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San Francisco Office Rents Pass Manhattan as Most Expensive in Country (bits.blogs.nytimes.com)
121 points by e15ctr0n on Jan 10, 2016 | hide | past | web | favorite | 146 comments



SF has a law (1986's Prop M) that restricts the supply of new office space: http://www.sfgate.com/bayarea/article/S-F-law-blocks-tech-bo...

One saving grace of the law is that in years when nobody wants to build, the city "banks" the excess for years when construction is over the limit. But we've just about exhausted those savings, and are now hitting the cap.

The developers and the owners of existing office space know that the carryover is about to run dry, and that the cap is going to be in full effect every year for many years to come, and are pricing their long-term leases accordingly. And companies, knowing the same thing, are signing them.

Did you hear that the Sierra Club is going to have to leave the San Francisco headquarters they've occupied since the 1800s, because the rent is now too high for them to afford? (http://www.sfexaminer.com/sierra-club-moving-headquarters-fr...) The irony is that those rising rents are due in no small part to their acting against their stated mission when it comes to allowing tall buildings in this city. They'd rather sprawl people out into the suburbs and beyond, where they'll bulldoze swaths of nature to build their buildings, and the people living and working there will have much larger carbon footprints.


> The irony is that those rising rents are due in no small part due to their acting against their stated mission when it comes to allowing tall buildings in this city. They'd rather sprawl people out into the suburbs and beyond, where they'll bulldoze swaths of nature to build their buildings, and the people living and working there will have much larger carbon footprints.

Berkeley is especially guilty of this. Last I heard, a few years ago, the building cap was something ridiculously low. I was told six stories was the max by a friend as we carpooled to work from East Bay to South Bay due to the scarcity of attractive rental spaces in SB. Thus, there is major congestion toward and away from SF every day as the population cannot be condensed. Berkeley is the most NIMBY city I've seen.

It took me two years to find a high quality space to rent in an attractive part of Oakland and this was about eight years ago. Today, there's no chance I'd give it up as I'm doubtful I could ever get as lucky in the present market. I've concluded that if I opt to spend a year traveling, I'll have to pay rent on my present space while I'm not using it because I don't want to live in a delapidated unit at an even higher rate when I come home.


Six stories isn't so bad; that's what they have throughout most of Paris, and it's enough to support vibrant, gloriously walkable neighborhoods with world-class transit and lots of public open space.

In SF, the vast majority of the city is zoned for a maximum of four stories, including the parcels surrounding most of its major transit hubs:

http://redd.it/3qu9uv

If we added those two extra stories, even just within 1/8th of a mile of transit hubs, it would yield enough housing to make a big dent in everyone's rent. We wouldn't even need any truly tall buildings.


There is a TON of extra (wasted?) space in SF as compared to Paris. Look at a street in Paris; then look at a street in SF: huge lanes, parking, large boardwalks, etc. Even if they had the same limits on stories, it would still be significantly different.


Paris also has a density more than three times that of San Francisco, and we don't need to go nearly that high to solve the problems we're facing right now. There are a great many people who want to live in denser districts, which is evidenced by the fact that the districts with high density have the highest rents. If low-density districts were more desirable, you'd expect to see them more expensive, but the most expensive area of SF (for renting) is... FiDi.

If the city were to become unpleasantly dense it would be evident in people's actual, chosen aggregate preferences.

But raldi hasn't really touched on the situation, in my opinion: much of the city is not only limited by height, but by the number of units per building, usually to 2 or 3. It's not the end of the world to raise that to 8 or so.


What large boardwalks are you referring to? If you mean sidewalks, they're much wider in Paris. That's why their sidewalk cafes are so much more charming than ours.


You should open up some satellite map pictures and just pan around a bit. As a general rule most of the streets of Paris don’t have too much sidewalk. Larger boulevards do of course.


Even 4 stories is pretty high density compared to the Bay Area norm.

More importantly, in SF, the vast majority of the city is zoned for 1 or 1–2 housing units per lot, with residences only (no mixed use), which means that in practice a huge part of the city is stuck at 1–2 stories. The lot shapes are these skinny awkward things that leave a little yard in the back, but many of those are basically unused dirt patches. Then add wide streets with huge amounts of street parking.


It's not bad if it's the whole city but good luck re-zoning the low density neighborhoods (or anything at all) in Berkeley. Berkeley politics are best described as leftist conservative. You should have seen the fight over just the downtown plan.


Compare the streets of Paris with the streets of Berkeley. The former was built before cars were a thing, and the narrow roads with less parking lots make for a greater density.


I'm surprised that the Sierra Club didn't buy their own offices if they have been there since the 1800s.


I'm kind of saddened with where the Sierra Club has ended up. I'm very favorable to the idea of defending the environment, but those guys are pretty stodgy in their ways. For instance, their opposition to mountain biking has turned a large and growing number of people away from them and their message, which is sad, as it's a group that has a lot in common. Their opposition to density is even battier.


That sounds similar to my experience when exploring the Green party's platform a few years back (maybe 2012). In theory, it'd seem like I'd be on their side with most issues but everything was presented in this unprofessional, amateur hour style that left me wondering about the efficacy of the entire movement. It's almost as if these movements aren't based on a rational perspective, but instead an emotional one, which just happens to overlap in many ways with a rational (from my, let's not destroy the Earth, let's let people be the people they'd like to be, let's invest in our infrastructure, and children, and reduce the inequality view of things) one.

