October 20, 2012

Economists say it costs too much for Bay Area to have an economy

More complaints that living where it’s Special isn’t all rainbows and unicorns:

Bay Area’s business climate is less friendly to startups than other parts of California, says study

By George Avalos, Contra Costa Times
Posted:   10/18/2012 10:43:17 AM PDT, Updated:   10/19/2012 08:10:22 AM PDT

121019-jobstudy-downgraphRelatively expensive housing, coupled with the high cost of living and doing business in the Bay Area, has made the nine-county region less hospitable to new companies than other big urban centers in California, according to a study released Thursday that urges improvements in what it describes as this area’s burdensome regulatory climate.

“You have to ease the regulations that people face when they want to launch a new venture,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute, which produced the report. “If somebody is trying to start a small business and spend a small fortune on a new home, they will probably start that business elsewhere.”

The Bay Area lags major rivals such as Los Angeles and San Diego in jobs created by startup companies, the study determined.

The strengths of the region are reflected in household income and other factors, the report stated. The region has increasingly specialized in high-value industries such as professional, scientific and technical services, along with information services and products.

121019-jobstudy-boromirSo what the Institute is complaining about is it’s difficult to start cheap-ass startups where it’s expensive?  That isn’t a bug, that’s a feature.  If it’s expensive to live here, it should be expensive to work here. Besides, if you need money for a lower-capital startup, you should sell one of your vacation homes, or write put options for what’s under all the couch cushions at your furniture factory.

The article waits until graf 7 to admit there’s no problem with the Bay Area job market after all. Actual quote from report: “The Bay Area economy is one of the most productive and prosperous in the country.”  Sounds awful. Then again, engineers are being bought and sold like excess office furniture by a Bain Capital-funded startup, which decided staying in business was too much trouble.  The buyer?  Apple.

We swear we are not making any of this up.  Let us know of your ease or difficulty in starting a business in the Real Bay Area (summary: 90% say it’s Special here even though it’s expensive. So?)  Or read the full 68 page report yourself, and comment on it before falling asleep.  Or discuss anything you wish in this Weekend Open Thread.


Comments (2) -- Posted by: madhaus @ 5:09 am

January 29, 2012

Oakland Tribune: SJ, SF are Special, East Bay Ain’t

This article won’t tell you anything you didn’t already know, but it’s interesting to see them admit it.  At least as far as the local economies go, things are much worse in the East Bay than in the SF or SJ Zones of Awesomeness.

South Bay expected to recover lost jobs by 2014; recovery slower in East Bay

By George Avalos, Oakland Tribune
Posted: 01/25/2012 05:48:06 PM PST, Updated: 01/25/2012 09:09:30 PM PST

The current economic boom will be robust enough for the South Bay to recover the jobs it lost during the recession by 2014 — but the East Bay and the San Francisco metro regions might need until at least 2015, the chief economist with the Bay Area Council Economic Institute said Wednesday.

“Every industry in the South Bay is growing except for construction and retail,” said Jon Haveman. “The East Bay is very much hurting, and it may continue to do so for a while.”

Haveman gave his divergent outlooks at a downtown Oakland conference sponsored by Torrey Pines Bank.

One big reason for the differing paces of recovery is that the East Bay tumbled into a much deeper economic abyss, an analysis of state Employment Development Department figures shows.


The article goes on to say that East Bay job growth during the oughties was fueled by the real estate boom: construction and the mortgage industry.  Alameda and Contra Costa Counties lost 105,000 jobs from peak employment in August, 2007.  Both San Francisco (defined as the City by the Bay plus Marin and San Mateo Counties) and the South Bay (undefined, but including at least Santa Clara County) lost much fewer jobs, which were each in turn a much smaller percentage of jobs lost.

And the conclusion of the article shows that the East Bay will be getting the trickle-down until they reinvent themselves as something other than manufacturing (gone), real estate (gone), or back-office space (still an option).

The best hope for an East Bay economic upswing may be to capture overflow tenants from its neighbors.

