Tech elites leaving San Francisco threaten Silicon Valley's supremacy

Re:Tech elites leaving San Francisco threaten Silicon Valley... by Raidion on Monday December 07, 2020 @03:26PM (#25336956)

This is true both ways though. If you're getting paid 140k, but your rent is 5k a month, you're only capturing 80k of wages, and the landlords are capturing 60k in rent.

If you're working remotely for 100k, and paying 1.7k a month in rent, you're capturing ~80k as well. That means more capital is going to the employers(who saves 40k) at the expense of the landlords (who lose out on that 40k).

I honestly think I'd rather have the capital go to the employers because a) it improves my value in relation to them (I now can argue that I should get paid more, because I bring in 40k a year more value than I did in SV) AND I have a financial interest in the company doing well (with options/RSUs/bonuses/etc).

The money going to the landlords starts to become very literally "rent seeking" where they will capture the capital without providing any productivity gains in return. You could argue that their value in "provide a location for people to live so they can collaborate more effectively" is decreasing with remote work, and they will have to charge less because the value they provide is decreasing.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by bcheung on Monday December 07, 2020 @04:14PM (#25337628)

The formula is different if you are a home owner, at least it was when there was more appreciation. You don't mind paying a higher mortgage as much if you are capturing a huge chunk of your current salary in home equity each year. Bay area home ownership is where a lot of people made their money.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by throwaway201103 on Monday December 07, 2020 @05:30PM (#25338596)

Until the employer is forced to cut their own prices to stay competitive, and then they aren't making the extra $40K on you anymore.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by bcheung on Monday December 07, 2020 @04:04PM (#25337496)

The bay area is one of the worse places to have rental properties in the country though in terms of ratio of rental income to mortgage costs. If it wasn't for appreciation most would sell instead of try to rent out homes. Landlords aren't making their money from the rents, they are making it from the appreciation.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by notSupplied on Monday December 07, 2020 @04:21PM (#25337723)

If a landowner is having trouble making a profit on rent due to high mortgage costs, that just means that the wealth was captured by the previous owner via a high sale price. So the point still stands that a disproportionate amount of wealth is flowing to land instead of capital or labor.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by bcheung on Monday December 07, 2020 @04:38PM (#25337934)

Appreciation is not rent seeking though. Also, savings is what funds capital investment. There's no capital without previous profit.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by CountSessine on Monday December 07, 2020 @08:35PM (#25340494)

Appreciation is not rent seeking though.

It most certainly is, if at the same time you're hanging out at city council meetings protesting construction and housing development. The cost of housing in SFBA isn't really the cost of land - its the cost of regulation. It's the marginal cost of building new housing.

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Re:Tech elites leaving San Francisco threaten Silicon Valley... by throwaway201103 on Monday December 07, 2020 @05:32PM (#25338614)

Yes, in a competitive market, rent is your cash flow. It pays recurring property taxes, maintenance, and interest. It's a cliche but you really have two opportunities to make money in rental property: when you buy, and when you sell.

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