I think the real issue with Silicon Valley's future isn't financial, it's cultural. I believe it is rapidly becoming a second Wall Street: the place where young professionals tough it out for a few years until their bank accounts and resumes are good enough for a more fulfilling job in a cheaper and more preferable location without the cost and the crazy.
The Bay Area is a great place to make money, but is it truly a great place to live? Strip away the nice weather and trendy restaurants, and it's hard not to notice how much of the communitarian counterculture that peaked in the 60s has been, like so much of the world today, eaten by software.
San Francisco is a city defined by successive invasions.
SF now costs about the same money as living in Manhattan. I suppose you might value the "theoretically outdoorsy tech-bro/bro-burner" lifestyle here enough to pay New York City prices for it, but you're definitely getting ripped off in terms of everything else: from food to culture to social life, New York is a dramatically better scene. Like 10x better. It isn't even close. And if you truly value mountains and great weather and whatnot, there are lots of cheaper places to get that.
Somewhat related: the little statistical summary they slipped into the end of the article noted that 60% of the caltrain riders are men, and 50% are single. Hope you like celibacy, young tech dude! Keep livin' the dream!
Proximity to the outdoors are just one reason people like living here (even if they aren't bros or bro-burners whatever that is). The food's endlessly great and people generally seem content with the culture/social life. That doesn't mean Manhattan is bad- it has a lot of great things. Different strokes for different folks. If you feel your SF dollar is worth 10 Manhattan dollars, act accordingly. It's worth noting the software jobs pay less well there, and there's a smaller community which has it's plusses and minuses (like being at a large school vs a small school).
Not all men are into women, and not all single people are celibate. Enjoy the snow :)
The bay area is definitely a world leader in smugness and self-satisfaction. The restaurant selection in SF is perhaps on par with the east village, but more expensive and provincial. It sure is "endlessly great" not to be able to get decent food after 10pm!
Also, you're wrong about salaries.
Whether or not it's valuable to live here depends on a lot of factors. The general advice tends to be of little value- like telling people where to go to college.
There's a lot of smugness here, sure. And SF has no monopoly. In Manhattan, I've met plenty of people that think they're at the center of the universe and the peak of civilization. Some that grew up there and never left and don't understand why anybody should see what else there is.
If you know where to look, you can find decent food after 10PM. Yes stuff closes early, it's true, and it'd be great if you could buy alcohol until 4am like Manhattan.
"Also, you're wrong about salaries."
Any data? Any explanation?
When I lived in London I feel like a I regularly ran into New Yorkers who would roll their eyes at the mere mention of an American city that wasn't New York. Certainly SF has the lock on tech douchebags but NYC is unrivaled in civic arrogance.
One is a world-class city on par with London, Paris or Tokyo. The other is a mid-sized American city with nice weather and small-town infrastructure, and a notoriety that accidentally exceeded its potential in the 1960s. The main reason it's the epicenter of the tech world today is because it's the closest thing to culture that silicon valley gets. And I say that as someone who loves (or used to love) this city. It's simply not worth paying New York prices to live in Nerdistan sur Mer.
If anything is neck and neck with it, I would say it's NYC. To some of the people I knew who came from NYC, that fact almost formed the entirety of their identity.
Fully agree, a lot of software will be entrenched in the Bay for decades to come.
I live in a (practically) zero crime area that has no yuppies and is very cheap. It's nowhere near SFO :)
paying their average developer $250,000/year
http://www.glassdoor.com/Salaries/san-francisco-software-eng...
Which comes back to the social argument: if tech companies proactively migrate these highly paid tech workers to other municipalities, it could significantly reduce the pressure on rent and home prices. The initiative could be sold as a massive goodwill effort to the local community. And, of course, the employees who willingly move away would get rewarded with a much lower cost of living.
Also, it's not like the area isn't benefitting from prosperity through taxes. Why is it a company's responsibility to donate for cleanup projects when their taxes already pay for such things? If there should be more meal programs in a city, the city can vote for that, and fund it through taxes.