This is very anecdotal as I only looked once and who knows they could be more professional now, or their platforms more fully fleshed out. But back when I checked it out, it just sounded like any old person off the street talking about their beliefs. It's not a particularly good look in my opinion.


A leader of the SF Green Party accused me of being a developer shill and anti-environmentalist because I believe it's better for the planet to house people in San Francisco than just about anywhere else. I tried to engage him in a dialogue about the topic, but he flat out refused, effectively saying, "You're completely wrong but I am far too busy to even begin to explain why":

https://www.reddit.com/r/SFBARF/comments/3n6rc0/sfbarf_needs...


"It's almost as if these movements aren't based on a rational perspective, but instead an emotional one"

Aren't most politics based on emotional appeals it's the nature of the beast.


Well... yea I guess that's true. Or a bordering on sociopath's rational perspective of themselves over everyone judging by the riches a lot of these guys and gals "success" stories post winning elections.

That's why I really appreciate Sander's constant peppering of statistics into every talk he gives. As an engineer, it speaks volumes to me.


"The developers and the owners of existing office space know that the carryover is about to run dry, and that the cap is going to be in full effect every year for many years to come, and are pricing their long-term leases accordingly. And companies, knowing the same thing, are signing them."

... just in time for the inevitable and predictable downturn.


...which will be followed a few years later by an inevitable and predictable recovery which will grow to surpass the highs of the previous boom.


To be livable, a city needs a balance between 3 things:

  - Business (commercial real estate)
  - Housing
  - Transportation (streets, busses, trains, flying cars)
The first 2 are easy, since they're very profitable to the city and developers. But taxpayers don't want to pay for transportation, and commuters are willing to tolerate horrible traffic and the resulting poor quality of life.

Does San Francisco have a good balance now? What if we doubled business and housing?


But in SF, there's a transit-impact fee commercial and residential real estate developers have to pay. Between that, the market-rate property tax they'll be paying, all the taxes the people inside the building will pay, and their transit fares, new construction is great for transit. Unless there are too many new parking spaces, of course.


SF has plenty of money for transportation. It's just used very ineffectively.


Citation needed. :-) Is the money used on the wrong things? Or on the right things, but not efficiently? Many public works projects end up over budget and behind schedule, so I guess that should be factored in.

Where is the money going, and/or where should it be going?

What % of people who work in San Francisco also live there?


San Francisco's budget is vastly less efficient than other comparable US cities:

http://www.sfweekly.com/sanfrancisco/the-worst-run-big-city-...

As for people living vs. working in SF, this comment does an excellent job explaining it, with sources:

https://news.ycombinator.com/item?id=10875936

tl;dr: The increase in population due to daily workers commuting in from outside is vastly smaller than in NYC.


> The chart-topping office rents in San Francisco are also a testament to the city’s geographic constraints, crammed as it is into 47 square miles at the top of a peninsula

It's more of a testament to the city's anti-development attitude. Manhattan has twice the people with half the land area, on an island.


> Manhattan has twice the people with half the land area, on an island.

Manhattan has twice the residents based on U.S. Census population data, but actual daytime population is more than just residents. A more important statistic is commuter-adjusted population [1], i.e. number of people in an area during normal business hours, including workers. That's where Manhattan and San Francisco really diverge.

The commuter-adjusted population of Manhattan is 3.1 M [2], compared to 1.6 M residents [3]. San Francisco has a commuter-adjusted population of 1.0 M [4, 5], compared to 0.8 M residents [5]. In other words, Manhattan's population booms almost 200% during normal business hours, while San Francisco's increases a modest 25%. Manhattan may have 2x more residents, but it has 3x more daytime population than San Francisco.

Given it has about half the land area, Manhattan's daytime population density is thus 6x that of San Francisco.

Attitudes on development -- namely transportation infrastructure and building construction -- certainly contribute to that difference.

1. http://www.census.gov/hhes/commuting/data/daytimepop.html

2. http://www.citylab.com/commute/2013/05/most-important-popula...

3. http://quickfacts.census.gov/qfd/states/36/36061.html

4. http://ww2.kqed.org/lowdown/2014/01/10/how-city-populations-...

5. http://factfinder.census.gov/faces/tableservices/jsf/pages/p...


Everything eweitz mentions is spot on. I'll just note what my sister said not two moments ago when reading some of these comments. "San Francisco is a baby town, a joke, compared to what's going on in Manhattan." And I kinda have to agree. San Francisco's current issues are entirely of their own making. I have no sympathy. I grew up in Queens, lived in Manhattan for 16 years and moved to Dallas a year ago (cause someone paid me.) I've been to SF more times than I can count over the last 10 years for computer related work and conference, etc. You couldn't pay me to live there.

No other place in the country has the kind of network effect that NYC does. It is entirely due to density and density is a direct result of NYC's subway system. As much as New Yorkers love to complain about the subway, and believe me it's a sport out here, we would not be able to accommodate the masses we accommodate without it. Transportation and, of course, vertical space is the way we do it. I really don't know why this is such a mystery to so many not from here. It's kind of glaringly obvious to the most casual of observers.

San Franciscans need to stop navel gazing and look up to the sky. Go up, my friends, go up.


"I grew up in Queens, lived in Manhattan for 16 years and moved to Dallas a year ago (cause someone paid me.) I've been to SF more times than I can count over the last 10 years for computer related work and conference, etc. You couldn't pay me to live there."

