San Francisco Tech Firms See Workers Flee from $4,500 Rents

It&#x27;s hard to overstate the impact this is going to have on San Francisco, long-term. As Technology becomes the most important industry in America, a well-governed San Francisco could have positioned itself as the next NYC. The hub where all of tech gathers, the same way all of finance gathered in Wall St. Replace the 70 year old 2-storey homes with Manhattan style apartment buildings, and rent in San Francisco would have remained very reasonable, despite the rapid economic growth. This would have prevented exactly this problem where tech workers are forced to disperse to other mini-hubs, due to lack of capacity in San Francisco.<p>20 years on, San Francisco could have become what New York City is today. One of the top 5 cities in the world, and the undisputed hub where all of technology resides. Instead, it&#x27;s on track to be just another major city, in the same league as countless others like Chicago&#x2F;Seattle&#x2F;Boston.

Lots of naysayers on HN, but I left SF last year and moved to Austin. I have zero regrets.<p>In SF, my 1 bedroom, 650 square foot apartment in SOMA went from $2,600 to $3,200 over 3 years.<p>In Austin, my salary went down $10k to $120k&#x2F;yr. My 2 bedroom, 1,100 square foot apartment is $1,150&#x2F;mo.<p>The tech scene here isn&#x27;t as vibrant as SF, but there&#x27;s still plenty of great meet ups.<p>All in all, yes there are some things I miss about SF, but the benefit of having way more cash month to month outweigh the negatives.<p>Edit: Clarity.

I live in a high rise in SF and pay $4400 for a one bedroom. Although it sounds expensive but it&#x27;s like $800 more than the least expensive place we could find near this place but it&#x27;s a well built apartment with lots of amenities.<p>I thought about moving out of SF but I don&#x27;t have any social connection outside of San Francisco. Plus weather is very nice here and there are lots of diverse cultural events happening in San Francisco. Add very thick job market on top of it. I was able to interview 50 companies when I was looking for a new job.<p>I&#x27;m saying I, as a case study is paying this rent because of reasons and I&#x27;m well aware how much more it is compared to other cities. There are 600 apartments in this high rise and out unit is one of cheapest ones. Most of units are having residents, so there are people who pay those rents.

I pay about that for rent - it&#x27;s the most I&#x27;ve ever paid for housing by a long shot, and it regularly freaks me out. I just can&#x27;t get used to it. The thing that gets me is that I&#x27;m barely paying the property taxes on the place I rent. The landlord isn&#x27;t gouging me.<p>It&#x27;s just the way it is here. Housing is so expensive because everyone wants to be here, and for good reason. This is the most thriving technical community in the entire world. We live different lifestyles as a result. It&#x27;s not better or worse, just different.<p>It seems like there are a fair amount of people who come for 2-3 years and then go back to wherever it is that they came from, but I think the amount of people who actually leave the bay area for tech jobs in Seattle&#x2F;Portland&#x2F;LA is pretty slim. I&#x27;m sure it happens, but if there&#x27;s an exodus happening I for one am completely unaware of it.

This is the result of people trying to get rich quick by simply having stuff rather than producing and maintaining stuff. I don&#x27;t know what the answer is. I do think that San Francisco is poorly planned out based on my observations last year when I visited to see if I could live there. There is no mass transit system on the scale of NYC or one that&#x27;s even trying to be. Everything seems really spread out. I felt like you needed a car to really be able to adequately take advantage of the area. I&#x27;m not really a fan of expensive rents and car culture. I also noticed people cheering when Twitter announced layoffs. I didn&#x27;t leave with the impression the community had adequately benefited from the tech industry being in the area. The people I spoke with felt that the tech industry takes away but doesn&#x27;t give back to the community.

Portland resident here. What this article doesn&#x27;t cover, is now locals are victim of gentrification. Rent prices are almost 2x, out of state buyers are throwing all cash offers on houses, and overall housing supply is low... I&#x27;m sure the commercial market is just as bad.<p>Interesting times.

