I mean this in as polite a way as possible, but why wouldn't established companies like Stripe just fuck off to another city entirely? It's a successful company with a great product - that I'm sure many people would like to work for. They could surely lure talent from the bay area by moving to a lower cost of living area where mid-level employees can afford to buy an actual house relatively close to work? And they could pull a mini-Amazon and get some sweet tax breaks to boot. Is there some hidden reason that companies like this insist on staying in the same area despite the many potential advantages of looking elsewhere?
"The typical person being moved today is part of a two-career family. The other half of that equation is probably not being moved, so the corporate move comes down hard on the couple’s relationship at a very delicate point. It brings intolerable stress to bear on the accommodation they’re both striving to achieve to allow two full-fledged careers. That’s hitting below the belt. Modern couples won’t put up with it and they won’t forgive it. The company move might have been possible in the 1950s and 1960s. Today it is folly."
They also cite a case study of a major project at Bell Labs which was moved from New Jersey to Illinois. The authors interviewed the former manager of that project:
"I asked him what he saw as his main successes and failures as boss. “Forget the successes,” he said. “The failure was that move. You can’t believe what it cost us in turnover.” He went on to give some figures. The immediately calculable cost of the move was the number of people who quit before relocation day. Expressed as a percentage of those moved, this initial turnover was greater than the French losses in the trenches of World War I."
(FWIW, that's just one of many insights from that book - I highly recommend it.)
A move strategy could be as simple as, opening up an office in a cheaper location:
1. New teams are created at the new location.
2. New hires on existing teams are placed at the new location, with exceptions if teams have a strong need to be in the same place.
3. Make it clear that you'll help people relocate to the new office if they choose to--some people will take you up on it.
Eventually, the original office will shrink and remaining staff can be allowed to work remotely (which should be a big part of a culture anyway, IMO).
Turnover is already high at tech companies, but in this case your turnover facilitates the move--as people leave at the old location you replace them at the new one. There will still likely be some turnover caused by even the slow move, but that turnover already exist with any move--even the move to south SF will probably cause some turnover because the location is just less convenient for some people.
For some cities this would equate to moving to another part of the same city.
> why wouldn't established companies like Stripe just ... off to another city entirely?
Because the employees they want to hire live and work in Silicon Valley. There's a lot of advantages to the area: Good weather, good cultural actives, good jobs...
Keep in mind that companies loose people when they move within the same geographic area. (For example, someone commuting over the Golden Gate bridge might decide to leave because now the commute is much longer.)
* By the time I screened with them, I had a job offer in hand that I really wanted. (This was long before Stripe became successful.) I lived a few blocks away, so I asked to screen in person, and then decided to take the job with the other company. I don't even know if they would have hired me!
This specifically. I think that for a lot of tech workers the valley is a great security blanket. They know if their current gig falls through there will be another one waiting just around the corner. No need to uproot and move. It's actually sort of strange on the surface. There are a lot of engineers in the valley who move around to various companies fairly frequently which looks on paper like they don't have a lot of stability, but in reality the sheer number of available jobs is providing that stability, even if their longevity of employment with any one company does not.
The weather in San Francisco is overrated, it's always cold and windy and there are never any seasons.
Fucking off to another city is functionally equivalent to laying off half the company.
After certain stage it’s more about managing growth than about R&D, so you can find most of the talent you need in alternate markets.
the long term root is that there is a huge productivity advantage to clusters of workers. (or, at least many people believe so) Around here, if you strike up a random conversation in public, it's very likely you will do so with someone who does something relevant to what you do, and this is good for getting new ideas and really good for getting new contacts. Right now? there's a huge concentration of programming know-how in silicon valley and san francisco, and building that sort of cluster somewhere else would be really difficult. (I think Los Angeles has a similar situation, only with the movie industry.)
