Live data from Hacker News

Landlords are trying not to rent to startups in San Francisco

42floors.com

281–290 of 308 posts

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

#281
post #225

Earlier quoted context omitted.

And Philadelphia. And Portland ME. Even Burlington VT. The list goes on. All of these places have lower costs of living than NY, SF and Boston.

Also: Austin, Chicago, Pittsburgh, Atlanta, Seattle, etc. Some things I like about a few of those: Pittsburgh is the 2nd-safest major U.S. city for pedestrians (after Boston) [1], is nice and compact, and a beautiful setting in a valley at the intersection of two rivers. Chicago has one of two 24-hour rapid-transit systems in North America (NYC is the other one), a beautiful lakefront, great deal of ethnic diversity,…

> , the main issue is just making sure to live in the actual city rather than the suburbs, if you want a city lifestyle.

Yeah but then your cost of living shoots up. I mean, I've priced Austin real estate. If I want to buy 2BR apartment in downtown Austin (the closest analogy to where I currently live in Brooklyn) I'm looking at half-million dollar properties. Which is fine for an NYC boy like me, it's what I'm used to, but then why am I moving again?

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

#282

This is a great analysis and the argument makes perfect sense in every respect. The only thing I find dubious is the idea that the bust is 2-4 years out. I think if you polled most SF commercial landlords, they would tell you that they expect most of their startup tenants to start having difficulty paying the rent in no more than 18 months. It would be interesting to see some actual data on this. After all, there's n…

A relative of mine made the mistake of renting to a start up. Rent has not been paid for several months. Legal proceedings have started. ( This is in a country where evicting tenants is notoriously difficult. )

What country is that? Sure isn't the U.S.

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

#283

Earlier quoted context omitted.

"A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth." - pg

Well, that's his view on it. I and many others would disagree fundamentally on those points.

There are many other types of business besides startups, and not all technology businesses are startups. That's fine, many of them work very well. Rapid growth is not the only way to run a successful business. But they're not "startups," by definition, they're some other kind of business.

You can, of course, attempt to appropriate the word "startup," redefine it to mean something else, and then attempt to get others to use your new definition, but empirically it seems that almost everyone is using pg's definition above for that word.

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

#284
post #274

Earlier quoted context omitted.

You don't think similar proportions of people in other fields would also like diverse culture?

Nope. Tech workers trend more liberal, more well-travelled and so on (I'm sure you can find negative ways to frame the differences as well). The cultural differences are real.

Rather, tech workers in San Francisco trend more liberal. This is because the city generally trends liberal; it's not specific to tech workers. Outside of that bubble, tech workers are the same as anyone else.

The largest single employer of tech workers in the world is probably the US military, and those tech workers definitely don't trend liberal.

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

#286

Earlier quoted context omitted.

>The entire point of a startup is to not stay its current size Growth for the sake of growth? I would actually think that this is pretty far away from what startups are about.

"A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth." - pg

I guess everyone is entitled to interpret words however they like, but the salient attribute of a startup is exactly what the word means: it's a new venture. And from the perspective of a landlord, that's what matters. New companies are the least predictable in their needs, their revenue stream, and their long-term prospects. They tend to have inexperienced managers and flighty owners. All of these things are true regardless of how they are funded, what industry they operate in or whether the owners are trying to become huge overnight, bootstrap into a comfortable living, or whatever else.

Established companies grow and shrink, too. They close offices and factories, open new ones, and occasionally file for bankruptcy protection. But they do these things much less frequently than a new company, and they do it with the backing of a much larger and more reliable cash flow. That cash flow means that even in bankruptcy, an established company's creditors usually end up with a significant recovery. From a landlord's perspective, these are the things that make established companies more attractive than startups. Thus, in this context at least, "startup" means nothing but "new company" and carries none of the other connotations that most people here assume when hearing the term.

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

#287
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?

90% racism but people will talk in endless circles to avoid admitting it. Also, sssshhhh. Stop with the hype. Ruining one city is enough.

[deleted]

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

#288
post #172
post #123

Earlier quoted context omitted.

I wish people would do that. I know when I see jobs that interest me, they're almost always in SF or NYC. Neither location is somewhere I'd flourish. Seriously, what is the actual appeal of SF? I just don't see it.

