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The Decline of Investment in San Francisco Startups

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Re: The Decline of Investment in San Francisco Startups

#401

Post by ido »

Zahlmeister wrote: post #398
ido wrote: post #397

Earlier quoted context omitted.

I didn't know that, every place I lived in here had much slower rent increases (despite the market around the apartment raising more than that - in fact in my current place I'm still paying then same rent 3 years into living here). Either way 15% in 3 years is still rent control.

Like I said, there's a demand for affordable housing and in Berlin that means very affordable . Lots of students, lots of artistans, and also lots of unemployed people. > Either way 15% in 3 years is still rent control. ...which affects very few people. There are some places that suddenly became "hip", where rent increases drove out lots of low-income people, which caused political backlash. These people really just…

Well I don't know what your point of comparison is, but my wife and I have been looking at buying or renting a bigger place (new baby) and all the stats I see when looking at places indicate purchase pricing going up at about double the rate of rental prices (often 5-7% YoY rent increase vs 10-15% YoY purchase price increases).

This has been the case for the last couple years at least. What do you attribute the discrepancy in rent increases vs purchase price increases if not for rent controls?

Do you know nobody living cheaply with an old contract that they would never get today, and that their landlord can't increase to market rate? Cause I know loads such people and this would not happen in a place without rent controls.

Re: The Decline of Investment in San Francisco Startups

#402

Post by Zahlmeister »

ido wrote: post #401
Zahlmeister wrote: post #398

Earlier quoted context omitted.

Like I said, there's a demand for affordable housing and in Berlin that means very affordable . Lots of students, lots of artistans, and also lots of unemployed people. > Either way 15% in 3 years is still rent control. ...which affects very few people. There are some places that suddenly became "hip", where rent increases drove out lots of low-income people, which caused political backlash. These people really just…

Well I don't know what your point of comparison is, but my wife and I have been looking at buying or renting a bigger place (new baby) and all the stats I see when looking at places indicate purchase pricing going up at about double the rate of rental prices (often 5-7% YoY rent increase vs 10-15% YoY purchase price increases). This has been the case for the last couple years at least. What do you attribute the discr…

Real estate prices all over the world have gone up as a consequence of zero-interest monetary policy. Berlin is still on the cheap end, so it's still attractive to buy there even now.

Rents don't go up proportionally, simply because the demand isn't there. During the US housing bubble, rents didn't go up either, while property prices went through the roof.

> Do you know nobody living cheaply with an old contract that they would never get today, and that their landlord can't increase to market rate? Cause I know loads such people and this would not happen in a place without rent controls.

That's because most contracts specify that increasing the rent follows the standard procedure: Over three years, rent can rise by up to 20% (15% in Berlin), if the comparable rents in the area have risen as well (which is influenced by market rate). Ultimately, this limits the pace at which rents rise, but not the extent. In Berlin, only very few areas could sustain such growth, whereas in places like Munich where people earn way more, rents have risen much higher.

This is also not the rent control specific to Berlin (which is what you originally referred to), these are federal regulations.

Re: The Decline of Investment in San Francisco Startups

#403

Post by ido »

Zahlmeister wrote: post #402
ido wrote: post #401

Earlier quoted context omitted.

Well I don't know what your point of comparison is, but my wife and I have been looking at buying or renting a bigger place (new baby) and all the stats I see when looking at places indicate purchase pricing going up at about double the rate of rental prices (often 5-7% YoY rent increase vs 10-15% YoY purchase price increases). This has been the case for the last couple years at least. What do you attribute the discr…

Real estate prices all over the world have gone up as a consequence of zero-interest monetary policy. Berlin is still on the cheap end, so it's still attractive to buy there even now. Rents don't go up proportionally, simply because the demand isn't there. During the US housing bubble, rents didn't go up either, while property prices went through the roof. > Do you know nobody living cheaply with an old contract that…

I refereed to rent controls in the sense that the american OP said are causing price increases in SF (afaik this is simply limiting rent increases for existing contracts, which is the default in Germany).

All of Germany is under rent control in that context, and IMO it works compared to exploding rents in the US and other countries (UK, Israel, most places really aside from some of continental Europe).

