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San Francisco split by Silicon Valley's wealth (latimes.com)
88 points by dmckeon on Aug 14, 2013 | hide | past | web | favorite | 140 comments



Are there any actual critiques to be had against Google busses other than some vague misplaced anger? Here we have private companies using their own capital to provide a more environmentally friendly way of getting their employees to the South Bay. What exactly is the problem here? Would they prefer if things were more like LA and everyone of these tech employees had their own high priced car? Would that make the wealth disparity less apparent?

Then after a few anecdotes of assholes acting like assholes (as if that's representative of anything), Uber is of course targeted. I find this particularly hilarious because I would argue that ride-share companies are exactly the tech companies who are working on real problems. Go ride in a Lyft or Uber X and ask the driver how they feel about the company. Lyft is providing real jobs and making use of resources that would otherwise be notoriously redundant and misused (cars).


I have gone through similar feelings and you raise a great point: The buses from Google, Facebook, etc. are far better than those same companies quietly doing nothing as their employees clog the freeways, which is very common among other companies but basically invisible. So they get crap for doing a good thing.

Here's the flipside, although I've never heard anyone actually make the first argument:

-Google the company actively dodges taxes, albeit through tactics common in the corporate world. So while it is pampering its own employees, it is undermining public transit by not paying nearly its fair share into the federal (and likely state) pools that help fund the transit for everyone else. Thus, Google is actively exacerbating inequality.

-Google's buses use public land intended for public transit to provide "stops" for its employees. Google can clearly afford to compensate for this, but, as far as I know, does not do so. This at a time when Muni and other transit agencies could really use the money. Free rent for large corporations is never going to be popular.

-Although there are environmental benefits to the buses, Google, Facebook, etc. are almost certainly not motivated primarily by the environmental benefits but by self interest. In other words, the freeways are full, and getting to South Bay each morning is a nightmare. And yet many desirable engineers etc prefer to live in SF vs South Bay. Hence, the buses, which make it easier for these companies to recruit. This competitive element then puts pressures on other smaller internet companies to run their own buses, even if those buses are not particularly full or if they are driving large distances within SF to pick up only a small number of people or single person at a given stop.


1. Google does not "dodge" taxes. They follow the incredibly complex web of rules the system specifically designed for this sort of use (or abuse). Its absurd to expect any corporation or person to go out of their way to pay more than they need to. (Milton Friedman Why Tax Reform is Impossible: http://www.youtube.com/watch?v=TruCIPy79w8 )

2. Muni does not need more money. SF does not need more money. SF's budget is twice that of Idaho's, and we have far fewer people and far less space than Idaho ( http://www.sfweekly.com/2009-12-16/news/the-worst-run-big-ci... ). Look no further than the ridiculous extension of muni from China town to downtown to see a clear indication of how funds are being completely misused. No one wants to fix the budget problems in SF and its so much easier to just blame whoever happens to be successful at the moment.

3. I'm not sure I disagree with your third point at all but also don't understand how its a negative thing. You are describing normal competition between companies. I can at least provide one piece of information: I used to work in the South Bay and hated the commute and would do everything in my power not to ever do it again, bus or not. So there's plenty of incentive to stay and work in a small company here, I assure you. Do you see lots of small companies running buses (honest question, I'm simply not familiar)? I seem to just see the flipside happening: more small companies simply being in SF.


I was framing the argument more than taking a side, I can see both sides of this. Not sure what you mean about Google not dodging taxes though. Like I said, it's common among large corporations, but that doesn't mean it's not a fact that it's happening. Google's tax avoidance schemes are well documented, whatever your opinion of them is morally there's no use denying they exist.

The broader point I was making isn't Google Is Evil For Not Paying Taxes. The point was, if you're going to not pay taxes, you don't get to play the "I'm a benevolent corporation helping make society a better place" card when you run enormous luxury coaches all over town and use sketchy pick up locations. People will assume the worst intentions.

I actually lean Google on this one. But that doesn't mean I have to buy the argument they are doing this out of the kindess of their Googler hearts. I say make them pay through the teeth for these stops like any red blooded capitalist would. (Like, say, Milton Friedman.)


If we want to compare potatoes to potatoes, SF has over 5 times the GDP in half the population of Idaho.


I'm curious why you feel that the extension of Muni is a waste of funds. As the project is to extend it from Caltrain station through Powell and then on to China Town, do you think the entire thing a waste, or just the latter portion?


> The buses from Google, Facebook, etc. are far better than those same companies quietly doing nothing as their employees clog the freeways, which is very common among other companies but basically invisible. So they get crap for doing a good thing.

This is a false dichotomy. You are assuming they would drive instead, when in fact most would not live in SF in the first place. I know plenty of people who bus down to Google/FB/etc and I'm fairly confident in saying the vast majority would not live in SF if the buses didn't exist - its a long grueling commute that is expensive to boot, regardless if you drive or take Caltrain.


I know plenty of people who work at Oracle and other South Bay companies who don't get buses and still work in the city. Anecodotes != confidence


> So while it is pampering its own employees...

I always chuckle when I read comments buying into this notion that all of the "perks" offered by Google et. al. are pure employee luxuries. From the plush buses with WiFi to the cafeterias with restaurant-quality food (whatever that means), the vast majority of these "perks" are designed to maximize the amount of time employees spend at work (or working) and/or increase employee dependence on the employer.

Most of the folks promoting these nonsensical arguments that portray the Bay Area's legions of high-paid tech employees as a pampered, care-free gilded class apparently fail to recognize just how subservient most of these individuals actually are to their employers. They may not be wage slaves, but when your employer picks you up in the morning, takes you home at night and seeks to provide literally everything you need in between...


Right, it's a cost-benefit analysis for the company. Why does Google have a dentist on its campus? So employees don't need to take the day off to visit the dentist; they can just take a break from the normal workday and then come right back.


SF and California should raise income taxes. There's no way for Google employees in California to dodge them. The best part is that the bill falls on those people who need city resources.

I doubt that SF will get its act together regardless of how high it raises taxes. But we can run the experiment to try.


San Francisco cannot have an income tax. This is forbidden at the state level. (http://taxes.about.com/od/statetaxes/a/States-Prohibiting-Ci...)

San Francisco CAN have a payroll tax, levied on companies based on pay to employees, a sort of shadow income tax. And indeed it does have a payroll tax. But you'll notice Twitter, Zynga and various other tech companies have gotten themselves exempted (for new hires, after moving to certain downtrod locations, at least in Twitter's case).

(There was a brief political battle between the left and unions like SEIU who opposed these tax breaks and a tech coalition involving Ed Lee, Ron Conway, Twitter and many others who support the payroll tax breaks. Obviously the latter group won.)


The buses use public land because they are entitled to - they pay road tax just like every other commercial operator. It makes me chuckle seeing the SF gov't complaining about this when it really makes SF richer through property and income tax paid by city residents who would likely live on the peninsula were it not for these corporate buses. Anecdotally I saw LOTS more engineers choosing to live in SF once the shuttles started at Google.


