Bay Area Boom

Posted on January 8, 2015 by David Laidlaw

If a picture is worth a thousand words, a billboard may be worth more. San Francisco’s main freeways including Routes 101 and Interstate 280 are populated by pictures of thirty to forty-something male models in their underwear. Unlike most models, these specimens are not ruggedly handsome or ripped; they are not sinewy or physically attractive in any way. The men are soft with weak chins; however, they have very attractive skills.

The billboards call to action is to “Find the Hottest Tech Talent.” The models purport to represent computer programmers since the advertisements list the model’s first name along with the programming language in which he is expert.

The Bay Area is booming and these ads are the evidence. Competition for talented programmers and engineers is fierce. Starting base salaries for engineers at Google and Facebook appear to be roughly $125,000 per year. Experienced software engineers command substantially more. Salaries are this high even though reports surfaced last year that Google, Apple and Adobe colluded to restrict compensation. Anecdotal stories also exist showing engineers spurning incredible offers. The Business Insider reported an example last year of a $500,000 salary offer from a startup that was rejected by an established programmer since Google was already paying him $3 million per year in cash and stock.

Given the exploding job market, housing prices have passed peak valuations. According to Zillow, the web-based real estate price aggregator, San Francisco’s median priced home was $993,000 as of November 30, 2014. San Francisco has many beautiful properties, but the city’s median property is not one that home buyers from other regions of the country would envision paying $1 million to own.

I was able to scrutinize these billboards and think about their significance since I spent a good portion of my time in the Bay Area stuck in traffic. The region’s roads and bridges do not come close to supporting the population’s transportation needs. Trips across the Golden Gate Bridge and the Bay Bridge often took over an hour during my holiday visit. These infrastructure issues represent a microcosm of the country as a whole and are the result of decades of underinvestment in public resources. Unlike many other locales, however, the Bay Area is very fortunate in that it has an abundance of human talent and financial capital to address these problems.