Does the tech industry ruin cities?

[DCReid]

It's kind of interesting that this thread was started in a skyscraper forum. I would bet that people would be celebrating techs if they put up signature HQ skyscrapers in their HQ and regional cities like JPMC is doing in NYC, or like the banks used to do in the 1970s and 1980s. It seems that every big city had a major skyscraper or even several that was the HQ for the big banks. The 80s Texas bank building boom was impressive and Houston was supposed to get one of the tallest buildings in the world, Bank of the Southwest by Helmut Jahn (the design of which Philly got instead). The techs certainly have the money to do so, but it seems that most prefer their suburban type campuses.

[iheartthed]

Originally Posted by DCReid

It's kind of interesting that this thread was started in a skyscraper forum. I would bet that people would be celebrating techs if they put up signature HQ skyscrapers in their HQ and regional cities like JPMC is doing in NYC, or like the banks used to do in the 1970s and 1980s. It seems that every big city had a major skyscraper or even several that was the HQ for the big banks. The 80s Texas bank building boom was impressive and Houston was supposed to get one of the tallest buildings in the world, Bank of the Southwest by Helmut Jahn (the design of which Philly got instead). The techs certainly have the money to do so, but it seems that most prefer their suburban type campuses.

A lot of tech companies in NYC are located in office towers. Meta had offices in a couple of different towers in NYC before consolidating. Spotify and a few other tech companies are located in the World Trade Center. Salesforce has towers in NYC and many other cities.

[JManc]

Originally Posted by iheartthed

A lot of tech companies in NYC are located in office towers. Meta had offices in a couple of different towers in NYC before consolidating. Spotify and a few other tech companies are located in the World Trade Center. Salesforce has towers in NYC and many other cities.

There is no alternative but to lease in office towers in NYC but they tend to be in existing/ already developed buildings. Meta for example, has (or had) a sizable presence here. I was envious of my co-workers who worked out of this location.

[austlar1]

Two of the currently empty new-build office structures in Austin signed up Meta and Google respectively as sole tenants. Meta decided not to use their 600,000 plus sq. foot leased space at the massive mixed-use 6G project and are now trying to unload on the sublease market. Google is the sole tenant for similar square footage at the new Pelli/Clarke/Pelli designed "Sailboat" building overlooking Town Lake. The space remains unoccupied, but, so far Google has not put the space on the sublease market, fueling hopes that they will eventually utilize the space. Google is the primary tenant in a smaller nearby spec high rise building and has occupied that space for several years now. I guess these tech giants don't mind being in a downtown high rise, but they certainly don't seem interested in owning or developing high rise office properties. Probably a good idea, if the fate of 1980s era Texas banking giants who built huge and ill-advised vanity office projects is any guide.

[SIGSEGV]

Salesforce is the exception with respect to towers I guess....

[Steely Dan]

Google is taking over this Helmut Jahn designed, full city block-sized, 1.2M SF UFO in the heart of Chicago's loop.



Source: https://chicago.urbanize.city/post/g...-redevelopment

[austlar1]

Originally Posted by SIGSEGV

Salesforce is the exception with respect to towers I guess....

That didn't work out so well for them either.
https://therealdeal.com/sanfrancisco...n-downtown-sf/

[craigs]

Originally Posted by austlar1

That didn't work out so well for them either.
https://therealdeal.com/sanfrancisco...n-downtown-sf/

That's "Salesforce East," though, not the iconic supertall that they had purpose-built to dominate the San Francisco skyline called "Salesforce Tower." That article is behind a paywall, but as far as I know, they are consolidating workers in their main tower.

[homebucket]

Salesforce also currently owns, and used to occupy 50 Fremont St as well, aka Salesforce West. Previously it occupied 400,000 sq ft of it before putting it up for lease in order to cut office space.

In the pre-pandemic times, Salesforce used to occupy the 3 main buildings you see on the left half of this photo I took (counterclockwise from the top Salesforce Tower, Salesforce West, Salesforce East). The one on the right is 181 Fremont, previously occupied by the Instagram division of Meta. It's now partially leased by Zendesk, and possibly soon, ByteDance aka TikTok. The tower on the bottom right is the infamous Millennium Tower.





PC: homebucket

[mhays]

Amazon has towers in the Seattle area of:
--600' (Bellevue)
--600' (Bellevue, topping out this year)
--520' (Seattle)
--520' (Seattle)
--520' (Seattle)
--At least 16 of 12-24 stories

These are all fairly stubby...i.e. done for efficiency rather than splash, using every inch of the allowable square footage and height.

