by Mish Shedlock, The Street:
The Wall Street Journal reports Elon Musk Moves to Texas, Takes Jab at Silicon Valley.
During the spring, when Mr. Musk was sparring over coronavirus shelter-in-place orders that shut his factory near San Francisco, California Gov. Gavin Newsom told CNBC he was “not worried about Elon leaving any time soon” and the state was committed to the car maker’s success.
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Tesla’s new car plant, its first U.S. factory outside Silicon Valley, is slated to open in Austin next year. Mr. Musk’s rocket company, Space Exploration Technologies Corp., or SpaceX, has operations in South Texas, leading Mr. Musk to spend a lot of time in the state. He filed paperwork in late October to move his personal foundation from California to Austin, according to local records.
Mr. Musk broadly criticized government regulations as stifling startup creation and favoring monopolies or duopolies. He called for the government to “just get out of the way” of innovators.
Other Companies Fleeing California
- Hewlett Packard Enterprise, whose origins trace back to the founding of Silicon Valley, said it planned to shift its headquarters to Texas.
- Palantir Technologies Inc., founded in the Bay Area in 2003, moved its headquarters to Denver this year. CEO Alex Karp, who co-founded the company, linked the departure to what he says is a view in Silicon Valley that is out of touch with American principles and societal needs.
- Two other prominent conservative venture capitalists, Peter Thiel and Keith Rabois, have cited what they see as Silicon Valley’s liberal politics as reasons to relocate. Mr. Rabois said he is headed to Miami. Mr. Thiel has moved to Los Angeles.
Rent Dives 35% in San Francisco
The rise of remote work in the wake of the Covid-19 pandemic is remaking one of America’s priciest places to live.
Bloomberg reports San Francisco’s 35% Plunge in Rents Shows Effects of Tech Fleeing City.
The resurgent coronavirus has thrust the tech hub back into lockdown. Offices sit empty as work-from-home policies stretch indefinitely. While this week’s share sales of hometown companies Airbnb Inc. and DoorDash Inc. would typically have the city girding for a flood of wealth, many workers have already fled for the suburbs, Lake Tahoe or beyond.
Nowhere are the effects more pronounced than in the real estate market, where apartment rents are plunging the most in the country.
The median rent for a studio apartment dropped 35% last month from a year earlier, to $2,100, while costs for one-bedrooms were down 27% to $2,716, according to data set to be released this week from Realtor.com. The declines are steepening from earlier in the pandemic, a sign that people with the flexibility to move are leaving an area that’s still among America’s priciest for housing.
San Francisco’s office-vacancy rate has roughly doubled this year to 8.3%, driving asking rents down almost 9%, according to real estate firm CBRE. Earlier this year, Pinterest Inc. shelled out almost $90 million to terminate its lease in a new downtown tower because it is “rethinking where future employees could be based” in a post-Covid era. Housing startup Opendoor paid $5.2 million to end its downtown lease early, a regulatory filing showed.
Texas does not collet state income tax nor does it tax capital gains.
California’s top income tax rate is 13.3%, the highest in the nation, with similar taxes on capital gains.
Musk qualified this year for billions of dollars in stock-option compensation as part of a pay-package agreement, making him the second-richest person in the world.