The housing activists are complaining that the tech workers are driving up rents and squeezing out “middle class families, small businesses, artists, and intellectuals.”  I guess the tech guys are not intellectuals.  According to Real Facts LLC, the average asking rent of a one bedroom in San Francisco is $2,797 (LA Times. Aug 14 2013, page A8).  According to Enrico Moretti in the New Geography of Jobs–every tech job produces 5 service jobs.  A lot of cities in the United States would like to have a successful tech sector like San Francisco.  It’s too much of a good thing.  You can read the entire article below.

San Francisco split by Silicon Valley’s wealth – latimes.com.

Another article by Richard Florida  shows the rise of the City of San Francisco as tech hub that shares venture capital funding with the Silicon Valley:

“The sheer number of large clusters of investment in the maps make it clear that venture capital in Bay Area is no longer primarily or predominantly centered in the quintessential techie hub of Silicon Valley. San Francisco has been catching up: The biggest dots by far – indicating the greatest volume and concentration of venture capital activity investment – appear to be in and around the center of San Francisco.”

Florida sees this sharing of money by the suburban Silicon Valley with the urban San Francisco as further evidence of a shift to dense cities versus urban sprawls.  Even within the Silicon Valley, he shows more venture money going to companies in the urban versus suburban parts of the Valley.

However, more interesting is how Florida shows how the two feed off each other to create a mega tech region:

“Of course cities and suburbs are not either/or propositions when it comes to startups, venture capital and high-tech in the Bay Area. If start-ups thrive in dense, diverse urban center cities where talent clusters, serendipity thrives, and services can be found in the surrounding neighborhood, large established companies like Google, Apple and Facebook need the space that their suburban campuses provide. The locational symbiosis is reflected in the shuttle buses these companies have long run between their suburban campuses and downtown San Francisco, where more and more of their workers prefer to live.”

Why San Francisco May Be the New Silicon Valley – Richard Florida – The Atlantic Cities.

We and other creative office developers started converting warehouses to creative office in Marina Del Rey in the mid 1990’s. The Marina was the next hot creative office area after Santa Monica. Creative companies escaped Santa Monica’s high rents by moving to Marina Del Rey creative office conversions. Most of the activity took place in the industrial area between Lincoln Boulevard and Redwood Avenue and Washington Boulevard and Maxella. At one time,  there was over 1 million square feet of creative office space in the Marina. In early 2001,  the dot com boom turned to bust; many tech companies failed, and vacancies surged. However, it was not the dot com bust that led to MDR’s loss of mojo. It was the housing boom. A land mine in the area’s zoning code allows twice the density for residential than commercial. Thousands of condos and lofts were built in the early and mid 2000’s. Some creative offices were demolished to make way for residential development.   Housing developers would pay a lot more for warehouse properties than creative office renovators would pay. The demolitions and absence of new creative office product caused the cluster of creative office companies to diminish. More exciting product was being developed in Culver City and now in Playa Vista. The MDR area is now called the Loft District or Artist District (there are no artists but just lofts that successful artists may live in). Despite all the rich amenities and growth in residential, the number of creative companies in the Marina has declined over time.  Make no mistake, creative companies like to cluster around each other.   Without a cluster–despite other amenities like restaurants–creative office cannot flourish.

Why High-Tech Companies Are Moving to the City – WSJ.com.

Richard Florida argues that  technology companies are moving from suburban business parks into heart of the major urban cities.

This article below from last year shows Los Angeles as low as number 10 as a hotspot for tech start-ups.  This contrasts with the dot com boom where Los Angeles was a solid four.  A lot depends on how one slices and dices data.  When you look at Los Angeles Orange County as a region, it ranks number 3 to 5 in venture funding ( depending on the quarter) according to Money Tree Price Waterhouse.  However, the rank falls percipitiously when you look at just  software venture funding as this area is driving the urban tech boom.  A recent article by Richard Florida put Los Angeles.  An article by Richard Florida, published in the Atlantic Cities (June 13, 2013), America’s Leading Metros for Venture Capital, shows the Los Angeles Metropolitan Area as number 5.

Map: The hottest spots in the U.S. for start-up tech jobs – GeekWire.

Advertising drives a lot of creative office demand.  From the production of commercials to digital firms like Adly.com- Westside has many firms related to the advertising agency.  The Westside creative office directly benefits when this industry grows.  The articles discusses the growth of LA rise as an advertising industry hub.  The Los Angeles growth arises from its  proximity to multiple marketing platform including television, movies, gaming, as well as the convergence of entertainment and technology thru new distribution channels like You Tube, Hulu, and Netflix.

Conference in L.A. reflects city’s rise as ad industry hub – latimes.com.

In urban L.A., developers are building trendy homes on tiny lots – latimes.com.

Richard Florida in this article argues that tech companies are moving back into the City.  His statistics shows the San Francisco-Oakland metropolitan surpassing the Silicon Valley as the number one location for venture capital investment in 2012

America’s Leading Metros for Venture Capital – Richard Florida – The Atlantic Cities.

Jones Lang LaSalle shows that over the last 20 years, the Los Angeles Westside had much more volatile rents than Downtown Los Angeles.  JLL claims that the Westside has startup tenants, while Downtown Los Angeles has more established tenants.  The gap between the two widens in booms and narrows in busts.  A 30% spread of Westside rents over Downtown rents predicts recession, according to JLL.  You can enlarge the chart by clicking on it.

Developers are starting construction of a new retain center that will increase the restaurant selection near Washington and National, close to ( but no so easy a walk) to the Hayden Tract.  The Hayden Tract is a popular creative office district in Culver City.  You can read more of about this development n the article below.

Chef Michael White and Blue Bottle Coffee Confirmed For Platform, a One-Of-A-Kind Center at Hayden Tract – Vital Updates – Eater LA.