I literally found someone to buy my company at a (non-industry) party. (I mean, I did a bad job of it, I was drinking too much and complaining loudly about how much it sucks to run a company and how I had fucked up like three really good chances to sell the thing and generally being a downer, which is rude, I think, at a party, but also not how you maximize the value of the company you sell. Still, I got an impactful amount of money, and more importantly, I got someone else to run the damn thing so I could go get a job that paid without dumping my existing customers.) I've solved technical problems in similar sorts of ways; it's completely normal to go hang out with friends and actually solve problems over drinks or pizza or whatever. (which yes, is a culture some people hate, and I totally understand that, but some of us like it, and like it or not, it's certainly effective.)
Another bigger microeconomic factor that people who don't live here don't understand is that California laws and cultural norms are set up to privilege people who have been here longer. If you bought a place here in '08? Silicon valley isn't very expensive at all; our property taxes are largely fixed based on what we paid for the place when we bought it. This is kinda true (but to a much lessor extent) for rents; I know a lot of people paying under 2/3rds what they'd pay in rent if they moved in today, even without rent control. with rent control, paying under 1/3rd what they'd pay if they moved in today is not uncommon. This means that the sticker shock you get from the outside looking in isn't actually what most of the people who have lived here long term are paying.
Maybe a big city elsewhere in the country will ever go "all-in" like Atlanta did and try to become the "Silicon Valley of the [South, Midwest, Rocky Mountains, etc.]"? I guess a place like Austin, TX could arguable lay claim to this title already, but their tech industry seems to be "home grown" because of the history of computing at UT and with Texas Instruments, NASA, Dell, etc. historically having strong roots in Texas.
But I wonder if a city could ever follow the model of Atlanta and try to build a "new Silicon Valley" from scratch with aggressive policies that lure companies/employees from existing tech hubs?
I love your story, I thank you for sharing it and your candor because this sounds exactly like something I would do and feel sheepish about afterwards. They way you describe this happening I can feel in my soul reenacting the exact same scenario. Well done!
Wouldn't this mean that landlords are effectively leaving money on the table? If it's not rent controlled, couldn't they just jack up the rent whenever they felt like it?
2. Because San Francisco is very nice (perhaps) and we have good schools around here. A lot of hires come from UCB, Stanford, UCLA, USC, and other UCs. Those account for several of the top engineering schools in the country/world.
3. Silicon Valley has hit an inflection point where we're now the best place in the world to find TOP talent in tech. It's not a great place for mid and junior level talent, but if you need top talent for an opportunity that is high growth and high per employee leverage, there is no place better in the world.
Ultimately, the main issue is that everything is too nice and worked too well so the cost of living has sky rocketed. And that is driving out everyone that isn't a top tier talent (engineering and opts). It's really sad, to be honest, I love San Francisco and Silicon Valley, and I wish we could find a way to solve the living cost issue and continue to grow as a hub for innovation.
The only time SF was every really cheap was during the 70s into the late 80s, which was due to a combination of white flight, the Loma Prieta earthquake, and the AIDS plague depopulating the city. Apart from that anomaly, it has been super pricey ever since the Gold Rush.
- That effectively means those employees tied to the old location have to quit or be let go. Stripe isn't a public company, so that causes major issues for those with options who suddenly need to exercise into an expensive illiquid holding. For those w/o vested options in a company as successful as Stripe, you're leaving a lot of money on the table. What are the odds you find another Stripe with options deep in the money?
- If your spouse is working in SF, if you move, now they have to quit their job and look for another one. If your spouse works in a non-public tech startup, see point 1.
- Moving isn't easy in the US if you own a home - the taxes, fees, expenses, commissions, etc alone will cost you ~8 or 9% of your sale. If you have 20% down you just lost half your equity. Easier of course if you have more equity in the home, but still -- fees/etc are a total loss to you.
- If the company re-locates you, they might cover some of the home change expenses, but those are often capped. It becomes quite expensive to the company to re-lo folks with homes (see above)
- Changing homes (and thus school districts) is a big issue for employees with children. Many school districts are not guaranteed by home ownership / lease, but rather by tenure in the district. You end up buying/leasing an expensive property in a new area and busing your child to a far off, possibly much less performant, school.
