Tag: bay area

• Shadow Stalker

  The Shed in Hudson Yards has an exhibition on right now called Manual Override. It features the work of five artists. One of those artists is Lynn Hershman Leeson, who is known for exploring the relationship between humans and technology (naturally, she lives in the Bay Area). Her piece at the exhibition is called Shadow Stalker.

  The way Shadow Stalker works is that you enter your email address — a single data point. The installation then pulls up all of the publicly accessible information associated with your email address. Things like your name, age, address, phone numbers, where you were last seen, and more.

  She refers to this information as your “digital shadow.” It is all of the personal information that is publicly accessible because of the internet. And it is the kind of the information that is already used for things like “predictive policing.” Software that predicts where crime is likely to occur.

  I am fairly public as a result of this blog. Already this year I have written over 75,000 words. So I can only imagine what the internet knows about me. Probably a lot. But of course, I am volunteering a lot of this information. What does the internet know about us that we didn’t explicitly tell it?

  If you’re interested in learning more about Shadow Stalker, here’s a video.

  2019.11.15

• The new decentralized workforce

  

  A few weeks ago the WSJ published an article about Toronto’s growing tech talent pool, arguing that its base now rivals the top US cities, but that it may not be an entirely good thing for the city’s ecosystem. I wrote about it here.

  This morning venture capitalist Fred Wilson published a post on his blog talking about the necessity of scaling tech companies in lower cost locations. It’s a good follow-up to the above article/post.

  Here’s an excerpt from Fred:

  Last week I heard some shocking numbers about salary levels for certain kinds of engineers in the bay area. I checked them out with a few of our bay area portfolio companies and they were more or less corroborated.

  The tight technical labor markets in the bay area, NYC, and a number of other regions in the US are making it hard to scale software businesses without burning massive amounts of cash.

  He goes on to argue that (startup) companies now need to think about scaling in other/remote locations sooner than they ever have before — basically as soon as the company hits about 50 engineers (or 100-200 employees).

  Many companies are now working with a distributed workforce. Supposedly 2/3 of the global workforce now spends at least one day of the week working remotely. I almost never work from home, but I do get how this is possible.

  So what is happening is that engineering talent is spilling over into secondary markets out of necessity. There’s an economic imperative to colonize. But I would imagine that, at least initially, most of the economic benefits accrue to the colonizer.

  Photo by NASA on Unsplash

  2019.09.01

• Zoned for detached single-family housing

  We are in West Virginia now, where the only kind of housing that we have come across is — not surprisingly — low-density, detached, and single-family.

  Indeed, approximately 75% of the residential land across the entire US is estimated to be zoned for detached single-family homes. Using data from UrbanFootprint, the NY Times recently published a series of city maps outlining the percentage of land dedicated exclusively to this housing type.

  

  

  In some cases, such as on residential corner lots in Portland, duplexes are allowed. But generally speaking, the pink corresponds to detached single-family housing. About 15% of residential land in New York City is zoned for this, compared to about 94% of the land in San Jose.

  Interestingly enough, none of the residential land in Manhattan is zoned to accommodate detached single-family housing.

  2019.06.30

• IPOs and home prices

  Fred Wilson made an interesting remark in his recent post about the current “IPO bonanza” that is taking place in the tech space. He is, of course, talking about the recent IPO of Lyft, the recent S-1 filings from Pinterest and others, and the expected filings from Uber, Airbnb, and so on.

  After listing the benefits of going public, he went on to say that this bonanza will surely also mean that it is going to become even more unaffordable in the Bay Area. Part of this is perhaps self-serving, since he operates a VC firm out of NYC. (Take your money and move to NYC.)

  But the data suggests that there is truth to this.

  When Twitter when public in 2013, it was estimated that it created some 1,600 millionaires. This is great for the local startup ecosystem as many of these beneficiaries could go on to found their own companies and create a whole new batch of jobs. The money gets recycled.

  But what does it do to the local housing market — especially a supply-constrained one like that of the Bay Area where it is difficult to build?

  In 2018, Barney Hartman-Glaser, Mark Thibodeau, and Jiro Yoshida penned a paper called, Cash to Spend: IPO Wealth and House Prices. In it, they looked at the impact of IPOs on local home prices in California from 1993 through to 2017.