If paying "road tax" (DMV fees, in California parlance) entitled me to park or idle wherever I wanted — like in bus zones — I'd be a much happier driver :)

Also, as I've mentioned elsewhere in the thread, SF has no income tax (per state law), and the property taxes are held quite low by Prop 13, so saying Googlers make the city richer (compared to other residents) isn't really correct. They certainly do pay some nice sales tax, I'm sure, but it's not like a Googler who makes 2x median income is going to benefit SF 2x a median citizen.


With regards to your first point, I'm honestly surprised the city/county/state doesn't just pass laws that require these companies to register such programs with the government and pay fees to operate the bus routes. Those fees would then go directly to the public transit authorities at the various levels.


This is true. Isn't that California's governmental motto: "When in doubt, tax"? (Half kidding).


At the same time everyone of those google employees who lives in SF pays SF taxes, quite high taxes as a matter of fact, and that contributes to the community, 2-3x more than any of these hippy touchy-feely types who claim that SF is theirs and theirs alone.

I agree though that they should pay for the use of public land for their bus stops, as they are solving a problem they largely created by making it possible for their employees to live there in the first place.

SF already has pretty high taxes, so the creation of a lot of wealth is not google or anyone elses fault. If SF can't do anything to alleviate poverty with the vast amount of funds it collects then that is the problem.

And if it't not possible anymore because SF is just overall too expensive, then that's life, some cities are wealthier than others, you don't see people moving into Montecito, Bel Air or other rich neighborhoods and demanding affordable housing? Perhaps if the city has become that desirable it just isn't possible anymore.


>everyone of those google employees who lives in SF pays SF taxes, quite high taxes as a matter of fact

Not sure what this refers to but San Francisco funds come mainly from payroll tax, sales tax, property tax, and real estate transfer tax.

Payroll tax is levied on companies not people, and even then it's not being levied on the people using these buses as they work down in Mountain View (excepting the small number of SF Googlers who also use the bus, if they do).

Sales tax is going to impact Googlers roughly the same as others in SF. Maybe even less since days are spent in South Bay (if you use the bus and don't work in SF office) and you're likely doing a disproportionate amount of online shopping :)

Property tax is relaively low in San Francisco due to Prop 13, so if you're renting it's not hitting you hard as the property has been held likely for a long time and is held basically steady under prop 13. If you're buying a home in SF you may pay some higher than average property tax but this is held in check by the fact that a 2/3rds popular vote is required for any property tax hike under prop 13. So they're not that bad.

>2-3x more than any of these hippy touchy-feely types who claim that SF is theirs and theirs alone.

Citation needed. This sounds pretty out of wack.


> Payroll tax is levied on companies not people

As a purely practical matter, payroll tax is levied on both sides of the employment transaction in the US [0]. Beyond that, diverse economic research in and out of the US suggests that the bulk of the tax incidence [1] of payroll taxes is on employees [2].

>> 2-3x more than any of these hippy touchy-feely types who claim that SF is theirs and theirs alone.

> Citation needed. This sounds pretty out of wack.

Here's some napkin analysis. [3] claims Google's average salary for a software engineer is 113k, and [4] claims that San Francisco / San Mateo's average salary is 64k. Since the 64k is dragged upward by the Google salaries, let's speculate that the Googlers on average make twice as much as the "touchy-feely" residents. It seems totally reasonable to think that someone making twice as much money will pay twice as much across the suite of payroll tax (they earn more), sales tax (they spend more), property tax (they own more property), and transfer tax (they exchange property more often). One would want to empirically corroborate this, but it doesn't sound unreasonable to me.

[0] http://en.wikipedia.org/wiki/Payroll_tax#United_States

[1] http://en.wikipedia.org/wiki/Tax_incidence

[2] http://www.nber.org/papers/w5053

[3] http://www.glassdoor.com/Salary/Google-Salaries-E9079.htm

[4] http://www.bizjournals.com/bizjournals/on-numbers/scott-thom...


You missed that the vast majority of Google's workers, and an even higher percentage of those on the buses, are not paying SF payroll tax because they are not based in SF. (SF payroll tax cannot be levied on an employee in Mountain View, no matter where they live.)

Also, it doesn't make sense that Googlers would pay 2x property tax. Property tax does not scale with salary. You can make a ton of money but if you rent you pay (indirectly) the same property tax as your neighbor and the same as the tenant five years ago paying 1/2 the rent (since the same landlord has held the building the whole time and you can't re-appraise under prop 13).

If you buy, meanwhile, Googlers pay extra only to the extent property values rise. While they have gone up (~25% in a year), we have not seen anything close to a doubling. (And it's not clear that Googlers "own more property" as you suggest. While they tend to be wealthier, they also tend to be younger and more geographically mobile, which would encourage renting.)

As for sales tax, think about where that comes from. It doesn't apply to groceries or rent. We're talking about restaurants, bars, car dealerships, and discretionary retail. We're also talking about a population who can eat dinner and lunch and breakfast at work, and get free haircuts and laundry, who tend to order discretionary retail products online, and who live in SF and take a bus to work. Do we really expect them to spend 2-3x buying cars, patronizing local retail, and going out restaurants, and bars?

I do realize Googlers go out and spend big locally from time to time. My point is that the office perks, use of transit, and use of online retail are going to mitigate their contribution to the local sales tax base. They might still spend more on sales tax-able items than the typical San Franciscan, but 2x-3x?


> You can make a ton of money but if you rent you pay (indirectly) the same property tax as your neighbor and the same as the tenant five years ago paying 1/2 the rent (since the same landlord has held the building the whole time and you can't re-appraise under prop 13).

You seem to be confusing SF rent control with California property tax re-appraisal rules. Prop 13 limits on the increase in tax basis value of property don't affect landlords ability to raise rents.

> If you buy, meanwhile, Googlers pay extra only to the extent property values rise.

And, because of Prop 13, not more than 1% more for that reason per year, unless they buy new property or do something else that allows an unlimited move to full market value.


>You seem to be confusing SF rent control with California property tax re-appraisal rules. Prop 13 limits on the increase in tax basis value of property don't affect landlords ability to raise rents.

Not confused on that. My point is that the guy paying 2x rent than his predecessor in the unit — rents can rise freely on vacancy under Costa Hawkins, so rent control doesn't play into this as you point out — is not contributing one extra dime in property tax, since the property tax on the building hasn't changed.

Good point on for-sale property, I didn't realize 13 held down those taxes even at sale.


> Not confused on that. My point is that the guy paying 2x rent than his predecessor in the unit — rents can rise freely on vacancy under Costa Hawkins, so rent control doesn't play into this as you point out — is not contributing one extra dime in property tax, since the property tax on the building hasn't changed.

The property tax will change each year as the assessed value can change year to year (but only, absent a change of ownership, increase no more than 1%/year.) The only time it won't change is if the assessed value doesn't change.


Companies don't pay taxes it's the shareholders and the employees who pay taxes. So if Google "avoids" taxes on its' income it will end up being paid (at probably a much higher rate) by the shareholders and employees of the company.

That their intentions aren't pure enough for some is not a reason to not celebrate what they're doing for their employees.


>Companies don't pay taxes it's the shareholders and the employees who pay taxes.

This is false. What do you mean?

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

http://www.bloomberg.com/news/2013-05-22/google-joins-apple-...

