Landlords are trying not to rent to startups in San Francisco • Hacker News Board

Re: Landlords are trying not to rent to startups in San Francisco

#111

Post by rconti » Thu, Jul 30, 2015, 11:03 PM UTC

nostrademons wrote: post #27

ChuckMcM wrote: post #10

Earlier quoted context omitted.

Agreed, many landlords seem to feel like the trouble is a mere few months away, although often any attempt at getting them to discuss how they arrived at that conclusion gets something like "I just know it." So one wonders about the whole "wisdom of the crowds" or "herd" in this case, and whether or not they can sense something that isn't showing up in other indicators. I've been looking but other than the extensivel…

A lot of this may come from the belief that the economy is only being propped up by the easy money policies of the Fed, and that the Fed is going to start tightening rapidly in the fall. There's a sense that once the tightening starts, everyone will run for the exits at once, and we'll have another 2008 situation but worse.

Not to pile on too much, but the Fed has been amazingly slow to raise rates and only shows signs of doing the most timid increase. It's the cheap money that's fueling the mad rush, yes, but it's a blunt policy tool being used to help along parts of the country that are really still struggling.

Until Detroit and Stockton and Pittsburgh are doing well again, aggressive policy is going to continue to fuel massive growth in SF and the Bay Area.

Tightening is not coming fast nor aggressively.

Re: Landlords are trying not to rent to startups in San Francisco

#112

Post by kaybe » Thu, Jul 30, 2015, 11:05 PM UTC

bbcbasic wrote: post #50

sseveran wrote: post #18

Earlier quoted context omitted.

You could also build/buy your own office. Then there would be no landlord.

Probably not a good idea for startups whose long term success is unpredictable though.

Well, then, new landlord business if the startup fails.

Re: Landlords are trying not to rent to startups in San Francisco

#113

Post by Johnny555 » Thu, Jul 30, 2015, 11:07 PM UTC

timtadh wrote: post #107

Johnny555 wrote: post #88

Earlier quoted context omitted.

We've tried and found that remote engineers are less effective, they miss out a lot from group whiteboard discussions, overhearing office chatter "Hey bill, service XX crashed again because of YY (and Mike overhears and says "Oh yeah, I saw YY in service ZZ too and fixed it"), and just general team cohesiveness. In theory we could hire more people for less salary if we had a remote workforce, but we're still a small…

I have found that this says more about the ability of the management and less about the ideas underpinning remote work. Large companies figured out some time ago that they could have a large remote workforce. So it isn't just Basecamp or whoever that is doing remote work. Remote work has it challenges but (and here is the important point) they can be managed if the team knows how to manage. FOSS proved over two decad…

Google, a very large company with nearly unlimited technical resources, continues to bus workers 40 miles down the peninsula every day because they want workers to stay on-site. Google, of all companies, could afford as much office space in SF as they need, yet they still choose to only have a relatively small satellite office there.

The experience of large companies that have large remote workforces and FOSS projects that have workers so motivated that they'll work for no pay probably doesn't translate well to a small startup that doesn't have the resources of a large company, nor the employees so motivated that they'll work for free.

Remote work, as you say, has it's challenges, and sometimes it's better to pay the money avoid the challenges than to pay the money to confront the challenges.

Re: Landlords are trying not to rent to startups in San Francisco

#114

Post by mschuster91 » Thu, Jul 30, 2015, 11:08 PM UTC

Crito wrote: post #75

LandoCalrissian wrote: post #28

Earlier quoted context omitted.

Then don't rent an office? I really don't know what you think the alternative would be. I assume the value comes from not having to work by a flaming barrel down by the river.

Although astazangasta is complaining about rent, he doesn't actually want to buy land either. He thinks he is entitled to free land.

Native Americans iirc thrived without the concept of "privatized land" for thousands of years. Same for basically other self-sustaining native population in history.

Okay, you got the occasional clashes with other clans for land but hey, you could always move somewhere else. That's impossible now, given the massive numbers of humans on this planet.

Re: Landlords are trying not to rent to startups in San Francisco

#115

Post by some-guy » Thu, Jul 30, 2015, 11:08 PM UTC

jtfairbank wrote: post #105

dataker wrote: post #39

While in SV, I couldn't understand the hate towards East Bay: it's fairly priced, close to the 'hub' and not as violent as otherwise portrayed. Could anyone elaborate?

I live in West Oakland and the favorite game is still "fireworks or gunshots". Its a great place to live if you're in your 20s, but I wouldn't want to move my family here. Maybe up by Berkeley is better?

I have lived in West Oakland and currently live in Adam's Point (both in Oakland's borders) and it feels like an entirely different city.

Re: Landlords are trying not to rent to startups in San Francisco

#116

Post by rconti » Thu, Jul 30, 2015, 11:11 PM UTC

timtadh wrote: post #107

Johnny555 wrote: post #88

Earlier quoted context omitted.

We've tried and found that remote engineers are less effective, they miss out a lot from group whiteboard discussions, overhearing office chatter "Hey bill, service XX crashed again because of YY (and Mike overhears and says "Oh yeah, I saw YY in service ZZ too and fixed it"), and just general team cohesiveness. In theory we could hire more people for less salary if we had a remote workforce, but we're still a small…

I have found that this says more about the ability of the management and less about the ideas underpinning remote work. Large companies figured out some time ago that they could have a large remote workforce. So it isn't just Basecamp or whoever that is doing remote work. Remote work has it challenges but (and here is the important point) they can be managed if the team knows how to manage. FOSS proved over two decad…

Large companies manage to not go out of business while still having a large remote workforce.

