Then they turn right around and tell all their employees to move to the area, then to get in their cars, buses, trains and start commuting to a physical location, in one of the busiest, most expensive city every single day. So that these workers can then sit on chairs in a building and do probably the easiest thing to do with a remote connection -- write code, documents, email, monitor servers.
Maybe they are eating it? Facebook, Amazon, and Google just have a very large buffet and it would take a while for them to notice.
Heck, I am taking little bytes (pun intended) every day ;-)
But seriously, I believe that could be the next revolution in the economy. We had the industrial revolution, the technological one (internet and such). Maybe remote work can be the next one. If it starts happening and large employers start to adopt it, it could change how cities and whole regions evolve.
Consider: agile frameworks at their core focus on improving communication, but remote increases the barriers to communication. For humans, online social contact doesn't provide the same benefits as as f2f. It makes depression worse, not better. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4183915/
I know someone at Amazon who gets flown halfway around the world over 4 times a year. They're not remote, but a frugal company like amazon decides it's important enough for them to visit headquarters regularly.
Timezones make communications harder as well, etc.
However I'll take these downsides vs the upsides.
consume_remote_work(<<Byte:8>>) ->
Do_something(Byte);
consume_remot_work(<<Byte:8, Rest/binary>>) ->
do_something(Byte),
consume_remote_work(Rest).This isn't just a modern phenomenon. Note the whole point of outsourcing was that given how well the world is connected, it barely matters from where you get work done from. But what it is in reality is basically a cost equation.
Early IT departments in most companies were considered a back office expense so remote/outsourcing work used to make sense. These days most tech companies have a lot of money, so the cost thing doesn't make sense.
Good connectivity was never reason for remote/outsourcing work, so it doesn't matter how good it gets.
I personally know I will never be able to afford housing close to work based on how things are now. Currently I'm just saving my pennies and hoping I can move to another job with a lower cost of living somewhere else in a few years.
Edit: For reference, I am just a just above 'entry level' engineer at Microsoft. I'm paid well, but not well enough for the housing around here.
This is exactly my situation as well. The neighbor to my left bought his house 3 years ago for 320. The neighbor to my right just bought an equivalent house for 570. No can do.
Unlike SF, however, the balance here does seem "worth it". I looked at the job market were I to return to Virginia right now, and while the land is cheap and plentiful, it took some digging to even find a posted role that felt promising. Tech hub job markets are no joke.
Even if everything you can buy suddenly got 10% cheaper, the houses in those areas would immediately increase back to the old level because the prices is driven by a high demand relative to supply.
Rents are included in cpi, but home prices aren't. Now, of course they are correlated, but that's certainly one of the arguments against using cpi.
edit: answered my own question, the bureau of labor statistics has more numbers than you can shake a stick at.
Inflation is generalized increased of nominal costs, not particular to an asset, nor in 'real terms' which is what is happening here.
Our house in the not-super-desirable area of NE Portland was worth ~$265k when we looked at the data in late February/March of this year (strong data supporting that number). When we finally put it on the market in the beginning of May, it sold in 1 day, with multiple offers, for a sales price of $312k.
Yes, that's a $47k increase in value in just over 2 months. When spring hit, real estate prices went bonkers in Portland this year. Also, we bought the house for $160k ~five years ago.
Purchase price was $145k. Sale price (after only 16 months) was $190k.
We used to proceeds from that sale to buy a two-bedroom house for my parents move into for their retirement. Paid $250k last October; recent sales in the neighborhood suggest it's worth $310-325k now.
So yeah, agreed re: bonkers Portland housing price inflation.
Inflation is generalized increase in prices. Im sure beers and miso-fries have barely changed prices if at all.
This means: we should all buy houses in the secondary tech hubs that are still affordable so our kids can afford to have families at tech firms when housing becomes unaffordable.
Companies should be incentivized (by us, software developers) to hire remote workers for jobs that don't need to be physically in an office.
I just want to see the logic of this. You think I can put downward pressure on property prices by insisting on a remote job?
I don't think hiring companies take joy in making your life difficult. They would hire more remote workers if they felt it could work. I prefer working remotely but find it much harder to manage.
Been remote for 10+ years. Make bay area salary and live in a huge house on the beach.
I'll arrive at work at 11 for my first meeting, having gotten a solid 1.5 hours of uninterrupted work done already, and be wrapping up any collaboration in order to return to my mobile cubicle by 4.
Of course, I'll still be available via skype. The morning stand up may happen while everyone is leaving their driveway.