>if Google "avoids" taxes on its' income it will end up being paid (at probably a much higher rate) by the shareholders and employees

Also not true. Long term capital gains tax is 15%. Dividends are taxed at the same rate, unless you make over $400k per year, at which point you pay 20%. Corporate taxes, in contrast, are 35% at the federal level. Taken with state taxes the effective rate is close to 40% (http://www.kpmg.com/global/en/services/tax/tax-tools-and-res...). So it's a net loss when Google dodges taxes.

(And I didn't even get into shares held abroad or in retirement accounts.)

(Edits with slightly less confrontational language.)


Ultimately everyone pays. Since corporations aren't humans they aren't paying anything. Everyone else in the corporation has to take fewer profits and less compensation as a result of those taxes. They aren't free.


Companies don't pay taxes it's the shareholders and the employees who pay taxes.

You're dead wrong.

The corporate tax is 35% at the federal level and anywhere from 1-12% at the state level. Reductions in corporate taxes increase the net income available to shareholders. One easy way for under-levered companies to increase profits for shareholders is to go borrow a bunch of debt (interest expense is deductible). As a sidenote, Minsky thought eliminating corporate taxes might increase economic stability because it would remove the incentive for corps to increase leverage in order to minimize taxes.

You might be thinking of a REIT or a MLP where taxable income is passed through to the partners.


I think what he/she means is that companies paying taxes means less money going to shareholders and employees, which means that those two groups are effectively the ones paying those taxes


Yes, but on the other hand if all these private companies used their capital to contribute building a decent public transportation system instead of building parallel ones, that would be far better for everybody.

In any other developed country in the world, it would take less than 30 minutes to go from SF to Palo Alto with a modern train.


SF and California should raise their income taxes further then. There's no way to dodge that.


What exactly is the problem here

It's just a tipping point. The disparity is becoming much more obvious and in-your-face, and busses some people can ride on and others cannot (while in reality totally reasonable) really serve to highlight the feeling of divisiveness.

The funny thing is it seems like this is nothing we haven't seen before- it's gentrification, except some sort of ultra-gentrification where the middle-class are driven out by the upper-middle-class.


Yea, I don't like the article's insinuation that programmers aren't middle-class. Programming is not a upper-class job, like say lawyers or doctors. We are not making that much money. I would definitely say upper-middle-class though.

What I don't understand is why people don't go where the jobs are. Historically if there was a market boom in a certain industry, people then sought out those skills and went for those jobs. I realize programming is computers and computers are a foreign language to a lot of people, especially middle-class people, but that doesn't mean it's impossible to learn if you just take the time to learn it and maybe some classes or training.

I feel like non-techie middle-class people never even consider a programming job, because it requires doctorate level education or something. It's a total misconception. Anyone can learn Ruby in a couple months if they put their mind to it and get a decent job.


Even lawyering and doctoring is not upper-class. The defining feature of upper-class in America is making money with money, so the only upper-class lawyers or doctors are the ones that (for example) own a practice instead of working day-to-day, much the same way that a programmer who now owns his own billion-dollar tech company would be upper-class.


try London where most of the new property built in central London is owned by rich outsiders as investments / bolt holes in case their country sufferers civil unrest


If anything, the presence of company busses is a clear signal that local government has failed to provide adequate public transport (despite happily taking the taxes that these companies and their employees pay), and that is where any anger should be directed.


There is the critique that if that energy and money were instead directed toward Muni and BART, everyone would benefit.


This is at best an unfair critique. For example, I used to work for Apple and the BART does not get that far. That is because Cupertino decided they didn't want the BART getting there. The reasons for this are varied and complex. The fact of the matter is that buying 10 busses to shuttle your employees is easy, and getting involved in a possibly 20 year boondoggle to extend the BART is hard, probably requires approval from the voters (who will probably yet again vote against it), and even if it does get done it doesn't consider the potential downsides to the communities it brings the BART to. At the end of the day it is completely unfair and unrealistic to essentially assign the responsibility of transportation management to companies simply because they are successful and because government is incompetent (look at SF's budget and you'll see they really shouldn't need anyones help to be making transportation better). The reality is that SF is a completely mismanaged city, where we are spending 5 years extending the light rail from china town to downtown not because anyone actually needs it but because of politics, instead of focusing on the actual transportation issues people face every day. That's where the anger should be focused. Google, et al are doing their best with what they're given and I think they've done pretty well so far.


I don't know the details as specifically as you, but do you really argue that Muni doesn't need improvement? As it is now, there is no efficient way to get to the northeast of the city (Chinatown, Nob Hill, Russian Hill, etc.) and Muni is barely faster than walking.

You ask me --- lots of really rich people moving into town? Great! Tax 'em.


So what's preventing Muni or BART from offering 4th & King - Google Campus route on their own?


Who would ride that? Google provides the service for free and you get to use WiFi while on board. MUNI operates within city limits, makes no sense to offer a bus outside of the city.


If there was a public route, Google would potentially reconsider.

My point in response to grandparent was that no matter how much money you throw at BART and Muni, political, jurisdictional and infrastructural issues will block further development.


I think that dichotomy is not quite right - you're saying that without the buses, the Google and Apple folk would still be in SF, they'd just be polluting more.

The other possibility is that far more people would live close to work, in the South Bay.

I saw the latter happen. The buses enabled an exodus to SF. This puts pressure on housing cost.


And what happens to housing cost when those folks need to live in the south bay?


it's evened out because people now live where they work instead of have EVERYONE live one place and work numerous other places.

I'm a capitalist whose fine with everything going on in SF to be honest, but I agree that Google is essentially solving a problem it is also helping to create with the buses, so while I don't think they should be criticized I'm also not sitting here cheering them for being environmentally friendly when it was evidently in their best interests to do what they did.


My understanding is the main complaints are that they're massive and block traffic and they also often illegally make use of public transportation's bus stops, which can force blocked public transportation into letting out their psssengers onto the street.


They are substantially less massive than the number of cars required to transport all of those workers.


Without the buses a lot of those workers might choose to live closer to the office, freeing up space in the city.


Workers commute both ways on those buses -- there is an office in downtown SF as well.


I think one big problem is that it allows workers to easily get from the city to the office outside the city. Without the ease of transport a lot of these people might live outside the city freeing up space for people who actually need to live there.


The Google Bus isn't the main issue, it's just a convenient and highly visible lightning rod. The class war that's happening in SF goes much, much deeper and has much more profound impact on people than just a bunch of buses zipping around town.

But most of these issues aren't nearly as viscerally visual and high-profile as an exclusive "you can't get on" bus fleet. It's simply an incredibly in-your-face reminder of everything else that is wrong with San Francisco.

> "I find this particularly hilarious because I would argue that ride-share companies are exactly the tech companies who are working on real problems."

As someone who lived in SF, and now lives in NYC, I find this statement sad yet hilarious.

Uber and Lyft exist because of a fundamental dysfunction in Bay Area transit. Lyft isn't even a thing here in NYC, and Uber is barely on anyone's radar - because we have working mass transit. These are only "real problems" because MUNI and BART represent the transit savviness of a wet paper bag. I used to spend more than a NYC subway monthly pass's cost on Ubers when I lived in SF every month, because the transit in that city is so utterly and completely fucked. Even among my social circles of relatively-highly-paid tech-workers, none of us have used Uber more than once or twice.