    That's because most contracts specify that 
    increasing the rent follows the standard 
    procedure: Over three years, rent can rise 
    by up to 20% (15% in Berlin), if the comparable 
    rents in the area have risen as well (which is
    influenced by market rate). Ultimately, this 
    limits the pace at which rents rise, but not 
    the extent.
This is a form of rent control almost nobody in the rest of the world outside of continental europe enjoys - prices generally rise as quick for current tenants as they do for everyone there: your landlord can tell you tomorrow than the next time your contract is up to renewal (usually yearly), the price will be 2x the current one and if you don't like that you have to leave.

Re: The Decline of Investment in San Francisco Startups

#404

Post by Zahlmeister »

ido wrote: post #403
Zahlmeister wrote: post #402

Earlier quoted context omitted.

Real estate prices all over the world have gone up as a consequence of zero-interest monetary policy. Berlin is still on the cheap end, so it's still attractive to buy there even now. Rents don't go up proportionally, simply because the demand isn't there. During the US housing bubble, rents didn't go up either, while property prices went through the roof. > Do you know nobody living cheaply with an old contract that…

I refereed to rent controls in the sense that the american OP said are causing price increases in SF (afaik this is simply limiting rent increases for existing contracts, which is the default in Germany). All of Germany is under rent control in that context, and IMO it works compared to exploding rents in the US and other countries (UK, Israel, most places really aside from some of continental Europe). That's because…

> your landlord can tell you tomorrow than the next time your contract is up to renewal (usually yearly), the price will be 2x the current one and if you don't like that you have to leave.

It all depends on your contract. Some contracts may put limits on rent increases in. Yes, in Germany there effectively is rent control that prevents a doubling of the rent within a year, but generally rents don't double within a year.

If those rent controls were good enough to satisfy the affected people, why are there protests and demands for additional laws for even more rent control in places like Berlin? Why is living in Munich so hard to afford? At what point does rent control start to "work"?

Re: The Decline of Investment in San Francisco Startups

#405

Post by randomdata »

ubernostrum wrote: post #399
randomdata wrote: post #385

Earlier quoted context omitted.

Where are they written off, exactly? They are most definitely included. If anything, they are specifically the people who am I talking about. Unless there is some reason their function isn't actually necessary, in which case, yes, the jobs may disappear. But I do not see the trouble with unnecessary jobs disappearing. Nobody is crying over the loss of loom operators either.

Turns out a city needs police officers. And firefighters. And garbage collectors. And transit operators. And cooks. And cleaners. And waiters. And teachers. And construction workers. And... lots and lots of jobs that don't involve getting paid $200k to use node.js to build a platform that does nothing, earns no revenue, and goes under 12 months later having provided no return on $100m in VC money. But for some reason…

There is no big book in the sky that says how much a job has to be paid.

It is simply supply and demand. If the populace needs police officers, firefighters, garbage collectors, transit operators, cooks, cleaners, waiters, and teachers, there is no reason those jobs cannot also pay $200k per year – if that is what it takes to keep people in the region doing those jobs.

Nobody thinks there is special value in that node.js job. It is simply that $200k is what it takes to incentivize someone to both live in the Bay Area and work on that node.js project. If the VCs could find people matching that criteria to do the job for less, they would be jumping all over those people. Why do you think SV's largest tech companies have been pushing the government so hard to ensure that everyone learn how to code in school? But, for now at least, they don't exist.

And when the people for the other aforementioned jobs don't exist at a lower price, pay has no choice to go up for the jobs as well. Unless the local population decide those jobs aren't as necessary as you claim they are and choose to forego them entirely. Which is always an option too.

Re: The Decline of Investment in San Francisco Startups

#406

Post by ido »

Zahlmeister wrote: post #404
ido wrote: post #403

Earlier quoted context omitted.

I refereed to rent controls in the sense that the american OP said are causing price increases in SF (afaik this is simply limiting rent increases for existing contracts, which is the default in Germany). All of Germany is under rent control in that context, and IMO it works compared to exploding rents in the US and other countries (UK, Israel, most places really aside from some of continental Europe). That's because…

> your landlord can tell you tomorrow than the next time your contract is up to renewal (usually yearly), the price will be 2x the current one and if you don't like that you have to leave. It all depends on your contract. Some contracts may put limits on rent increases in. Yes, in Germany there effectively is rent control that prevents a doubling of the rent within a year, but generally rents don't double within a ye…

It works, it's just not enough. It's still better than the situation in the US, UK, etc where there's even less (I remind you that the OP's argument was that rent control was a bad thing).

Re: The Decline of Investment in San Francisco Startups

#407

Post by geebee »

pcwalton wrote: post #293
timr wrote: post #80

Earlier quoted context omitted.

