR basement apartment for
$200/mo (in 2002). "Real" 1BR apartments in my area were going for 3x that.

I'm pretty lucky in hindsight to have landed that place, there really are not
that many basic rentals like that available. Being able to live so cheaply
really helped me accelerate my life situation (I wasn't even a student then
and was literally starting from nothing).

------
BadassFractal
Modern day SV-style programmers are basically factory workers that exist in
really nice conditions.

~~~
pnut
White collar sweat shop.

------
kordless
Given sites have started blocking people from reading the story, even if you
Google the title, I think we should stop posting links to them. I can't read
the article, and if someone else posts the content here, that's not a tenable
solution.

------
hoodoof
But not for the royalty.... err sorry VC's.

------
Laaw
Anyone have additional/alternative sources for this article? I like to read as
many perspectives as possible.

------
joekrill
I can't read this article because it's behind a paywall. Does this mean these
dorms are owned by the employer in the same way a school owns the dorms that
students live in? What happens when the employee is fired/let go? Now they are
out of a job AND have no place to live?

~~~
roymurdock
No, the dorms are owned and operated by real-estate companies and startups
such as Maveron (Common), Stage 3 (Ollie), Open Door, and WeLive.

If you click on "web" next to "flag" and "past", you'll be able to access an
unpaywalled version of the article by clicking through the first link.

~~~
joekrill
Ah, thanks for the clarification.

Clicking through to web doesn't work for me anymore. Even if I open in an
incognito window, it won't let me read the whole thing.

------
Animats
The favelas of tomorrow.

------
Semiapies
How about sanely responding to price signals by looking for places _other_
than San Francisco and the like to set up shop in? If your response to the
situation is _this_ , why should anyone take your business seriously?

------
codeonfire
This new idea is old as time
[https://en.wikipedia.org/wiki/Boarding_house](https://en.wikipedia.org/wiki/Boarding_house)

~~~
Apocryphon
In a better world, micro-units and housing structures like this would be
affordable housing for homeless people. Those with means would not have to
resort to this, and the needy would be off the streets.

------
GarvielLoken
Paywall

~~~
anexprogrammer
Hit the "web" link at top to google and go around paywall

~~~
fblp
The links on Google don't go around the paywall. At least on mobils

~~~
withdavidli
Did for me. On Android, chrome. This is weird. Several times now I have either
bypassed the paywall or got hit with it clicking the title link on different
posts. Anyone know what's up with this?

~~~
nxzero
Please just post the link, thanks.

------
rogersmith
Even better startup idea, concentrate people into camps, make them pay with
labor

pm if you want to be CMO on this one

~~~
dang
We've banned this account for repeatedly breaking the HN guidelines.

If you don't want it to be banned, you're welcome to email hn@ycombinator.com
and give us reason to believe that you'll only post civil, substantive
comments in the future.

------
bjconlan
The return of the flophouse... hopefully after the .com-2.0 crash maybe the
homeless in SF will have a place to call home again.