  What they found, among other things, was a “positive and significant association between local house price changes and firms going public.” The price increases were also found to be the greatest the closer you get to the headquarters of the firm that just went public.

  If you’d like to download a copy of the paper, you can do that here.

  2019.04.02

• US cities with the most corporate HQs

  The University of Toronto School of Cities recently looked at the changing economic geography of Fortune 500 companies across the US from 1975 to 2017. Here is a diagram of the results taken from CityLab:

  

  New York sits at the top with 70 corporate headquarters as of 2017. But the San Francisco Bay Area is now the second largest center with 35 headquarters – a testament to tech.

  The study does, however, omit service firms, as these weren’t tracked in Fortune’s list back in 1975.

  Also noteworthy is the specialization that has taken place across specific cities and regions. Here is another excerpt from CityLab:

  America’s headquarters geography reflects the substantial variation and specialization of the U.S. economy. New York leads in finance and business services, consumer services, and goods and materials. But Houston leads in energy, San Jose in tech, and Chicago in retail and wholesale. Chicago also ranks second in consumer services, and goods and materials, and Dallas takes third in energy. Other cities like Nashville and Minneapolis take third in consumer services, and goods and materials, respectively.

  The full article can be found, here.

  2018.11.16

• San Francisco’s tax for the homeless

  Proposition C will be on San Francisco’s ballots this November 6th, 2018. 

  If approved by voters, the following additional taxes would be levied on businesses in order to create a dedicated fund to both support and prevent homelessness in the city:

  For businesses that pay a gross receipts tax, an additional tax of 0.175 percent to 0.690 percent on those gross revenues in San Francisco over $50 million;

  For businesses that pay the administrative office tax, an additional tax of 1.5 percent of their payroll expense in San Francisco.

  Marc Benioff – the founder of Salesforce (which happens to be the city’s largest employer) – has emerged as the lead supporter of Prop C. Between personal and corporate funds, he has contributed almost $8 million to getting this passed.

  But other billionaires in the Bay Area, such as Jack Dorsey of Twitter, have taken a different position, instead siding with Mayor London Breed, who does not support Prop C. 

  If you’re interested in this topic, the New Yorker has a piece called, The Battle of the Big-Tech Titans Over San Francisco’s Tax for the Homeless

  2018.11.02

• A more distributed startup geography

  The Economist recently argued that Silicon Valley’s innovation hegemony is waning and that it is a product of two factors: there appears to be more innovation happening elsewhere (good news), but that innovation in general also seems to be harder to achieve (bad news). Here is an excerpt from the article:

  Other cities are rising in relative importance as a result. The Kauffman Foundation, a non-profit group that tracks entrepreneurship, now ranks the Miami-Fort Lauderdale area first for startup activity in America, based on the density of startups and new entrepreneurs. Mr Thiel is moving to Los Angeles, which has a vibrant tech scene. Phoenix and Pittsburgh have become hubs for autonomous vehicles; New York for media startups; London for fintech; Shenzhen for hardware. None of these places can match the Valley on its own; between them, they point to a world in which innovation is more distributed.

  Part of the problem, of course, is rising costs in the Bay Area. Everything from the cost of living to the cost of operating a business. The article cites a recent survey where nearly half of all respondents said they are planning to leave the Bay Area in the next few years. This is up from 34% only two years ago.

  I don’t doubt that rising costs are causing some people to look to other cities, as well as other countries in the case of draconian visa policies. But I am suspect of the claim that we’ve heat peak “innovation” – however you want to define that.

  2018.09.05

• Winner take all

  We have talked a lot on this blog about the concentration of economic activity in global cities. Here is an old post about a paper called “winner-take-all-cities”, which documents the overrepresentation of talent, economic activity, innovation, and wealth creation in a select number of alpha cities.

  But this same phenomenon is playing out in a myriad of different ways. Aaron Renn calls this the “superstar effect” and has been writing about it for years. Another more recent example is this post by Richard Kerby called: Where did you go to school?

  Kerby looked at where venture capitalists in the US went to school and discovered that around 40% of them have gone to one of two schools: Stanford or Harvard. His argument is that not only is the venture capital industry lacking in gender and racial diversity, but it’s also lacking in cognitive diversity.