To be blunt, Uber and Lyft are solutions to the problem that San Francisco can't get its shit together to save its life.

Others in this thread mention that if the investment made in private company shuttles were poured into the public transit system then everyone could benefit. It would be nice, but I don't think this is actually true - the problem with MUNI, Caltrain, and BART isn't due to lack of funding, it's due to extensive corruption and mismanagement. At the agency level, at the municipality level, and at the regional level. Google could've thrown truckloads of cash at them and it would've disappeared into the ether with little to show for it.

I don't blame Google, Facebook, and Apple for running their own shuttles. It was the most rational, least evil choice in response to a fundamental governmental dysfunction. The protest against the growing divide is a red herring - the divide largely exists and is perpetuated by a woefully incompetent and corrupt city government.

There is a growing collection of startups whose primary purpose is fixing SF/Bay Area dysfunction - Uber and Lyft being among them. I'm disappointed at how revolutionary people seem to think they are, when they seem more like they're solving problems that shouldn't exist in a competent, working city, in a highly exclusive and upmarket way. Transportation is horrifyingly broken and people can't get around? Solution: upmarket shiny black sedans priced completely out of reach for everyone except the monied techno-elite. It may be necessary, but forgive me if I don't cheer loudly.

At the risk of making a crappy analogy, the roof is leaking and you're congratulating the guy who came along and put some buckets on the floor.


You can blame government for the dysfunction, but I wouldn't be quick to completely blame local government for the stalls in public transit development.

The majority of NYC subway development occurred prior to the introduction of environmental policies such as NEPA (1970). In fact since 1956, NYC has only constructed 2 additional subway lines (1988, 1989) and currently has one more under construction.

Meanwhile SF BART didn't start operations until 1972. In fact I believe if BART didn't start planning and construction prior to national environmental policy implementation, BART may have never been built.

If we look overseas, since 1970, Tokyo opened 6 subway lines (4 Tokyo Metro, 2 Toei subway--Tokyo has two subway companies). While that doesn't seem like much of a difference, consider that those subway lines directly compete with surface rail transit systems operated by 8 different companies which are "feeder" lines and additional JR which not only is a feeder system, but also operates the main loop line for Tokyo.

It should also be noted that NEPA was actually a direct response to the Interstate Highway project where a common complaint was residents losing their communities or properties due to highway being paved right through the city. But NEPA requires environmental reviews for any new development so mass transit systems were affected as well.

So I would say the dysfunctional is not just at the city or state level, but also at the federal level as well.


But most of these issues aren't nearly as viscerally visual and high-profile as an exclusive "you can't get on" bus fleet. It's simply an incredibly in-your-face reminder of everything else that is wrong with San Francisco.

Are people really envious and want to ride a bus that goes to one place in effectively the middle of nowhere where there is a business park they have no business being at? A lot of things are exclusive, people's cars and residences are some of those. There may be a divide, but no one is complaining they don't get to go inside someone else's house whenever they want, and if they did, they wouldn't be taken seriously.

I'm not sure this is the actual reason or the message you mean to portray.


Aside from the wishy-washy fairness argument, I can see a couple of actual critiques:

1) The busses displace the attention and money of a lot of motivated and well-off tech workers who might otherwise demand improved public transit systems.

2) The busses artificially distort the housing market in SF. Previously the number of people who wanted to live in SF was limited by the number of jobs available in the city - now that number includes anyone with access to a shuttle. And the people with jobs in SF now can't afford to live where they work.

I think the fallacy here is that without the busses, you'd have 10,000 (or whatever the number) tech workers driving 1+ hours from North Beach to Mountain View in their own cars. In reality, most of those people would just move closer to where they work.


Her son, like most young people, wants to be able to move out and live on his own even as the city gets more and more expensive.

These articles frustrate me because they rarely manage to mention obvious factors like, say, supply and demand—a problem that I wrote more about here: http://jseliger.wordpress.com/2013/04/08/connecting-the-dots... . If you're unhappy about rapidly rising housing prices, the simple solution is to build more of it. We have the technology to do so and have for a hundred years.

One can argue that high prices are a reasonable cost for low density, but to do so at least requires some basic knowledge of how supply and demand work.

On a separate note, articles like this also show why newspapers are having so many problems: if a random commenter like me knows more introductory-level econ than the reporter writing about such issues, the reporter has no business writing about business.


SV tech giants creates artificial demand in SF by providing premium buses, without motivating any sort of supply. Developers can't choose to say, build more housing near the place of employment in SF because there isn't one. The closest would be to build near a bus stop -- which is completely ephemeral real estate.

And that's the point of the article. How can developers possibly respond to this demand?


There's a lack of real estate for businesses in the city as well.

Getting an office for your tech startup isn't trivial nor cheap. A lot more of these companies in the south bay along the Caltrain could be in SF if there was more commercial real estate available.


Why is this "artificial"? Living in a big city and long commuting in/out is perfectly normal.


It amazes me how the examples given in the article as displays of wealth don't resonate with me at all.

In the Middle East, you have Sheiks creating gigantic palaces that rival wonders of the world, all for their display of wealth and power.

In the Balkans, you have rich gypsies throwing money on women at their weddings and carrying more bling on them than you will ever have in your lifetime.

I just left SF for a bit after living in SoMa for a year. People should understand that spending YOUR money on YOUR wedding to make it special is not an exorbitant display of wealth. Neither is having a corporate jet area at an airport or a charter of private buses for that matter.

It could be worse; much worse.


> In the Balkans, you have rich gypsies throwing money on women at their weddings and carrying more bling on them than you will ever have in your lifetime.

From my understanding, the throwing of money during a wedding is a tradition in some cultures. It's either used to pay for the wedding, or the money goes around and is used in another wedding.

I've given money at weddings, in an envelope instead of throwing it, but I wouldn't call that a display of wealth. Not if spending YOUR money on YOUR wedding isn't, at least.


Either build more housing, remove rent control or have SF no longer be appealing. Those are the only options to stop rental increases. Anything else is artificial and doomed to fail by introducing flawed mechanisms to try and subvert the most natural process there is (Supply/Demand)

SF seems like one of the only places on earth where the general mindset is "I have a absolute human right to live in San Francisco". Good luck trying that attitude in Aspen or Greenwich. The bottom line is that so long as SF is one of the most desirable places in the US to live, people are going to flock here and capitalism will take over (SURPRISE)

Its really just simple supply and demand. There is a lot of people wanting to live in SF (demand) and lots of low paying tenants who dont move causing little vacancies (supply). The end result is astronomical prices.


Well come on, it's a little more complicated than that. Where you live is not just a simple commodity to you, it's your home. Having lived through the complete gentrification (Disneyfication) of Manhattan I found that, despite being of the Liberal bent, it was hard to see old neighborhoods disappear, look around at nice neighborhoods and realize a good percentage of the apartments are owned by people who are in them only a few days a year, and watch as the interesting fringe stuff (i.e. The Hat) was replaced by the interesting mega-expensive stuff (i.e. Per Se.) It feels bad to become an outcast in your own land, even though that kind of thing does not come into play in Liberal thought.

