Apple Looks Beyond Silicon Valley to Improve Recruitment and Retention

[DanTSX]

Another good step is rethinking housing construction regulation and red tape. You can’t build this way, you can’t do this without that and that and that, you can’t build there, you can’t build up etc etc etc etc. Housing is like anything market related, supply and demand will be a big factor in cost. The lack of trying to meet supply in favor of other, ahem, priorities has been significant and going on for many years. (Upward building I n Silicon Valley is semi hampered by SJ Airport being toward the valley’s middle).

It caused a huge outsurge of house buying up 680 then eastward down 580, even reaching Tracy/5/Manteca, up Vasco as well as on the other side of the valley down 101 to Morgan Hill and Gilroy and beyond. Traffic gridlock hell is what I called it.
They want to maintain the green belt then emphasize big tax incentive options to builders to build upward. Lord knows they’ve tax incentivized Cisco, Google, Apple, Intel, Adobe, Ebay, Facebook(they picked up Sun Micros sweet bayfront old campus) and likely many others.

Modular pod-based housing may be an option.

We can also make it more sustainable by incentivizing consumption of insect protein, by taxing mammalian protein higher than a normal FANG dev can afford to consume. Also, centrally controlled thermostats and water faucets to preserve precious water and energy resources.

 

[InuNacho]

Absolutely, but Apple is just one company. Even though it's large, it's just a small fraction of high-wage tech workers in the Bay Area. Local governments have approved and continue to approve more and more office space, without making sure that all these new workers, high-wage and low-wage, have a place to live. A good first step is a moratorium on offices in the entire Bay Area, but that's a very hard sell.

Now these are just my own observations from daily life, not any deep digging into zoning or anything like that.

I think there is a trend NOW for less office and more high density residential as evidenced by the Downtown SJ, Great Mall, and sadly Berryessa Flea Market areas.
My brother works as a structural engineer working on the Google Campus in the Northern Sunnyvale area by the dump. What is being torn down left and right across the South Bay is the old industrial plots to make way for new projects and a majority of them appear to be higher density residential.

The office construction you're seeing across the South Bay (cannot speak for the entire Bay) is mostly big firms revamping their offices like Nvidia off Central Expressway.

There is a MASSIVE unused stock of unused office/light industrial in the South Bay. When looking for a flex space for my business pre-pandemic I was genuinely surprised how cheap and how many spaces were open.

What is not being built enough of though is market rate or affordable housing. Most is above market rate.

 

[Fowl]

What is not being built enough of though is market rate or affordable housing. Most is above market rate.

Well, "market rate" is not affordable, especially if you head toward places like San Francisco. Affordable housing is a necessary patch, but it makes everyone who is not a high earner dependent on waiting lists, proofs of income, all those things which were once the province of the desperately poor. It's not a stable solution.

 

[LoggerMN]

I think there is a trend NOW for less office and more high density residential as evidenced by the Downtown SJ, Great Mall, and sadly Berryessa Flea Market areas.

Definitely much more higher density housing getting built in the valley, but all the reporting I've seen still shows the rate it's being built is lower than the increase in demand.

What is not being built enough of though is market rate or affordable housing. Most is above market rate.

You are confused about what market rate housing means. Market rate does not mean you can afford it. If the house sells, it's at market rate. That is literally the definition of market rate. The only way to sell housing below market rate is to force it by law, or to find suckers willing to sell their property for less than top dollar.

A nasty unintended consequence of rent control type laws, is it pulls supply out of the market rate pool. And in a market like this, that just makes competition for the fewer market rate homes more intense and drives their prices up further. So we have to solve the demand side of the problem.

Big tech finally deciding to hire elsewhere, is probably the most significant things that can happen. I'd like to see new office construction approvals tied to an commensurate number of housing units being built. Right now they should be required to build more nearby housing than is required by the the office space. Force the house supply to increase a little. This would serve to drive more big tech growth outside the valley, reducing demand, while not out-right blocking growth for those willing to help solve our housing problem.

In other words, our building policies should be, if you want to help solve our housing problem, you are welcome to grow here. If not, grow somewhere else. The problem with this stance, is you can't do it at the city or county level. Existing homeowners benefit when other cities or counties enact such policies, but their own locality does not. So, it must be enacted at the state level.

 

[jk73]

Definitely much more higher density housing getting built in the valley, but all the reporting I've seen still shows the rate it's being built is lower than the increase in demand.

And thus it will always be, since people can relocate in a matter of days but housing takes months or years to build.

 

[AxoNeuron]

It doesn't matter if more housing is built that are also too expensive! There is collusion in the renting industry, I worked in it. They will NOT reduce rents unless forced to do so no matter how overcrowded neighborhoods get.
There can be reasonable controls, and rents should not be allowed to go up higher than the CPI.
We are getting raped by developers and landlords, the middle class is getting hammered and the politicians are in on it and getting paid quite well.
It's mainly the Democrats in California that are creating this mess. They say woke things while stabbing us in the back.
People need to stop knee jerk voting for Democrats and get some competition in the Government.

