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True but these days, it is the TALENT opting for many cheaper places that offer major city amenities with many of the traditional talent magnets becoming more and more cost-prohibitive. So companies follow suit. The usual dynamic is being turned on its head.
Thank you. What happened as soon as these SF tech companies started instituting WFH? Many employees started to move away from the Bay Area to cheaper locations. People at the company I work for have done the same thing. It's the new trend as people don't want to live in urban environments due to a few reasons that have happened in 2020 (not to take the thread too off topic), and more space is becoming preferred.
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Originally Posted by As Above So Below...
Those factors dont point anyway since companies tend to relocate for tax purposes. Regardless of how much rent drops in the Bay Area, it wont come close to being as affordable to operate.
Either way, and Mutiny77 correctly pointed out, the talent has opted for many of these cities too. You wont be short on talent in cities like Dallas, Houston, or Atlanta for ANY industry. I know you dont get it. Per your post history you dont seem to be able to comprehend why anyone would choose to live in the sunbelt giants vs. the Bay, Seattle, or a Northern Urban area. But that isnt reality. Many people do just that.
Those factors dont point anyway since companies tend to relocate for tax purposes. Regardless of how much rent drops in the Bay Area, it wont come close to being as affordable to operate.
Either way, and Mutiny77 correctly pointed out, the talent has opted for many of these cities too. You wont be short on talent in cities like Dallas, Houston, or Atlanta for ANY industry. I know you dont get it. Per your post history you dont seem to be able to comprehend why anyone would choose to live in the sunbelt giants vs. the Bay, Seattle, or a Northern Urban area. But that isnt reality. Many people do just that.
Yeah. Also add Charlotte. Talent + affordability are the primary drivers. California was hidstorically dominant in wide spread talent but it’s 2020.
Those factors dont point anyway since companies tend to relocate for tax purposes. Regardless of how much rent drops in the Bay Area, it wont come close to being as affordable to operate.
Either way, and Mutiny77 correctly pointed out, the talent has opted for many of these cities too. You wont be short on talent in cities like Dallas, Houston, or Atlanta for ANY industry. I know you dont get it. Per your post history you dont seem to be able to comprehend why anyone would choose to live in the sunbelt giants vs. the Bay, Seattle, or a Northern Urban area. But that isnt reality. Many people do just that.
You're confusing me with someone else! I've never suggested anything of the kind. (But hey, if you can find an example, or several, go ahead and show us!)
In any case, you both seem to have given up making an actual point on the topic.
And now you've dug in deeper. If you think recruitment isn't a huge location factor in certain industries, including the focusing of tech in certain cities, you're just not paying attention.
You're confusing me with someone else! I've never suggested anything of the kind. (But hey, if you can find an example, or several, go ahead and show us!)
In any case, you both seem to have given up making an actual point on the topic.
And now you've dug in deeper. If you think recruitment isn't a huge location factor in certain industries, including the focusing of tech in certain cities, you're just not paying attention.
You fail to see that the Pie of Tech is being shared toward many regions cities. The South is able to gain the relocations from the West Coast now. Just no one says saying Seattle or SF/SF is going to loose the bulk of theirs. Still there is showing the lure to CHEAPER areas has hit them.
No one is claiming that the Midwest or Northeast is gaining Tech from the West. We did have Amazon choose to share its pie. Still they claimed it was not about cost or more cheaper regions. The NORTH must do Startups of their own and not depend on relocations from the West. The South still SEEKS it and whatever spoils of the North they still can muster.
It is like China.... .once all the relocations go there. They then have the pull and talent to grow more of their own. Still the South is SALIVATING to gain more from whoever they can pillage it from. YES I DO see it as something like that. Still it is Free-Enterprise sadly pitting our own cities, states and regions against each other and Corporate America seeks to reap ALL the benefits they can. Soon other cities will become the NEW DARLINGS of the SOUTH till finally Cost rise enough there to not be the pull it still is. IMO as the idiot of the posters.....
The people with high incomes tend to like high-amenity cities....have you noticed that tech and finance gravitate toward expensive places?