How much time have you actually spent in SF? As an SF Bay Area resident since 2009, there's no better place if you want a career in tech. Yes, you can still have a great career outside of SF but it's a lot easier here. I have lived and worked in 4 US cities and the best engineers are here. The selection of good jobs is immense. If you are a decent engineer, you have so many choices.

A couple days for a conference.

From what I've read in this topic and elsewhere, the cost of living is very high.

I'd rather not live in a city with as much of a chance of an earthquake as SF has. Living in a known disaster area just seems kinda off...

Then there's just personal preference.

I live in a city of less that 200K, and I find it to be larger than I like. The other day I hit stop and go traffic in a larger city, and found myself wondering why anyone would subject themselves to that on a regular basis. Or subject themselves to crowded mass transit systems, those crowds are a big part of why I use my car instead in my city.

And so on...

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

#289
post #225

Earlier quoted context omitted.

It depends on who you are. Consider someone who likes walking to work, groceries, and everything they need; hates driving and owning a car; loves having top caliber arts and entertainment; feels more alive living in a place where people are on the street; and enjoy an evening walking bar to bar drinking with friends and not having to worry about a DUI on the way home, cities offer a lot. That is Boston, Manhattan, an…

And Philadelphia. And Portland ME. Even Burlington VT. The list goes on. All of these places have lower costs of living than NY, SF and Boston.

Hey, someone else who remembers that First Portland exists and is pretty great!

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

#290

Earlier quoted context omitted.

Which is likely. Echoes of the eurozone here for sure; SF probably needs 8% interest rates but even 0% is doing very little for the Rust Belt and other perennially depressed regions. Now, the eurozone critics think the problem is lack of fiscal union, but the US suggests it goes a lot deeper than that.

In principle, couldn't the issue be too few fiscal transfers? I.e. San Francisco should be paying even more into the federal coffers, to be redistributed even more to Alabama and New Mexico? Or, thinking about the other direction, even restricting ourselves to within California San Francisco and the Bay Area single-handedly pay for a massively disproportionate part of state government services and redistribution. Per…

I don't think more fiscal transfers are the answer. If you took an even bigger chunk of money away from SF, you might succeed in reducing the rate at which real estate prices there are driven upward. But air-dropping that money in Akron will probably serve only to drive up real estate prices in Akron, which doesn't really solve anything (in particular, it does not increase output).

The problem here is twofold: first, not enough of the money being created is flowing into operating assets; second, the operating assets being purchased with this money aren't productive. This seems like an obvious and natural consequence of a service economy, in which the dominant inputs are labor and real estate. When you pay higher wages, that money has to go somewhere. Some of it goes toward consumption, but most is surplus and gets invested. It has the same problem it had when it was created: it can go toward real estate, operating assets, or portfolio investment. No one wants operating assets in a service economy (because they're not productive), so it ends up in real estate or portfolio investments. That drives up asset prices but does not increase output. Diverting more of this money into operating assets (things that make stuff) would increase output and alleviate the pressure on asset prices. Instead it goes into more wages (paying people more does not make them produce more) and real estate (paying more for land or office space does not make it produce more, either). One of the few bright spots was oil, but the sharp drop in prices has made investment there unattractive as well, and has reduced nominal output at the same time.

The central bankers can control the rate of asset price inflation by making money cheaper or more expensive, but they can't do anything to increase output when the money they create is used primarily to acquire nonproductive assets, or to acquire at higher prices assets that are already being fully utilized. That's why real estate is expensive and output is stagnant, and why fiscal transfers won't solve anything.

Any number of solutions suggest themselves: relaxing regulatory requirements to make manufacturing, utilities, and other non-service industries more productive; fixing China so that surplus cash in the US can be invested in operating assets there instead of domestic real estate; fixing laws that limit the supply of real estate, both to directly reduce the price and to make it less appealing as an investment; investing more tax revenue in infrastructure instead of transfer payments to individuals (where much of it ends up in ... real estate); radical alternatives like breaking up the United States into separate nation-states that are more cohesive internally. I'm sure you can think of others as well.

Post reply on HN