Of course they won't reduce rents until they are "forced" to do so. They are not running a charity. They will keep rents as high as they possibly can.

Do you know what the easiest way to "force" them to reduce rent is? To build more housing. More housing = more supply = lower price pressure.

 

[jk73]

Of course they won't reduce rents until they are "forced" to do so. They are not running a charity. They will keep rents as high as they possibly can.

Do you know what the easiest way to "force" them to reduce rent is? To build more housing. More housing = more supply = lower price pressure.

You can’t force anyone to build more housing. That, too, is a pipe dream.

Apple makes iPhones as fast as it can with a price tag of ~$800+. You think they’d try to make even more if the max price was reduced to $300?

 

[Fowl]

You can’t force anyone to build more housing. That, too, is a pipe dream.

Apple makes iPhones as fast as it can with a price tag of ~$800+. You think they’d try to make even more if the max price was reduced to $300?

That's exactly it. If developers build so much that they cause enough glut to lower housing prices (and their profits), they'll pause until prices go back up.

 

[2010mini]

Then it’s time to take off the blindfold and get a look at the world we live in. But first you have to want to see.

I have never been influenced by me employer. My family morals, my personal morals, my political beliefs have remained the same. My work and personal life don’t overlap.

 

[2010mini]

That's exactly it. If developers build so much that they cause enough glut to lower housing prices (and their profits), they'll pause until prices go back up.

there is only so much space available in that area. Unless someone starts making new land, the prices of homes will always reflect the demand/supply principle

 

[Karma*Police]

Will be interesting to see what the long term affects of the Bay Area housing price comes to. My guess if more companies push for this, you will see a substantial drop in housing prices…simple supply/demand at work

I agree. And that could be catastrophic because it could create a vicious cycle of selling as homeowners try to protect their investment/minimize losses. There are other factors beyond the high cost of living which this article doesn’t get into, like rising crime, homelessness, worsening schools, etc.

That’s why a recent poll showed that over 40% of SFans plan to leave the city in the next few years. The Bay Area could very well end up like Detroit, Baltimore, Newark, etc… once rich, beautiful cities that have been devastated by poor policies and have never recovered.

Apple might be fighting an uphill battle here.

 

[Fowl]

That’s why a recent poll showed that over 40% of SFans plan to leave the city in the next few years. The Bay Area could very well end up like Detroit, Baltimore, Newark, etc… once rich, beautiful cities that have been devastated by poor policies and have never recovered.

Detroit was built on the auto industry. Once that shrank, it was left with a lot of unemployment.
The Bay Area has happily pushed out other industries in favor of the lucrative tech monoculture. That could come and bite it back.

 

[Fowl]

Do you know what the easiest way to "force" them to reduce rent is? To build more housing. More housing = more supply = lower price pressure.

That's like saying that the way to make iPhones affordable to everyone is to allow Apple to manufacture as many of them as they want. More iPhones = cheap iPhones...
As it happens, Apple can make as many iPhones as it wants, and they are not cheap.

 

[Karma*Police]

Detroit was built on the auto industry. Once that shrank, it was left with a lot of unemployment.
The Bay Area has happily pushed out other industries in favor of the lucrative tech monoculture. That could come and bite it back.

That too.

 

[pdaholic]

The rent is too dam high!

 

[bradl]

Oracle, Facebook, and Amazon all announced plans to come to Nashville. This is exactly why I’m closing on a home in three weeks. Scary what these salaries will do to the average worker in any town big tech is in.

I'm thinking the same, but in moving back home to Omaha. We already have the Data Center Corridor there, off of NE-50 and I-80, where Fidelity, Google, Yahoo, Facebook, and Amazon there, and Paypal having a major presence two exits east, as well as Google having another data center in Council Bluffs, just across the river.

Apple is rumoured to be starting up something in/around Des Moines.. If they do, I can see a decent exodus out of California. I'm currently in Sacramento, and Apple has a huge facility in Elk Grove, Intel is right up the street from me in Folsom, and seeing how cost of living is going belly up here and home prices going up, I'm really tempted to put feelers out to the market to see how much I'd get. For Market Value, my 3 bed/1 bath house at 961 sq. feet would net me a 5 bed/4 bath house at 3400 sq. feet, 3 car garage, and the basement.

If Apple makes that type of move, it would be hard for me to see myself staying here, especially in the role I'm in.

BL.

 

[Karma*Police]

That's like saying that the way to make iPhones affordable to everyone is to allow Apple to manufacture as many of them as they want. More iPhones = cheap iPhones...
As it happens, Apple can make as many iPhones as it wants, and they are not cheap.

Apple isn't immune from supply/demand dynamics. Taking your example to the extreme, if Apple over-produced iPhones and they're left with a billion unsold iPhones, they will absolutely be forced to reduce prices. Just like Apple, home builders are careful not to overbuild for that exact reason.

The problem in SF is that it has become extremely business-unfriendly and building homes/apartment complexes just isn't worth it. Here's an example: a home builder spent 5 years and 1.4 million dollars in a failed attempt to convert a laundromat into an apartment complex due to all the red tape.