Wait, so I could pay you to live in Dallas, but I couldn't pay you to live in SF ?


California's rules, regulations, tone and general outlook on most things irk me, and even more so SF as the epicenter of such things in California. So, no, I don't think one could pay me to live in San Francisco.

It doesn't need to be said here but I'll go ahead and say it anyway - Texas has no state income tax. Sure, they have no mass transit to speak of, but then again, in truth, they don't need it. (Outside of the philosophical view that all metropoli need mass transit, which I agree with.)

Edit: the fact that SF, a city with arguably a third the population of NYC has rents more than NYC is exactly the kind of "thing" that irks me about SF. It's the kind of social dysfunction that's intolerable - for me.

Another is the Bay Bridge. When standing in Marin north of the Golden Gate, there are a number of plaques describing the building of the GGB. A picturesque view with the BB in the background. Guess what? It turns out the GGB was built ahead of schedule and under budget - with no computers! I don't even need to go into the failings of the BB. You get my point.


Ahh I see, you hate regulation, taxes, and don't think a city the size of Dallas really needs mass transit in practice. So this isn't really about San Francisco at all. The only thing that really surprises me now is that you speak highly of New York.

I could describe how much more "social dysfunction" there is in Texas than California at length but I sense its going to be an uphill battle. Suffice it to say that my friends just got back from Austin where they witnessed a "mock shooting" at the university in support of the new open carry gun laws. When your legislators spend time expanding gun rights after repeated mass shootings, you're looking at social dysfunction. These same legislators also found the time to carefully craft anti-abortion legislation recently in an attempt to force all abortion clinics to close until the Supreme Court can overturn the decision. Meanwhile they don't seem to mind all the fake clinics being set up which use tax money and tax benefits to confuse and lie to desperate women who are under extreme stress already. You can have your 0% income tax rate "paradise" and try to remember that Texas has among the highest property tax rates in the country to make up for it.


> You can have your 0% income tax rate "paradise" and try to remember that Texas has among the highest property tax rates in the country to make up for it.

Coming from NY, those property taxes don't really make me even flinch. When you combine lower cost of living, lower real estate and no income tax higher property tax doesn't even move the needle.


Yeah Dallas is really the epitome of good urban planning and land use compared to San Francisco. Lets go get in our cars and drive thirty minutes to Chili's so we can have a real cultural experience </sarcasm>

Texas pretty much defines sprawl in my mind. San Francisco could be more dense but it certainly isn't sprawling.


You'd have to pay a lot more.


"San Francisco is a baby town, a joke, compared to what's going on in Manhattan."

I don't particularly have a soft spot for either city, but I agree with you on the note of maturity. Manhattan has a far better idea of what it's doing compared to SF.


I agree about the Manhattan to SF comparison.

But if you take a less cynical view, doesn't this mean that SF represents a remarkable opportunity?

At some point the population has to get it together, elect better reps, reject the nimbyism and build more towers and trains.

It's actually happening as we speak. New bay bridge, extensions of muni, transbay tower, Salesforce tower, ...

I'm biased living in SF, just getting married, and avoiding the current market rate rents. but I see tremendous opportunities in SF.

Which is crazy to think given all the advantages - nature, water, work, weather - SF has over most other places.


Agreed. That reminds of this old quote (replace france with SF):

>God just finished creating the world. He looks his creation and see France.

>"This country is to beautiful. It's unfair for the others countries."

>And so, God created the French.

On a side note, congratulations on getting married. Hope all goes well.


This is the first time that I read Hacker News that I realized who the poster was. Hopefully Dallas is treating you well!


Ha! This is the first time I've been recognized by someone reading something I wrote! Dallas is actually pretty ok. Shhh... don't let my NY friends know that I said that ;)


Exactly. SF's problem is not just a lack of sensible zoning but also a lack of adequate infrastructure to handle a modern sensible environment for commerce. Manhattan not just doubles its population size each business day but the vast majority of those people use public transit to get there. SF is still far too linked to the car. In many ways NYC is a 21st century center for commerce while SF is largely stuck with a 20th century way of thinking about things.


Manhattan has twice the people with half the land area, on an island.

...that is tightly connected to 10 times that land area as the boroughs of New York City. Everybody leaves that part out. It's more convenient to live in Queens and commute to Manhattan than it is to live in the Outer Richmond and commute to SOMA.

This matters, because the part of San Francisco that people conventionally see as "San Francisco" in has little overlap with the parts of the city that are actually low density. The city north of Market and east of Divisadero is fairly high-density development, by any standard: most buildings are at least six stories, and often taller than that. But to make the other 2/3rds of San Francisco viable as high-density development, you'd need to build a ton of new mass transit. It's car country over there.

There's immense hypocrisy on both sides of this discussion. I think height limits in SOMA and the Financial district and Mission Bay should be higher. But it's hard to stomach density criticisms from people who want to live in cute, victorian, single-family housing in Noe valley themselves, and re-develop the places where poor brown people live. And that's happening a lot around here.


Manhattan is an island. It didn't get tightly connected to a bunch of other land by refusing to let anyone build anything.


That's a fatuous response. There are many reasons why San Francisco doesn't have New York City levels of public transit, the most important of which is that it's a comparatively tiny city, approximately 1/8th the size of New York, by population. If the "bay area" were a single city with a single government, it would be much easier to build a comprehensive transit system.

