In todays world, thanks to remote learning and remote working you can be in Cupertino, California or Round Rock, Texas and do your job. San Fran is collapsing as a town—as leases expire companies are fleeing or closing. Want to live in a home about half the price and twice the size of your hovel in San Jose—go to Tamp, Florida or Nashville, Tennessee. Want a government that does not believe it owns you and your children? Any place but California.
“Pair this with complaints that the city has failed to handle its homelessness problem, leading to open-air drug scenes and massive tent encampments in neighborhoods like the Tenderloin. One in every 100 San Franciscans is homeless, and California is a national outlier in terms of what proportion of the homeless population is actively “unsheltered,” as in, sleeping on the streets or under highway overpasses. In San Francisco, 73 percent of the city’s homeless population is considered unsheltered. That’s not normal, even for a big city: In New York City, the figure is about 3 percent.
And then there was the pandemic, which made many big tech offices obsolete: Twitter, Yelp, and Airbnb attempted to sublease their expensive Bay Area office spaces. Pinterest paid almost $90 million in the third quarter of 2020 to break the lease of their almost 500,000-square-foot office space. For many workers, the value of living in San Francisco dropped. Why pay a premium to live near an office you aren’t going to?
Thanks to Newsom you might not be able to find a gas station in 13 years—no gas powered cars to be sold in California. Our schools have stopped being education institutions but more like Soviet indoctrination—both academically and morally. In the midst of a recession, King Gavin and the Sacramento Democrats are raising the gas tax—and have a law to do so EVERY July 1 till the final collapse of the State. This is the time to scram—before the value of your home also collapses, your job moves to another State and your children turn you into the State for suggesting we are a nation of laws..that is if they do not die of an overdose, supervised by Newsom or the Queen of San Fran, Mayor Breed.
California’s Competitors
Miami and Austin lured people away from California. But the new tech hubs could end up repeating San Francisco’s mistakes.
LIZ WOLFE, Reason, 6/23/22 CLICK ON BLUE HEADLINE TO SEE COMPELETE ARTICLE
It’s easy to understand why people moved to California—and it’s just as easy to understand why they are now leaving.
In the 1950s, planned developments of sprawling single-family ranch houses sprung up throughout California. Postwar abundance meant normal people could have garages and swimming pools. Real estate magnates set their sights on creating full towns, with all the modern amenities, out of sparsely populated ranchland. Jobs, meanwhile, were abundant—defense, entertainment, infrastructure, service, and engineering, specifically semiconductors.
This was the dream of postwar California: sunny, sprawling, full of opportunity, and, if not quite cheap, within the reach of the comfortably employed middle class. That was true even in booming urban locales like San Francisco. In 1997, for example, when the city was still a quite-desirable major metropolitan hub, the inflation-adjusted median home price was $508,000.
In the quarter-century since, that dream has become increasingly out of reach. The median home value in San Francisco in 2022 is above $1.5 million, according to the Zillow Home Value Index, which shows home values rising by more than 10 percent in the past year alone. In nearby San Jose, Redfin reports a median home price of $1.45 million—but home values have risen by a staggering 24 percent in the last year. Today’s Bay Area is simply unaffordable for most people, in part because California regulations hinder new construction and in part because natural geographical constraints reduce the total amount of buildable space; San Francisco has a huge housing supply shortage that shows no signs of being remedied soon.
Pair this with complaints that the city has failed to handle its homelessness problem, leading to open-air drug scenes and massive tent encampments in neighborhoods like the Tenderloin. One in every 100 San Franciscans is homeless, and California is a national outlier in terms of what proportion of the homeless population is actively “unsheltered,” as in, sleeping on the streets or under highway overpasses. In San Francisco, 73 percent of the city’s homeless population is considered unsheltered. That’s not normal, even for a big city: In New York City, the figure is about 3 percent.
And then there was the pandemic, which made many big tech offices obsolete: Twitter, Yelp, and Airbnb attempted to sublease their expensive Bay Area office spaces. Pinterest paid almost $90 million in the third quarter of 2020 to break the lease of their almost 500,000-square-foot office space. For many workers, the value of living in San Francisco dropped. Why pay a premium to live near an office you aren’t going to?