  My point with this post, though, is one of hyper-concentration. Tech is a dominant force in today’s economy. And in 2017, nearly 45% of all venture capital investment in the US went to companies located in the Bay Area – meaning San Francisco and San Jose.

  So here is an example of a select number of schools training a select number of minds that then go on to invest in a select number of cities. Fred Wilson, who is a venture capitalist, has a good response to this problem of diversity in the VC industry.

  But, of course, this is bigger than just the VC business.

  2018.08.10

• Thoughts on housing in the Bay Area

  I was out for drinks recently with a friend of mine who is a developer in California and she mentioned a few things to me that I thought were really interesting. 

  First, she talked about how virtually nothing gets built in the Bay Area “as of right.” And so the market is hugely supply constrained. She said, you’re lucky if you can get your entitlements in 2 years. It’s starting to take longer. I immediately said: “That’s Toronto.”

  Second, we talked about Proposition 13, which was timely given this recent post. One of the consequences of Prop 13, beyond helping golf clubs survive, is that longtime homeowners seem to be highly incentivized not to move. 

  Their property taxes are so below market that it can be more cost effective for them to stay put as opposed to downsize – even if they have too much house. This means far less turnover in the housing market.

  Third, there really does seem to be a feeling in the Bay Area that it’s at a breaking point in terms of affordability. When a successful software engineer making $200,000 a year can’t afford housing, people naturally start to look to other cities.

  We hear this refrain all the time in the media, but because I’m not active in that market, it was far more impactful hearing it from a friend.

  2018.03.16

• Constructing the tallest building in San Francisco

  Alexis C. Madrigal recently published a piece about the Salesforce Tower in San Francisco called: The Tower at the Heart of the Tech Boom. At 61 floors and 1,070 feet, it is now the tallest building in San Francisco and the second tallest building west of the Mississippi River after the Wilshire Grand Center in Los Angeles.

  Hines and Boston Properties are the developers of the building. Pelli Clarke Pelli is the architect. And Salesforce is the anchor tenant. In April 2014, it was announced that they had leased 714,000 sf on floors 1, 3-30, and 61. (Get that top floor.) So almost half of the building.

  Perhaps not surprisingly, Madrigal calls the Salesforce Tower the “the most visible monument to the industry [tech] in the region and the country.” It is a demonstration of the power and reach of Silicon Valley. San Francisco has a new symbol. The TransAmerica Pyramid now feels inadequate.

  Though interesting, this is actually not what I want to talk about today. I’d like to talk about what it took to build such a tall building in a seismically active city like San Francisco. Unfortunately, this feels timely given that the sinking Millennium Tower is getting so much attention right now.

  The structural engineer for the Salesforce tower is Seattle-based Magnusson Klemencic Associates (MKA). They are a world-renowned structural and civil engineering firm that have been around since the 1920s. Other projects they are currently working on include the third tallest building in Chicago.

  The tower’s seismic force-resisting system is made up of reinforced concrete shear walls that surround the central elevator and exit stair core. These walls are 24 to 48 inches thick. Here is a plan taken from a STRUCTURE Magazine post written by Ron Klemencic of MKA:

  

  The tower’s foundations have been well documented, or at least frequently mentioned, because of how deep they had to go down. The site has poor soil conditions (fill, sand, San Francisco “old bay clay”, and weak bedrock), and so given the weight of the tower the only option was to go down to bedrock – approximately 250 feet below grade.

  The foundation system they ended up going with uses something called Load-Bearing Elements (LBEs). The typical LBE measures 5′ x 10.5′. The entire foundation system uses 42 LBEs and a mat foundation that varies in thickness from 14′ around the core to 5′ around the perimeter. (See image below.) The LBEs were brought down to rock. And in some cases, they went down more than 310 feet below grade.

  

  As a condition of buying the site, the Transbay Joint Powers Authority required proof that any future tall building would not negatively impact the surrounding structures – including the adjacent Transbay Transit Center – and that it would perform under a Maximum Considered Earthquake (MCE) event.

  So while the tower itself may be a symbol for the new world, its structural system also achieves many firsts in terms of how to build a supertall in a seismically active region.

  Please keep in mind that I am not a structural engineer. I just pretend to be an architect sometimes. If you’re interested in more of the details, check out the post by Ron Klemencic. All of the above information was taken from there.

  2017.11.11