"Wishing people would just leave is what the NIMBY organizations have been trying for decades." ...and yet, this crisis is only about 5 years old. Between 2008 and 2012, San Francisco rents were going down , not up. San Francisco's population declined in the 1980s. Say what you will about construction rates, but this is an acute housing crisis, brought on by an asset bubble, instigated by historically low interest ra…

I am much less interested in what "should" happen in a macroeconomic sense than what is happening: lots of people need to live here right now . It's worth remembering that the people most hurt by NIMBY policies are not, by and large, the tech workers making six-figure salaries. The victims are the teachers, firefighters, artists, nurses, secretaries, and everyone else who isn't a programmer. Yeah, it might be nice if…

"The victims are the teachers, firefighters, artists, nurses, secretaries, and everyone else who isn't a programmer."

I'm coming late to this just to make a narrow point, but I'm not sure you should put nurses into that sentence. Take a look at US News Best Jobs and see a roundup of BLS stats for salaries in San Francisco.

Registered Nurses earn a median salary of $133,650 in San Francisco

https://money.usnews.com/careers/best-jobs/registered-nurse/...

A software developer in SF earns a median salary of $117,770

https://money.usnews.com/careers/best-jobs/software-develope...

Now, that does seem suspiciously low to me (in San Jose, the salary is over $140k). And every time I mention this, I am careful to point out that I have no objection whatsoever to nurses making lots of money, more than programmers. It's a tough and important job that deserves good pay, and while I wouldn't argue that it should pay more, I certainly wouldn't argue that it shouldn't, either (I do think programming is a tougher and more stressful job than people generally realize).

But the notion that programmers with their high pay are driving out nurses seems a stretch. I would argue that programmer compensation is higher than what is cited here, and there are other factors. But none of this is enough, to me, to overcome these numbers. While low income people are driven out of SF by the presence of higher earning workers, I don't think you can really say Nurses are driven out by programmers. Doesn't really work.

And programmers, I assure you, are most definitely hurt by the high housing costs in SF.

Re: The Decline of Investment in San Francisco Startups

#408

Post by sliverstorm »

crawshaw wrote: post #372
sliverstorm wrote: post #371

Earlier quoted context omitted.

I did not say demand exceeds housing technology carrying capacity. I said if the peninsula urbanizes (i.e. denser building, maybe 2-4x, not mega skyscrapers with bunks) demand will keep up. That should not be an extraordinary claim, given how many bedroom communities and commuters already surround it.

Why are you limiting the possible technologies? Skyscrapers work. Housing is a cost of living. Driving the cost of being alive as low as possible should be a high priority. We should use the tools we have to do it.

Because I believe they sacrifice quality of life for density, and I think we can do better.

We don't need to pack everyone in like sardines. As you already noted, there's plenty of space in the world. (You just have to turn your eyes outside the peninsula).

P.S. I do not live nor aspire to live in the peninsula, or anywhere near it

Re: The Decline of Investment in San Francisco Startups

#409

Post by chrissnell »

johan_larson wrote: post #339
chrissnell wrote: post #273

Earlier quoted context omitted.

I think we're starting to see a shift. Today, as a hiring manager that hires remote workers, I have the pick-of-the-litter when it comes to talent for my team (infrastructure engineering). I can find the very best folks, people that I would have a much harder time winning when up against the FANGs (Facebook-Amazon-Netflix-Google) of the world if I was hiring in my company's SFBA home base. Having remote-friendliness…

Interesting. Where do you usually advertise remote positions, Chris?

The HN Who's Hiring thread, our website, a few other job sites, etc. You can probably find it in my recent comment history.

Re: The Decline of Investment in San Francisco Startups

#410

Post by crawshaw »

sliverstorm wrote: post #408
crawshaw wrote: post #372

Earlier quoted context omitted.

Why are you limiting the possible technologies? Skyscrapers work. Housing is a cost of living. Driving the cost of being alive as low as possible should be a high priority. We should use the tools we have to do it.

Because I believe they sacrifice quality of life for density, and I think we can do better. We don't need to pack everyone in like sardines. As you already noted, there's plenty of space in the world. (You just have to turn your eyes outside the peninsula). P.S. I do not live nor aspire to live in the peninsula, or anywhere near it

Why are you limiting the possible technologies through government regulation?

No other city is full because at some point people decide not to live so tightly packed together, and demand dries up.

Current laws raise prices to enforce low density. That's wrong.

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