San Francisco–For decades, every city in the Bay Area has restricted housing production. And for decades, the Bay Area has gone deeper into housing debt. People and money continue streaming into the region, cities rarely allow new housing, and prices continue to rise.
This hurts every industry in the Bay Area, and tech is no exception. The housing market steals money straight out of our pockets and, if we stay the current course, will rob us of the better version of ourselves we need more time to become.
How Housing Robs Us Blind
Housing in San Francisco costs 73% more than in Austin, 53% more than in Seattle, and 36% more than in Los Angeles. And figures for many of the Peninsula Cities are even worse. After accounting for cost of living, our real incomes in Bay Area tech are often lower than those of our colleagues in less expensive locales simply by virtue of housing costs.
Obviously, this is bad for us as employees, but it hurts founders and investors as well. The higher housing prices climb, the more founders have to pay employees to provide for the same standard of living. And the higher labor costs become, the more money founders have to raise from investors, meaning more capital gets tied up funding the same amount of work.
All this adds up to tech, as an industry, paying more and more to stay in the Bay Area for zero added benefit.
But there’s more at stake than just burn rates and take-home pay. As it stands, housing prices are a millstone around our industry’s neck. And the longer it takes us to shrug off the burden, the more of our future we’ll lose while we struggle to keep running in place.
Selling Tomorrow to Pay for Today
Tech works because we have an underlying ecosystem of startups vetting each and every new idea. Whether a fledgling company grows up to be a unicorn, gets acquired by a giant, or dissolves into obscurity, it’s contributing to the massively scaled process of trial and error that drives our industry as a whole. This process, in turn, is powered by a continuous flow of people and ideas, all mixing and matching in the hopes of building something new.
But the higher housing prices climb, the fewer new people and ideas will be able to make it to the region. In a 2015 interview with Business Insider,Chamath Palihapitiya remarked that if he were just turning twenty now, the twenty-year-old version of himself probably wouldn’t come to the Bay Area because, at this point, it’s too expensive. Our broken housing system is silently depriving us of future contributors who could build great things; and for each individual who’s preemptively priced out, we’ll never know what those things might have been.