“Tech companies are filling spaces in the South Bay and rents are rising,” [director of a realty brokerage Edward] Del Beccaro said. “As office rents rise in San Francisco and Santa Clara County, you will see some companies migrate to the East Bay.”


Where do you see the job growth in the next few years?  Is President Gingrich going to have us all working on a Moon Colony Program?


Comments (3) -- Posted by: madhaus @ 5:13 am

October 9, 2011

Smaller Companies Squeezed Out of Peninsula

Maybe Facebook isn’t going to save us all.  Maybe it’s going to push rents up so high that only it and Google can afford office space in the Peninsula.


Membrane Technologies, other tech firms, shift operations from Peninsula to East Bay

By George Avalos, Oakland Tribune
Posted: 10/06/2011 03:14:56 PM PDT, Updated: 10/06/2011 03:59:22 PM PDT

Membrane Technology & Research is moving its headquarters and other operations to Newark in the latest deal by a company migrating across the bay in search of less expensive offices.

Based in Menlo Park, Membrane Technology has signed a deal to lease 62,000 square feet at Stevenson Point Tech Park I, taking up an entire building at 39630 Eureka Drive.

Membrane will shift about 70 jobs to the new head offices, said Hans Wijmans, Membrane’s CEO.

“We of course hope that the future will bring growth and will require new hires,” Wijmans said.

The company makes membranes that can filter out unwanted substances from industrial operations. The tube-shaped devices can remove carbon dioxide and nitrogen emitted by refineries, coal plants and natural gas facilities.

Take that, Menlo Park!  Newark is poaching your high-tech jobs!  Not only that, this place has explosive growth!

Membrane Technology suffered an explosion at one of its Menlo Park buildings in early September. One man, a company employee, was killed in the blast. Cal-OSHA is investigating the incident.

That sounds exactly like the sort of industry that belongs in Newark!  Way to go!

This is an Open Thread.  Where is your job most likely to relocate to?  What city would you least want it to move to?

Comments (10) -- Posted by: madhaus @ 5:36 am

July 24, 2011

Rents Going Up: More Tech Jobs, Fewer Homeowners

Let’s have another buy vs rent thread with this latest News of the Obvious from what’s little is left of our local newspaper.

Bay Area rents, especially in Silicon Valley, are on the rise

By Pete Carey, San Jose Mercury News
Posted: 07/21/2011 12:01:00 AM PDT, Updated: 07/21/2011 10:07:26 AM PDT

Bay Area apartment rents are on the rise, fed by the contrasting economic forces of a booming tech recovery and the steady flow of foreclosures that is turning former homeowners into renters.

The San Jose metro area, which includes Silicon Valley, weighed in with the highest average rent — $1,759 a month — among 43 metro regions monitored by RealFacts, a Novato apartment rental research company that released a report on second-quarter rental prices Thursday. The region also saw the biggest year-over-year increase, up 12.6 percent.

The San Francisco metro area — encompassing the Peninsula, East Bay and Marin County — had the second-highest rents in the survey, at $1,644, and the third-highest year-over-year increase, at 7.6 percent.

Rents are a barometer of the region’s economic vitality and job market, and after several years of stagnation, this year they’re pointing to recent job market gains. But they also signal the continued weakness of the housing market, with stiff competition for rentals throughout the region.

Photo: SJMN

That opening paragraph observes that rent going up isn’t only driven by new jobs being created by tech firms: it’s also due to new renters being transformed from former homeloaners.  So what are you seeing where you live?  Are your new neighbors former owners who now rent, or former renters who can now own?  Is your firm hiring or cutting back?  Is rent going up where you live?  Are house rents going up as quickly as apartment lease rates?

If you want to get into the apartment rental business, you could look to East Palo Alto, where up to 1,800 rental units are about to change hands.  The current owner, Page Mill Properties, defaulted on a balloon payment, and Wells Fargo is looking to sell the entire portfolio.  East Palo Alto: Close to the new Facebook campus, plus rent control!

And while former homeowners may be looking to rent now, foreigners with suitcases full of cash are still buying up RBA property, supposedly.

