LinkedIn spent millions on its new San Francisco headquarters, and that's a good thing
If you're looking from outside, offices like these may look like a symbol of everything that's wrong with the current tech boom.
San Francisco has become ridiculously unaffordable. Longtime residents are getting squeezed out by skyrocketing rents and evictions, while local lawmakers dither about whether and how to build more housing. A lot of long-time businesses are shutting down because of sudden rent increases. Inequality is rampant - people are sleeping in the streets outside new expensive restaurants and bars.Meanwhile, tech workers are still able to negotiate their salary up by more than $100,000 just in a few weeks. To them, a beautiful office is just a recruiting tool, like free espresso and kombucha on tap. These offices are not public. They're closed private spaces and do not offer obvious benefits to society.
But there's something to keep in mind: the tech boom employs a lot of people outside of tech.
Take that LinkedIn office. According to BuildZoom, which tracks building permits, more than 50 building permits with a listed valuation of more than $127 million were granted for that office building.
Dig into the permits a little, and you can see how much money LinkedIn was putting back into the local economy. For instance, there's a permit granted to Griffin/Swinerton, a contracting joint venture, for $1.3 million to remodel the 15th floor.
There are smaller-value permits granted to plumbers, kitchen remodelers, window installers, and so on.
These companies employ people outside tech. So do the caterers, food and drink vendors, real estate agents, and every other kind of company that provides goods and services to tech companies setting up shop in San Francisco and the people who work there.This is what a thriving local economy looks like. Even with the imbalances caused by the lack of housing and ineffective local government policies toward those who have been left out, an economic boom is overall better than an economic bust.
Earlier this week, Boston Properties - a major commercial real estate owner in San Francisco - noted that the big tech buyers are a lot scarcer than they were a couple years ago. The current boom is starting to wind down. When it ends, a lot of these jobs will go with it.
Be careful what you wish for.