Moreover, New York has been one of the world's largest cities for over a century. It's had a while to get good at things. San Francisco was a cow-town until the 1980s.

I realize it's self-satisfying to blame NIMBYs for everything, but the facts are more complicated.


An anti-development attitude combined with a less effective and smaller mass transit system compared to NYC.


How do people get away with making bad comparisons in major news sources? Manhattan is 34 square miles surrounded by water. It's an island! This would seem to indicate that there must be more to the problem. Better mass transit into Oakland, for example, would help. That's another 78 square miles of usable land.


While it doesn't effect the city itself, the geography appears to constrain suburbs. The lack of nearby suburbs probably drives prices up.

New York has sprawling suburbs that go into nearby states.

The SF equivalent of a lot of those areas are mountain ranges and oceans. To be sure, SF has suburbs (or suburb equivalents): SV, Oakland, etc. But a lot of prime area for suburbs can't support one.

Draw a 30 miles radius circle from manhattan and SF, and I bet NYC has more livable land.

That said, that is all the more reason for strong development in SF. Or else you are going to end up with SF just being a rich neighborhood for millionaires in a Bay Area megacity.


How many people live in SF and Silicon Valley? 4 million people? There are 20 million people who live in the NY area?

https://en.m.wikipedia.org/wiki/New_York_metropolitan_area

If you want to work in Manhattan, you need to live near mass transit (bus, train) because 30 miles in/out of the island is too painful. That greatly limits where you can live.


I used to live 25 miles from Manhattan. Easy 30 min commute on Metro North.


Really? Where? No need to provide half an answer. I'm sure you meant 30 minutes on the train. I live 3 miles from Manhattan. It takes me between 20-90 minutes by bus.


LIRR is a commuter train that serves over 30miles out.


All the commuter trains in the NY area serve over 30 miles out. NJ Transit and Metro North also serve is several directions into NJ, New York, and CT. No one claimed that they didn't.


You should apply equal skepticism to everything you see in the news. These days, news outlets are all about pushing a particular narrative, not about impartially reporting the facts.


So do we want San Francisco to be more like Manhattan? Is Manhattan the ideal city -- the pinnacle? I think of Manhattan as being noisy, crowded, and no where to park.


Yes, Manhattan is the ideal city. It's so ideal, that even people who live in the other four boroughs of New York City[0] refer to Manhattan as "the City."

[0] New York City is comprised of five boroughs (aka. counties): 1. Manhattan (officially known as New York County) 2. The Bronx (yes, "The Bronx." No one says "Bronx.") 3. Queens 4. Brooklyn (officially known as Kings County) 5. Staten Island


If you have a good transit system you don't need parking.


So basically you work in Manhattan, and live elsewhere. I was thinking of living in Manhattan, and having a car for weekend getaways -- is that possible?


Plus the decline of NYC.

Manhattan is increasingly a financial services company town, and many parts of that industry are drifting to Jersey.


I'm not sure what sort of decline is happening here. Silicon alley is booming. The city is a cultural smogasboard. Hundreds (maybe thousands) of large corporations are centered and based here. Construction is rampant. And the city is likely one of the safest metropolis's in the world.

But maybe you could prove me wrong... I'm not sure, just noting what I see.


The economy of NYC is much less diversified than it was say 20 years ago or in the postwar period.

Those corporate HQs used to come with thousands of workers -- now more likely a couple floors of folks supporting the CEO. A lot of residential construction is funded by capital flight and shady political lobbying that helped get 2/3 top state leaders convicted of corruption charges.

Still a great city, but not the economic behemoth that it was.


I don't know what the underlying geography of SF is like, but in case you have ever wondered why Manhattan is only vertically developed in two areas of the island where there are tall skylines (with a lot of low-lying areas in between, i.e. the Village, Chelsea, Chinatown, Little Italy, etc), it is because those are the only two areas on the island where the bedrock can support that type of development. I don't know if this factors into SF development options, but just an FYI.



This is rather interesting. I took a course many years ago at NYU on the history of the city, and my parent comment was taught to us in the class by none other than the Dean of the actual school. Fascinating.


It's an incredibly common urban legend even in the city itself - fortunately with no basis in reality.

As an example the Metropolitan Life North Building right next to Madison Square Park was originally designed in the 20s to beat the Empire State for height (but sadly, the Depression happened), and that plot of land is firmly on the "soft" ground "unsuitable" for tall skyscrapers.

Not only do we not need the bedrock now, it appears we never needed it - and the engineers of the early 20th century knew this as well as we do.


Yes. And any tall building in SF's Embarcadero stands in defiance of the need for bedrock. A lot of the land there is just old, accidental landfill.

Also, I think, but, I'm not sure, that they built this extremely large, heavy structure right over the bay itself a few years back, something about helping cars get from Oakland to SF and back. I don't know how much bedrock they found underneath the supports for that thing, whatever it's called. Can't seem to remember its name ...


Bedrock is not needed to build a sky scraper. It was just natural trends, not enforced with zoning laws.


>> "Bedrock is not needed to build a sky scraper..."

True, but that's because of comparatively recent developments in geotechnical engineering. They needed it during the first wave of skyscraper development.


The first NYC ones certainly used bedrock. But floating raft system was invented in Chicago in 1882. So I wouldn't say recent.


That's historical and enforced by zoning. Large buildings can now be built anywhere.


There are a bunch of very tall buildings in SF built on landfill.

The issue is entirely politics not engineering.