Soon enough this new daily routine is going to be about as disruptive to productivity in the office as taking lunch, since almost everyone with a car will taking advantage of it. The start and ends of business days are going to become 'private', with people keeping their heads down, and interacting via video and chat/mail as the norm, with face-to-face work performed during the middle of the day.
We may even have to do away with lunchtimes as we know them, since they take away from prime face-to-face work time. Or perhaps, with all the other communication going on, daily team-bonding time over food might be one of few on going reasons for direct interactions.
And vehicles are going to start being designed to be really comfortable to work/play in. Every mid-morning, people are going to have to choose between getting up from the work they are stuck into and moving to the desk in their office, or staying focused on the task at hand. Eventually, people are going to start choosing the privacy and comfort of their car over the relative space of a cubicle, and more and more people are going to start working from the parking lot. Companies may even start expecting a portion of their workforce to bring their own vehicles, in the manner of 'bring your own device' and alter/reduce their use of offices.
Of course, things could go the other way: in the city, you'll want to the car to go pick up the groceries and do errands, and then find a in a nice empty shaded spot out of town for the day, and to find a new spot if anyone sketchy shows up.
This is just one tiny, tiny change as we move from a civilizations of vehicles to a civilization of intelligent transport. Cars and buses are about to be replaced by the equivalent of very small mobile homes/buildings.
There are deep seated biological and cultural reasons why current technologies don't replace physical proximity.
Some of the more important ones, such as networking, remote technologies can't even try to address. It's terrible for job seeking, lateral career changes and building connections.
I wonder how many people are like this.
Sounds like a terribly inefficient and unsustainable lifestyle. Commuting just for stand up?
How is this inefficient, unsustainable?
It provides the combination of private work and group interactions that are parcel of most white collar jobs. The vehicles will be electric, and many will probably spending any idle time at solar farms, to save on energy distribution costs, if they aren't being used as private offices. It is going to allow people to live where the want, and still do they work they want to.
I think it's the kind of setup that works best, for some kinds of software projects.
Moreover: the cadence of business just won't let this happen, or it would be widespread already.
The chance that is coming is that cars drive themselves. As a consequence, part of the business day is going to be spent working during the commute.
Note only will that time become productive time, but it might reduce traffic on the roads and reduce congestion.
Now if only employers embraced remote-work fully, I'd move to Gold Bar or somewhere else in the Cascades and dispense with the city altogether.
My family probably wouldn't be too happy to suddenly have roommates. Hah. But yes, if you're young and single, that's a solid option I would think.
You're looking at it the wrong way. It's not that the situation in California has wider repercussions, it's that there is a wider problem whose symptoms happen to manifest themselves earliest in California because it's one of the nicer places to live: there are simply too many people and not enough space for them all to live in the nice places.
Tokyo added more housing than the entire state of California:
https://www.vox.com/2016/8/8/12390048/san-francisco-housing-...
And as someone who lived in Europe for a while, I think we've had the technology to house a fair number of people in desirable area for several hundred years. It's the political will that's lacking.
https://www.theguardian.com/sustainable-business/disposable-...
And I don't write that as a fingers-in-ears, market-will-solve-all-problems libertarian, but as a fairly left-wing guy.
There's a project at my former company that will redevelop a part of downtown SF. There was a massive back and forth and iterations that had to be done because the numbers guy at the real estate development company wanted to cut out all residential since commercial would be more profitable.
Those are the people you have to incentivize to make it work.
And anyone who wants to live in a 250 square foot apartment and get stuffed (literally!) into a subway every day to get to work is free to move there. But the people who find SV desirable move there in no small measure because it's not like Tokyo.
Just heard a lady in my neighborhood in L.A. complaining about the development of a parking lot and crackhouse into a modern apartment building. Didn’t even bother to argue, sometimes the divide is too great.
The problem is that there are (as I said) more people who prefer to live in less dense development than there is space to accommodate them all. At that point, the market takes over and decides who gets to have a back yard and who has to settle for the fifth floor walkup. Given the problem statement, isn't that the best possible outcome?
Then again, my assumption is this some old lady that has been in the neighborhood for a while. Her kids won't give a shit about the growth when they can live in or sell her house for a shit ton of money.
The land itself is privately owned, sure, but undeveloped land is not very useful.
I love hiking in redwood forests. I love peace and quiet. I love not having to deal with traffic. So I think undeveloped land is very useful.
The topic is development of single-story housing into apartments. The Bay Area is rife with short houses around transit terminals.
You would have less traffic in the Valley if there were more apartments, so employees could bike and walk to work. They now commute from neighboring cities.
This assumes that all of the houses vacated by currently commuting employees moving into apartments near transit (and thus becoming non-commuters) would be replaced by people who don't commute. But that's extremely unlikely to be the case.