I don't think that some people asking for some other solution than pure supply-and-demand is untoward. Understanding how they feel: that their home (meaning both the place they live in and their neighborhood) might be more important to them than most other things. There's a certain amount of suffering we cause them with our exercise of simple capitalism. While we can't measure pain in dollars and cents, that doesn't mean we shouldn't care about it. Not everything should be measured in dollars and capitalism is not the only moral system, nor is it inevitable.

I don't have answers (well, actually, I have plenty of opinions on answers but none that are radically different than any other answers already given) but I also don't think that the brou-ha-ha is useless: it's always useful to have these discussions. The end result of this kind of public pressure is often compromise.


and one of the reason everyone wants to move to the bay area is that there are so many damn jobs. Sure housing is cheap is hell where I live in Ohio but you can't get a job to pay for it.


Gentrification happens, people get bitter when they don't own their homes. This is normal economics that happens in every major city (e.g. Williamsburg, Brooklyn, East Side, Austin, Mississippi District, Portland, Mission, SF, etc., etc., etc.). Much of this has to do with the end of white flight, which should probably be considered a good thing. The laws in SF are as renter friendly as you can get in this country. I'm not sure what all the fuss is about.


> The laws in SF are as renter friendly as you can get in this country.

That depends what you mean. Rent control, for example, can be viewed as extremely friendly to the current renters but extremely unfriendly to would-be renters and the rental market as a whole.


I would love to work there, but the rents look completely ridiculous compared to the rest of the country. I live in the heart of a wealthy urban area, and still pay close to a third what I would pay in SF. I am an engineer, so I could afford to live there, but saving would be impossible. It is a bit worrying that the tech community seems to be so irresponsible with where they choose to set up shop. Sure, an office in downtown Manhattan would be awesome, but is it really necessary for a non profitable startup?


I lived in SF 2011-2012, and have lived in NYC since then. Let me tell ya, my cost of living now in Manhattan is substantially lower than what it was in SF.

NYC isn't cheap, but it isn't quite the level of insanity as San Francisco.


I wouldn't say that saving is impossible on an engineer's salary, but I suppose it's all relative on how much you want to save and what your "lifestyle expenses" are outside of rent.


I'm a Googler living in SF, and my landlord recently tried to drive me out of my apartment, so I think I have an informed perspective on this.

It's not as simple as you make it out to be. The laws being renter friendly are helpful but they don't solve anything. If I hadn't had the time and money to try to fight this I would probably be looking for a new place right now.


My point is that i used to live in Austin, where "trying to kick you out of the apartment" involves not offering you a lease for the following year, because, say, they don't like your haircut. That is, any reason as long as it's not because you are a protected class or for retaliation for requesting repairs. If that doesn't work, they could just double, or triple, your rent.

The idea that you actually get to perpetually live in an apartment even if the owner doesn't want you there is quite generous. The idea that it's socially deemed "the right thing to do" is rather progressive.


I was responding to this, specifically: "The laws in SF are as renter friendly as you can get in this country. I'm not sure what all the fuss is about."

If those tenant friendly laws are de facto easy to work around - and they are, particularly for poorer tenants - then they are significantly weaker than they seem. That's what the fuss is about. Poorer people get driven out because they don't have the time and money to fight their landlords trying to double their rent, whether legal or not. Richer people like me are able to fight it and win.

I don't think you understand California or San Francisco rental laws. They do not say you get to perpetually live in an apartment even if the owner doesn't want you there. They control how much a landlord can raise rent, and limit some forms of eviction. But they also have many exceptions, and the burden can be on the tenant to prove the landlord is wrong.


I am in a rent controlled building in SF. Our building recently got sold and the new owner evicted the lowest paying tenant. She (the new owner) has to live in the unit for two years before she can re-rent the unit, but considering the previous tenant had been there for 15-20 years, the increased rent she will get after those two years will more than make up for the lost rent (assuming that is her intention). Additionally, she is starting to repair/update the building. I was initially excited about this (the building is a bit old/outdated), but after reading the rent control laws, found out that she is allowed to pass on 100% of the cost to the tenants (through a 5% annual increase until the costs are paid off), and additionally, can deduct 100% of the cost from her taxes. Also, I found out what the sale price of the building was, and after doing a little back of the napkin calculations, realized that her mortgage is probably going to be less than what she collects in rent from the remaining two tenants. So for the cost of the down payment, the landlord is getting a place to live, all of the building upgrades paid for by the tenants, the mortgage paid for by the tenants, and a small income from what is left over from the rent as well as any capital gains on the building. This sounds like a pretty good deal (and I was actually upset that I didn't move on it myself).

I agree with the sentiment that rent control can result in an increase in market prices. But it's not as if the landlords are getting completely screwed, they still have avenues in which they can evict tenants, profitably upgrade the building, and achieve close to market rents. Additionally, a major factor that gets overlooked in the rent control debate is that the 'secondary market' (rooms for rent in rent controlled units) provides fairly affordable housing for young newcomers. Almost everybody I know who lives in SF does so by renting a room in a rent controlled unit that they found through friends or through craigslist. These rooms are significantly cheaper than market rates (rent control by-laws actually require that any rooms in a rent controlled unit must be re-rented at an evenly split price, or normalized price based on square footage, not that everyone abides by those rules), and probably the only reason people with marginal means can afford to live here. So, while rent control may result in an increase in market prices, it also creates a secondary market that allows for economic diversity to continue to exist in SF.

I am somewhat split on rent control, but my gut feeling tells me it is the right thing to do. Allowing landlords to arbitrarily raise rent or randomly evict tenants is unfair and disruptive to people's lives. Rent control allows for a secondary market that lets young and lower income folks get a foot in the door. I think the 'lazy rent controlled tenant who pays nothing because they lived there for 30 years' is largely a myth (or such a rarity that they have only minimal impact on the macro trends) because rent control still allows for evictions, just with a bit more red tape. Also, another factor that doesn't get discussed is the effect of rent control on a downward market. Because rents aren't ruthlessly increased to market rates during the boom times, it means people who get laid off in the bad times can actually afford to stick around and look for a new job for a while, rather than having to lift anchor and move somewhere cheaper. From what I recall, the vacancy rate in SF rose a little bit during the great recession, but no where near as bad as other places.


The idea that you actually get to perpetually live in an apartment even if the owner doesn't want you there is quite generous. The idea that it's socially deemed "the right thing to do" is rather progressive.

this concept confounds me (and I stayed in a nice rent controlled apt in SF last week). still, someone else's property, which they invested in/ care for, which they no longer get to control.

IMHO - these are all symptoms of problems that have more to do with astronomical salaries - a symptom of a perceived labor shortage - a symptom of the 'gold rush', et al.


Well, it kind of sucks that your options in the US are gentrification or Detroitification. It's part of the price we pay for not having the social safety nets and public investment in infrastructure that other countries have.


In Canada, similar gentrification is also happening rapidly in Toronto/Vancouver. Detroitification happened on the Canadian east coast (when the fishing industry died). And we have better "social safety nets". I don't think social programs manage to keep cities alive or the same as they were, nor would the overall country benefit from trying harder to do so.

