Tech Rides Are Focus of Hostility in Bay Area

[SwedishAdvocate]

@tenstringer009

The development issues you describe seem like a substantial challenge for sure.

.../ I'm sure I'd be upset if I couldn't get a tenant to leave for a new one who would be willing to pay 2x+ whatever the current one did. There's a very delicate balancing act that needs to happen between owner and tenant rights. /...

The way I see it, this is where representative (and why not also proportionate) Democracy, and the right to freely organize comes into play. The people will then subsequently in a (preferably proportionate) representative democratical way together set the rules.


- - - Updated - - -

…/ There would be some benefits of Google owned and operated housing, but then [1] there is the whole "monopoly thing" and [2] who gets to live there. /…

1. If it’s a Google/Facebook/[insert other large company with lots of cash here] owned subsidiary, then wouldn’t it instead be one more competing actor in the market?

2. That part seems difficult to ‘get away from’ no matter how ‘you’ do it…

 

[Lloyd]

There would be some benefits of Google owned and operated housing, but then there is the whole "monopoly thing" and who gets to live there. Also, I used Google as an example because of my familiarity, and because of the particular altercation with the Google sponsored bus. Lets not forget that there are many other high tech firms here.

(wouldn't it be great if Tesla built a few apartment complexes with viable high speed charging so renters could full take advantage of the best technology out there)

This is happening in the Torrance, CA where corporations (Toyota, Nissan, etc. ) are buying the existing homes as soon as they come on the market, and then leasing them to their employees. People trying to buy a house in this area are not happy about that either, making it more difficult to find a home. My mother in law just sold her home there like this. It was on the market 2 days!

San Diego is worse where companies are buying homes 500 at a time, putting them into a management company and selling them as a package with a cash flow. I was told but not verified that the Chinese government was one of their best clients. I guess they are not buying our government securities anymore so they are just buying our homes!

 

[lorih]

Wow, hadn't heard that about San Diego. But I wasn't thinking about the tech firms here buying home. There has been tons of multi-unit buildings going up in the SV area, but the cost of rentals hasn't gone down. In fact, these new rentals are even higher priced than other apartments.

Was thinking if Tech companies subsidized some multi unit complexes to keep market prices more reasonable overall, but I am looking at "pie in the sky". Of course, if we did organize the top 5 market cap companies with headquarters in SV, and got them interested in addressing some local housing issues, they might come up with some pretty creative ideas.

i am not connected into the "CEO" world, but if I were that would be an interesting summit to host.

 

[rolosrevenge]

What I don't get, is why people aren't building more and bigger apartment complexes if the rents are growing at such a fast rate. Is there something that is keeping supply low even as demand continues to rise?

 

[AnOutsider]

What I don't get, is why people aren't building more and bigger apartment complexes if the rents are growing at such a fast rate. Is there something that is keeping supply low even as demand continues to rise?

Maybe situations like these are a bit more widespread:

I'm not sure what the set-up is like in Sweden, but when I was in college I worked on developing and financing a conceptual low-income housing project in Central California, and let me just say, it is NOT easy. Granted, I certainly was not an expert at it, but when you combine the high real estate costs with a very convoluted low-income housing program, it would be very difficult to pull a large scale project off in the Bay Area. Trying to get anything built in San Francisco is a challenge with it taking some developers 15+ years to get their projects off the ground, so it would be very difficult for anyone to plan a low-income housing project in SF given all the variables (supervisors' approval/possible ballot measure, state funding once your project is actually approved, cost projections from initial concept to groundbreaking, etc.).

If it costs a lot (in time and money) to build, I can imagine that the owner is likely going to try to get as much as possible in rent anyway

 

[Lloyd]

What I don't get, is why people aren't building more and bigger apartment complexes if the rents are growing at such a fast rate. Is there something that is keeping supply low even as demand continues to rise?

Two Words: Rent Control....... and it is more difficult to be a landlord, legally and practically.

 

[lorih]

There has been a lot of new multi unit housing complexes put up all over Silicon Valley, but we still need more if the market were just supply ampnd demand. The rents I mentioned below are for places built in the 1970's. Newer complexes are even more expensive to rent. i know we do have zoning issues on height. No more than 2-3 stories high in most locations in Silicon Valley, so that does limit size of complexes they build.

in the most expensive area (Pennisula area, home of Stanford, Tesla, Google, NASA and Linkedin amongst many other large employers) in some cases older units have been ripped down and replaced with newer units with one more floor of appartments (1 level converted to 2 level, 2 level goes to 3), but that is pretty much it unkess they have special location or zoning exclusions. Also, you cant really rip a place down that houses 50-200 units to build something with 100-400 units if people still live there.