- I totally agree with SF being epensive, but for other cities, moving to suburbs isn't that much less expensive for young workers. Now you suddenly have to buy a car, pay for gas, pay tolls, registrations, etc. Also, for those early career w/o children, being in a one-company-town suburb is a career-killer. There isnt an ecosystem and it becomes harder to switch jobs. I had an employer move their office from Manhattan to suburban Connecticut with the argument that is was less expensive (yes, less expensive for the company -- but absolutely not less expensive for the employee)
To be totally blunt, I also suspect a large part of it is that the founders would like to be in the bay area.
I don't mean that as a slight either - I think if you're spending a good portion of your life on something, you might as well do it in a place you enjoy spending time in!
At my firm, the founders wish they could go back to NYC or east coast in a heartbeat, but tied to Bay Area due to funding connections and employee pool. I work a lot with Europe so I'd love to be on the east coast as well.
How should I look at this issue from the perspective of an outsider? Should I join the crowd or run in the opposite direction?
CALIFORNIA CODES, LABOR CODE SECTION 2870-2872
https://leginfo.legislature.ca.gov/faces/codes_displaySectio...
California has too much going for it for engineers to abandon it over a company that can’t event afford to keep an office open there, and I’m saying that as an outsider, I much prefer the east coast or Colorado.
People have mentioned the dual-income problem, but even without that, people have friends, and schools, and communities, and lives that they've built up where they live. When I moved cross country, it took two years after we arrived to develop our first close friends, and probably five years before we felt that we were as connected to our new home as we were to the one we left.
Moving across town doesn't disrupt these connections and communities for your employees, but moving across the state or country does.
https://stripe.com/blog/nyc-office
Of course NYC has its own housing problems, but they're cheaper than the valley.
Stripe is not hiring "mid-level" employees. Or at the very least that is not the type of people they are compensating to run critical roles.
Good luck telling a Senior Staff Engineer who makes $500k (plus probably a couple of million in RSUs) that they have to move to Albuquerque, NM.
The other reality is that people take jobs knowing that there are other jobs available if they themselves decide to "fuck right off".
TL;DR - Network effects exists in the physical world. Too many talented people live in the bay area for "quality of life".
This is not the only other option. Imagine telling an engineer, hey I'll pay you $500k a year in Atlanta, Miami, Philadelphia, Chicago, or Boston? Rent is immediately cut in half and some states have no income taxes. Their disposable income essentially triples.
You can barely get people to move to Denver while keeping an SF salary.
Also, there are reasons why people would prefer the bay area over Denver for non cost related stuff. (And vice versa)
Some day the business climate will cool and the realm of new tech growth won't seem as limitless. When this time comes, big profitable tech companies will continue their drive for bigger profits, and they will turn to cutting costs rather than driving new growth.
When cutting costs comes to tech, plenty of established companies will decide it's time to head off to a smaller city with lower rent and lower wages - or atleast some of them will, and eventually wages and rent in silicon valley will start heading downwards from its current place in the heavens.
There are other chicken and egg dynamics such as a large city is likely top have a large airport with lots of direct flights which is helpful for business and leisure travel.
Employers, especially startups and growth companies, want to hire top talent (and poach top talent from similar firms). That means they want to be located where there is a baseline of other similar firms.
Remote work is slowly changing that dynamic but the gravity of the city is strong.
Nobody wants to take a huge paycut regardless of house prices - there are lots of other things in the world you can use money for (including saving for retirement, if you're practical) that aren't particularly regionally inflated.
The people who've been at successful companies for longest also tend to have been pretty well compensated overall, so ownership of something nearby isn't always so out of reach for them. So your most important contributors are the least motivated for this move. Doesn't seem like a good recipe.
It does seem like they are taking a balanced strategy, however. I remember a story a few months ago about how their latest team is all-remote. They might have better incentives to open more offices in lower-cost locales after going public (see Uber's new Dallas plans for example).
