I don't mean to come off the wrong way or as judgmental. But when I think of a software developer in SF, I don't think of someone with a nice house with a backyard. I think of someone in a cramped apartment, probably with roommates.

This has always puzzled me. It's certainly not the salary as many cities around the country pay more in terms of the relative cost of living. My only thought is that it must be the companies that are headquartered there; which in turn takes a severe lack of financial foresight from said engineer. It's almost like these people don't know how to balance a check book, or rather, they don't care to.

This city is still the Gold Rush, always has been. People move here with the dream to make a ton of money and have a good time, most likely moving away after <10 years when they get serious about family. This city is fueled by alcohol and general hedonism, which is fun! San Francisco is an awesome place to live, and people want to live in it. Tech workers move in to town and push everyone out, blah, blah, blah -- but its true, for better or for worse. Top talent not only wants to work in the Bay Area, but are also so often willing to throw away everything to live in San Francisco. The Valley down south has been there for half a century, attracting the best and brightest in the world.

Its only now, with this Second Boom's influx of new businesses into the City Proper and the realization company-provided motorcoaches to bust the commute, that the tech workers are really pouring into SF. We're the only ones who can afford to live, so we stay here, working more and founding more businesses. If the price continues to go up (mark my words, no more than 30% above now), rather than be threatened, the industry will slowly spread out to the periphery. What is startup-rich Soma was urban blight during the 90's, the periphery.

I'd be the first to argue that urban development is good, especially when done effectively (not the conversion of existing rental space into high-HOA condos), and quickly (unlike commercial real estate development in Soma and South Beach). Just realize that we are the kings of this age of this city, and we are the last ones who would be at threat, especially when you can just move East or South and ride the comfy bus in to work.

tl;dr Nothing threatens tech but the drying up of capital to be invested in new business. Rent and/or supply is far, far down on the list of even those potential threats to the SF tech industry.

Your theory is sound except for one little problem: the Bay Area's transportation system is fucked. FUCKED. Completely, utterly, irredeemably fucked. BART is a joke, MUNI is like a fevered bad dream, Caltrain woefully inadequate.

So yeah, SOMA used to be urban blight, now it's urban blight with a bit of startups mixed in (seriously, go hang out at 6th/Mission for a bit). Rent (both residential and commercial) in SF is exploding, but there no more periphery, because nobody can reasonably get to said periphery.

Oakland has been trying to steal some of SF's thunder for years, offering themselves as the more affordable alternative. This will never happen at scale, because of how utterly screwed transportation is.

SF is out of space, and there's very little room for it to expand into, because nobody is willing to redevelop land, the the complete fuckery of a transportation network you have prevents effective expansion into anywhere that will let you develop.

At some point the cost of living and operating needs to square with reality. At some point a startup board member is going to say "Holy fuck, you pay HOW MUCH for your office?"

Tech investment is, unfortunately, not a zero-sum game. Every dollar that doesn't go into a Silicon Valley tech company is not guaranteed to go into a tech company elsewhere.

So yeah, the failure of SF/SV will probably mean an increase in tech investment in other cities, but ultimately I don't think there's a chance in hell we'll break even. It will be a huge net loss for the tech industry as a whole.

Not to mention there isn't really a strong SF/Bay Area alternative when it comes to tech. I know Boston/Tel Aviv/Berlin/Toronto (add Montreal, Waterloo, NYC, Austin, and Seattle to the list for more completeness) like to hang up banners proclaiming themselves to be just like Silicon Valley, but let's be honest, the scale difference is enormous. None of the above listed cities are even close to being able to assume Silicon Valley's mantle.

Even as someone who no longer lives in the area, who has no interest in returning to the area, the loss of the SF/Bay Area's status as the de facto tech capital of the world will have enormous negative repercussions.

What? We were talking about high rental costs in SF (probably implying high employee salaries). why does that affect investor confidence?

A little hyperbolic, I think.

For one thing, BART is running ancient rolling stock that's already well pasts its original designed service lifetime - the bulk of the fleet is now sixteen years over its original 25-year service life. The system breaks down frequently because of this, and over the years the system has lost enough cars (and cannibalized enough for parts) that there is no longer sufficient spare capacity to rotate into service when trains break down.

