Does the tech industry ruin cities?

[pdxtex]

Would you consider the tech industry to be a welcome addition to a city or a curse in disguise? At first glance, I might think high tech is great for a city but peel back a few layers and its almost like economic strip mining. Industry of innovation but highly volatile, funded by venture capital and staffed by over worked indentured servants. Im starting to think I'm glad Portland is less involved in software and more involved with hardware manufacturing.

[JManc]

Having worked in tech for a few years, most were far from being over worked. Cushiest job I've ever had but I think tech is a mixed bag; on one hand, it brings a lot economic growth and development catering to a highly paid professional class but on the other hand, it drives up costs of living and the industry is going through some growing pains so there's volatility right now.

[mhays]

It's a fair question. Think Guardians of the Galaxy when Quill grabbed the infinity stone...and would've died had other people not grabbed on to share some of the power...

Tech (the HQ and engineering locations) tends to create massive workforces with six-figure salaries and stock options that can make people rich. That can dominate cities. But spread that around a little and we'll survive both the ups and downs.

I like what it's done for Seattle, on average. On one hand it's made the city more expensive. On the other hand it's made us a lot bigger and more international. A major donation is now hundreds of millions, not tens.

PS, venture capital is important for companies starting out, but some cities like Austin and Seattle are more about mature companies. The influence is more about six-figure salaries (and sometimes hundred-billionaires) and less about 200 companies trying to create the next jackpot.

[homebucket]

Like most things it has its side effects but overall I think it provides far more benefit than harm.

[dimondpark]

it definitely ruins housing affordability in those cities, very quickly actually.

[Steely Dan]

"ruin" is a silly word to use.

But like most things in our cosmos, when systems get out of balance in what's generally perceived to be a positive direction, there are also usually some negative consequences that come along with it.

Few things are just altogether always objectively good.

Except pizza.

[Riverranchdrone]

I love my tech job. Although they bring high demand for resources like water and electricity, and produce a lot of pollution. They pay very well and have more reasonable work demands compared to retail.

[Six Corners]

As long as a place maintains a level of economic diversity, I don't think the tech industry really "ruins" a city.

St. Louis, like many places, has been attempting to increase tech industry jobs and although you may sometime hear warnings from some disillusioned in the Bay Area, Seattle, Portland, etc., St. Louis (and likely other stable or stagnant rust belt-ish places like Milwaukee, Pittsburgh, Cleveland, Detroit) may have greater capacity to take on what it would mean to be a tech hub. In St. Louis, we are a city built for 600,000 that currently houses 300,000. I don't have much knowledge base around how an influx of tech workers and companies would impact local prices, but the capacity is certainly to take them in.

[chris08876]

Would it be fair to say that it leads to an increase risk in homelessness by driving prices to insane levels, displacing locals.

Really capitalizing on our cities weaknesses, which is always not enough housing. I mean what do folks expect when an industry with on average, highly paid workers does to a local housing market. Out bid, out buy the average folks, and quickly gobbling up that housing supply.

Question on stability as well. The whole strip mining effect. Mass layoffs can be a bad thing. Good maybe for a year or two or a finite time but after that... the net benefits initially can lead to problems.

Does the tech industry ruin cities? For the Middle Class, it impacts it for sure.

[homebucket]

Originally Posted by dimondpark

it definitely ruins housing affordability in those cities, very quickly actually.

I would say it contributes to it (demand), but it's not the main cause of it. The primary cause is NIMBYism and lack of sufficient supply.

[chris08876]

Originally Posted by homebucket

I would say it contributes to it (demand), but it's not the main cause of it. The primary cause is NIMBYism and lack of sufficient supply.

Tech in a way can be seen as fuel that magnifies existing city gaps. To your point, lack of sufficient supply and NIMBYs.

Any sort of impact to the price homeostasis of "X" region is going to naturally result in some impact to the "average" percentile of residents. Will really impact the bottom 10 percent. This can lead to issues long term.

I think the biggest effect, and this is more because of the compensation ranges offered by tech, on average, is the gated-community effect that tends to transpire in cities where tech has a big BIG hold in. This will overtime hurt a city if a city is to be considered a "people" city or a "common man and woman" city. Long term prosperity, really due to prices and cost of living, will see a decline. For the general masses.

It can be reversed but considering the mode of operation for our cities, ones that always fall behind on projected or current demand, will squeeze the average person even further and this is dangerous long term.

[iheartthed]

Originally Posted by homebucket

I would say it contributes to it (demand), but it's not the main cause of it. The primary cause is NIMBYism and lack of sufficient supply.

Agreed. Tech industry isn't the cause but the population increases because of tech, and wealth produced by tech, contributed to price spikes.

[goat314]

Originally Posted by Six Corners

As long as a place maintains a level of economic diversity, I don't think the tech industry really "ruins" a city.

St. Louis, like many places, has been attempting to increase tech industry jobs and although you may sometime hear warnings from some disillusioned in the Bay Area, Seattle, Portland, etc., St. Louis (and likely other stable or stagnant rust belt-ish places like Milwaukee, Pittsburgh, Cleveland, Detroit) may have greater capacity to take on what it would mean to be a tech hub. In St. Louis, we are a city built for 600,000 that currently houses 300,000. I don't have much knowledge base around how an influx of tech workers and companies would impact local prices, but the capacity is certainly to take them in.

St. Louis was built to handle 850k, but other than that I agree with your capacity argument. St. Louis has the infrastructure and bones to hand another couple million in the metro area, no problem.

[SIGSEGV]

I will say that since tech, due to its nature, is much more WFH friendly than many other industries, may not bring as many benefits to cities as it used to...

But probably the people affected most are WFH meccas like Bishop, CA...

[badrunner]

San Francisco used to be the most bohemian city in the country, a city of artists and musicians, from the 1960s well into the late 90s.

Today, well...

• Video Link

[austlar1]

Originally Posted by badrunner

San Francisco used to be the most bohemian city in the country, a city of artists and musicians, from the 1960s well into the late 90s.

Today, well...

• Video Link

Something similar to be said about Austin, where we used to keep it weird.

[wwmiv]

Artistry hubs that have become high-income exclusive and broadly unaffordable tech havens:

• San Francisco
• Seattle
• Denver
• Portland
• Austin
• Nashville

[mhays]

Scale is really important here. And type of companies and jobs.

100,000 software people is different from 10,000 software people.

50,000 chip manufacturing people is different from 50,000 software people.

20,000 at stable companies is different from 20,000 at start-ups.

I mean different in pay, in jackpots for new companies going public, in risk of the jobs moving away...

[Crawford]

SF was really expensive before techworld tho. It was a very expensive American city in 1980. The others are smaller tech havens that also have a ton of in-migration unrelated to tech, increasing unaffordability.

[DCReid]

Difficult to determine if tech in itself caused the spike in unaffordability of those places. Seems more due to the US stock bull market of 40+ years and counting, along with the long term love affair with tech companies. It used to take decades for companies to be worth $100 billion or their stock prices to be over $100, but it can take merely months for a tech company to achieve those thresholds. High stock prices support very high salaries for lots of workers which support higher housing and living costs for those cities with a high concentration of tech workers or cities that attract the tech firms. No other industry seems to have had a long-term love affair from the stock market like tech, which has gone boom to bust then back to boom. Seems that any city that has a high concentration of any longer term favored industry will become less affordable, particularly if its size is constrained. I think Boston is a good example in that main growth industry seems to be pharma//biotech, and it appears to be as expensive as the Northern California tech cities.