EDIT: Apparently I'm being downvoted without comment. Great way to further the dialogue. Well, I will: I live in a college town and when developers promised a decade ago that replacing houses with high rises would lower housing prices, well, they built the apartment blocks and prices still went up across the board, by a lot. I'm not talking out of my ass, here.
That sounds interesting -- can you point me to any documentation about this practice, or are you just brainstorming?
San Francisco's population has been growing at about 900 people per month for the past few years. San Francisco's housing stock has been growing at about 150 units per month. Approving new housing is way too hard, and the economically illiterate voters just throw up even more roadblocks to housing (e.g. Proposition B, passed by 14% of San Francisco's registered voters in a very-low-turnout June 2014 election).
Tall buildings also cost more per unit to build, which needs to come out in the price. But the way I see it, 1 unit of rich person living in a luxury condo is 1 unit of rich person not out-competing a middle-class family for a little house in a boring neighborhood.
The definition of elastic demand is that there is change in demand given a change in price. College students and tech workers, who will pay anything for their place, are examples of demand inelasticity. The demand keeps going up, despite the price.
Though, I suppose you have a point, considering the global market. There are enough houses in the United States for everybody to live. It’s just that more people want to live in the Bay Area than in Detroit, so we’re double- and quadruple-packed here while entire neighborhoods go empty there. And then, skyrocketing house prices attract speculators, who will bid against people who actually belong here and keep the price rising as long as possible.
1. is to keep on going with the dense housing to saturate.
2. a city council that insists on below-market-rate housing be included with the development
3. layer cake development: bottom floor is retail, middle is office, top floors are apartments/hotels + below market rate
This prevents developers from cherry-picking the highest demand usage for their building at the expense of the total needs of the community.
Would this havok occur in a building friendly city, such as Dallas? They have encountered a recent economic boom due to oil, but you don't hear many complaints of rapid price increases.
Those scared that building up will lower their property values need to relax. Population density will bring more value and thus more desire to live in an area raising the property values of locals. A house that sells for 1.5 million right now could be sitting on a piece of land worth 50 million if a high rise wanted to use it.
We also need to defeat Proposition I. A moratorium on new housing permits along with more “studies” is exactly not what we need in this housing crisis.
I haven’t looked at the other propositions enough to have an opinion to relay about those, yet. However, you can be sure that the anti-growth voters will be out in force, and we need to come out and vote for more housing.
Maybe a proposition to allow immigrants to vote in city politics might be good too.
It's almost disgusting walking around ~8th st soma and seeing single story car maintenance places or strip malls take up entire blocks. Tear them down and build rows and rows of 5 story to 20 story apartments.
As for Dallas (err... THE METROPLEX), it isn't a peninsula with restricted growth, crappy highways, and old money refusing anything new that doesn't look like a quaint bombed out city from the old country. I still don't understand why south san francisco looks like a 3rd world country. Eminent domain the whole area and build neotokyo on top of the existing shanty town.
Argh.
Another issue is that there is quite a bit of an income gap within the tech industry itself. Yes, a $100k salary out of college is fantastic, but the cost of living is so ridiculously high that it's almost impossible to buy decent housing here unless you already have old money (which I don't). My parents had an easier time in the 1970s buying a house with their lower salary (adjusted for inflation) than I do now in the Bay Area.
Conversely, many of my hip millenial techie peers are willing to blow their entire salary living in San Francisco, going out to eat every night, driving up their credit cards. I don't have enough fingers on my hands to count the number of folks I know who make six figures and spend 70%+ of their income on rent alone just to be around their friends.
Between the insane rent and child care costs... it's just not worth it. ~$4k/mo for a 2 bedroom and then you're looking at $1k+/mo for one kid in daycare. I've been living in SF for the past five years and despite how much I like it, I'll probably move out with a baby on the way.
I live in the outer sunset and I own my home.