Furthermore, all of the people living near transit would still drive on occasion, so traffic would almost certainly get worse.
Other potential nudges would be to waive parking requirements for such development, thus denying parking places for the residents.
But redwood forests are a distraction. The main problem is SFH which can and would be replaced with duplexes and fourplexes if the market were allowed to work.
Much of the forest land on the peninsula is privately owned, not by individuals, but by conservation organizations.
> The main problem is SFH
Except that people like their yards and pools.
All else being equal, denser housing is better. But all else is rarely equal. Almost invariably, increased density comes with increased population. The SFH it replaces doesn't get turned back into open space, it remains SFH. Or it turns into more MFH, so now you have N times as many people living in the same space. That is the problem.
Immigration is not a problem. It is an opportunity.
N people live in a place. K people want to move there. You can either find ways to accommodate N+K people, or you can choose not to and have the richest people drive out the poorest (or the middle class if you start building affordable housing). Only one of those two options is classist and xenophobic. Take your pick.
And the best way to do that is probably via a market-based, incremental approach: not everyone is going to sell out and turn their SFH into flats right away - it'd be gradual.
I don't argue that we should cover all the land available with houses, I like wild grass, but I just point out that if we really hadn't enough space -- we would have settled it already.
I've never heard the now popular "Earth is overpopulated" rant from anyone who lives outside major metro. Going by train in Russia or Japan (yes, Japan) and watching empty fertile lands for hours is a really useful educational experience.
Also, 1. Americans love to live in private houses. And that takes up way more space, and energy to maintain than condos/flats. Yes, some people in other countries just cannot afford private house, but I've noticed often they just feel anything bad about living in a condo.
2. Americans like their cars. And parking/highways take a lot of space, obviously.
I think people in the Bay Area got their's and don't want others moving in... they love the high prices... it suits them just fine.
And that is the problem. You're not the only one. Yes, if we turned the San Francisco Bay area into a clone of Manhattan or Hong Kong or Tokyo we could accommodate a lot more people. But a lot of people would not consider that a good outcome. People who like that kind of lifestyle can have it in any of the dozens of dense cities on the planet.
The SFBay area is desirable precisely because it is not (yet) dense. People move here because they like yards and redwood trees and vineyards and hiking trails. Manifestly there are more people who want these things than there is space to accommodate all of them. That is the problem.
no, they want jobs. you can get outdoors anywhere in the US, but only a few places in the US actually have a super vibrant economy.
and NOTHING precludes turning SF into a stack of 120-story high-density towers apartments for all family types and leaving the redwoods and grassy fields alone.
nothing but the unwillingness to go density, thus ensuring the grassy fields will slowly be turned into cookie cutter suburbs
The moment Proposition 13 gets repealed that will no longer be a problem.
Changing the single-family zoning to just allow 2 or 3 story housing on 1 out of 10 blocks would be enough to alleviate the shortage, provided developers had few enough regulatory obstacles.
It boggles my mind that the Palo Alto Caltrain abuts single family homes with 5000 sq ft yards. Their quality of life is low due to the noise and traffic. That area really should be apartments.
Going to Paris, Amsterdam, Stockholm, or any other similar city will show you that a little density in the right places can accommodate many people.
Paris isn’t a sci-fi dystopia. It’s still pleasant, and has more than 2x density as SF.
False. San Francisco has an entire quadrant of non-walkable non-mixed use areas that need to be rezoned and connected to its light rail transit network (Richmond). Density does not preclude green spaces. All residents have a park within a 10 minute walk[0].
http://hoodline.com/2017/05/san-francisco-is-nation-s-first-...
If they didn't consider that a good outcome, they would stop paying money to move there, or move out, and cause housing prices to drop, thus solving the problem.
They are around here. I have three redwood trees in my own yard, and I'm a half hour bike ride from multiple redwood groves. There are even a couple of vineyards around here.
> an apartment building next door does not threaten your yard
You haven't seen my yard.
I don't really get that. Where I lived in Italy had about 300,000 people in roughly the same size area as Bend (less than 100K), and I thought it was a pretty nice place in a lot of ways. We didn't have a yard for the kids, so we went down to the local park with them, where they saw their friends and we'd get to chat with parents. Because most people live in towns, they're able to protect some natural areas close to the town that I could ride my bike to.
I get that some people really want the 'country' experience, but then you shouldn't live in the middle of millions of people (the bay area). There are shit-tons of small towns with lots of cheap-ish land outside them that are nice in their own way.
By letting cities be cities, we get to protect more land, which I think many of us support.
Sure, Peninsula is expensive, but its proximity to jobs is the major driver of its housing costs.