The main difference w/ Toronto vs SF is that Toronto has a liberal condo building policy so more affordable housing is being built by a (relatively) booming real estate industry. Whereas SF's property development growth has nowhere near reflected its population/income boom.


The problem in SF is there is no middle class or family housing being built. All these fancy new buildings going up are high margin 4k/mo rent and some percentage of section 8. There's nothing going up even in the range of 1800-2800 1 or 2BR places.

What would probably be reasonable is 1400/mo studio, 2000/mo 1BR, 2800/mo 2BR. What would be ideal is more like 1200/mo, 1700/mo, 2400/mo respectively. Yeah, that's still expensive, but it's a newer building and hopefully older buildings would be around 80% of that. But that's not going to happen.

Some additional policies like penalizing companies for letting new places be unrented for some amount of time, or allowing developers to (temporarily) displace SRO occupants while they demolish and rebuild higher density buildings in the Tenderloin could possibly help change behaviors towards increasing the supply of more modest housing, but that's not going to happen any time soon. In the meantime, the city is fine letting people do what they want at top as long as it benefits the people at the bottom, with no plans to do anything for people in between.


Those rent prices are not even available in places like San Jose (one example: http://www.equityapartments.com/california/san-francisco-bay...)


You can rent a pretty nice 2b duplex in Mountain View for 2.5k. 20 minute bike ride to Google.


Most of the 2 bdr units in Mountain View on Craigslist are well over 2500:

http://sfbay.craigslist.org/search/apa/pen?query=&zoomToPost...


I can confirm this fact in Toronto.

I can still see some seniors living in older neighbourhoods in Toronto but most of them have moved to the suburbs.


And Atlantic Canadian cities are still great places to live because Canada has invested in social safety nets, sane urban development, and not abandoning entire cities. 'Detroitification' is a not-even-wrong way to describe how any population centre in Atlantic Canada has fared.


The Atlantic Canadian cities were never the size of places like Detroit, it's not a good comparison.


I could be wrong here, but I thought much of SF is considered "historic district" or something, therefore new, more dense housing is not being build, thus rents rise like crazy?


You indeed are wrong. Thousands of units of high density housing is being constructed currently.


I don't think he's wrong. All of the new development seems to be along Market (hell in a one mile stretch of Market near my house, there are THREE huge residential developments going up); i.e., you don't see any new high-rise developments going up in the Mission district (which I believe is designated "historic").


And yet, the riots and looting sprees happen not in San Francisco, but in European countries like the UK, France, and Sweden.

http://en.wikipedia.org/wiki/2013_Stockholm_riots

Sweden. Not exactly a bastion of savage Randian individualism.

Not to say that generous welfare states are of no value, but the available data suggest they are far from a panacea


That's an inconvenient fact for the standard liberal wisdom to explain. Here's links to information about the French riots:

http://en.wikipedia.org/wiki/2005_civil_unrest_in_France

and London riots/flash mobs:

http://en.wikipedia.org/wiki/2011_England_riots


Here's an inconvenient fact: Headline-making civil unrest in Europe is "Tuesday" in the American inner city.

The European riots are only significant because they're unusual against such comparatively low levels of background violence.


That's a gross exaggeration. Until you show me a number of burned out hulks of cars from a "Tuesday" in a US city, it's your stereotypes against my actual examples.


I'd imagine the police having guns in America are a great deterrent for rioters


Although interestingly, both the London and Stockholm riots were caused by police shootings.


I'm curious to what you think the other options are?

Gentrification doesn't mean pushing all residents and culture out of a place - but it typically flows to areas with the least resistance (and location/ proximity).

So if you have an economically desolate area, and gentrification is at one end of the scale with 'detroitification' at the other - what is in the middle?


The whole point of this (and a hundred other) articles is that the US is losing its "middle."

Increasingly, you are either rich or poor. A have or a have not. Most HN readers are haves or (because you are still young) think you will be haves. But life doesn't always turn out according to plan.


I can't express how much I agree to this - but with a small addition: The "middle" is disappearing in Europe also.

The most worrying thing is that if you put 95% of the people on a ship's back, it's going to sink; together with its front.


Not so with an iceberg, unfortunately.


> I'm not sure what all the fuss is about.

I think everyone's just trying to make sense of the SF real estate market, tech industry workers included. The average rental unit price in SF is now higher than Manhattan, last time I checked.

Hopefully, talking about the craziness of the SF real estate market will lead to more solutions, e.g. public pressure to make commuting from the East bay more feasible ala Brooklyn and Manhattan.


This article is not the first on the subject, and it probably won't be the last.

I should just save them and forwarded them to the Google recruiters that contact me 1-2 times a year. Not going to work in the bay area. I like living in a place where my neighbors do not work in tech. I like SF, but what made the city truly extraordinary is gone.


I like living in a place where my neighbors do not work in tech.

Out of curiosity, why? Where I live, finding real life interactions with people in tech is quite rare, and I wish it were different.

Grass is greener.


I've lived both, and honestly, for me personally at least, getting away from tech people is the greener side.

Meeting a lot of people who share your field and passions is really cool. For a little while. Then you realize you can't get away from it - everyone works in tech. You go to a party and end up talking about tech esoterica. You go to a bar and end up talking about tech esoterica. You sit down for a cup of coffee and end up talking about tech esoterica.

It's exhausting after a while. Personally I'm much happier now in a city where there is a substantial tech presence I can seek out, but I can just as easily get away from.


Perhaps I should have phrased it as "I like living in a place where MOST my neighbors do not work in tech".

I am in agreement that having some interaction with others in the tech industry is important. There should be a happy medium somewhere since living next to nothing but tech workers and lawyers is boring. My current neighbors are teachers, photographers, small business owners, but I wish there was a techie in the mix.


I wish one of my neighbors worked in tech.


Yes, lets put up a divider between the relatively wealthy tech people and the poor, so that the third parties (property owners, government) stay unharmed.

Tech people also don't want to pay 40% of their net income to some rent seeker for a studio appartment. This level of prices will ultimately be toxic to the economy.


This is due to not enough housing being built over the past 30 years


Supply of housing kept artificially low (SF gov resisting building up for decades). Demand for housing rising, as it should in any desirable city.

People seem surprised by this.

As long as we are adding CS to school curricula, maybe we should add some Econ 101 as well...


My high school (in Cupertino, CA -- 45 miles south of SF) did require an economics course and the one I took (AP Micro Econ for part of the course, regular macro econ for remainder) used rent control as an example of policies with unintended consequences. I don't think ignorance is the problem here, this is textbook stuff.

I think the real issues are these:

1) Economics is a science, it helps you build a mathematical model of ``what happens if''. It doesn't immediately follow that even if rent control has drawbacks (lowered mobility, gradual conversion of units from apartments to TiCs or condos, higher rent and lower ability for those who move into the city) that they aren't socially acceptable due to perceived benefits. I am not making this argument myself here, by the way (I don't think social benefits of rent control justify the costs); I am merely stating that it isn't as straightforward (going from "rent control has unintended consequences" to "rent control is a wrong policy" is an example of Hume's is-ought fallacy).

