New Listings in Manhattan Surge, As Real Estate Market Reopens. But contracts are still lagging far behind last year’s levels. By Liz Lucking.
How does the San Francisco Bay Area maintain its leadership in the internet technology industry in the global economy despite its high cost of living?
“New York City embraced density,” said a real estate developer to me when I asked him why real estate in Silicon Valley was so high compared to New York City (this is especially true when you compare San Francisco to Manhattan and Brooklyn). I had also pointed out that most buildings and neighborhoods in Silicon Valley are so short. I mean vertically challenged.
Silicon Valley needs to at least accept density (more high rises, more people living and working per square mile) to help keep living costs in check.
There should be a way to increase both affordable housing and market rate housing to meet surging housing demand.
I’m aware of the theory that increasing housing increases demand and thefore prices. But there has to be a way to cut housing costs so middle class folks can afford to live in Silicon Valley, besides living in closets, with roommates, in high crime I mean gritty neighborhoods or 60 miles away from work.
And Silicon Valley needs to do the same things Wall Street does in Manhattan and, to a lesser extent, Greenwich and Stamford, Connecticut, Brooklyn and Jersey City.
You have to add real and perceived value to:
- investors (in the case of Wall Street, including liquidity providers such those who lend you money via overnight repo, etc., lenders and bondholders),
- risk-taking founders, management and employees and
- customers (and, in the case of Silicon Valley, users) happy.
Or be a legal monopoly or part of a legal oligopoly that can extract huge margins from customers. Facebook and Google are mostly free to use but they account for over 60% of online ad revenue.
Its important to keep those with money happy by giving them stock, debt, shitcoins or products and services they are willing to part their money for.
Best is to deliver real value. But a big part is delivering perceived value (see, e.g., shitcoins).
There is a brand value, inertia and network effects to Wall Street and Silicon Valley. They each have monopolies and are hard to dislodge.