They're building the new Transbay Tower in SF on soft ground. It just means they had to put in a bunch of very deep piles and a foundation that constituted one of the largest concrete pours of all time. But the real estate market is such that they were happy to do it, in exchange for permission to build the tallest building in the city.


I have a friend whose parents own three houses in SF.

When I asked about the rapidly increasing cost of rent and how it's driving people out, he told me, paraphrasing,

"People don't have a right to live in San Francisco."

Another way of saying that you should only live there if you can afford it.

Needless to say, I'm inclined to believe that NIMBY's cannot be reasoned with.


"People don't have a right to live in San Francisco."

Which is true, although the flip side is that people shouldn't have the right to prevent others from building new housing. At least not for reasons like "it might cause my property value to stop wildly increasing".


I can't speak for everyone, and this is just my personal experience. I grew up in SF, and I haven't seen this sinister quality in people who oppose density. I disagree with them, I'd like to see SF add more density, but my impression is that most of the old timers in SF oppose new development because they are resistant to change and highly suspicious of developers, not because they want to create shortages and spike the value of their property.

In short, at the extreme, the school teacher or SF state professor who was able to support a family and buy a 4 bedroom house in the sunset in 1975 wants the new professor in 2016 to be able to buy a a 4 bedroom house in SF and support a family, and is unhappy that this is no longer possible.

They also tend to believe, rightly or wrongly, that "density" would just mean lots of high end expensive apartments that nobody in the "middle class" can afford. In short (and again, I'm guessing), they are very cynical, perhaps irrationally so, about what development will do.

There are, of course, some pretty horrendous examples of redevelopment projects and so forth in SF. I know, you're already reaching for the keyboard to explain the difference, but you'd be preaching to the choir here. I'm just trying to explain why it's not really a desire to maximize the value of a real estate asset that drives so much of opposition to new housing and development. The whole thing has a very bad reputation in SF.

There is such a thing as YIMBY in San Francisco, often people who have seen their friends and children priced out.


If you are stepping on my toes and refuse to step off, I don't care whether you are being evil or irrational, you are still perpetuating an injustice


Agreed. Although My friend is a nice guy and his folks are nice people, a lack of empathy invariably forms the basis of passive cruelty. Not empathy as in "let's forgive everyone for everything", but "let me honestly consider your point of view even it may conflict with the way I'm supporting myself". This is, of course, generally impossible for most people, including myself, since it takes a great deal of mental and financial security to weather that kind of introspection.


> They also tend to believe, rightly or wrongly, that "density" would just mean lots of high end expensive apartments that nobody in the "middle class" can afford.

That would be wrongly.

Supply and demand are real. The fact that SF is now more expensive that NYC proves it. Restrict supply long enough, and prices will go up.

People who refuse to believe in simple, verifiable facts deserve what they get, "sinister" or not.


Part of the problem, though, is that they don't get what they "deserve." I'm a little hesitant to get into what "deserve" means, but I would agree that people who oppose new housing often don't experience the consequences.

Because of prop 13, property owners are largely insulated from the downside of a sudden spike in housing prices, and because their new neighbors pay far more in taxes, they get to enjoy a higher tax base without contributing to it.

Renters are more vulnerable. Rent control laws are strict in San Francisco, but people who lose their rent controlled apartment after decades are pretty much hosed. It's a risky gamble that works out for some, but not all. Many renters feel they never had the means to get into the housing market, not then, not now, so this gamble wasn't really a choice. This seems to have caused renters and tenants groups to double down on rent control rather than agitate for an increase in supply. Again, this is probably because they perceive new development as catering to the very wealthy.


They're probably right to be cynical. Housing developers want to make as much money as possible, which means that they prefer to build stuff that sells at a premium price - ideally, at a mark-up to the existing older property that it's competing with. Rather hard to drive down prices that way.


While true, it also highly dismissive of structural problems which you have noted. The subtext with this line, whenever I hear it, is essentially "this city is for rich people only."

The "needless to say" bit was on the presumption that SF should not try to imitate Dubai.


I have no problem with this point of view. Highrises will likely ruin the beauty and quaintness of some of SF's neighborhoods in an irrevertable way. There's also zero chance that average rental prices would go down in the short term, if ever: the market is too lucrative and there are plenty of rich people to fill all available slots. On the other hand, if there's little new development, maybe people would finally leave SF alone after a while and go somewhere else. (Or if the tech bubble bursts again.)

I think what these people mean is not that SF belongs to the rich, but that arrogant startup kids have no right to reshape a city that's been theirs for decades, just because said kids really, really want to live there.

I've been to many cities around the world that are practically defined by their lovely architecture, their comfortable streets, and their astounding views. Were I living in one of those cities during a tech boom, I would fight tooth and nail to prevent ugly highrises from taking over the skyline.

There's no ethical mandate to permanently keep growing.

(Caveat: I don't actually like SF all that much, but I totally understand where this mindset comes from.)


Did your friend's parents tell you outright they were against the building of new housing? From what you've written it seems you've inferred that they are, but their opinion (as you've portrayed it) is as compatible with a pro-growth position as anti-growth.


The article links to this report[1] by which SF 1-bedroom housing rents are also highest in the U.S. It's an interesting report, citing a median rent of $3,490 for 1-bedroom apartment in SF, but can someone please tell me if this is price per week, per 2 weeks, per month, or per year? In the UK for example rents are often cited per week or per 2 weeks, and where I live per month.