 

[Karma*Police]

I am surprised there is no state wide limitation or cap on how much you can charge per m2 for rent. That would solve the problem a little

They tried that in Venezuela, Cuba, and elsewhere. It didn't quite work out.

 

[Fowl]

The problem in SF is that it has become extremely business-unfriendly and building homes/apartment complexes just isn't worth it. Here's an example: a home builder spent 5 years and 1.4 million dollars in a failed attempt to convert a laundromat into an apartment complex due to all the red tape.

That's one example, but there are highrises popping like mushrooms all over the city.

 

[GalileoSeven]

I'm thinking the same, but in moving back home to Omaha. We already have the Data Center Corridor there, off of NE-50 and I-80, where Fidelity, Google, Yahoo, Facebook, and Amazon there, and Paypal having a major presence two exits east, as well as Google having another data center in Council Bluffs, just across the river.

Apple is rumoured to be starting up something in/around Des Moines.. If they do, I can see a decent exodus out of California. I'm currently in Sacramento, and Apple has a huge facility in Elk Grove, Intel is right up the street from me in Folsom, and seeing how cost of living is going belly up here and home prices going up, I'm really tempted to put feelers out to the market to see how much I'd get. For Market Value, my 3 bed/1 bath house at 961 sq. feet would net me a 5 bed/4 bath house at 3400 sq. feet, 3 car garage, and the basement.

If Apple makes that type of move, it would be hard for me to see myself staying here, especially in the role I'm in.

BL.

Another Omahan here. A friend/former coworker lives in San Diego (not sure of the area) and some years back, paid about $430-450K for something that previously would go for $165-170 here (more like $180-190 now). You could definitely live well - just have to watch out for the Property Taxes.

Aside from the usual tech names expanding their data center footprint across the 'Silicon Prairie', there's an eCommerce upstart that's been making a few waves as of late (https://www.wowt.com/2021/04/09/neb...dds-hundreds-of-jobs-after-online-sales-soar/)

 

[bradl]

Another Omahan here. A friend/former coworker lives in San Diego (not sure of the area) and some years back, paid about $430-450K for something that previously would go for $165-170 here (more like $180-190 now). You could definitely live well - just have to watch out for the Property Taxes.

The current house I'm in just finally got back above water from the housing crash in 2008-2010. Silly us bought at $285K, which then dropped to 144K, and is now back up to about $300K. the first house I grew up in right now is appraising for $85K, and it's a 3 bed/1 bath at 1054 sq. feet, but that isn't including the basement nor the garage... if it were available, I could buy it right now, outright with cash, but seeing that that entire neighborhood has gone to hell, I'm not stepping anywhere near that yet.

Nah.. Where my parents currently live (out by Candlewood/Boys Town), I could sell this house here, put all of that towards a house in that area, and owe only $85K more, and get a 4 bed/3 bath at 4400sq. feet, (area not including the basement nor the 3-car garage).

It's really looking tempting.

Aside from the usual tech names expanding their data center footprint across the 'Silicon Prairie', there's an eCommerce upstart that's been making a few waves as of late (https://www.wowt.com/2021/04/09/neb...dds-hundreds-of-jobs-after-online-sales-soar/)

Thanks for this. I'm looking at that as well as the Linux sysadmin job that just opened up at Creighton University.. but if Apple moves in or something opens up at those data centers, I'd definitely be looking at heading back. There's nothing wrong with northern California as long as you're not in the Bay Area, but after contemplating Portland, I'd rather head back home.

BL.

 

[Karma*Police]

That's one example, but there are highrises popping like mushrooms all over the city.

Yeah, I don't know what the ratio of success/failure is, but I just keep hearing horror stories about how business-unfriendly SF has become, and the number of companies closing, leaving or canceling expansion plans seems to grow every month.

 

[AxoNeuron]

That's like saying that the way to make iPhones affordable to everyone is to allow Apple to manufacture as many of them as they want. More iPhones = cheap iPhones...
As it happens, Apple can make as many iPhones as it wants, and they are not cheap.

This is literally basic economics - it's supply and demand, it doesn't get simpler than this. Apple can set the price of the iPhone to be whatever it wants, sure, but if everyone has 5 iPhones, the actual market price will be significantly reduced, and people will stop paying $1K for them.

The same principle applies to housing (unless you think that housing is somehow special and the principles of supply and demand somehow don't apply). Maybe gravity doesn't apply to them either

At the end of the day, more houses = lower rent. It really is that simple. Rent control, on the other hand, is something we have ALREADY tried many times. It literally makes the problem worse, not better.

 

[jk73]

There’s never going to be an oversupply of housing in an area like the Bay Area, let alone an oversupply at a time when anyone with a pulse can get a mortgage at near record-low rates. The whole idea is a pipe dream.

 

[AxoNeuron]

...

I don't understand how you can possibly think rent control, which has been tried (and failed) many times in the past, will somehow magically work now...