I&#x27;m a contrarian voice here, but I strongly value my day-to-day encounters and connections with exceptional individuals who I cross paths with in daily life... moreso than the exorbitant cost-of-living in the area. The access to opportunities, collaborations, and community here is unparalleled (comparisons: Taipei, New York City, Boston, and London, all of which I&#x27;ve spent prolonged periods due to business).<p>Spend one weekend hiking in Yosemite, another working on a digital arts project in Oakland, and you still got plenty of bandwidth to sip your fancy coffees and swing by Stanford for some lectures and run into competent friends to solve some business problems for fun and profit... life is pretty damn good for work and play.<p>Caveat: Of course, this is coming from a position of privilege: that I spent both undergrad and grad in the area and have built up a strong base of connections here within the profession world and academia, and that the $10k-20k net salary optimization does not meaningfully affect my quality of life.

We&#x27;ve just setup a new office for our company (<a href="https:&#x2F;&#x2F;raygun.com" rel="nofollow">https:&#x2F;&#x2F;raygun.com</a>) in Seattle. We have a small office in SF, but going to building a much larger one up here (we&#x27;re HQ&#x27;d in Wellington, New Zealand)<p>Seattle locals complain a little about all the cranes across the skyline. I see it another way - Seattle is absolutely going to eat SF&#x27;s lunch if it doesn&#x27;t change.<p>You already have Microsoft, Boeing, etc here. Google, Facebook and Space X have now opened offices too. This city seems to be fully engaged handling that growth and how to capitalize on it. We&#x27;ve been receiving flyers about developing the transit system for the next 25 years. A far cry from the sassy (and painfully accurate) BART twitter account calling out the lack of investment in it.<p>I&#x27;m not saying it&#x27;s perfect, but there&#x27;s some real problems with the inelastic supply of housing in the SF&#x2F;Bay Area.

Yes, rents are high, but if you invest even a little bit of time you can find a fine residence in the Bay Area for a lot less than $4,500.<p>I rent a two bedroom house in Oakland for $2,200. My commute is not too much longer than it would be if I live in certain parts of San Francisco.<p>There&#x27;s simply little advantage to living right in the heart of a major city.<p>You have to ask yourself:<p>&quot;Instead of renting in a high-profile location, what else could I buy with an extra $24,000 a year?&quot;<p>Yes, average rents are too high, but nobody says you have to pay the average rent.

Lots of people want to live in an urban setting. Build more urban neighborhoods, everywhere.

&quot;They’ve increased 38 percent in Seattle, 12 percent in Austin and 6 percent in Phoenix.&quot;<p>The article names the usual suspects for engineer emigrants (Austin, Portland, strangely no mention of NYC or Raleigh RTP), but why are people moving to Phoenix? Isn&#x27;t living in the less sexy areas of South Bay (Sunnyvale, Milpitas, South San Jose) pretty much on par with urban life in Phoenix?

At least SF still has the jobs and industry to drive the insane housing prices. Try somewhere like Vancouver where the prices are just as crazy but minus any connection to an actual economic or technological driver; there&#x27;s zero industry left, zero investment, and a pervasive Stockholm syndrome where the entire city population convinces itself it&#x27;s the &#x27;best place on Earth.&#x27; It&#x27;s turning into an epic ghost town of real estate speculators and low-rent TV post-production sweat shops with all the real tech talent draining to places like SF and NYC.

It&#x27;s worth mentioning: This isn&#x27;t just causing people to flee. It&#x27;s actively repelling people from moving there.<p>(Personally, I&#x27;ve turned down job offers for ~2x what I make now just so I don&#x27;t have to endure today&#x27;s rent prices, which I anticipate are only going to increase.)<p>If you&#x27;re in SF and you want better access to talent, consider a distributed team instead of expecting everyone to move to SF.