[1] https://www.zumper.com/blog/2016/01/zumper-national-rent-rep...


In the US, home/apartment rental prices always refer to monthly cost unless explicitly stated otherwise.


For residential rents, yes, it's always monthly cost. Commercial rents are usually quoted in dollars per square foot per year in the US, as they are in this article.


Thanks


I think UK is only place where rents are advertised as per week, found it very weird when living there.


I think it only happens in areas of the UK where rents are very high, such that a monthly amount would look ridiculously high to almost anyone even if it's the going rate.


Rents are listed as per week here in Australia too.


As a French citizen, I've always assumed that Oz and US could be culturally close. Both are young countries with a lot of space, "unlimited" resources and a need to manage imigration. After living 3 years in Oz, I've noticed it has a lot of similarities with UK, for example the use of the metric system (or their schizophrenia about it), the per week/per month rents, the orthograph and vocabulary ("aluminium";) and down to the awesome simplicity of their tax forms and tax code. Actually the UK tax code is canonically simple and should be adopted by the whole world ;)


> and down to the awesome simplicity of their tax forms and tax code. Actually the UK tax code is canonically simple and should be adopted by the whole world ;)

I hope that wink means you're being sarcastic.[0] Yes, the majority of people are only in a single income tax bracket (20%). And the Pay As You Earn (PAYE) system means that most people who earn wages or salaries don't have to file their taxes. But only looking at income tax doesn't take into account the whole picture. "National Insurance" is effectively just an income tax but it's far more complicated than the income tax system (it doesn't get ring-fenced for pensions or health care or social services, it goes into the same coffers as income tax receipts).

But consumption tax is a VAT, which is notoriously expensive to collect. Then there are tax credits on dividends, and various business tax rules. Oh yeah and property tax is paid by the occupier of a house or apartment, not the owner (council tax)! And then there is the City of London that pretty much gets to write it's own rules.

The UK's tax system is better than some, but it's possible to do _much_ better.

0 - https://www.gov.uk/government/organisations/office-of-tax-si...


I wasn't being sarcastic. In France you also have the taxes you mention (VAT, CGT, property tax, inhabitation tax, ...). We don't have the PAYE (UK) / PAYG (OZ) form. Employers here have no less than 22 kinds of "NI" tax (old age, incapacity, complimentary incapacity, retirement, complimentary retirement, health 1, 2, 3 and 4, low income insurance, unemployment insurance, etc). And that's just for a salary. The company still has to pay land tax, local tax, dividends tax, etc. It is at such a point that I believe the complexity of the wage sheet (there are more than 96 mandatory mentions on the French salary sheet) is the reason we pay monthly instead of fortnightly.

I really assure you that the simple implementation of PAYE in France would improve our national gross product by 10%. It is huge, it does mean that way more than 5% of employees, public servants, accountants and consultants are dedicated to write, understand, advise, control and ombudsmaning salary sheets.


OK, I agree the PAYE system is great for those who earn wages/salaries. If you earn ~£43+/year you are in the 40% bracket and may have to file a tax return, however. That's in order to get things like the right amount of tax relief on your retirement savings contributions. The rest of the non-salary & non-income tax system aren't any better than any other country, IMO.


In Australia I head some anecdote that resonated that went something like;

Aussies and Brits believe they are culturally different until there's an American in the room.


> I've noticed it has a lot of similarities with UK, for example the use of the metric system

I'm not sure why you think this is worth pointing out, considering that Liberia, Myanmar, and the US are the only countries not using it.


He was referring to our 'schizophrenic' use of it. It's used differently among generations. Older people use purely imperial, whereas young people use a confusing mixture. For example, I measure long distances in miles, but short distances in meters and centimeters! I think of weights and volumes in a metric way, except when talking about the weight of a person, when I use stone (not pounds, mind you).

I might be an extreme example, but most people use an imperial-metric melange of some kind.


A bunch of old British empire countries really half ass it.


This trips many people up - £200 per week is not the same as £800 per month as most months are usually longer than 28 days. It is a way of (to many people, very sneakily) charging people more than they expect.


It's not sneaky if it's the prevailing norm.

Coming from Australia, I am accustomed to multiplying by 52 instead of 12.


It's different when you're used to it - a large amount of people here in London are from other countries/areas where this isn't prevalent and haven't worked out (or not really considered) the difference between the two.


Only in London - in the rest of the UK rents are usually monthly.


Australia too.


I use to work in the Empire State building. There were stories about from tenants that in the mid 90's the building was pretty much empty and the rents per sq/foot of office space was 75% less then an apartment.

So there are stories about people renting office space to live in. They'd also have a gym membership to use the shower and they'd save a ton of money.


Is that still the case in parts of Manhattan?

I would seriously considering doing this.


Have you ever noticed how there are fortune tellers occupying prime storefronts all over the city? The places with a little chair behind the window and a thick curtain? I never saw anybody ever go in or out of those places. I asked a prosecutor friend whether these places are fronts for prostitution or drugs. Turns out the fortune teller stores are actually being used as homes for entire families. They cordone off a tiny area for palm-reading and live in rest of the space. It's a really cheap (and super illegal) way for a family to live in Manhattan.


Neato. Thanks for the anecdote.

I recall reading from somewhere, probably on HN, that a lot of banks open up storefronts primarily as a means of shifting money around into different instruments, not because they actually need or want people to do business at that banking location.