Even with all the building going on, it still doesnt keep up with all the new employees hired (mostly single engineers).

And like I said, the newer units just rent for even more money, so it doesnt lower the base rental prices, just adds a few more high end apartment complexes.

Probably the more established places like San Fran, Berkeley and Oakland (like where the bus conflicts are happening) are more established and probably not growing as quickly in housing developments as tenstringer009 mentioned. And often what is being build is 'gentrification'. Kick out lower income people, for higher income people (both rentals and homeowners). Which is really want people are upset about.

- - - Updated - - -

Two Words: Rent Control....... and it is more difficult to be a landlord, legally and practically.

Agreed. Rent control would be useful. I just doubt SV would adopt it. The whole free enterprise, free thinking, rapid expansion is pretty much the core values of SV.

 

[gg_got_a_tesla]

In a lighter vein, if Tim Draper - of DFJ Ventures, who invested in Tesla and SpaceX, and also father of Valley Girl - were to have his way, Silicon Valley will be its own state!

What Happens To California If Silicon Valley Became A State, In 7 Charts | TechCrunch

 

[brianman]

Again I don't get it. "Population hubs" naturally become more expensive over time, or they die as a new population hub becomes the "place to be" and that place has higher prices.

So for those want to latch onto their plot of land... Would they prefer that big cities die out slowly as business moves to somewhere else instead?

 

[rolosrevenge]

Two Words: Rent Control....... and it is more difficult to be a landlord, legally and practically.

Well then, it seems a simple solution to the grievances of the protesters is to make it easier for people to build new apartments and address the zoning height problem. Build 10 story complexes if need be.

 

[richkae]

But, not everyone is a single male engineer here.

How are the buses exclusively a benefit for single male engineers?

- - - Updated - - -

Trying to get anything built in San Francisco is a challenge with it taking some developers 15+ years to get their projects off the ground

Doesn't this clearly illustrate that the problem is actually the local government interfering with the free markets ability to add new housing in the face of high demand?

 

[stopcrazypp]

Again I don't get it. "Population hubs" naturally become more expensive over time, or they die as a new population hub becomes the "place to be" and that place has higher prices.

So for those want to latch onto their plot of land... Would they prefer that big cities die out slowly as business moves to somewhere else instead?

For a lot of the big cities, they have enough cultural appeal that makes it attractive to live there and not something "new" places can really replace. It's expected for the places to become more expensive over time, but not really at the rate the market rent is growing. It's a similar thing to the real estate bubble.

I do think lorih made a good point, that it's a balance between landlords and tenants. Right now it's a bit overly skewed toward tenants, and landlords really only have two choices:
1) collecting ridiculously low rent indefinitely (with the only hope of collecting market rent if the person moves out)
2) Ellis Act eviction

The allowed rent increase per year is indexed to CPI, but it's too low IMHO. Maxes out at about 2% per year and a lot of the people being evicted are paying lower than a quarter of market rent. In many cases those people are willing to pay more (although not market rent, probably somewhere in the middle) and the landlord is probably willing to let them stay even if it's not market rent, but the rent control law doesn't allow that.

If the law allowed larger increases (like 3-5% similar to commercial rent) or set a baseline "affordable" rent that the landlord can increase to then I think the incentive for Ellis Act evictions would be naturally reduced. Instead the local board wants to simply make it harder to do such evictions, which I don't think really addresses the issue.

- - - Updated - - -

How are the buses exclusively a benefit for single male engineers?

Not exclusively, but I don't think it's a stretch to say single engineers make up an extremely large percentage of the users.

Doesn't this clearly illustrate that the problem is actually the local government interfering with the free markets ability to add new housing in the face of high demand?

There are actually a bunch of new apartments being built. And large housing projects tend to be difficult in large cities (no matter which one) because there's whole lot of safety/environmentally related laws.

 

[lorih]

For a lot of the big cities, they have enough cultural appeal that makes it attractive to live there and not something "new" places can really replace. It's expected for the places to become more expensive over time, but not really at the rate the market rent is growing. It's a similar thing to the real estate bubble.

I do think lorih made a good point, that it's a balance between landlords and tenants. Right now it's a bit overly skewed toward tenants, and landlords really only have two choices:
1) collecting ridiculously low rent indefinitely (with the only hope of collecting market rent if the person moves out)
2) Ellis Act eviction

The allowed rent increase per year is indexed to CPI, but it's too low IMHO. Maxes out at about 2% per year and a lot of the people being evicted are paying lower than a quarter of market rent. In many cases those people are willing to pay more (although not market rent, probably somewhere in the middle) and the landlord is probably willing to let them stay even if it's not market rent, but the rent control law doesn't allow that.

