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Can companies save money by locating near transit?

June 17, 2011 By: Peter Smith Category: Advocacy

I don’t know the answer to this question, but I suspect it is a ‘Yes’. Savings on employee salaries could offset higher costs of land/office space/payroll taxes/etc.

I’m currently on the prowl for a new job. I’m not a fan of buses, so the only realistic non-car transportation choices for me are walking, biking, and train travel.

I have some choice in where I work (hard to believe, I know). I can’t pick a company I want to work for and work there (I’m not that good), but I do often end up with competing offers which have various pluses and minuses — one of the biggest factors for me, of course, is location location location.

Let’s go to a concrete example. There are myriad tech companies (my main deal) all over the Bay Area — downtown San Francisco all the way down The Peninsula (everything between San Francisco and San Jose), all the way into downtown San Jose and all of the mega-sprawl that is San Jose (the 10th biggest city in the US). Two locations I’m currently looking at are downtown Redwood City, and Redwood Shores — they sound similar because they’re pretty close — but downtown Redwood City has a train stop, and Redwood Shores has….high speed roadways, and is located on ‘the wrong side’ of 101 — that is, to get there by bike from Caltrain, for instance, you’d have to cross over the 101. Somehow.

When speaking to a recruiter about the Redwood Shores position, I said, “I’d normally ask in the range of $X k/yr, but since y’all are in a….less than optimal location for me to commute to (understatement!), I’d ask for X*1.20 (that is, 20% more than I would ask for a position in a good location, like downtown Redwood City.”

Then she hit me with the, “Well, I think they work from home sometimes, etc.,” to which I thought about my old engineering professor’s line: “Life is full of decisions.” Translated, this would mean, “Listen — y’all decided to locate on the wrong side of the 101 — that’s up to y’all — but you have to deal with the consequences of your actions and decisions.” In other words, it’s not my fault that they decided to be on the wrong/cheap-land side of the 101, and I don’t care that someone can sometimes work from home — if it’s 100% telecommute/work-from-home, then there’s something to talk about, otherwise, I just need to know if you’re good with the additional 20% salary boost to compensate for the crummy office location. Apparently, they are. [In actuality, my Crappy Commute Multiplier is closer to 40%, but I suspect I'm not normal.]

What if we could show that employees, in particular young, urban-y employees who don’t necessarily like to or want to drive, would work for…10-20% less if they could get to work without a car? That’s significant money. Also, employers like Google and Microsoft and Apple and myriad other companies run what amounts to a massive, private army of high end/luxury transportation services to shuttle employees to Caltrain, and to various locations/cities/downtowns all over the Bay Area — wouldn’t they like to get rid of this incredible expense?

[Incidentally, it is generally taken for granted that this private transit army is good for the area and its employees, but I believe it helps to keep land use sprawly and inefficient, helps increase traffic congestion and noise and various other nuisances/pollution, and it helps undermine public transit. That's a story for another day, though.]

Why is crossing the 101, on foot or bike, such a disaster? Just look at what you would see on your way to Redwood Shores from the nearest Caltrain station, Belmont — this is Ralston Ave., heading East — you’ve survived the onramp to the 101 Southbound, and now you’re faced with an uphill climb while the number of car lanes increases — once you make it to the top of the hill, you’ll once again have to not get killed by drivers zooming onto the onramp for the 101 Northbound, as the wide shoulder recedes from about 6′ wide to about 2′, before it eventually disappears altogether — and for your reward, you’ll be subjected to Marine Parkway, yet another high-speed, multi-lane roadway, with a speed-inducing raised median (those are the Oracle towers ahead) (and don’t ask about the way back — with the disappearing bike lane that drops you between four lanes of high speed auto traffic, two lanes on either side of you, while you try to maintain your balance as you ride over the reflectors that sit on the striped white line that you are now riding/praying on):

So, a few tidbits:

  1. Freeways destroy value. I can’t say this with authority because I’m not a commercial real estate person, but i suspect office space rates on the ‘right side’ of the 101 are higher than on the ‘wrong side’ of the 101 (aka ‘the middle of nowhere’)
  2. Any unnatural obstruction to the movement of people (and their services and ideas!) and goods has the potential to destroy value — so whether you erect an invisible Maginot line between countries to keep people from moving about freely (aka ‘borders’), some anti-human wall to trap people in Apartheid-like bantustans, or just build a massive freeway — all of these things have the potential to destroy economic value (not to mention the human spirit)
  3. There is an abundance of labor, and most companies understand that most employees are replaceable, so companies are not hesitant to locate in the middle of nowhere. For exceptionally-talented employees, companies need only to pony up the extra coin to bring them on board
  4. There is some talk of companies abandoning suburbia for walkable, bikeable, transit-accessible places, but I don’t believe there’s much evidence for it. For example, take Google, Facebook, and Apple — they’re all either extending and expanding their stays in The Middle of Nowhere, or they are moving even further out into The Middle of Nowhere.

