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Silicon Valley exodus: Bay Area tech companies leaving for Texas

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Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#391

Post by jedberg »

gonehome wrote: post #376
11thEarlOfMar wrote: post #24

This general topic seems to come back into focus on a regular basis on HN (last time, 1 week ago). People have been leaving SV in numbers for the 30 years I've been here, always citing traffic & cost of housing as the primary reasons. Though this time, you could add decriminalization of petty crime. Nonetheless, the population growth remains net positive. The fundamental design of the Internet was to be robust agains…

I’ve seen comments about the “end of Silicon Valley” as early as 1993. Though back then you could get a house in Cupertino for 300k? It’s now $3M. This has some effect and makes living here to start a company higher risk.

A $300K house in 1993 is only $2M now. :)

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#392

Post by giantg2 »

kelp wrote: post #329
gedy wrote: post #261

Earlier quoted context omitted.

Prop 13 is one of the few reasons many could consider staying in California, vs having to pay property taxes on the bubble prices here. Property taxes do go up at what amounts to reasonable inflation numbers.

The most compelling argument I’ve heard in favor of continuing prop 13, from a good policy perspective is that it lets people stay in their homes. But couldn’t we achieve the same thing by means testing property taxes? As it is now, the tax rate is set basically based on how long you’ve owned your property. I could be making $$$ and pay very very little. While my neighbor who bought more recently but earns less pays…

"Means testing property taxes..."

It sounds like income and capital gains taxes would be a better type of system if one wants to charge people based on their means.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#393

Post by dcolkitt »

Retric wrote: post #377
SmokeyHamster wrote: post #289

Earlier quoted context omitted.

To be fair, here's the complete list of companies in the known universe that don't try to avoid taxes or regulation: [error data not found] There's a cost of moving. California's taxes and regulations are bad, bad enough to force many out, but not all. If things continue on their present course, even Google and Amazon, who personally like the political climate there, will have to start looking elsewhere.

Plenty of company CEO’s know little to nothing about taxes and simply hand relevant details to a different firm. Growth gives exponential returns, taxes give linear returns which is why they can be ignored for years. Regulations are similarly irrelevant for most companies, as long as the competition needs to play by the same rules they tend to zero out as just a cost of doing business.

> taxes give linear returns which is why they can be ignored for years

This isn't true at all. The effect of taxes compound just like anything else. E.g. if Warren Buffet had originally incorporated Berkshire as a Bermuda-based reinsurer, he'd be worth over $400 billion today. If he didn't structure it as an insurer at all he'd only be worth $20 billion.

Tax savings compound at whatever the long-term ROE of the corporate entity. Therefore tax arbitrage is most important for hyper growth companies.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#394

Post by abernard1 »

reportingsjr wrote: post #389
abernard1 wrote: post #368

Earlier quoted context omitted.

He made some very suggestive comments last week about Tesla being the last manufacturer of cars in CA. I might add, the size of the Austin gigafactory is larger than the size of all Tesla factories in the world combined [1]. I will leave you to do the math if Tesla leaving CA isn't a possibility. [1] https://electrek.co/2020/07/30/tesla-gigafactory-texas-crazy...

That size comparison doesn't actually show a comparison. It only has the footprints for the other factories, and the entirety of the land purchase for the texas factory. What a bizarre thing! If you look at the planning documents you'll see that the planned footprint for the texas factory is probably a similar size to the plans for the rest of their "giga" factories. https://electrek.co/wp-content/uploads/sites/3/202…

It explains the footprints in the article. They're largely not usable, whereas the Austin one is.

These are manufacturing jobs. It is not exactly like California has a better environment for that than Texas.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#395

Post by dcolkitt »

Hypx wrote: post #28
dkobran wrote: post #16

HP and Oracle don’t exactly represent the heart of Silicon Valley today and what makes it special/unique. I actually think zombie corporations like Oracle, companies that haven’t innovated in decades and instead rely on an army of sales people to sell legacy software, are somewhat the antithesis of Silicon Valley which is really about real technological innovation and disruption at it’s core. I know there are lots of…

Agreed. They're companies trying to avoid taxes or regulation. Only companies on the downslide really consider that as an relevant option.