Exactly. And if we're talking about leaders who typically come out of the Ivies, little Ivies, etc. - it's simply human nature, and the product of a society which is far less egalitarian than we love to believe it is - that they usually want to be around the sort of people and cultural activities to which they're accustomed. They want their social circles to be filled with other people who are at the top of their fields. They want to be close to the best restaurants, opera and ballet companies, museums, shopping, etc. - not just reasonable regional substitutes, but true institutions. They've been educated to appreciate the finest of amenities, and learned to expect greatness from themselves and the milieu they choose to settle in.
That's why I believe our greatest cities will remain our primary corporate hubs for years to come, at least in relatively traditional industries like finance, media, and to a large degree tech. Back-office operations will move where taxes are low and labor is cheap, but IMO with a few notable exceptions C-suite types will largely choose to remain in familiar urban comfort zones like NYC, SF, Chicago and (more recently) LA. Now, shareholders might attempt to drive relocation movements with varying degrees of success, but in most cases I suspect attracting and retaining the best top-level executives will mean staying in those "superstar cities."
You're confusing me with someone else! I've never suggested anything of the kind. (But hey, if you can find an example, or several, go ahead and show us!)
In any case, you both seem to have given up making an actual point on the topic.
And now you've dug in deeper. If you think recruitment isn't a huge location factor in certain industries, including the focusing of tech in certain cities, you're just not paying attention.
Yes of course human capital and talent plays a role. But places like DFW, Houston, and Atlanta have that in spades. So there isnt an issue there.
And I already made my points and my argument in post 155 of this thread. See below.
Quote:
Originally Posted by As Above So Below...
There are a lot of places corporations could move to that are cheap and have low taxes. Yet they keep choosing the same places over and over again. Ohio has no corporate tax and is cheaper than the Texas cities or Atlanta. So why isnt it as huge of a relocation magnet? There are reasons:
1) Logistical Access. Ohio doesnt have a massive air hub where people can fly in from all over the nation and the world like Atlanta, DFW, and Houston have.
2) Americans overwhelmingly favor warm weather. It is easier to convince people to move to a place that isnt cold. Ive dug through the numbers over and over and its just a fact. That doesnt mean every single American prefers warm weather because they obviously dont.
3) Americans overwhelmingly favor suburban environments close to big cities even in sunbelt cities. I know we on CD like to gloss about urbanity, but the average American does not think like we are.
4) Looking at the rest of the region, MN, IA, IL, PA, NJ, DE, MD, DC, and MA have really high corporate tax rates. Honestly, why would a corporate want to relocate there and automatically give 8-12% of their profits over to the state? Now granted Ohio and South Dakota have no corporate tax and IN, MO, ND, and KY have very reasonable corporate tax rates, but you just wont find the list of corporate and personal amenities in those places that an Atlanta or Dallas offer.
5) Personal taxes. Its harder to get people to relocate to places with high state tax. Every single state in the Northern half of the US has state tax except WA, WY, and SD. Every Midwestern state (again except SD) and every Northeastern state has state tax.
In the case of Texas, there is no state tax and no corporate tax. Is it really that hard to see why people and corporations are moving here? You can call that predatory but there is nothing stopping the Northern states from adopting similar measures.
You fail to see that the Pie of Tech is being shared toward many regions cities. The South is able to gain the relocations from the West Coast now. Just no one says saying Seattle or SF/SF is going to loose the bulk of theirs. Still there is showing the lure to CHEAPER areas has hit them.
I used to be way more into this in the past, but lately I've been pretty ambivalent about the corporate HQ relocations out of state to be honest.
Sometimes I feel like I would actually like to see more corporate relocations and even local politicos have called for it. Ro Khanna, whom I have a personal association with(not very close tho), represents half of Silicon Valley in congress, and is all about spreading the wealth and jobs created here to other parts of the country. https://khanna.house.gov/media/in-th...-rural-america
I dont think anywhere makes it rain like the Bay Area, it's okay to let some it fall elsewhere...LOL
Plus we need a breather. Housing is too expensive, people are too money-oriented, way too much rat race, and tbh the lockdown back in march really made me appreciate no traffic and pristine air quality.
Hopefully Chevron will move soon too-there have been rumors for like 30 years. LOL.