You can have all that and more in Salinas or San Luis Obispo, but you’ll find that the lack of jobs makes property values far lower.
You don’t have to tear down parkland or pave the horse trails to allow a few more large apartment complexes next to the already noise-polluting Caltrain line.
As much as a lot of non-SV folks, myself included, enjoy ragging on California, the nice weather and good job prospects make it a very desirable place to live, and as such makes people far more tolerant of the hilariously awful housing situation and political climate.
For example?
> you just don't want to live there.
Obviously, it's not just me. If lots of people wanted to live in these supposed cheap, nice places they'd all be moving there instead of norcal.
It doesn't have to be "lots of people", just the executives that build and lease office buildings and set remote work policies.
Most people could be ambivalent-to-averse to living in the Bay Area but if the high paying and attractive (1) jobs are there, they'll end up moving there anyway.
(1) That is, jobs working for companies who consider technology a competitive advantage, not an expense.
There are over 300 million people in the US. What is this generalization supposed to mean? Try to look past extrapolating the 20 mile radius you live in to the entire country.
Fort Bragg is on the coast, and Redding is inland - they have wildly different climates. Redding is pretty damn hot, actually, and supposedly very sunny:
https://en.wikipedia.org/wiki/Redding,_California#Climate
The politics are probably not something most SF people would like, though (nor I, really).
There are a ton of beautiful places around there, though, and in southern Oregon as well. The oak/madrone/pine forests in that area are extremely beautiful in my opinion.
Yes, Redding is uncomfortably hot.
In fact, that's generally true: everything inland is hot, and everything on the coast is cold. In between there's a narrow strip that is "just right". SV just happens to be in this sweet spot.
There have been many threads recently which blame Amazon and other tech companies for creating Seattle's problems, yet other communities all over the US and beyond are clamoring for the exact same problem.
Seattle has gone a long way to accommodate the growth, but it still isn't enough. Too much of the city is zoned for single family residences. And the Bay Area suffers from the same issues.
High real estate prices & rents are the price we're all paying for keeping JPMorgan & Goldman Sachs solvent during the financial crisis.
There is a consensus that 'everything is overpriced', its just doesnt look like it will have a hard correction.
And I'm pretty sure low density zoning is in effect in every city in CA.
If the price of one thing increases relative to the price of everything else (including the price of labor, i.e., how much you get paid) that cannot directly be explained by a money supply change. A shortage being caused by something else is a much simpler explanation.
Shouldn't real estate developers be able to make even more money on top of this by increasing the housing supply? Wouldn't the "banks" have cheap loans for real estate developers? This can't explain a shortage.
Capital dollars (from VC's) are easier to come by in SV than wage dollars. You prefer to think of the shortage as one of houses. I ask you to consider the idea that it is a shortage of wage dollars.
Simple shock to demand can create shortages if supply is inelastic(which it is on RE in general due to the length to put a unit on the market, and it is so in San Francisco with its constrained supply)
The capital gain on housing then becomes a self-reinforcing loop as capital seeks yield in a low interest rate environment, and investment flows towards these unproductive assets instead of creating productive capacity. Regular buy-to-inhabit buyers are dragged along in the cycle as long as they can obtain sufficient credit.
In a system like ours (the world's that is - I'm not American) where money is created when banks write loans, debt increases more quickly than the money supply (because debt has interest, money doesn't, and in a housing boom relatively little new real value is being created). So the debt can never all be repayed, and at some point there must be a financial crisis.
Unless this time is different?
As someone that worked in RE, housing has been sensibly overpriced based on wages since at least a few years ago and globally. But its also not clear it would crash, because housing has met genuine demand.
The idea that these banks were perfectly healthy is a lie propagated by bailout apologists.
It's a visible issue in some neighborhoods in DC. Blocks that were nearly 100% minority 15 years ago are predominantly young, white, and affluent. But, the corner church is still run by a minority pastor, with a largely minority congregation, all of whom want weekend parking on the street (as they now "commute" to church from the outer suburbs).
And I'm sure Satya Nadella doesn't have a problem paying for a house anywhere, even though he's a minority.
Anyways, I agree that viewing poverty solely through a racial lens is not productive. But, race does play a part. At the very minimum, blacks are more likely to be poor than whites. They are more likely to experience downward economic mobility. And more likely to experience multi-generational poverty.
I left California right before the last housing bubble burst to take advantage of the real estate arbitrage.
I'd love to do it again.
Besides jobs, California offers open minds and much a much friendlier atmosphere for brown people.
