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Remote work is reshaping San Francisco, as tech workers flee and rents fall

wsj.com

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Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#321

Post by mapgrep »

adjkant wrote: post #192

These HN comments don't seem to grasp that there are two distinct groups of people here, and these trends can/will counteract eachother: the ones that are in the city for work, and the ones that are in the city because they love cities. COVID creates an exodus of one, but people in the latter category are also moving into cities as well as prices drop and they are no longer priced out. HN folks love to complain about…

This is a really great point. People are now more able to exercise location preferences separately from work preferences. This will allow people to leave who didn’t have that choice before and to enter the city (or re-enter) who did not have that choice before.

What’s interesting to me is who must remain in the city. Obviously you have hands-on essential workers who tend to be poorly paid. But I think long term you will also have some of the best paid people in the city required to remain - managers and executives and anyone else for whom communication is a voluminous and essential part of their job. There really is no substitute for face to face when it comes to quality and once the pandemic is history these people will be back at the office.

Paul Krugman had an interesting video he made shortly after the pandemic pointing out that companies had already begun moving certain workers out of the expensive cities long before this. They figured out they could move, say, the HR department from Manhattan to New Jersey. IT services going to suburbs or even offshore (except for some people on site to be hands on). With tech companies you tended to see this with functions that for better or worse they valued less (for example content moderators). This will continue.

Now we see mainline engineers (who are definitely valued) allowed to leave, because communication is less important for their job than for a manager (even one at same salary level like a PM). But a lot of people will remain or come to cities. And I think it’s worth noting that those folks are probably less likely to make any moves right now than the people moving out. Moving out reduces economic risk in the short term. Moving somewhere more expensive is something people will put off until there is more certainty. But rents will spike up at some point as people who like or need cities make their move (I am not saying they will return to prior levels though).

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#322

Post by adjkant »

01100011 wrote: post #307
adjkant wrote: post #244

Earlier quoted context omitted.

I think you underestimate the density of restaurants and cuisines available. No suburb I have encountered gets close to matching this situation. Suburbs also typically require cars, something I don't own and never want to own. I don't want a backyard either as that just means another thing to maintain against entropy! All of this to say, it depends on what you value :)

My gym is 2 blocks away. Within 2 blocks I have about 10 restaurants. I also don't have to walk over syringes or navigate homeless camps. I think you're stereotyping non-urban environments.

> I also don't have to walk over syringes or navigate homeless camps.

That stereotyping goes both ways, as this is nothing like my walk to my gym.

> My gym is 2 blocks away. Within 2 blocks I have about 10 restaurants.

Does that density hold for the 30 minute walk radius from your dwelling in all directions? There's a big difference between living in the "main street" area of a suburban area and that type of environment.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#323

Post by ghaff »

tjr225 wrote: post #240
randycupertino wrote: post #214

Earlier quoted context omitted.

I wonder if the pandemic is going to decimate the housing markets even more in those remote mountain towns. I have two coworkers who just moved to Bozeman, MT to be closer to skiing and fishing. I would think places like Kalispell, Coeur d'Alene, Jackson Hole, Taos and Bend are all going to see a large influx of remote workers who like outdoor lifestyles.

I would suspect yes the pressure will be greater in areas like that. It is one of the reasons I prefer bigger cities on the west coast though; more houses, more jobs, and just as much nature. I have worked 100% remotely for almost two years now and love it but now I live somewhere with a crappy job market. Yes I save money but I live in constant fear of having to take a 50% pay cut if I can’t find more remote work. I…

In my case, I live well outside of Boston with quite a bit of land and only a few houses around me. No, it's not a mountain town in the Rockies or Sierras but it means I can go into the city for an evening if I want to, have lots of potential employers within (somewhat) reasonable driving distance, and could even commute into Boston by train if I wanted to--though it wouldn't really be sustainable long-term on a daily basis.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#324

Post by seanmcdirmid »

justchilly wrote: post #181
lostmyoldone wrote: post #65

Earlier quoted context omitted.

San Fransisco has one of the highest, and in some cases - highest - housing and rental prices in the US. If taxes are as high as you claim, it would be more rational to argue that the high prices are indirectly caused by that tax, rather than prices being held down by taxes. Several causes seems more likely for a change in inventory, or pricing. An extremely high cost of housing and the consequently smaller than aver…

If you make $250k in SF (sounds high, but about average for the people I know that are leaving SF), state income tax alone is $19,996. If you make that in Texas, state income tax is $0. That $20k/year is for many people a bigger deal than the cost of living. Most people I know leaving were home owners or rent controlled. Source: moved to Austin in June.