Large metro areas are much more productive because people can learn from each other.
It was common to joke in the 80's that IBM stands for "I've Been Moved."
The employees are a self-selected population for the area.
The employees that work for a company have already decided that is where they want to live and work.
They could just open an additional office in a more "reasonable" place, say somewhere with lower taxes, lower cost of living, shitty weather and fewer qualified employees...
Also, I've often wondered if locating a company in somewhere with a nosebleed cost of living like SF is a way to exclude employees that are not young, single and/or without families to distract them. SF is great for single people.
2) It's cultural and political signaling which is required in the SV atmosphere.
He is now trying to make office space even more restricted, and his allies are working to reduce office space alternatively by raising the fees on office construction. https://www.sfchronicle.com/business/article/SF-Mayor-SoMa-n... https://www.bizjournals.com/sanfrancisco/news/2019/10/22/sf-... (More about John Elberling: http://sfbamo.com/news/tenants-in-todco-property-allege-abus...)
San Francisco prevents office space from being abundant and cheap, and therefore the office jobs are being moved to counties with even worse jobs-housing balance, turning San Francisco into a bedroom community for (the richer individuals working in) the peninsula.
That's a rather uncharitable characterization. SF is just trying to tie jobs to adequate housing construction. We already have way too few houses, especially low-income housing.[1] Which is what makes Stripe's move here particularly low integrity: they'll have all the housing impact on SF without paying any of the corporate taxes.
From your own source: "A separate economic feasibility study from the City's Office of Economic and Workforce Development found that a range of office projects are 'currently infeasible,' even without a city fee increase. The study did contend that an improvement in market conditions could make a modest fee increase viable."
[1] https://hoodline.com/2019/10/report-sf-adding-equal-numbers-...
And also making the assumption that only people who work in San Fransisco will live in San Fransisco? Because those Stripe employees who live in SF right now are likely not going to change their apartments. They'll continue living where they are, except now SF now longer benefits from the taxes that Stripe would otherwise have paid.
I’m a San Francisco native. I’ve learned to be uncharitable when it comes to the Board of Supervisors. They are masters of saying one thing and doing another.
Increasing the fees on office space is going to make even more projects infeasible, which would lead to fewer offices being constructed. Which, in their minds, will justify the fees. For the longest time, the self-styled “anti-corporate” faction in San Francisco politics have said that the cap on office space construction that Elberling helped to pass back in 1986 is not a real burden because so few offices have been built that the cap has rarely been the limiting factor.
Limiting offices in San Francisco isn’t even going to help with the jobs-housing imbalance. As we see here, the limited office supply in San Francisco is driving companies to move to other Bay Area cities that don’t pretend to care about the jobs-housing imbalance.
The workers still need somewhere to live, and many of them will live in San Francisco. But instead of using our extensive investment in transit to downtown San Francisco, they will use the more limited transit and freeways going to the outskirts of South City.
Enough with this every-county-for-itself race to the bottom. If the San Francisco supervisors were serious about the jobs-housing balance, they would not be making offices harder to build in San Francisco. They would be ceding local control of land use to a regional authority, in exchange for the rest of the Bay Area counties ceding their control, too, so that we could build an integrated and equitable region. Solve the jobs-housing imbalance for the whole region by building a lot more homes. https://cayimby.org
And they've ended up with an endless number of one off, inefficient policies to try to address the problem this has created without addressing the actual cause of the problem.
If that was the case wouldn't a tax by number of employees be what to push through?
As someone who lives in the area, I like the fact that both BART & Caltrain cross-over right around the airport (I commute to Palo Alto and SF downtown). The addition of a Milbrae to South SF shuttle would cover both options with a single pickup (& even the folks who drive there to take BART to SF).
The Oyster pt marina is connected out of only Alameda & Oakland, but that does beat trying to get to either bridges in general particularly the 8:10 AM ferry out of Oakland / 5:10 out of Oyster pt.