[austlar1]

Not sure how much downtown SF real estate Salesforce actually owns or owned. Salesforce Tower was developed by Hines Properties out of Houston.This article says Salesforce had over 500,000 square feet of office space on SF sublease market in March of 2024. Salesforce Tower actually appears to be owned by an entity known as BXP, formerly called Boston Properties, rather than by Salesforce. Salesforce must be the marquee tenant for the famous building that bears its name. Salesforce has 163,000 square feet listed on sublease market at Salesforce Tower/415 Mission St and well over 300,000 square feet on sublease market at other locations in downtown SF. This would seem to reinforce the notion that tech companies prefer to lease high end real estate rather than own it or develop it. Google might be an exception.
https://sfstandard.com/2023/04/11/sa...lesforce-east/

[hipster duck]

To answer the OP: no, tech by itself doesn't ruin cities.

I get the correlation. The biggest tech hubs - notably San Francisco and Seattle - have very visible social problems in their downtown, and it got worse as big tech gained ascendancy in both cities.

There are two things going on: the first is that the cities of the west coast - where two biggest tech hubs happen to be located - have always had a large homeless population that uses drugs, and now it's amplified because we're in the midst of a continent-wide opioid epidemic.

The second is that tech pays higher salaries and the workforce is younger, but the housing stock in these places favors older homeowners. So on top of rental prices rising because there's more money sloshing around, rental prices rise further because the supply isn't meeting the demand.

There are smaller "tech centers" where you're not seeing the same issues - or at least not nearly to the same extent. Kitchener-Waterloo in Canada isn't nearly in the same league as the Bay Area or Seattle for tech, but it's also a much smaller metro. It's still a place where tech has a big presence and pays high salaries relative to what other locals are making. There is an affordability problem, but not any more so than similar sized cities in Southern Ontario that aren't heavy on tech. There are homeless people and there is a drug epidemic but, again, not any more so than similar cities in Ontario (this is arguably worse in places that are 'cheap' and don't have good economic prospects, particularly in the north). Waterloo region has done a fairly good job building new rental supply. It was also never the kind of place that homeless people would gravitate to, unlike SF and Seattle in their pre-tech days.

[mhays]

The San Francisco area compounds these issues by making growth extremely difficult and expensive, the biggest reason for its off-the-charts housing costs. Seattle and others make growth expensive, but not on the same level, and construction is allowed to keep up with demand far more easily via zoned capacity and simpler and more predictable entitlement processes.

Both San Francisco and Seattle also have a "live and let live (or die)" policy about street behavior, and non-deadly winter weather. Both cities (meaning the cities of) have shifted toward the center in recent elections in response.

[iheartthed]

Originally Posted by JManc

There is no alternative but to lease in office towers in NYC but they tend to be in existing/ already developed buildings.

Not necessarily. When tech companies first started to register on the NYC commercial market they tended to go for cheaper space in older buildings because the Class A space in prime locations was too expensive. Some well-established companies still opt for space in non-prime locations (Google and Meta), while others have started to go for prime real estate (Salesforce, Amazon).

Originally Posted by JManc

Meta for example, has (or had) a sizable presence here. I was envious of my co-workers who worked out of this location.

Yes, that was Meta's primary location in NYC before the Farley Post Office conversion. They also have another chunk of space at 225 Park Ave South, which is near 770 Broadway.

[Doc_Love]

Imo the business model the company follows especially the industry leaders can have a positive, or negative impact on the cities they call their home or do business in. Companies that keep R&D & white collar jobs at home or in the western sphere of influence unbalance the economy. All the more so if outsourcing manufacturing to countries that have at least one of these traits poor/developing, endemically corrupt & authoritarian.

While there is nothing wrong with doing business in poor or developing countries to do so at the near complete exclusion of their home cities, countries or allies who play by the rules based international order isn’t healthy. Doing business in endemically corrupt countries on a massive scale drags corruption back into our economy and or gives the business unfair advantages that push others towards corruption. Again this has a destabilizing impact on local, regional and national economies. Doing a disproportionate amount of outsourcing to authoritarian regimes creates toxic relationships between key players at the cutting edge of the economy.

The world is what it is and your partners don’t have to be sister republics or clones of your means of governance. However the more of those 3 key traits a country possesses that a business’s model for success depends on by keeping operating costs down the more it hurts at home. Whether by ignoring laws abroad by paying bribes, leaning on toxic local government to keep wages low by force or other carrot and stick measures & gaining dominance over a sector by giving up trade secrets will end up hurting.

Is tech bad for a city no not at all it’s something that should be coveted as a mark of a successful economy the means that the company and by influence the greater industry employ to achieve it is the issue.

If all we have are the white collar jobs in a monogenetic industry then any disruptions can be very harmful to such dependent cities. A more balanced tech sector likely wouldn’t see such disruptions if more of the business as a whole is tied into the city’s and region’s economics as a whole would see a disruption but it wouldn’t be so threatening.

I’m not preaching isolationism but if you have expensive eggs make sure they’re put into secure baskets. Dealing with other economies that play by the rules or invest into up and coming economies that want to play by the rules so within the bilateral exchange all sides see the need to pull in the same general direction, despite domestic quirks.