Trulia, the online real estate information service, reports a big jump in searches for Silicon Valley real estate from other countries. Searches for property in Cupertino were up 90 percent in the first quarter of this year from a year earlier, Trulia reported. Palo Alto was up 121 percent; Los Altos Hills up 182 percent; Atherton up 68 percent and San Jose up 86 percent.

This is an Open Thread.

Comments (67) -- Posted by: madhaus @ 5:13 am

June 11, 2011

Apple’s New Cupertino HQ Landing in 2015

imageSteve Jobs appeared at Cupertino City Hall to request plan approval for Apple’s striking new headquarters.  Seems they can’t fit all their Cupertino employees at the current HQ over at 280 and De Anza Boulevard, so they want to build a 12,000 person, 4 story building on the site they purchased from Hewlett-Packard.

And it looks like either a spaceship or a giant donut.  Mmmmm, donuts.

Jobs To Cupertino: We Want A Spaceship-Shaped, 12K Capacity Building As Our New Apple Campus

Alexia Tsotsis, TechCrunch, Jun 7, 2011

After having a banner WWDC start yesterday, Apple founder and CEO Steve Jobs humblypresented his idea for a new Apple campus at the Cupertino City Council today. Jobs wants to build one building that will hold 12,000 Apple employees on a former Hewlett-Packard property in the area between Tantau North Wolfe, Homestead and the 280 freeway.”It’s a little like a spaceship landed,” Jobs says. No kidding.

Jobs began the presentation referring to the fact that Apple is growing “like a weed,” and that its current campus at D’Anza and the 280 isn’t enough — fitting only about 2,800 people. Apple currently rents buildings to house its other 6,700 employees in the area. The new building will augment the current campus.

Paving the way for these plans, Apple purchased about 100 acres from Hewlett Packard in 2010 and added them to the 50 it owns adjacent. Jobs says he has corralled “some great architects … some of the best in the world” to come up with a design that will house 12,000 people in one four story high building on the property. The area is now mainly apricot orchards.

With the futuristic design Apple apparently is relying heavily on its experience building retail stores, and it will be creating one massive piece of curved glass if the proposal goes through. “There’s not a single straight piece of glass in this building,” Jobs says. The parking will be underground.


Here’s the site in question:


I’ve added the street names to the original slide.  Pruneridge will no longer be a through street from San Jose to Wolfe, but will stop at the new Apple campus at Tantau.  This reasonable alternative to 280 will then have traffic joining the fray on Homestead to the north.  But at least I’ll be able to get a parking space at BJ’s when this thing opens.  (Actually I won’t; Jobs says they will still need all the space at Infinite Loop, the current Apple HQ.)


As long as Apple doesn’t introduce an iPhone 5 that electrocutes the user while secretly tweeting photos of his/her crotch, this is a done deal:

“There is no chance that we’re saying no,” insisted [Cupertino Mayor Gilbert] Wong, who started his life with Apple IIs and Apple II +s, “The Mothership has landed in Cupertino.”


Will this make the house with a dragon sell faster with more overbidding?  This is an Open Thread.

Comments (19) -- Posted by: madhaus @ 5:09 am

March 6, 2011

Former Sun CEO Scott McNealy Worries About Region’s Prospects

Former Sun CEO Worries About Region’s Prospects

WSJ: When did you see Silicon Valley begin to recover from the recession, and how far along has it come?

Mr. McNealy: It’s not a terribly job-filled recovery. Productivity gains continue to push the need to hire out. A lot of the jobs today are around two areas: government-sponsored green initiatives and the social-networking space.

I’m skeptical that the green jobs are [going to drive the recovery]. So far, the track record’s been terrible. That’s going to be a challenge for the people here who stuck their neck out to go green.

Then there’s social networking, which is a pretty interesting phenomenon. There’s a lot of energy there, but that’s not a terribly labor-intensive kind of activity. I don’t think social networking is the jobs driver.

I see a migration from the early days of the Valley. We aren’t doing manufacturing; we aren’t doing design; we aren’t doing computers. It’s all moving to Asia and other places where there are lots of technical engineers who are willing to work at a more reasonable salary because they don’t have to spend $3.5 million on a home and pay half of it to taxes.


