> I'd be so happy if some big entity (Google/Apple/YC) decided one day to relocate a big portion of their existence to a new place.

That's already been tried -- unfortunately, it just moves the problem to the new place. Housing costs rise sharply following wherever you move the company. It's the same exact problem, moved to a new place and hurting new groups of people.

(See Portland, Seattle, Denver for examples)

No doubt bringing in tech workers will likely cause prices will rise, but will they rise to the current SF levels? If they don't, assuming that the pay also doesn't drop too much, then it might be worth it for some individuals, no?

Glancing at Denver, downtown 1 bedroom ~700 sq ft apartments seem to run ~$1500/mo. That's ~$500/mo cheaper than way out in the suburbs of SF; and in my experience at least $1000/mo cheaper than SF itself. And the Denver area has houses for less than $1M, so home ownership might even be an option, whereas in the Bay it's been rendered all but a pipe dream.

> but will they rise to the current SF levels?

Once you include salaries in the inclusion, it could be worse than SF. For example, Michigan's urban apartments are already often more expensive than Seattle (when measured as percent of median income needed to cover average urban rents).

The sticker prices are vastly misleading because many folks get SF-level triple-figure salaries, and can pull those anywhere in the world. They can shop across entire housing markets. They see a $600k condo in say, Milwaukee, and think "wow, that would be so cheap (on my San Francisco salary)".

But 99% of regular people can't do any of that, they have to afford local housing using local wages. And regular people still need housing just as much as developers do. A $600k house might as well cost 6-million dollars, because they are both equally impossible to ever afford for a regular person.

> If they don't, assuming that the pay also doesn't drop too much, then it might be worth it for some individuals, no?

For a few individuals, yes absolutely. When we promote this idea of "fix housing affordability by spreading the problem everywhere", we do alleviate a little bit of pain for technology workers and give them a shot of home ownership (which is great).

But we do this at the expense of permanently hurting housing availability for a huge swath of other people -- something vitally important, but often gets overlooked when people talk about housing by hyper-focusing on just San Francisco's problem, and ignoring the crisis happening in all of the other cities nationwide.

Honest question: can you think of any examples that are not already trendy cities (as the case has been with those three) where large tech companies have made serious investments that led to a big, negative social outcome?

On the flip side, I can think of two success stories. I'm a Pittsburgh native, and my family is still there. The influence of CMU has long been beneficial to the region. The recent fight for AI talent by the likes of Google and Uber have been a source of pride for Pittsburghers generally (though I'm sure folks in academia have concerns) when things like the Uber self-driving experiment launch on their roads first. My grandmother - who has never been on the internet - called me when she read it in the newspaper.

After undergrad, I worked for a large tech company that put an outpost in the Detroit area. There had been rumors this company may leave town (which did not happen), and the local papers and city were deeply disappointed at this possibility. When they ultimately announced they were actually expanding their office, it was considered a big win in the media.

So yeah, this is a very different cultural and economic experience than my current one in the Bay Area. I do agree with you though -- going into cities with competitive housing markets and trendiness probably just puts you on a crash course to similar problems in your new locale.

Fortunately, there are a lot more cities in America that do not have those issues and actively seek business development.

> (See Portland, Seattle, Denver for examples)

Intel relocated a lot of their engineering to Portland (well, Hillsboro) a few decades ago. The strategy seems to have worked for the most part. Housing only got really expensive here in the last 5-6 years with the latest tech bubble out of SFBA.

I would think that once the relocation was public knowledge, well-funded property speculators would beat potential renters to the punch, leading to the same problem all over again.

The first solution that comes to mind is to legislate that certain pieces of property must be the legal primary residence of the owner.

No, it wouldn't, for at least two big reasons. First: SFBA has geographical and political constraints that make housing particularly problematic. Other major US cities, and even college towns like Ann Arbor, don't have those same problems.

Secondly, the Bay Area housing shortage is a phenomenon of hundreds of companies being located in the same area. No one company, even Google, could have that same impact on another metro area. You're only going to stand a chance of recreating the SFBA housing shortage (and it's a small chance) if the whole Bay Area market moves wholesale to a single new place.

I can name a number of USA cities that are experiencing housing shortages and rent/costs inflating far beyond where they would be if there wasn't a huge flight out of CA along with local political issues (NIMBYs, not allowing smaller vertical growth land lots). Austin, Seattle, Portland, Denver. All of these cities have been affected by this. My house value has gone up $40k in the last year. It's gone from sub 100s to a half a million over the last 5 years.

This is far and away not only an SFBA regional issue.

http://www.bizjournals.com/austin/news/2017/02/16/austins-ho...