If the law allowed larger increases (like 3-5% similar to commercial rent) or set a baseline "affordable" rent that the landlord can increase to then I think the incentive for Ellis Act evictions would be naturally reduced. Instead the local board wants to simply make it harder to do such evictions, which I don't think really addresses the issue.

- - - Updated - - -


Not exclusively, but I don't think it's a stretch to say single engineers make up an extremely large percentage of the users.


There are actually a bunch of new apartments being built. And large housing projects tend to be difficult in large cities (no matter which one) because there's whole lot of safety/environmentally related laws.

If you had read my post you would see that rents have gone up 10-12% year on year, and even if sign a lease renewal, the rent increase was 4.5% in my case, 5 or more in my friend's situation.

And the buses we are talking about are paid for exclusively by the tech company, only allow their own employees to ride, and were picking people up at city bus stops.

 

[brianman]

And the buses we are talking about are paid for exclusively by the tech company, only allow their own employees to ride, and were picking people up at city bus stops.

So are city (or, generally, public) bus stops the crux of the issue?

 

[rolosrevenge]

So are city (or, generally, public) bus stops the crux of the issue?

I feel that's the only legitimate complaint against the companies. A private company should have to pay to use them, or else buy their own bus stops.

 

[lorih]

I haven't spoken to protestors, but they were quoted as being upset that locals have been "pushed out" due to increased housing prices in the communities where the Google bus stops. (ie. company run buses provide free transportation to high paid workers moving further away from work to lower priced areas).

Most of these Googlers wouldn't drive 2-4 hrs a day commuting if they had to drive themselves, but they are being bused in for free from surrounding communities. They can sleep or work on company bus, so it makes it easier for them to live further out.

I think the fact that they were stopping at city bus stops just made the clash more likely because poorer local people riding city buses saw wealthy engineers on free Google bus every day. It is more like the conflict happened because it sparked a catalyst for resentful locals to easily target. Google is a wealthy company, pays its employees extremely well, and gives them lots of free perks. Locals don't feel those perks should include enabling these high skilled, high paid workers to take over the lower income areas.

Though the argument could be made that Google was using city bus stops and not paying anything to the city for this privilege. I can tell you that the bus stops that have benches usually only fit 2-3 people, and the shelters are small. I can imagine people that have been riding the city buses all along would be resentful for relocated wealthy workers taking over and they are left standing in the rain, but the conflict has mainly been over housing costs increasing 10-12% / month every year for last 3 years (I don't have data before that) when most non-techie people's salaries have stayed the same or only increased 2%.

 

[brianman]

The reason I ask is because, IMO, if that's the root issue then it's somewhat (I want to say pathetic but instead I'll say...) troubling that no proposals have been made at actually addressing the problem. Is it more fun to protest than to actually address the problem?

 

[lorih]

Well, like my first posts pointed out, the bus stop isn't the real issue. It is a "symbol" of the underlying problem and provides the incubator for the clash of two different social classes.

Personally, I believe Google truly has good interest at heart. If it were an easy solution, Google would have taken care of it.

To truly fix would require broad housing improvement/expansion. Keep in mind we are also talking about 4 or 5 different counties (even more cites), different regulations, and already densely populated areas.

 

[cwerdna]

It interestingly got some coverage on Nightly Business Report today.

Nightly Business Report -- February 12, 2014 - YouTube (skip to 22:29 or so, if the link doesn't take you there). The segment's only a few minutes long.

One of the people opposing the tech companies buses is in the story and brings up using public transit. Yeah, but the problem is to get from where people live in SF to where Apple and Google are (and many other tech companies in Silicon Valley and the Peninsula) via public transit, hah! Good luck w/that. In many cases, it would be HORRIBLE due to the frequency, availability, # of stops, # of bus/train changes required, etc.

I'd like to see that guy endure using public transit to commute from SF to the above tech companies on a daily basis.

 

[lorih]

Thanks for posting that. And I agree, the guy on the video is being silly. Public transportation works in SF if you are traveling WITHIN SF. Trying to get to Google in Mountain View from SF, Berkley or Oakland via public transportation would be ridiculously difficult.

And within Silicon Valley, public transportation is very poor.

I once plotted out how to go 5 miles from home to work in San Jose. Driving took 10 minutes on all local roads, no traffic, piece of cake. If I wanted to use public transportation I had to walk, take a bus, walk to a different bus line, get connection, walk again take another bus, and walk last 1/2 mile to work. All told it would take 3 buses, 45 minutes to an hour, with 1.5 miles of the total 5 miles walking!