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Tech Company Wagons Ho! Geography of the Urban Land Rush

Are technology companies willing to spend more for expensive urban real estate in order to attract cheaper talent?
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(Photo: Sylvain Kalache/Flickr)

(Photo: Sylvain Kalache/Flickr)

People moved to the suburbs in droves. Eventually, often following the residential decisions of executives, companies followed. (See economic geography of Cleveland and Detroit for best examples.) Consider the trend reversed, jobs trailing millennials back into the city:

The wealthy are clamoring to buy glassy apartments that soar high in the skyline, while the fastest growing companies are demanding spacious low-slung buildings and eschewing tall towers. ...

... Take Facebook Inc. The company is in the midst of building a new 430,000-square-foot headquarters in Silicon Valley.

While an office tower of that size could rise higher than 20 floors, Facebook’s building is merely a single floor, stretched out over one-third of a mile, the size of seven football fields.

Built on stilts over parking, It could be likened it to a giant Home Depot, but one with a roof garden pockmarked with skylights that allow light to stream to workers below. The theory is that workers collaborate better when in close proximity, and aren’t separated by stairs or elevators that inhabit interaction—a focus on the employee, rather than impressing outsiders with grandeur.

Tech companies across the world are building or occupying similar style buildings.

Twitter’s headquarters is in a sprawling former wholesale furniture mart on San Francisco’s Market Street. Google last year unveiled plans for a so-called “ground-scraper” in London, a 1 million square foot building that is longer than London’s Shard tower is tall. In New York, the search giant occupies one of the largest buildings in the city that is just 18 floors high.

While residential newcomers eschew their suburban land-grabbing ways, tech companies retain the campus form that has served them well in the greenfields of Silicon Valley. Forget the sidewalk ballet. Give bros a foosball table room ballet.

Foosball table bros like urban living. Foosball table bros are young. Foosball table bros are willing to give up 50 percent of their income for close proximity to work and play.

Foosball table bros don't make as much as mid-career professionals supporting a family in an elite school district. I assert that tech companies are willing to take up expensive urban real estate in horizontal fashion in order to tap a cheaper labor pool. In essence, the young and well-educated who love downtown living subsidize tech firm labor costs.