The question is, how much cheaper is office space/land/taxes in the middle of nowhere (Redwood Shores, Cupertino, etc.) compared to in places that are relatively walk/bike/transit-accessible? Then factor in how much less expensively employees would be willing to work for if they were allowed to work in the more-desirable location — which means they’ll have higher-quality lives, they’ll live healthier and longer, they won’t be contributing as much to the destruction of the environment, they won’t suffer as much marital stress and unpleasantness (and ultimately, divorce), etc. If the two costs are close (savings on office space vs. savings on employee salaries), then perhaps companies should rethink where they locate.

4 Comments to “Can companies save money by locating near transit?”


  1. dr2chase says:

    The thing to note, is that it doesn’t take much to fix it, or to unfix it.

    For the GooglePlex, coming from Menlo Park or Palo Alto, there’s a ped bridge near Embarcadero, that lets you avoid the traffic — as long as you are not on a tandem, tricycle, pulling a kiddie trailer, or in a wheelchair. Some incompetent safety-nanny moron went and put a dismount gate in the middle of the bridge, that prevents those users from crossing the bridge, period — your kid in the trailer, must mix it up with merging traffic crossing over 101. Wheelchair or walker, uck foo, buddy. The “incompetent” part is that a moderately experienced person on a “normal” bike can traverse the dismount gate on his or her bike, no dismount required — the moron who thought to install that gate, did not even achieve their own goals, they just messed it up for everyone else. Add to that, piles of leaves at the bend on the west side, making a slide much more likely. I used to do that commute about 20 years ago, and thought of thermite every time I did it.

    And the right sign is not “walk your bike”, it is “please yield to pedestrian traffic”. Walking your bike is a useless waste of time unless there’s other people you might run into. Don’t waste people’s time. Focus on what matters.

    Another place where things work pretty well, is if your commute is down-peninsula (say, Palo Alto to Santa Clara, around the the Agnews area), 101 is pretty nicely crossable at Moffett Field, and eventually you cut through some park in Sunnyvale. But you have to know that; the overpasses are Horrible.

    If you do find a nice bicycle commute out to the Redwood Shores area, that would be useful to know. A friend of mine used to work out there, I should ask him.

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  2. Belmont is building a new bike bridge over Hwy 101 just north of Ralston Ave. Should be complete sometime this summer. The west end of the bridge is on a bike path to the Caltrain station. The east end of the bridge is a block from Oracle.

    I agree with your basic argument about location, though. The new Facebook building at Sun Quintin is a tremendously worse location than their current location in Palo Alto. I wonder how many employees Facebook will lose with this move. Bike routes from Caltrain to Sun Quintin are not short and not great.

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  3. Peter Smith says:

    Sun Quintin!

    I didn’t notice much stuff going on related to the Belmont Walk/Bike Bridge - I’d even forgotten it was supposed to happen at all. This article says completion by September or October:

    http://belmont-ca.patch.com/articles/lanes-of-ralston-ave-to-close-for-bike-bridge-work

    I’d rather they fix the existing infrastructure rather than build new, expensive stuff, but I guess I’ll take it.

    I rode the walk/bike path towards the station the other day and there was basically no room for anybody. I was going like 5 mph on my bike and still managed to scare the **** out of a pedestrian. It’s definitely very poorly designed, etc., but again, I guess we’ll take it.

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  4. Peter Smith says:

    And I remember that pedestrian overpass at Embarcadero — i used to jog over it a couple of mornings a week. and i remember the dismount gate!

    i will be interested to see how the new walk/bike bridge could allow for more bike commuters — but it’s still pretty bike-unfriendly out there, imo, especially at night. there’s _so_ much roadway out there — huge overcapacity - it should be easy to rechannel those roads and allow for bikes.

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