2) There are other legal/economics issues besides rent control. There are certain tenant right laws that currently making it very difficult for one-property landlords to rent their property out. In other words if you're moving to South Bay/Fremont or Pleasanton for the next 12 years to better schools (more on this later...) or to New York/London for 5 years to work in finance sector it may be more monetarily advantageous to you to sell or AirBnB the place. If you're an individual with a single investment property it makes all the sense to sell now (or again, to AirBnB) as opposed to continue renting out.

Tenant’s rights is a great concept and undoubtedly tenants should be protected from unsafe conditions, predatory practices, eviction without any notice, harassment, etc... However, some of the laws (e.g., difficulty of eviction for legitimate reasons, bizzare laws that can require a property to wait for 10 years before being rented or sold again after an eviction in some cases, etc...) clearly make things easier for slumlords (individuals/families with more than a single property), large property management companies, and apartment complexes.

3) Non-rent related political/economic issues: namely schools, transportation, and safety. First, there is whole Western half of SF (Sunset, Richmond) that's simply an amazing town: walkable mixed-use neighbourhoods, slightly larger homes, lower rent, less crime. "Small" problem: it takes as long to get to SOMA or FiDi from Inner Richmond as it does from Mountain View or Palo Alto. Sunset is slightly better when muni is on-time (that's like saying "JVM is fast when you're not having a full GC" -- at-grade transportation will enviable suffer delays), but it's still a longer (and more exhausting) commute than driving from, e.g., Daly City.

Second, schools are (literally) a lottery ticket. The known-good public schools (e.g., Lowell) are magnets that are extremely competitive admissions wise. Private schools would be fine, but become unaffordable when there's also rent/mortgage to pay in SF. Child friendly neighbourhoods (likes one I describe above) are generally removed from work areas.

Essentially this leaves only one option: if you're a family, due to safety/space reasons you'll probably have to commute[1] anyway to get to work; since you can commute from somewhere with either cheaper housing (East Bay) or great public schools (South Bay, Fremont area, Pleasanton, etc...), or take a job in one of these areas and have a shorter commuter, the costs of living in SF proper outweigh the benefits...

4) Non-political factors: SF is at the end of Peninsula, with mountains in the middle, and on its south side. It's also highly in demand. You can build up as in Manhattan (and SF should) but even though SF is now cheaper than Manhattan, Manhattan real estate is still unaffordable for most Americans.

In other words, imagine you've an NP-complete algorithm. You can apply every optimization possible, but in the end you either have to throw a core with more transistors at it (where you're limited by physics), throw more parallel cores/distributed CPUs at it (_if_ it happens to be easily parallelizable), or find a heuristic that doesn't give you a complete answer but is good enough (like Miller-Rabin primarily test).

Ultimately I think (but may as well be proven wrong) that a combination of these is what will happen here: reform of housing laws ("optimization") and smaller housing in SF proper ("more transistors on a core"), more SF-like dense urban cores in Bay Area, e.g., more jobs in Oakland/Berkeley, revival of Downtown SJ ("more cores"), and "densification" with a move towards mixed use residential/light commercial in suburbs/exurbs coupled with better public and private transportation options ("heuristical solutions").

[1] To out of towners, here are some numbers from personal experience/experience of friends:

Mid-Richmond to SOMA by bus -- 40 minutes Inner Sunset to SOMA by Muni without delays ~20 minutes

Menlo Park to SOMA -- 35 minutes Daly City to SOMA -- 20 minutes at most Saratoga to FiDi - 1 hour 5 minutes Saratoga to Palo Alto California ave area -- 20 minutes Saratoga to Menlo Park - 30 minutes Mountain View to Menlo Park -- 15 minutes Mountain View to Sunnyvale/Santa Clara - 5-15 minutes

Driving commute in SF proper is not a good option. First, you lose out majorly on the savings of living in the city by having a car (the car itself, insurance, gas, parking, maintenance. Second, there's very little freeway in SF proper, but major job centers (SOMA, downtown) happen to be near freeway exits -- driving on SF surface streets is simply not worth it in terms of gas costs from idling/stop-and-go traffic, damage that happens to your car (with a manual car it means having to replace a clutch more often; with an automatic I can't imagine the stress put on the torque converter), and most importantly the stress/discomfort.


Location, location, location...

"The number of properties renting for less than $1,772 within a mile of Google shuttle stops declined sharply between 2010 and 2012"

http://www.latimes.com/business/la-fi-silicon-valley-backlas...

So, the real problem is that people want to live conviently to work. If there were only some other way to solve this problem. Unfortunaley, that might would urban planning.

It's great that we're all thinking about the Hyperloop so we can travel 400 miles in 30 minutes. How about crossing San Francisco and into the valley in 30 minutes?


How about: "The number of properties in San Francisco renting for less than $1,772 declined sharply between 2010 and 2012."

I'm not sure this graphic really contains any information.


Aren't there quite a few unoccupied buildings in areas like the Tenderloin and Civic Center that could be made into apartments?


Totally misplaced anger by non-techies - the housing problem in SF is down to the planning restrictions.


Agreed, that article totally missed the point here on the NIMBY-ism all over SF. Look at cities like Vancouver (often voted best city to live in the world) and their core is filled with dense skyrises that also ensure vibrant and busy street level activity which leads to lower crime and safer streets.


Whose "problem" is economic equality? It doesn't sound like it should be the responsibility of the companies that happen to reside in/near the Valley. Google's mission statement is to index the Internet, not to bolster the Valley, so they optimize accordingly. The companies and its residents don't owe their cities anything. Living there is merely an implementation detail.

Granted, I think it would be nice if San Francisco wasn't left in the dust so to speak... But I can't think of how keeping the city propped up in a certain way aligns with people's and corporations' natural inclinations.

It doesn't add up any other way, I don't think. What is happening is perfectly logical. Maybe unfortunate. But logical.


The problem is the SF City gov. They are destroying everything they want to protect about the city by restricting housing developments.


The buses are a convenient and visible symbol for SF activists to use as a shorthand for the influx of tech workers and housing demand.

While buses clearly reduce roadway commuting loads, and are convenient for those inside them, they are also highly visible at pick-up/drop-off points in the City, and in HOV lanes on the freeway - especially visible to people who are waiting for a Muni bus, or who are in heavy traffic watching buses go past in an HOV lane.

Activists who understand this keep talking about buses rather than about people, or about the failures of the City to provide more competitive working environments for tech companies and their workers.


I guess it's that time of the month again: class warfare and the effect of the tech industry on SF.

> Fueling the growing rift is a common belief that the vast wealth being amassed by the tech industry is not spilling over into the community.

This is a deliberately naive view of economics. Unless tech workers spend nothing they consume local goods and services and money flows through the economy that way. If you profile tech workers who live in SF you'll tend to find they're young (20s) and tend to spend a lot of their money on "entertainment" (bars, restaurants, etc). How exactly does this not benefit the SF economy?

> Instead, activists say, the high-tech invasion is driving up the cost of living to levels that more San Franciscans cannot afford.

No, ignorance of supply and demand, archaic zoning laws and other artificial constraints on supply drive up the cost of living in SF and the rest of the Bay area.

If, for example, you had high density housing along the Caltrain corridor you'd probably find that a lot less people would feel the need to live in SF.