> They're companies trying to avoid taxes or regulation. Only companies on the downslide really consider that as an relevant option.

Which is why continental Europe has so many fast-growing tech companies.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#396

Post by gfo »

dkobran wrote: post #16

HP and Oracle don’t exactly represent the heart of Silicon Valley today and what makes it special/unique. I actually think zombie corporations like Oracle, companies that haven’t innovated in decades and instead rely on an army of sales people to sell legacy software, are somewhat the antithesis of Silicon Valley which is really about real technological innovation and disruption at it’s core. I know there are lots of…

I noticed this as well: the 'exodus' is comprised (so far) of companies which haven't innovated in a long time.

At least according to the linked article, three companies so far have moved to Texas. The word 'exodus' seems to be doing a lot of heavy lifting.

The bigger 'exodus' might be the glut of folks who temporarily moved away from the Bay Area at the start of the pandemic and have made those moves permanent. I don't have hard data to back up whether that would qualify as an exodus (and not sure what number is required for that classification either - just that it's greater than three), other than anecdotal evidence and personally knowing a few folks who moved back to their hometowns permanently from that area.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#397

Post by api »

vmchale wrote: post #294
api wrote: post #246

Earlier quoted context omitted.

I've heard this and the general borderline unenforceability of "we own all your work, even during off hours" clauses in employment contracts as a major reason that the center of innovation shifted from Boston and the East Coast to Silicon Valley and California. Boston should have been Silicon Valley. It had all the education and a much deeper history of innovation. It also could have been down in New Jersey where Bel…

> Boston should have been Silicon Valley. It had all the education Boston is a tech hub, just smaller.

I've lived there years ago. It is a tech hub, but it's considerably smaller in most areas and has a less innovative business culture. A tell for this is the pejorative use of the word "cowboy" for someone that doesn't do things by the book. It's something you never hear elsewhere, not even in the Midwest or Texas.

It's also way too classist and aristocratic in its thinking. Where you went to school basically informs a caste system.

Climate aside though, it is a nicer city. It has more usable (though quite old) transit, is very walkable, clean, low crime, and is much more affordable than the Bay Area (though still pricey).

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#398

Post by delaynomore »

chrisco255 wrote: post #43
lavishlatern wrote: post #35

Earlier quoted context omitted.

Alternatively, the influx of tech money greatly increases the cost of property in Texas. In turn, senior residents start to no longer be able to afford to keep up their property taxes. Eventually a proposition appears on the ballot to limit the growth of property taxes...

There's a lot of land in Texas, and they're not opposed to building high rises.

You are still limited by commute time. Urban sprawl can be costly to the local government, and ultimately the tax payers.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#399

Post by s0rce »

pb7 wrote: post #59
s0rce wrote: post #49

Earlier quoted context omitted.

Lots of nimby policies (Prop 13, blocking new construction) significantly raises housing costs for everyone, I suspect this isn't a small part of why many people leave.

And you think the people leaving are the ones that voted for this? Can you explain what leads you to think that?

No, probably not generally, I must have misinterpreted the post I commented on, I thought it was general policies leading to people leaving.

Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas

#400

Post by giantg2 »

doyouevensunbro wrote: post #367
spamizbad wrote: post #345

Earlier quoted context omitted.

What do you think happens in most other states with normal property taxes? Do you think people just continuously get pushed out of their homes because of local taxes? It's pretty rare even in extremely high property tax counties like Cook and DuPage here in Illinois.

I have known it to happen to friend’s parents that live in New Jersey, as their pension didn’t keep up with the property tax increases. But New Jersey is notorious for their property tax. I mean, Prop 13 passed specifically because seniors were losing their homes. But in this case the cure was worse than the disease.

People in PA get pushed out of homes due to the tax too. It's especially common among seniors in high cost areas like Delaware county.

Paying $5k-10k every year perpetually just seems outrageous to me. (I don't make a silicon valley wage)

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