Los Angeles got lumped in with other places in this article, but it completely misses the sprawl problem - you want to pay less? sure! Just sit in traffic!<p>&gt;$569,500 in Los Angeles, Zillow data show.<p>If you want a decent quality of life without 1-2 hour one-way commutes and you work in tech, most likely you need to live either in Sillicon Beach (Santa Monica&#x2F;Pacific Palisades to about Redondo) or Pasadena or Irvine areas. None of these are as cheap as $600k. Rents are catching up quickly as well.<p>If you are trading traffic for cheaper rent, Bay Area has those options too.

Fuck. And I thought paying $1k a month in Toronto was too much. I&#x27;ve been looking for work in cheaper cities like Hamilton or London literally because what I make versus what it takes to survive don&#x27;t sit well with me - and never have.

So are there any tech hubs right now that <i>aren&#x27;t</i> dealing with issues of rent increases, gentrifications, and growing pains?

if anyone is interested in solving the problem, im putting together a campaign for major housing reform through the ballot measure. email me greg@gregferenstein dot com

In the immediate sense, this is bad, long term one hopes, this will just accelerate the diffusion of technology centered companies away from the bay area and to the valleys and prairies and cities around the country, slowly transforming the economy as they spread out, or likely just spread out from these distant outposts.<p>Once the startups make it, rather than develop large campuses in the bay area they can expand elsewhere and take advantage of those workforces.

Many problems with this article.<p>&quot;A software engineer in Austin earning $110,000 would need to make $195,000 in San Francisco to maintain the same quality of life&quot;<p>Would they? They point out the median in the bay area is $118k, but there&#x27;s no indication that the median in Austin is $110k; maybe they just pulled that number out of thin air?<p>They cite slowing tech employment growth in SF, but it seems clear that it&#x27;s a result of near-0 tech unemployment.<p>They talk about the exodus &quot;in the past year&quot; as if it suddenly started happening; people have been bitching about the most recent cycle for years, but it&#x27;s been going on for decades.<p>&quot;They&#x27;ve become tech hubs in their own right in a way they weren&#x27;t three to five years ago&quot;<p>What?<p>&quot;We bought a beautiful Craftsman home in an awesome neighborhood and that just would not have been possible in San Francisco.&quot;<p>I have no problem with people moving and displacing others, but you have to be clear that the reason you can afford that is bringing the fruits of a higher-cost-of-living area to a lower-cost-of-living one, not because it&#x27;s inherently more affordable for people who actually (already) live there. In this case, he&#x27;s .. moving his company? So I guess he&#x27;s able to keep his pay the same (??).

People who are saying that you should be able to work on software from anywhere are underestimating the importance of IRL network effects.

As a software developer already living in Portland, I&#x27;m loving this. I have no quantitative proof, but it feels like, even as recent as 10 years ago, the high tech in the Portland area was very hardware oriented. These days it seems like there are more software startups, and more high profile software companies (Amazon, Google, Ebay) with offices in the area.

Another angle to this is cost of sending kids to schools (my kids are elementary school age). I support public schools and frequently volunteer to teach stress management programs in public high schools. However, few years back, to cut down on housing costs, I purchased a condo in &quot;very low API score school district&quot;. When my kids were ready for school, we hesitated to send to public school and choose private school. Now, my wife and I are shocked with the costs and have been inconclusive on private school vs owning a house in &quot;good&quot; school district.<p>I learnt from others that in other parts of US, we get good schools and decent house at reasonable price in Seattle&#x2F;Portland&#x2F;Austin etc. But uprooting entire family looks extreme at this point and we don&#x27;t have stomach to do it.<p>Curious, as to what others in similar situation are doing.

I keep saying it, and I&#x27;ll keep on saying it..<p>Who is going to be the first to move? The capital or the talent?<p>One has to drive the other out. VC money isn&#x27;t going as far as it used to, and talent has to increasingly eat more ramen just to live and keep the lights on in their company.

As soon as I have sufficient savings I plan to move to Texas. I will work for 30% less salary than paying 50% of my salary as rent for a completely worthless apartment that is not even being maintained properly.

I&#x27;m about ready to cry uncle. Maybe now tech companies will consider remote work. Everyone will be happier.