Our problem with Austin has always been the city council artificially limiting development. We didn't allow 10k sq foot lots until last year which means we're JUST now starting to build those 3-4 story townhouses near downtown. If you go to Dallas or Houston they are all over the place and little neighborhoods will feel vastly more populated than they do in Austin. The unfortunate part of this is that now younger people who could afford these townhouses are pushed into tiny studio apartments downtown or into houses 12-20 miles away from downtown. There was no in between if you didn't have millions to spend but wanted to live in/near downtown like there is in Houston/Dallas currently.

The biggest constraint would seem to be political or specifically lack of willingness to update building codes in one of the largest cities by area in ca -SJ. Land is so very underutilized in San Jose. Its development on the surface looks more like an agglomeration of suburbs rather than a city proper. If they allowed for new code to allow density in the city of San Jose alone, it would go a good way to alleviating the housing shortage.

SJ is over 3x the surface area of SF but has barely 20% more residents in that area. Imagine if they just doubled density --you'd allow for the absorption of an extra million residents. If they only upped the density by 50% they'd allow for over an extra 500,000 residents --that would alleviate the issue by itself.

There is so much poorly built stock from the 60s and 70s that it would not only renew the city but it would become the undisputed powerhouse of the bay area.

Why not just encourage Facebook, Google et al. to move some divisions a little bit east to the San Joaquine Valley? I'm guessing the city governments of Stockton, Tracy, Fresno, Visalia would be amiable.

For that matter they could move up to places with better weather like Eureka or Reading. However, given that companies prefer to stay in the local scene and there is underutilized land, it would seem like something worth looking into given the demand as well as availability, if not government willingness.

SFBA's issue are entirely political.

A housing shortage is trivially easy to recreate; just stop building housing while trying to pack more and more people in the same space. An SFBA-grade housing shortage isn't that much harder then, you just need to convince a small handful of people on city and county boards to stop building housing, while trying to put more people in the same space. Sprinkle some income inequality that makes Rwanda look equitable and you've got a plot of dirt going for $200k in South San Francisco.

You could pack half the Bay Area's population into Santa Clara county if you made it as dense as San Francisco but there's not the will to go even that far, never mind somewhere actually dense. New York's not even all that dense in the scheme of things, but at that level of density, you could fit almost 36 million people into Santa Clara county alone, or the whole Bay Area, and then 3 more of them.

Hundreds of companies being located in the same area isn't the problem, the refusal to build more housing is.

This is exactly correct.

There is no rational reason why Palo Alto should have detached houses with lawns, or Sausalito be a little town, except for terrible political decisions about land use and mass transit.

You're contending with some very intractable land use and land economics issues, and effectively addressing them will be very difficult without addressing some of these issues, like preferential access to capital over many other asset classes, preferential terms, preferential tax treatment, preferential infrastructure treatment, etc. This doesn't even start to get into the fact that out of all asset classes, property is an extremely common and popular asset class held and upholds a substantial portion of the wealth of most of the political class around the world. Legislating against property as wealth goes directly against their personal financial interests.

Practical solutions that have a hope of actually taking effect within the next 2-3 years must be deployable without the aid of legislation. One way to mitigate speculators is to put up a credible threat that you (the company) wield the ability to unilaterally and virtually overnight make their speculation worthless. If you are able to structure a company town such that it is Google-level amenities and infrastructure attractive and physically entirely self-contained (even water sourcing, water treatment, energy generation, recycling/waste management, schools, parks, restaurants, and retail shops, etc., are part of the company town), then demonstrate the capability to move everything at a moment's notice within a month or two and leave behind just bare foundation ties, then after the first such move that bankrupts the speculators that call the company's bluff, future speculators will find it extraordinarily difficult to secure loans to speculate with.

Lots and lots of details I'm leaving out, and this wouldn't be without its problems and challenges, but if you really want to slice the Gordian Knot of high property prices inflating employee compensation, then it will take an outside-the-box action of this magnitude to do so.

> The first solution that comes to mind is to legislate that certain pieces of property must be the legal primary residence of the owner.

I am not sure I understand this solution. Are you saying that San Francisco's housing problems are not caused by demand that far outstrips supply? This proposal would just mean that prices stay high, but more people buy instead of rent.

How about legalizing building? SF could easily accommodate far more people.

Even if it was easier to build in SF, the cost of investment is SO HUGE, that the only way to recoup it is to make it a luxury high-rise that does nothing for the non-wealthy residents of the city.

Developers of new buildings absolutely do not want rents to drop, because otherwise there would be no reason to develop the area. The cost of land is extremely high.

This doesn't make sense. If I build a ton of luxury apartments and fill them with willing buyers, then won't those buyers be giving up their own housing?

Overall, the total amount of housing increases which should drop prices.

If it costs you 500,000,000 dollars to build a building, you need to charge a certain amount of rent for the investment to pan out. Hint: it won't be cheap.