WSJ: What needs to change in Silicon Valley to foster job creation?

Mr. McNealy: It’s not the Valley. It’s the overhead and the overhang, the clouds brought in by Sacramento and Washington, D.C., the regulations, the deficit and the misallocation of resources. It’s all of those things. Obviously, I’m a believer in the private sector and in personal responsibility.

The biggest issues with the Valley are local, state and federal governmental overreach and overregulation. It’s over-pensioned, over-unionized and over the top.

Yeah! Damn all those over-pensioned and over-unionized workers in the Valley. If it weren’t for all those pensions and unions… we’d… uh…. have…. uh…. more tech jobs! (Quick, can someone fill in the logic?)

But hey… Scott feels your pain:

WSJ: Are there any unconventional indicators that you watch to judge the health of the local economy?

Mr. McNealy: It’s not very scientific, but my boys all play a pretty expensive, but middle-class sport: ice hockey. I see very clearly that there are a lot more financial strains on the families of the hockey teams here in the Bay Area. Families vote not to go to the tournament in Colorado Springs or their kids vote not to do the highest level of hockey because it’s too expensive. Or they drop out of hockey altogether. It’s significantly worse than it was a couple years ago.

Hm… the only families that I know who has kids playing ice hockey are now Scott McNealy and Guy Kawasaki. Goes to show that if you’re not worth millions, you’re not middle class here in the Valley!

Comments (35) -- Posted by: burbed @ 5:52 am

November 28, 2010

Santa Clara: Just Another South Bay City

Thanks to Burbed reader (and occasional guest editor) DreamT for this fascinating news item.

Layoffs facing another South Bay city

Tuesday, November 09, 2010
By David Louie

us-101_sb_exit_393_02_santa_claraSANTA CLARA, Calif. (KGO) — Nearly 1,000 city workers in Santa Clara are facing a tough choice — pay cuts for everyone, or layoffs for nearly 10 percent of them. Tonight the City Council votes on a plan that would cost about 80 workers their jobs if the unions don’t agree to pass on a scheduled pay raise.

Santa Clara residents love their city for its parks, for its libraries and its low utility rates, thanks to a municipal power company. However, an economic tsunami has been building because of the recession — it’s facing a $5 million deficit this year and $13 million next year. So its 910 employees are facing a tough choice — pay cuts or layoffs. 

Layoffs, budget cuts, salary freezes, and givebacks: signs of the times across the nation.  Real Bay Area cities shouldn’t worry about these problems, but plenty in the Bay Area do.  Here we have it: Santa Clara is just another South Bay city. 

This despite the city already laying off 100 city workers.  As you know, dead wood is everywhere.  At least they still have their vaunted utilities to boast about.

Update: Layoffs are winning!  Santa Clara City Council voted 6-1 on November 9th to implement layoffs if not all city employees agree to concessions.  Employees must agree by December 9th to a 5.15 percent pay cut or 12 unpaid furlough days, plus all scheduled raises would be given up.  Up to 80 city employees would be laid off if the concessions are not accepted by all bargaining units.  These would be effective January 8th.

Outgoing mayor Patricia Mahan cast the dissenting vote, possibly because of talk to delay the vote in order to allow more of the bargaining units to agree to the concessions.

Comments (33) -- Posted by: madhaus @ 5:01 am

March 28, 2010

Bay Area to have the best census takers in the world!

A wealth of qualified census-takers

by Chris Kenrick
Palo Alto Online Staff

The U.S. Census-taker who knocks on your door this spring just might have an M.B.A., or even a Ph.D.

Silicon Valley’s high jobless rate has created a wealth of talent to staff the 2010 Census, which is now on final countdown to Census Day April 1.

By that date, every U.S. resident should have returned the 10-question form they’ll receive sometime in mid-March. If one hasn’t mailed back the form, one of those ultra-qualified census workers will be knocking on the door.

Jim Kamenelis, a longtime Silicon Valley IT director, is one of those with ample qualifications. An experienced IT manager who was looking for work after a failed startup, Kamenelis was hired by the Census Bureau in the summer of 2008 to help ramp-up to the big count. He expects his job to end this September, he said.