Ironically, I feel that California offers much less in terms of "open minds" - I am strongly liberal on social matters and advocated for homosexual marriage rights in AZ. Here I feel legitimately scared to mention that I have conservative views on business affairs without fear of potentially losing a job given how quickly people are to lambaste anyone they can for any opinion that doesn't conform to the acceptable limits of non-conformity.
I'm just keeping my head down and doing my job until I can go back to a more sensible location.
As far as the political views you highlighted, my guess is you're part of the vast majority of the electorate that's socially liberal and financially conservative.
Question is, can that vast majority ever organize?
There isn't a vast majority on controversial social issues or they wouldn't be so controversial.
I'm a trans lesbian, born and still live in Texas. When I move out of state, it's going to be a state with trans-inclusive protections at the state level.
Spending this entire year worrying about Dan Patrick shoving transphobic legislation down our throats was emotionally harrowing, and I don't want to go through it again. I hope to be out of the state by the time the 2019 session begins. And Patrick promised to do this long before the legislative session ended, so I spent all of 2016 worrying too.
Finding a place to move to has been like solving a puzzle. A red state is out of the question. I don't want to risk another bathroom bill. And statewide LGBT protections are needed even if a local government has its own protections because a) being protected in one city is worthless when none of its suburbs have protections, and b) the state can revoke local government's ability to protect minorities at any time (look at Arkansas or North Carolina).
I also love southwestern-style suburbs and I'm fairly conservative in a lot of areas that don't involve LGBT rights (namely that I love suburbs, I utterly despise hipsters, I'm a very proud neoliberal globalist Jew, and I'm an establishment Democrat that despises the Bernie wing), so that's making it hard to find a place that's exactly like what I want. I'm looking for a conservative, sprawling suburb that isn't riddled with hipsters and is located in a blue state. I also insist on a place where AC is universal, and for food-related reasons, I want to live somewhere there's a lot of Asian people.
I've basically narrowed it down to parts of the LA and Vegas areas (OC and Torrance in LA, Spring Valley in Vegas).
You're describing Westchester or Long Island, down to a T.
I dislike how old the houses are, and the way it's laid out, the residential areas feel like they're out in the country. And central AC isn't universal there: the house in Bronxville my aunt and uncle lived in when I was a kid didn't have it, though they installed it shortly before they sold it in 2003 (and like most New York Jews, moved to Florida). Not sure about the house in Harrison my cousin just bought; I'll have to ask her.
I'm also not a fan of how the suburbs of NYC all orbit around the city. All of the good shopping is in the city. All of the jobs are in the city. When my aunt came to visit me for my college graduation, she was shocked at the massive amount of restaurants and shopping in the suburbs of Dallas, because where she comes from, the suburbs are just bedroom communities and all the businesses are in the city. I'm also used to working in the suburbs; in Dallas right now, I live in the burbs and commute farther out in the burbs. You can't do that in New York.
And the suburbs there are laid out like shit too: Dallas suburbs are all built on an arterial grid, where the suburbs contain endless six-lane divided arterial roads placed one mile apart from each other both north-south and east-west. On the other hand, major thoroughfares in Westchester are two-lane roads, and nothing is laid out with any rhyme or reason.
My ultimate fantasy is for somebody to dig Plano, TX out of the ground and transplant it into a blue state. I want to live somewhere that's exactly like where I live now, except in a state with state-level LGBT protections and a 0% chance of electing a government that will reverse them.
To give you an idea of what I'm looking for, here are some Street View shots of residential neighborhoods in Plano. I'm looking for some place that looks identical:
https://goo.gl/maps/d9shDtPFxZ62
https://goo.gl/maps/6pLpYCtpW2R2
https://goo.gl/maps/QWRw3rVfMPr
On the other hand, here are some Street View shots of the Westchester I'm used to. I'm not a fan at all of how this looks:
https://goo.gl/maps/KKk9JrbsJ3N2
Lotta immigrant communities in a lot of "red states" that've largely been making progress on their own just like everywhere else, and now we're helping hang them out to dry.
If I move I want it to be to such a place for just that reason. You don't win over anyone, or win any battles, by retreating.
Facebook recently opened a datacenter in Fort Worth. [0]
I heard something like 100k people are moving into the DFW metroplex a month? I haven't verified that but the real estate market is definitely crushing right now.
It's only a matter of time.
[0] https://code.facebook.com/posts/1014459531921764/facebook-in...
Sacramento!
Leaves problems: very high housing costs, overly legislated lives, high taxes, traffic, etc.
Other tech hubs. Portland, Seattle - even little Bend has plenty of people from California who are attracted by the (for them) low housing prices. They, in turn, put pressure on housing prices for 'ordinary' people here.
California's housing crisis has repercussions all up and down the west coast.