This has been going on for eternity and still does. The catch is that it's illegal and if the fire inspectors get wind of it you can have a very sudden and unpleasant removal from your "apartment"


I suppose I'll just stick to the plan of living out of a van then...


For those that are not familiar with commercial rental quotes, they are stated in units of $/sq ft/year. A good rule of thumb is that you need about 200 sq ft per worker.

So, at $72/ft, your 10-person startup needs to spend $144,000 annually just for office space in SF.


That's price for a single developer, not that bad.


um, 10% overhead "not that bad" ?


For a small startup, an extra dev or 1-2mo extra runway has way more leverage. We went with downtown Oakland: cut commute east bay folks, quickly BART accessible for SF ones, and joys of a good downtown like nice restaurant s & cafes. When growing, we unanimously decided to stay rather than go to SF.


Relatively, yes.

Other comments suggest being based in a different location around the country instead – those will have both cheaper labor costs and cheaper office space. Will the ratio ever go below 5% though?


For a 1-bedroom in SF, won't it be cheaper to live in a hotel, apartment hotel or an Airbnb?


As someone who goes to SF for a lot of conferences, hotels are pretty outrageous as well. Depends on the relative areas, but they're probably worse than Manhattan as well. Depends on demand during a given week, but hotels are pretty easily $300/night with taxes.


Really? I was just in SF for a conference at paid 115 dollars a day for a pretty nice place. That's like half of Manhattan pricing.


I haven't paid less than $200/night for years in SF. At the last VMworld, $400/night with taxes was a bargain. It certainly depends on the week and the location, but anecdotally (and I travel to both locations quite frequently), SF in the general Moscone area is every bit as expensive as midtown Manhattan.


Well yes, but of course "hotel close to a premier convention center, where most hotel bills are going to be paid by corporate, not individual" are going to be noticeably higher.


Yes, but those sort of rates extend to the Union Square and Ferry Building areas and I don't observe, say, Fisherman's Wharf necessarily being a lot cheaper. (And there's very little in the Mission and Dogpatch areas when I've gone to events at the campus down that way.) During a big conference even the hotels down by the airport can be over $300/night.

(I'm sure there are cheaper options especially once you get well away from the tourist, downtown, and convention center areas. Though I imagine that's true of Manhattan as well. But SF has gotten quite expensive in general.)


I paid 200 a night for the 30th and 31st (so new years eve premium) at Hotel Zelos and then 115/night for Parc 55 for the 1st-6th for a conference.

Did I get lucky? My wife's hotel stipend was 280 a night, which suggests, I probably did.


The Zelos used to be the Palomar, which at least used to be a pretty good deal for that area though I don't think I've personally stayed there. $115 is a very good price for a business hotel in the Union Square area. I imagine immediately after New Years may be relatively light on business travelers.


Even if that's true, so you really want to move (potentially) every month? And actually live in a hostel for an entire year? There's more to life than money


I've considered this carefully. I don't believe that you save money this way necessarily, but it certainly provides a different experience. This article covers the ups and downs better than I ever could.

http://www.nytimes.com/2015/11/29/realestate/our-year-of-liv...


Yes, but not everyone living in SF has that kind of money.


Good. Maybe we'll get "silicon valleys" everywhere else as well when situation becomes completely untenable.


Why isn't office disrupted by transferring to remote work? You have these companies that make tools like 'slack', 'asana', 'dropbox' etc. which help you work remotely and all of them require their employees to be at the office in the most expensive location in the US. Programming/customer_support/sales/design/marketing jobs can all be done from anywhere. What is stopping these startups from going remote?


As someone who worked in an office for many years and then moved to fully remote, here are the reasons:

- Politics / Face Time. Some people really do think that nothing goes on when people are working from home. Some people like to have everyone's attention now and again, to demonstrate something about their status.

- They haven't figured out how to do it yet, both technically and socially. If you have one or two people who don't know how GitHub works, or how Trello or Slack work, you can't do it. There are certain people who come from an age where you never needed productivity tools, and they just can't use them, no matter how easy it is. Unfortunately, they tend to be the people who can decide whether remote is working out for the team.

- They haven't figured it out socially: some people have configured their home life in a way that doesn't work for remote. The associations between being in the home and being away from home are deeply ingrained in some folks.

As for actual productivity, I've found it skyrockets in a properly functioning remote team. We have a Slack/Trello/Github/etc mashup where Slack is the hub. Anything that comes up can be pinged to the right person, and you can see when people are pushing code. The cards let you organise things. No commute + set your own hours means you get things done.

Not being tied to a location is great, too, though I do try to make sure the family gets enough attention.


I've been way more productive working remotely than I ever was in an office. I think it has a lot to do with a comfortable working environment, no commuting, and fewer distractions.


Face time - Some people thrive in a social environment. The same nut watching you work will find another way to track and impede you virtually.

Technically/Socially - An issue for all offices. I don't see my TFS to git migration going as well virtually. In person groups worked well. It's works well for a lot of things and often.

Productivity - Chat/SCM/etc are the hub regardless of physical location. In person we have access to white boards and pairing stations.

Commute - Every cyclist and public transit commuter gets a workout and decompression time. I still set my own hours with a core hour preference and accepting meetings that fit in my schedule.

Don't assume it's a technical and social issue. There's a spectrum of personalities and needs. I tried working from home with all the tools and a competent team socially. It was one of the worst positions in my life and had nothing to do with the work. I prefer my home away from home.