I could also stand to not see or hear Elon Musk anymore. His behavior towards his workers and county health officials during the pandemic really turned me off to him and his company. He lied and said he was moving his company to Texas but sadly he's only building a factory or something like that there---why couldnt he just leave?
As tech keeps growing, it's certainly spilling over to some extent. But what hasn't changed is that most cities are tough places to hire 2,000 software engineers, let alone 20,000. I'm talking pre-Covid for the moment.
Only two cities in the US have companies that have EVER hired tech workers by the tens of thousands...San Francisco and Seattle, both repeatedly. DC will try to do do a small-scale version of that over a couple decades. Nobody else has even tried.
It's not about local talent. Even top tech cities don't have endless supplies of available people, and companies compete against each other. Nor can the local flow of grads provide more than a trickle. You have to recruit globally, including a heavy Asian component since that's where the largest number of STEM grads are.
Some companies make recruitment work with semi-dense suburban campuses with decent transit service augmented by private buses. That's Google, Apple, and Microsoft's main campuses. Microsoft is about 60% SOV commuters BTW. This type of campus has been losing market share in these cities. But it can work for the major brands, aided by cities' brands and decent air connections especially to Asia.
The new paradigm (last 15-20 years) is more about downtowns, or at least suburban downtowns and secondary nodes. The goal is to hire 20-somethings primarily, and 20-somethings with six-figure incomes often like urban living. The math is tough in SF, but $120k salaries work with Seattle's $3,000 highrise apartments, often with no car.
Amazon's HQ1 and Salesforce are based in old downtowns. In my area, the majority of new-economy techs are too, like Redfin, Zillow, Getty, and Expedia. Examples of HQs in secondary downtowns and urbanish nodes include Adobe, Amazon Bellevue, Amazon NOVA, and Salesforce. Many companies that have suburban HQs often have urban engineering offices in other cities. Smaller companies in young-heavy fields tend to love urban cores.
Exactly. And if we're talking about leaders who typically come out of the Ivies, little Ivies, etc. - it's simply human nature, and the product of a society which is far less egalitarian than we love to believe it is - that they usually want to be around the sort of people and cultural activities to which they're accustomed. They want their social circles to be filled with other people who are at the top of their fields. They want to be close to the best restaurants, opera and ballet companies, museums, shopping, etc. - not just reasonable regional substitutes, but true institutions. They've been educated to appreciate the finest of amenities, and learned to expect greatness from themselves and the milieu they choose to settle in.
That's why I believe our greatest cities will remain our primary corporate hubs for years to come, at least in relatively traditional industries like finance, media, and to a large degree tech. Back-office operations will move where taxes are low and labor is cheap, but IMO with a few notable exceptions C-suite types will largely choose to remain in familiar urban comfort zones like NYC, SF, Chicago and (more recently) LA. Now, shareholders might attempt to drive relocation movements with varying degrees of success, but in most cases I suspect attracting and retaining the best top-level executives will mean staying in those "superstar cities."
It's also about the desires of 20-somethings. Whether from the US or especially abroad, they expect decent transit, walkability, lots of takeout places in a five-minute walk, bars, and so on.
It's also about the desires of 20-somethings. Whether from the US or especially abroad, they expect decent transit, walkability, lots of takeout places in a five-minute walk, bars, and so on.
Still, there is more to these relocations then young-professional new urban transplants and Corporations still maintaining offices in major Northern cities too. It is also where they are and are not building NEW Manufacturing and assembly plants.
We had Tesla announce a couple months ago in building a new plant outside Austin. Got fed $$$ also to do so. Though they are not moving the California plant. The new one would almost have NEVER been in a fear of Union Northern city metro and now more regulatory and pricy California etc.
Clearly, these corporations steer relocations and the Southern migrations include lower-skilled jobs in these plants like Tesla where lower-skilled jobs will be in the $13.00 + range. GM pays a minimum of $18.00+. Land cheaper then California of course and low-Union fears and taxes with incentives even the Feds gave. Make it virtually impossible for a Rust-Belt city to lure a Tesla competing against what it can get in a Texas.... Elon Musk even noted Tulsa, OK was second choice. Could a Boeing choose some future plant in a Texas???
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