Kamenelis said he has tested about 15,000 local applicants for census jobs, which are on-again-off-again depending on tasks at hand. He has also managed a variety of preparations, such as updating addresses and maps, required for the upcoming count.

"There’s an incredible pool of capable people available right now," Kamenelis said.

"It’s amazing how many talented people we hire — we have lawyers, business executives, a lot of retired military, and one lady here is a Ph.D. in computer science.

"These are a lot of accomplished folks who, for whatever reason, are unemployed and this is the best thing available to them."

You heard it here first folks. Another reason why the Bay Area is special? Another reason why the next decade is going to rock for this fine valley?

We’ve got the best census takers and workers in the WORLD! Just think of all the innovation these PhD’s, JDs, MBAs, and military folks will be able to add to the census process. I bet all the other cities in America are just drooling with envy as to how lucky we have it.

Without a doubt, we are surely going to have the best counted census in the world right here in the Valley. Congrats!

Comments (89) -- Posted by: burbed @ 5:01 am

February 5, 2010

AOL Builds Up Local Presence Amid Turnaround Push

AOL Builds Up Local Presence Amid Turnaround Push

AOL Inc. is bolstering its Silicon Valley presence as it seeks to tap the region’s engineering talent and entrepreneurialism, making it the latest in a long line of tech firms not based here to boost their Bay Area foothold.

Even as it lays off a third of its total work force, or 2,300 employees, AOL is increasing its Bay Area staff from 300 people to as many as 600 this year. The New York-based Internet company is hiring sales professionals, engineers and others to work on the technology systems that power its advertising, instant messaging and other Web products and services. It also is trying to strengthen its ties to the start-up community, largely through a new venture-capital arm that will invest in local companies.

Meanwhile, Finland-based Nokia opened a research center in Palo Alto in 2006. In August, mobile-phone maker Sony Ericsson, a joint venture between Sweden’s Telefon AB L.M. Ericsson and Japan’s Sony Corp., announced a new division in San Jose that will focus on the convergence between mobile and Internet.

The buildup is likely to bolster the Bay Area’s job and real-estate markets, which have held up relatively well compared with other parts of California during the recession. AOL currently is negotiating a lease for a new office space to house its expansion and plans to consolidate operations now spread among four offices in Mountain View and San Francisco.

The Valley is back! The predictions of 10% appreciation this year – in the bag!

When FaceBook and Zynga and Twitter IPO? Watch out Manhattan! We are totally going to crush you!

Comments (7) -- Posted by: burbed @ 4:40 am

August 16, 2009

Mountain View Voice : Report: Silicon Valley jobs decline while pay increases

Mountain View Voice : Report: Silicon Valley jobs decline while pay increases
Despite record unemployment rates, some sectors of Silicon Valley’s high-tech economy continue to shine, according to a report released Wednesday.

“While the employment picture may sound a bit negative, the wage picture was much more sunny,” said Amar Mann, regional economist with the U.S. Bureau of Labor Statistics, who co-authored the report titled “After the Dot-Com Bubble: Silicon Valley High-Tech Employment and wages in 2001 and 2008.”

Mann said the six-county Silicon Valley region lost more than 85,000 high-tech jobs between 2001 and 2008, a decline of about 17 percent.

The region comprises Santa Clara, Santa Cruz, San Mateo, San Francisco, Alameda, and Contra Costa counties.
However, the average Silicon Valley tech worker’s salary grew by 36 percent during the same period, from about $97,000 a year in 2001 to $132,000 a year in 2008, Mann said.

By contrast, salaries nationwide grew by just 25 percent between 2001 and 2008, he said.

I don’t know about you, but is excellent news. This means that we’re finally getting rid of all the undesirable, ignorant, people from Silicon Valley.

Silicon Valley will be now the true center of the intelligent world. Seriously. If you’re not clearing $85,000 – please just leave. Please. You’re a disgrace to the Bay Area. Thank you.

Comments (60) -- Posted by: burbed @ 6:32 am