Re slack etc: at my office we have a solution for people who can't competently use the tools required by their job function: unemployment insurance


Doesn't work when the person in question is a partner.


Because it isn't true. Remote work is fine one or two days a week but nothing beats the bandwidth of a dozen engineers in a room with a whiteboard when it comes to tackling hard problems.

If you're just making cookie-cutter intranets or shopping carts or something sure, go 100% remote, but that is not what Silicon Valley is for.


Gaius,

Studies are mixed on the pros/cons of office vs remote. For example a Stanford study showed productivity increased 9 to 13% for remote office workers. Some have shown that collaboration can increase as well as communication was more intentional (I don't remember the study offhand).

Anyways, point is it's not all or nothing and the data is still out on effectiveness and efficiency (I'd think it also depends on the nature of the work etc)


Totally depends on the person IMO... We have one day a week we work from home... I find myself producing more that day than the rest combined.

Others on the team function differently


And on the role.

Compare:

1. A role which requires very little communication with the rest of team and quite a lot of long, uninterrupted concentration.

E.g. a developer working a long time on some internally intricate sub-system which has well-defined interfaces to the rest of the system.

2. E.g. a UX designer (or perhaps a product manager) who needs to talk to many people, whose projects shift quickly, whose work affects many other people's work, etc.


UX design of customer facing systems would actually benefit most from remote work. The UX designer should create a company wide blog (or similar) showing off the current iteration of the design, along with reasons why each design element is included.

This is far better than simply talking to many people 1 to 1. It creates a written history indicating why each design element was chosen. It allows stakeholders to understand the requirements behind a particularly strange UX choice and allows them to give suggestions for better UX in a way that takes those requirements into account. Iteration can be faster as comments can be taken from all sides at the same time instead of having to seek people out and set up meetings.

I only see positives for a UX designer given the nature of their work is highly visual, functional and is cross-organizational. In fact, I think any company NOT doing UX design this way is probably being inefficient?


Given how much we know at this point of the utter questionability of studies in the social and psychological sciences, I don't think it's at all productive to make this kind of point.

Sad but true.


No, much of Silicon Valley these days is for making cookie-cutter mobile social apps and the like.


>If you're just making cookie-cutter intranets or shopping carts or something sure, go 100% remote, but that is not what Silicon Valley is for.

Maybe that's not what Silicon Valley is for, in some grand cosmic sense, but I'd require some convincing that it isn't what Silicon Valley actually mostly does.


Fine, but this supposed benefit is _easily_ negated by the huge problem of employees leaving the Bay Area due to costs, trying to rehire, inflated salaries for cost of living, etc.

Our new management came in with "no more remote!", but then trying to keep up with what SV is "for" has been a giant hassle and destroyed ability to deliver.


I work for Pivotal Labs, so my daily style of working is all about colocation and pair programming. I am accustomed to being able to turn to any of my peers, especially product managers and designers, to ask a question. Previously I worked entirely remotely as a freelancer.

I've also interacted quite a bit with the Spring team, either in the office or through Slack. They are a fully distributed team, some of whom choose to work in various Pivotal offices because of the amenities.

Both approaches work, they just work differently. The cats-and-dogs arguments people have about local/remote is, in my experience, largely about personal preference.


I think we need to level up the tools one or two more notches, until it's more like being in the same room.

Both because people may slack of when unsupervised, and because you want a team dynamic where you can have a quick 10 minute meeting about stuff, and so on.

Maybe Oculus Rift will be the beginning the end of astronomical SF real estate prices.


Things have improved but we still don't really have the like whiteboarding (or whatever) together in a conference room. I agree that it's partly the lack of tools--maybe VR will help although this whole "like being in the same room" notion has been around for a long time and it hasn't been cracked.

Some of it is also cultural. If you're not going to have drop by conversations and other serendipitous meetings, you need to be more disciplined about having those conversations anyway even if they wouldn't have historically risen to the level of sending an email or making a call.


It's still the early days of remote work but it's coming...

It's really hard to turn an office culture into a remote culture.

I experienced this at my last employer (Heroku). We hired a ton of great remote staff, but there was always an impedance mismatch. Lots of local people still want to solve problems face to face.

It's much easier to start remote from scratch.

I am doing this with my new venture (Convox).

There are challenges. The high bandwidth face to face time is indeed better for problem solving. And is truly important for serendipity. But we are willfully trading those things in to work from home, live all around the country, and not spend money on an office.

Even YC is behind the curve here. They make you move to Mountain View and tell you distributed startups don't work.


Many smaller and mid-size companies tend to have more of an ad-hoc process of setting meetings and making decisions than larger firms. In my experience, people who are working from home or in another time-zone tend to miss out on a chance to participate. And if they are on another continent like Asia, their influence becomes even more remote.


That's true and can even be true with larger companies--at least if teams aren't already highly distributed through acquisitions, etc. That said, barring major shifts, it's probably also true that new companies are increasingly going to have to choose between having a nominal HQ in a favored area like SV and being largely distributed or locating somewhere more affordable.


Time zones are a major challenge, but remote work includes a huge range of locations in the same timezone.


the irony is that hiring older workers, remote workers (sometimes older, remote workers) is something that only younger managers/executives do.


Having lived in both, I can tell you that Manhattan is much nicer, cleaner, and safer, with more resources, better food, and better culture. Violent Crime rate is 2.5x times higher in San Francisco. (Ask Wolfram Alpha)




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