Couple that with track and control design that does not permit bypasses, and you've got yourself a recipe for trouble. A train stuck in the tube cannot be bypassed - unlike other subway systems - and thus every single minor trouble cascades into a major cockup of everyone's day.

So you have a system that is prone to magnifying small failures into big ones, and you combine that with trains that are way past their service life and running on proverbial fumes.

Bonus also: BART hasn't purchased any new rolling stock in a very, very long time, and all of its rolling stock will come up to the end of their service lifetimes by 2019 (with 65% of the fleet already past service life). Instead of spreading the capital cost of new vehicles over decades, BART is now placed in a position where it needs to replace its 670+ car fleet in the span of about six years. In all likelihood this will mean even more of the fleet going into "beyond service life" territory and wreaking havoc on everyone's commute.

BART can be improved. But before BART can be improved you first need to catch up on 20 years of complete neglect. It's billions of dollars that has no hope of ever getting spent in the current political and economic climate, and that's just to get BART to the point where it's reasonably good at accomplishing its current stated purpose. At that point you can think about expanding the system, increasing capacity beyond its current scope, etc etc.

Actually, I just looked this up, the current plan is to phase in new vehicles beginning 2017, over a 15-20 year period. That's going to be quite a treat, considering even the newest trains in the current fleet will be 44 years old by the time BART is done with their rolling stock refresh - 18 years past its expected service life.

Bonus also: large parts of BART track are actually substantially damaged, reducing speed and increasing noise (to unsafe levels, even). You can't hope to begin adding capacity until you fix this. Between the fleet, the antiquated control systems, and damaged track, BART doesn't need minor fixes, it needs deep overhauls of nearly every aspect of its infrastructure.

MUNI isn't much better off: http://www.sfexaminer.com/sanfrancisco/report-on-munis-light...

Ancient equipment, ancient infrastructure, a fleet stretched thin to the breaking point, decades of under-funding and mismanagement, all of these descriptors apply just as much to MUNI (if not more) than to BART.

The regional and city transportation infrastructure in the SF Bay Area is a complete mess. This is, unfortunately, not hyperbole. We are over a decade, and billions of dollars of additional spending, away from even restoring these transit systems to proper function, much less go after expanding their scope.

You think you're winning but you're treading water at best. On the MacLeod pyramid, you're hard-core Clueless. Put the Kool-Aid down!

I'm willing to posit that the relative high rent prices has give our industry to greatest boost of all in town.

What? That's money being wasted, not progress.

Silicon Valley was built when the land was cheap. It's now expensive and still somewhat strong, but that's an artifact of former greatness. Even if people move quickly, the patterns that attract and repel talent are slower to move (decades) and the chickens haven't come home to roost yet. Trust me: the land price problem is very bad for San Francisco's future.

This city is still the Gold Rush, always has been.

You don't have to have landlords making you poor to want to be rich.

This city is fueled by alcohol and general hedonism, which is fun!

Dude, San Francisco hedonism's got nothing on New York or L.A. or Miami, and none of those cities are regarded as tech hubs.

Just realize that we are the kings of this age of this city, and we are the last ones who would be at threat

You realize that 25-year-old VCs with no discernible merit (but the family connections that got them there) are making more than you will at age 50, and that those VP/NTWTFKs (Non-Technical Who The Fuck Knows) are getting 0.75% equity slices to your 0.03%, right?

You can't buy a house because of the real kings of that place and age: the VCs and those horrible executive implants that the VCs bring into your company (i.e. the VCs' underachieving friends who get positions in what you worked your ass off to build).

I guess I was lucky enough to land a public sector job at a software shop that runs much like the hip ones out west. They are here, just not well represented.

I've telecommuted for a few contracts and the structure of those companies appear to be similar to what I've been exposed to here on the east coast.

I would imagine both have their fair share of differences and being there physically is, I'm sure, much different. However I find it hard to believe that the difference is so significant that it warrants surrendering financial gain.