Finally, there was the broader sense, especially among high-value tech workers, that San Francisco and its neighbors were uninterested and unresponsive, focused only on extracting from their most productive citizens in the form of high taxes, which fund poor city services. In the last few years, many have simply grown tired of paying exorbitant taxes for the privilege of living in California—one that now bestows little in return.
Hence the Golden State exodus. In 2021, for the first time ever, California lost a congressional seat. The state didn’t technically lose population, but it didn’t have the same growth rate as the rest of the country.
Booming cities like Miami, Florida, and Austin, Texas, have been the beneficiaries of this exodus. Housing costs play an outsized role in migration patterns: San Francisco’s price per square foot hovered around $924 in January 2022. In Miami, it’s about $300 per square foot, and in Austin, it’s about $330 per square foot.
But the shift also owes something to responsive governance. Leaders of other cities have actively courted the movers. In December 2020, venture capitalist Delian Asparouhov tweeted “ok guys hear me out, what if we move silicon valley to miami.” Miami Mayor Francis Suarez responded promptly, “How can I help?”
Yet as Bay Area tech workers depart, it remains an open question whether those new pastures will truly be greener. The city of Austin has faced rising housing costs, stemming in part from restrictions on development. Miami has struggled with corruption and policing problems. San Francisco’s urban competitors are cheaper, for now, but there are already worrying signs that the cities luring tech’s highly mobile, highly desirable workers are already poised to repeat many of the same mistakes that drove so many Californians away.
MESS WITH TEXAS?
Some Golden State emigrés set their sights on Texas, the land that promises no state income tax, some of the lowest corporate tax rates in the country, and plentiful land for building headquarters and factories.
At the beginning of the pandemic, Tesla built a factory on the outskirts of Austin. Founder Elon Musk now flits back and forth between Austin and Boca Chica, a rural South Texas town he’s successfully colonized for SpaceX purposes. Venture capitalist Luke Nosek, a co-founder of Paypal and member of SpaceX’s board, had moved to the Austin area years prior. Tech-adjacent writers and thinkers and podcasters, like Tim Ferriss, Ryan Holiday, and Joe Rogan, took up residence too, some of them before it was trendy to do so.
Joe Lonsdale was one of many tech-industry founders who moved his firm, 8VC, and most of its employees to Austin soon after. 8VC has funded the work management platform Asana, the telehealth company Hims, and the virtual reality company Oculus. Lonsdale is also one of the co-founders of Palantir, the oft-criticized company that creates software that sifts through and makes sense of complex data sets, which has controversially been used by police departments, the military, and Immigration and Customs Enforcement.
“Austin has a few advantages in housing; first of all, it started from a much lower price base,” says Lonsdale. “Geographically, Austin has a lot more ability to expand supply.” There’s very little land preservation in Austin compared to San Francisco (which Lonsdale says may not be a good thing, exactly; both extremes are perhaps undesirable). “There’s no CEQA. There’s not, like, crazy things,” he adds, referring to the California Environmental Quality Act passed in 1970.
At the time of its passage, CEQA was pitched as a way to protect the state’s natural preserves from state-backed building projects by requiring extensive studies of environmental impact. But it eventually became a major legal blockade for private development, since it empowered any individual or interest group, including unions and environmental activists, to demand expensive, time-consuming environmental reviews, often with implicit demands for concessions from the developers. This, combined with real geographical constraints in cities like San Francisco, has contributed to California’s high and rising housing costs.
But just because Austin doesn’t have to deal with CEQA or land boundaries like San Francisco’s doesn’t mean it’s an easy place to build. If anything, it’s been becoming more difficult for decades. A common refrain among both urban policy wonks and ordinary residents is that Austin is like San Francisco in the ’90s. Those who migrated to the city and bought early stand to gain from the soaring housing prices, but many others are getting.
CLICK ON HEADLINE TO READ COMPLETE STORY