And it is not just 101 northbound for this, taking 280 through 380 isn't too bad either - the traffic jam pretty much starts northbound at Sneath lane.
I'd say that this puts Stripe in a better location for commutes, though far away from all the other offices.
That said, South SF definitely seems like trading a worse commute for anyone in SF or the South Bay who rely on Muni/BART/Caltrain (presumably the majority of current and future Stripe employees) for improved commute options from parts of the East Bay (ferry) & the Peninsula (driving). This seems like a bet on a future tech flight from SF proper (to the Peninsula and East Bay). As someone hitting the point where I'm thinking about where I'd like to raise kids, this doesn't seem like a terribly bad bet to make, particularly as I see places I wouldn't have considered living at 24 evolve towards what I originally preferred about city life.
I only apply for jobs which I can ferry to and it'll definitely enable employees at Stripe live in more affordable locations.
I'm surprised to hear that you didn't support Prop C. I've visited SF and was horrified by the homeless problem there, particularly in the face of huge inequality. Didn't you want to do something about that?
This sentence made me think - I wonder how expensive it would be for a startup to run a private boat commuting service. Google has their buses, but obviously they have near-limitless resources.
What specifically are these options?
People don't talk about this very much. But it seems extremely unfair that Stripe/Square pay way more tax than Saleforce in terms of ratio to their revenues. (I don't recall the numbers. Anyone?)
Jack Dorsey tried to raise this point multiple times. But people just kept screaming that he didn't care about homeless :S
JFC, it's not because of a lack of money that SF has a problem with homeless people, and it's not that more money would make the problem magically go away.
[1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-...
https://sftreasurer.org/business/taxes-fees/gross-receipts-t...
This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?
You might want to ask sf.citi, the SF tech industry lobbying group who came up with it in 2012. Here's a video of Jack Dorsey campaigning for the gross receipts tax as CEO of Square.[1]
The argument then, of course, was that we shouldn't tax early stage pre-revenue tech companies based on their payroll because it increases their burn rate. Better to wait until they generate revenue and tax that. Help support the growth of new companies so they can bring in more tax revenue in the long run. Or so the argument went.
Now that they're making money and it's time to pay up, of course, they've changed their tune. Suddenly they've discovered that the system they lobbied for and got is "unfair" and they still shouldn't pay taxes.
[1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-...
I don’t think anybody thinks that either the gross receipts tax (with different rates depending on industry) or the payroll tax (which included stock exercise in payroll) were good ideas. They are inferior alternatives to property taxes (which are capped and distorted by Proposition 13) and income taxes (which RTC 17041.5 prohibits local governments from raising).
“Alex Tourk, spokesman for sf.citi, a tech business group, said San Francisco needs to consider changes to its business taxes. The city is currently reviewing the tax system, which brings in a total of $1 billion annually. But those taxes could climb higher under the revised system.
“Unfortunately, Stripe choosing to leave town is not an anomaly,” he said. “The membership of sf.citi would prefer a more holistic strategy per the mayor’s suggestion that we work together as a collective business community to fix the gross receipts tax once and for all and establish a fair and equitable tax system that we can all rely on.”
Chris Thornberg, founder of Beacon Economics, said businesses leaving San Francisco has more to do with real estate costs and high wages than taxes.
“Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years,” Thornberg said. Stripe is staying in the Bay Area, so its departure isn’t a blow to the region, he said.”
Said nobody involved with any big business. Amazon in New York, Apple’s avoidance of repatriating cash, etc. Taxes have a massive impact on business decisions all of the time.
This kind of ignorant thinking is what destroyed the yacht manufacturing industry in the US. “Oh, what difference can a small tax make? Whoops, doesn’t matter because I’m a politician and I’m immune to consequences.”
Payment processing rates in USA are ___
Can somebody help me double check something? I don’t know the answers to those questions
I feel like I read WeChat processes payments at 0.1% while Stripe/PayPal are still around 2%
If it's the full amount of a purchase, not only is that insane, but it really feels like double dipping, as the seller would have to pay the tax on their receipts as well.