Large companies often have a ton of inertia, not a lot of competition, and they often take a very long time to fail. Just because they've started doing it, and are getting away with it for now, does not mean it's a good idea.

I'm not saying it's NOT a good idea, I'm just saying you can't tell based merely on the fact that they're doing it. They also have lots of employees who put in the bare minimum and punch a clock to draw a paycheck. Does that fly in a smaller, less well-funded company?

Re: Landlords are trying not to rent to startups in San Francisco

#117

Post by _delirium » Thu, Jul 30, 2015, 11:11 PM UTC

fredkbloggs wrote: post #67

ffreire wrote: post #36

Earlier quoted context omitted.

Your response coupled with your username gave me a shiver, heh. That said, why would the Fed tighten money in the fall when we're so close to an election year? I know they hold longer terms to hopefully avoid political swings, but, it just seems like bad timing.

I'd turn that on its head: keeping short rates as low as they are requires extraordinary economic weakness. The only bad time to raise rates away from zero is when a total collapse is ongoing. None of the recent economic data suggests that a collapse is ongoing; quite the opposite. You're right that it's bad timing in that their rate increase is likely to come shortly before a bust, and therefore will be second-guess…

They would need a new approach to monetary policy to really have justified raising rates in 2013, because there was neither inflation nor full employment, the two things the traditional Taylor rule watches. Inflation was stuck around 0.1-0.2% for all of 2013 (below target), while unemployment was around 7-8% (above target).

If the SF Bay Area had its own monetary policy, things look a lot different in the local statistics, of course.

Re: Landlords are trying not to rent to startups in San Francisco

#118

Post by blackjack48 » Thu, Jul 30, 2015, 11:12 PM UTC

Another reason I didn't see mentioned: many open floor plan spaces are still permitted as light-industrial spaces. Due to the intricacies of the city's zoning laws and unfortunate politics, landlords are at a greater risk of receiving a zoning violation for leasing space to a tech company than they would be if they found a "blue-collar" tenant.

Re: Landlords are trying not to rent to startups in San Francisco

#119

Post by marincounty » Thu, Jul 30, 2015, 11:15 PM UTC

nostrademons wrote: post #55

ffreire wrote: post #36

Earlier quoted context omitted.

Your response coupled with your username gave me a shiver, heh. That said, why would the Fed tighten money in the fall when we're so close to an election year? I know they hold longer terms to hopefully avoid political swings, but, it just seems like bad timing.

Well, if the Fed doesn't tighten, they're at a pretty high risk of introducing serious inflation into the economy. The high commercial rents are a form of inflation; so are the wages of tech workers, and people being priced out of the Bay Area. So far, this is local to a few industries and metropolitan areas, but if the Fed doesn't act you could see it start showing up in nationwide statistics. That said, I'm not ent…

"Well, if the Fed doesn't tighten, they're at a pretty high risk of introducing serious inflation into the economy."

I doubt this will take place. If anything, I think we will see deflation?

These low interest rates have provided gambling money to the 1 percenter's. (I don't want argue--just the way I see it.)

There's a part of me that want to cash in on these low interest rates(part owner in a home in the Bay Area--that people really seem to want.), but my inner voice--wants the fed to raise rates?

Why--the poor/middle class have been left out of the recovery(unless you are in tech.). We get essentially 0 % on our meager cd savings accounts. We can't gamble in this bubbly/momentum/free money stock market?

In essence, what the poor/middle class got out of this recovery is no change in wages, higher rent, higher fees, and 0 percent on our savings. (I do appreciate the access to health insurance though. At least, they(hospitals) can't attach my interest in a home-- if I got sick, and managed to survive? Before Obama Care, I couldn't get health insurance, and always knew I was one judgement away from being homeless. (For those that hate ObamaCare, I would be happy with a 2 million, nationwide--homestead exemption, incorporated into our federal bankruptcy laws? All homes should be judgement proof.)

So Janet--raise the interest rates. The rich boys are just gambling, and laughing! They have so much money they don't know where to put it? The REIT's are buying up too many commercial/residential units; on your free money--I sometimes wonder whether its foreigners(who can buy a home in the U.S., as easily as picking up a phone), or REIT's whom own more?

See, only the banks, and their Best clients are given this free money. I am not seeing the trickle down? We got out of the risk of Depression? It's time to raise rates, and never bailout another bank again.

Re: Landlords are trying not to rent to startups in San Francisco

#120

Post by ww520 » Thu, Jul 30, 2015, 11:15 PM UTC

superuser2 wrote: post #109

ww520 wrote: post #104

Earlier quoted context omitted.

It's not that the bust is coming soon. Startups are notoriously bad tenants as a class, whose life cycle is too short. Signing long lease with them just doesn't make sense. By definition a startup is an experiment to build products and a business in a short amount of time, with one to two years of funding in most cases. 9 out of 10 these experiments fail, so 9 out 10 startup tenants will move out after a short time.…

Even if it doesn't fail and turns into a unicorn, its space needs will rapidly increase and it will still want to move on to bigger and better offices. The entire point of a startup is to not stay its current size - either it will grow wildly or disappear altogether. If you can comfortably occupy the same amount of space for 2+ years, you're not a startup, you're a small business.

Exactly. Either way they don't stay long. Landlords have learned the hard lesson over the years.