$20k/year to live in Austin, I think my AC bill would eat all that up. But there are other places that don’t have state income tax, like Seattle.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#325

Post by jonahbenton »

seanmcdirmid wrote: post #315
blincoln wrote: post #221

Earlier quoted context omitted.

FWIW, it seems similar in the Seattle area. Lots of people moving out of the big cities. I assume it's a combination of being able to work from home and people no longer being able to afford their incredibly expensive in-city homes due to furloughs and layoffs.

Except home prices are rocketing up rather than down ATM. If people are moving out, you’d think more of them would be selling their houses.

Mortgage interest rates at all-all-all time lows. It's a little ridiculous to say that given that mortgages are, say, a 50 year old product. All time not very long.

But debt and interest have been with us for thousands of years and it is likely that there has never been such low cost liquidity for durable assets (houses) as there is now.

When you think about why THAT is, it should make you worried to buy that house.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#326

Post by AIX2ESXI »

Been a professional IT worker since 1999. Most of my sysadmin roles have always been on site with occasional remote work. Over the years, I've been able to swing working for a few weeks at a time while traveling abroad.

Currently based in Los Angeles and my organization is allowing us to work remote. Looking to just move abroad to Ukraine and lower my costs of living while immersing myself into a new culture and escaping the discord in my homeland. Might never come back if remote work is not longer taboo for DevOps and Infrastructure admins.

For those of you leaving the Metro areas, I encourage you to integrate in your new communities and be open minded. You will be welcomed if you leave your old ways behind and bring your talent and generosity to where you stay. Good luck!

(That WSJ Article comment section is hilarious btw, don't prove them right.)

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#327

Post by baron816 »

captaincole wrote: post #102

I am living in SF now and this confirms a very clear pattern that I have seen emerging, particularly of tech workers. I would say that >50% of the people I know who were living in the city have left, or are in the process of leaving. Some examples (there are countless): 1) All three of the roommates that I had are choosing to leave either permanently or temporarily. 2) A friend who works for google who is going on a…

Alternate experience: I just moved into SF a week ago from elsewhere in the Bay.

I was able to get a large, modern, luxury 1BR in a decent location for under $3K + almost a 1 month concession and no deposit.

Being a single, young(ish) guy, it still makes sense to be in a city. I have more space than I need now, and I can afford the rent. Maybe things aren’t that nice right now, but I’m hoping they’ll get back to semi-normality in a few months. Plus, I’m still banking on there being more opportunity to level up in my career much more here.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#328

Post by KallDrexx »

jurassic wrote: post #26
danhak wrote: post #21

Earlier quoted context omitted.

Property taxes in California are among the lowest in the nation.

Property taxes are not that relevant for the masses who can't afford to buy property.

It indirectly does though. Because property tax in california is always taxed at the amount you purchased your house at (as opposed to what your house is currently worth at), it incentivizes immobility.

If you bought your house a decade ago it's going to be worth WAY more now than it is now. In a healthy market you might then either try to roll that extra equity into another place by either upsizing to get something that more fits your needs, or downsizing if that makes sense.

However, because of the property tax mechanisms if you move from a $1m house to another $1m house your property taxes will go up substantially even if it is a side grade. That means that you are less likely to move (in fact you may not be able to afford even a side grade depending on your circumstances).

This keeps housing inventory low, which keeps prices rising.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#329

Post by paxys »

captaincole wrote: post #102

I am living in SF now and this confirms a very clear pattern that I have seen emerging, particularly of tech workers. I would say that >50% of the people I know who were living in the city have left, or are in the process of leaving. Some examples (there are countless): 1) All three of the roommates that I had are choosing to leave either permanently or temporarily. 2) A friend who works for google who is going on a…

About half of the young-ish employees at my company left SF (temporarily) to move back in with family. The company has also offered to make people permanently remote, but very few (less than 10 out of many hundreds) have taken up that offer so far.

IMO it is too early to judge the permanent impact of this to the city.

Re: Remote work is reshaping San Francisco, as tech workers flee and rents fall

#330

Post by seanmcdirmid »

jeffbee wrote: post #99
x87678r wrote: post #93

Earlier quoted context omitted.

It absolutely does if you're thinking of building new apartment building.

That would depend on the tax regime. In "highest and best use" jurisdictions you'd already be taxed on the potential value of the building, whether you build it or you don't.

That doesn’t happen anywhere in the USA that I’m aware of. Your 3 story townhome is racked a lot less than the 33 story apartment story that could have been built on its land instead.

Private capital will chase the best money making opportunities regardless. They will just avoid buying property if they don’t think they can make enough money on it. Property tax rates definitely play a role in that.

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