Stripe charges %2.9 + $0.30 per transaction.
That is not an "ultra low margin" by any means in the CC processing domain. Actually, that is a massive markup when compared to other ISO's and VAR's.
Depending on the Merchant's processor and their volume, significance, and sophistication, their Discount Rate[0] is often well less than the %2.9 Stripe demands. The fact that Stripe also tacks on another $0.30 USD on top of the top-end Discount Rate for their transaction fee is insane (see here[1] and here[2] for some context and these don't even account for fee negotiations).
And to suggest "no way can they compete while paying ..." is to ignore Stripe has a valuation at/near $35,000,000,000 USD[3].
0 - https://www.creditcards.com/credit-card-news/glossary/term-d...
1 - https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...
2 - https://www.mastercard.us/content/dam/mccom/en-us/documents/...
3 - https://techcrunch.com/2019/09/19/stripe-is-raising-another-...
Given that Stripe is already not a major player for those very large companies, 1% of revenues on merchants that have high average transaction sizes means they might as well not show up to the negotiating table, as their break even point will be more expensive than other's best offer.
Stripe's fee is $3.20 (2.9% plus $0.30).
The question is how much of that is gross revenue? Many take the position that the portion that Stripe pays to Visa/MC is not gross revenue to Stripe because it was never their revenue; they were just collecting money the merchant would have owed to Visa/MC. If so, then Stripe's gross revenue is only the $1 they have left after paying Visa/MC on the merchant's behalf.
But others take the position that the entire $3.20 is gross revenue to Stripe, and that the amount they pay to Visa/MC is a COSS of that revenue.
If Stripe pays Visa/MC less for that $100 transaction than the merchant would if Stripe weren't involved, than it's clear that the $3.20 is gross revenue to stripe and the Visa/MC fee is a COSS. But if Stripe would owe Visa/MC the same as the merchant would, then arguably the Visa/MC was never revenue to them in the first place. It comes down to the terms of the contract--is Stripe merely forwarding on the merchant's Visa/MC fee or is it assuming that liability on behalf of the merchant?
When it was growing, Stripe took the position that the entire $3.20 was gross revenue, because it made them look good. (See also, Groupon, Uber.) Now that they're a very big company though, it makes them look too good for tax purposes, even if the financial reality is very different. But having chosen their accounting method, they're stuck with it.
That's revenue, not margin.
The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their payroll location and 50% based on their sales location. So while their portion of sales in San Francisco is negligible, most of their payroll is there.
This is an expected outcome given that. What this means is more cars on streets as South San Francisco has pretty bad infra and driving/taking shuttles is the only way to get to the new Stripe office.
Stripe has a valuation of $35,000,000,000 USD[0].
The real question I have is how anyone thinks Stripe is "barely breaking even."
0 - https://www.forbes.com/sites/donnafuscaldo/2019/09/19/stripe...
Regarding the gross receipts tax, couldn't they just move their HQ-on-paper to any place that doesn't have a gross receipts tax?
For example, if you have $10M/yr in tax incidence and 100 employees all in SF, you could have an on-paper workforce of 1000 Nigerians at the national median wage of roughly $1k/yr, saving $9M/yr in taxes.
From Oakland/the East Bay, there is no good way to get to South San Francisco by public transportation. You are looking at a 2+ hour commute in each direction to go < 15 miles
If a company has multiple locations in the bay area, I already know the San Francisco location is not headquarters and I'm not interested.
This is mainly for leadership roles, companies always find it more practical for any lead to be at HQ compared to their trendy satellite/remote experiment.
How would that be illegal? Employers can't tell employees where to live, and a law that told them to do that is insane, even compared to other crazy laws of the Bay Area.
There is no reason why SSF couldn't be a thriving, cool place to live and work. It takes companies like Stripe to take the lead and have a vision.