> She has seen a sharp uptick in evictions under the Ellis Act, the state law that allows a landlord to evict all tenants of a building if it is being taken off the rental market. And now she and the other tenants in her building

This is inevitable when you create artificially low rental prices. If you want to avoid this sort of thing the only way to do it is either a) have a government authority own the buildings or b) subsidize the rent paid on the private market. Rent control is always going to leave owners looking for a way to get out of it.

> So he's hunting for a job as a recruiter in the tech industry.

And who said this isn't benefiting the SF economy?

As for the private buses, I don't recall the cost per worker for the system but I believe it's actually pretty low. BART/Muni/Caltrain/VTA/etc is actually pretty expensive and government subsidized. The real problem here is that public transit in the Bay Area is appallingly organized and run so companies have no real choice but to go private.

But I bet the politicians love all this finger-pointing at tech companies. It certainly takes the heat off them.


If, for example, you had high density housing along the Caltrain corridor you'd probably find that a lot less people would feel the need to live in SF.

What are you talking about? There's plenty of housing by Caltrain. I myself live within bed-shaking distance of Caltrain.

A shortage of residences near Caltrain isn't the problem. The problem is ... all these cities SUCK. They are homogeneous culturally barren wastelands. THAT'S why people want to live in SF.

But by moving to SF in such large numbers, with tech millions burning a hole in their pockets, they are driving up rents and home prices to such a degree that non-techies cannot afford to live there.

As this continues, SF itself will turn into a homogeneous culturally barren wasteland - more like San Jose. And the yuppie bars and overpriced restaurants that remain will be staffed by workers bussed in from somewhere else. The art and music and quirkiness will be long gone.


All good points, but there is actually the bigger social problem which is that tech companies are generating an increasing amount of wealth and concentrating it among a smaller number of employees without the overall economy growing at the same rate. During the industrial age there was the natural consequence that large companies needed many employees. Now that tacit social contract is being up-ended and nowhere is this more visible than in San Francisco.

Too many techies ignore this reality and soothe their conscience by an almost religious belief in meritocracy and that anyone can do what they do, they just need to retrain. I'm not trying to assign blame or say that we should feel guilty about our relative success, but we need to acknowledge the structural problem and think about how it can be solved before it turns into real class warfare.


I've read a few articles noting the tension between private bus services and public space. I don't live in Silicon Valley, but it sounds like these private buses are really taking advantage of public space and I think the city needs to step in, write up some rules for fair use and generate revenue from this private system.


Generate revenue from these? (that is, make up and levy a new tax)

Were it not for these buses, there would be more cars on the road (and jostling for parking spots, and more pollution) and more people piling into Muni, Caltrain and BART during rush hour. These buses, like the bathrooms in Starbucks, are a private company providing a public good.

I work for a company that doesn't give me these buses. I wish they did. I'm plenty envious. But I am under no illusion that these private bus systems owe me anything more than the lightened traffic burden they already gave me.


Not necessarily. I hate these articles just as much as the next techie, but there is no denying that Google is solving a problem they are creating: if they didn't offer these buses then people wouldn't live in SF anywhere NEAR as frequently and there wouldn't be as much traffic: so they offer the buses.

I do think they should be paying some sort of fees to use public bus stops etc., but everything else I disagree with in the article and think it's bullshit.


Or the people wouldn't live so far away from where they work thus freeing up more housing and lessening (at least for a time) the skyrocketing rental situation in the city.


I don't think that is necessarily the case. I live in SF and work in Sunnyvale and would ever even consider leaving SF as long as I'm single.

Even if the shuttle is convenient, it is still 2-3 hours of your day gone, every day.


If people wouldn't work at a company in the valley without the private shuttles because it would be too difficult to get there, then the company is clearly getting enormous benefit from the arrangement. It is certainly a good thing that they reduce the number of cars on the road, but it isn't clear to me that all of those people would still be going that far to work everyday without the shuttle. I'm not sure I see it as "providing a public good" for that reason.


Shuttle busses also go to places far from Silicon Valley such as Berkeley, Santa Cruz, etc. I do think that many of those people wouldn't work in Silicon Valley without the shuttles.


Can you elaborate on how the buses are taking advantage of public space?


I've read they often make use of public bus stops, blocking the publicly funded transportation system.


> Most young technology workers order food and supplies online, so she doesn't run into them at the corner store. They keep their noses buried in their smartphones when they walk on the streets and don't volunteer in the community, Flandrich said.

This is true even outside Silicon Valley. A techies community is the Internet. GitHub, Reddit, Hacker News, forums, etc. This trend will only get more prolific as the Internet becomes more immerse.


What can be done? Build more housing I guess, but who's to say the most desirable still won't be bought by those looking to pay the most?

Not to be dismissive of the impact to those who have up to this point been able to afford it and now must change their lives.. but I don't know if there's any 'cure' for people wanting to sell a scarce resource to the highest bidder.


Just so the article is clear on which group it's trying to scapegoat: they fail to mention any of the big biotech companies who also run commuter coaches out of San Francisco.

There are so many reasons for SF's growing wealth gap and housing costs. This is just an article with all the same hate-speech as one blaming a minority.


It's funny how the article doesn't consider technologists to be intellectuals.


Sally the project manager, Ben the QA guy, and Amit the Rails hacker, who make up 99% of the SV workforce, are decidedly not intellectuals.


Do you know any interesting people who you would consider to be intellectuals who work in technology? If so, are their intellectual interests separate from technology (ie., they have a second life as a musician/artist/writer), or do they have technical interests that you would consider "intellectual".


You can't be sure of that unless you attend the same cocktail parties as Sally, Ben and Amit.


99% is hyperbole. There is a lot more going on in SF than just rails shops. You may only hear about the rails shops, but I know plenty of people in the area working on serious tech that improves life.

Plus, who is to decide who is and is not an intellectual. You're characterization probably applies to a greater percentage of the non-techie population than the techie population.


True, I just thought it was amusing.


I don't live in SF but question about the techie bus stops: Do panhandlers congregate there?


They've had some problems with muggings, but I haven't seen more panhandling than usual near them.


Pf, Silicon Valley is split by Silicon Valley's wealth. There are a huge amount of people here who have $1m+ net worth, and an even larger number who have moved in since to clean up their code (making far less). That's not even mentioning the even greater number of support staff who make less than the transit workers and cops.

The amount of money the top tier people are making around here should be illegal.


On what principle should "making huge amounts of money because you are top tier" be illegal? And with what filters?


I was being provocative, but as a tech worker in the valley, even I have a hard time coping with the cost of living in the area.


>And with what filters?

From my years of spending time on HN: being involved in banking or finance means your wealth is undeserved and ill-gotten. When your business fails, you should go to jail.

But the excesses of the technology world are lauded. Because, you know, Napster.

It's some interesting hypocrisy.


First of all, I wouldn't call it "hypocrisy". I would call it "not very clear point of view". I doubt they/we do it by intention; they/we just don't get the whole picture.

And I write "they/we" because I sometimes have the same "hate" towards the banking/finance industry. But sometimes it's well-fed by its methods. Of course I wouldn't demand a clerk to go to jail but I would like to see a few bank bosses that always get away by bribing (or blackmailing) politicians treated the same way a small store boss would be treated.




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