Right now downtown SSF is totally boring but add a good grocery store (ahem, Berkeley Bowl) a couple cool coffee shops, wine bars and great restaurants and it would be a perfect fine place to live and work - half way between the south bay and SF.
Buy, renovate or build a place or open a restaurant in SSF now while you have than chance. It will be corporate, funky but potentially cool in 5 years with your creative and financial energy in it.
Personally, by living in a large city I'm giving up the ability to own a home in exchange for access to niche resources such as ethnic enclaves, bohemian artist communities, cultural events, groups dedicated to uncommon hobbies, etc. Just having trendy restaurants and coffee shops wouldn't do it for me.
- SSF has been welcoming new housing (see multistory apartments going up along highway)
- SSF has been welcoming businesses. The new biotech clusters are truly shocking, I’d guess another 5 million sq ft of office/lab space is new or under way. Genentech just submitted a plan to double their foot print.
- it has a decent commercial strip, obviously nothing compared to SF, but how could it be
- it has both a Caltrain and BART station, but your point is true about the locations not being ideal
If you’re a 20-something looking for cool restaurants and an ideal car-less life, then yeah, SF is better, but for the remaining 80% of the population, SSF offers a lot.
Thanks, I needed the laugh.
Also, real estate can be found that are still within a range middle class can afford.
Compared to what? A tear down in (an OK part of) San Rafael went for around $800,000 a few months ago. Marin is consistently one of the most expensive counties in the Bay Area and there's relatively little public transit and bridge toll to contend with. Marin is also strongly anti-development.
How many cities have Both Bart and Caltrain?
It would be PR suicide for a company to admit that the increased tax to fund homlessness was a major factor for the move. To accounting though a tax is a tax.
So I went to the source (I think) and it appears Stripe would have been taxed at 0.560% on its gross receipts. [0,1]
Assumptions: 1) Stripe would be classed as a “financial services” company per the law and subject to section 953.6 of the law 2) Stripe has gross receipts over $25 million
My confusion is the discussion of a 1% tax rate on gross receipts. I don’t see any business taxed at that rate and on this case neither Stripe nor Square would be.
[0] https://sftreasurer.org/business/taxes-fees/gross-receipts-t... [1] http://library.amlegal.com/nxt/gateway.dll?f=templates&fn=de...
As a former Stripe (ex-Stripe?), I do buy the story of running out of room. That office is lovely, but they keep growing on a pretty steep curve, and the floors weren't as dense in there as you might imagine. Decidedly cool interior design tho!
If anything had gone right, SF should be a HK-like dystopian city filled with electronics and high-tech.
But instead we have a horizontally limited place, that is filled with homeless and restricts new advances like shared kick scooters.
It’s sad.
Do you know what dystopian means? Generally speaking it's not something people pine for.
ADDED: Opinions will of course differ as to whether SF should have more aggressively transformed to be more like Hong Kong. (Which is an extremely expensive city with serious housing problems BTW.)
This is what the voters here wanted and have been voting for the entire time. Not that I like the outcome either, but considering SF is a pretty wealthy and culturally influential place, I don’t feel sorry for them in the least. It’s just the outcome of decades of policy with public support.
Make San Francisco Great Again lol
What a laughable comment, as anyone can just look at the overseas behavior of large companies to see how this is false.
"Real estate prices drive business decisions, not taxes" as though business are not capable of understanding that real estate costs should take into account the tax implications of said real estate.
Maybe it's counterintuitive for some, but San Francisco is nothing like a old Midwest factory town where reduced jobs and economic activity would be a serious issue. It would be even better if they had moved somewhere further away that needed the jobs and economic growth more, but this isn't a bad result.
The effect of moving these high-income jobs to San Mateo County is that Stripe employees will now live in San Francisco and commute to San Mateo, increasing the pressure to gentrify communities near the transit infrastructure, while freeing Stripe’s former office space for another high-tech company that can make even more profit per employee.
More density near transit seems like a good result.
If I'm paying 50% in taxes as opposed to 10%, I will be making different business decisions.
Most SF startups incorporate in Delaware because of the low corporate taxes.
That is not true. Most startups everywhere incorporate in Delaware because Delaware has the most robust legal system (e.g. the Court of Chancery) dedicated to handling corporate disputes. More info: https://whyy.org/articles/why-do-so-many-corporations-choose...
It's no coincidence that Delaware has very low corporate taxes:
https://www.investopedia.com/articles/personal-finance/09251...
Oyster Point was slated for 1,200 housing units, but biotech opposed them.
> The residential development proposal was met by resistance from representatives of the life sciences industry though, with claims residents living in the area could make it less attractive to businesses.
https://www.smdailyjournal.com/news/local/new-builder-buys-o...
It's not universal within the organization, but _very_ common in the tech groups I interact with. All this talk about whether one can have pleasing weather vs cost of living highlights that for some, having both is quite possible.
I'm on Canada's west coast, so Vancouver (with crowding, culture and cost) is my nearest approximation to the Bay area. Being at or near HQ is irrelevant when remote work is common-place, and very occasional travel ceases to be a big deal.
On a more positive note the Caltrain station is closer, so the East Bay commute could improve significantly in 20-30 years if the Caltrain to Oakland tunnel is ever built.
https://www.sfchronicle.com/business/article/Tech-moguls-wor...
The line about this being about space and not taxes is hard to believe.[1] And for good reason. Last year Stripe funded an anti-homeless campaign just $1 shy of the reporting threshold, initially, until they were exposed.[2] That's not something you do if you're proud of sharing your true motivations.
[1] https://www.sfexaminer.com/news/affordable-housing-fee-hike-...
[2] https://missionlocal.org/2018/10/orgy-of-big-money-donations...
I don’t get the sense that San Francisco’s homeless problem can be solved by throwing dollars at it. San Francisco chooses high housing prices by restricting construction. Its NIMBYs block tackling its homelessness problem.
Money won’t change those choices by San Francisco’s voters. It will just swell another city bureaucracy.
I can think of plenty of things that SF locals complain about when I talk to them that would be mitigated by more tax dollars spent by the appropriate agencies. If your argument is that SF local government is a black hole that spends 0% of its tax income on important programs, then that's another matter but requires a bit more support...
The company's impact on what?
I'm not sure what you mean by "offset their impact", but regardless, employees living in SF will still pay local taxes.
[I'm a Stripe employee, but I'm remote from NC and speaking entirely for myself.]
Click bait. They're moving ten miles south of their current office ...
Click bait. They're moving ten miles south of their current office .
Of course, the big difference is that Stripe's current office is at the edge of SOMA and Mission Bay, within pretty short distance of the Embarcadero and Financial District. Their new office will be...a business park. No offense to business parks -- Bishop Ranch in San Ramon is unexpectedly lovely -- but they're rarely known for their vibrant cafés, restaurants and nightlife.
Just to give you an idea, according to Google Maps from where I live (Hayes Valley, a pretty central area) it'd take me right now 11 minutes on a car to get to Stripe's headquarter or 33 on public transit. At the new location it'd take me "between 30 minutes and 1 hour" or 1 hour 9 minutes respectively. The driving estimation is super variable because commuter traffic in that corridor is a nightmare.
So no, this is most definitely not click bait.
But it seems fair to speculate that it could be part of a slippery slope.
And it might have pretty substantial impact on the city of San Francisco (the governmental entity).
Because that's where it was the place to be for cool tech companies, start-ups, and venture capitalism.
Now that companies realize they can just move to Witchita, Kansas or wherever else they want, they will.
The rendering shows a sad 1990's office park, complete with a path winding artificially along the water, office windows overlooking parking lots, and useless lawn accents that no one will ever play on. Imagine the desolate dystopian feeling when you came in to do a few hours work on a Saturday.
We should have the will, talent, and state capacity to build more San Francisco style urban landscape. High prices cause San Francisco's worst problems. More high quality urban areas would make these areas cheaper and more people could enjoy them.