Zuckerberg: Traffic, housing woes hindering Facebook’s growth in Bay Area

Facebook CEO Mark Zuckerberg said the social media company plans to expand offices more outside of the Bay Area than within it because of local infrastructure challenges like traffic and housing costs.

“At this point, we’re growing primarily outside of the Bay Area. Obviously, we’re still going to be growing a bit here, but the infrastructure here is really, really tapped. You guys all see this,” Zuckerberg said Thursday at an internal company question-and-answer session that was broadcast online. “The housing prices are way up. The traffic is bad.”

The Menlo Park tech giant has more than 60 offices around the world and nearly 40,000 global employees at the end of June. It has been one of the fastest-growing companies in the Bay Area, with locations in Burlingame, Fremont, Mountain View, Sausalito, Sunnyvale and two new towers in San Francisco.

Zuckerberg said the company would continue investing in the Bay Area to help to build more housing and alleviate transit, but much of the focus would be expanding outside the region.

Facebook, like Salesforce, Google and other large tech employers in the region, is grappling with limits to growth at home. At the same time, its revenues continue to rise, along with their ambitions. So they are growing around the country. A new study by real estate brokerage Cushman Wakefield found that 58 of the largest tech and biotech companies headquartered in the Bay Area have leased an additional 30.4 million square feet around the U.S., or room for over 150,000 employees. Austin, Texas; Seattle; New York and Southern California were the most popular regions to expand to.

Facebook is close to a massive lease in New York’s Hudson Yards, Crain’s reported. Manhattan’s real estate costs are comparable to San Francisco, but other cities are far more affordable. For instance, Austin’s office rents are around $40 a square foot annually. San Francisco rents are twice that, according to Cushman Wakefield.

Zuckerberg was responding to an employee who asked if Facebook had considered allowing more software engineers to work remotely as a growth strategy. Zuckerberg said yes, but said Facebook finds grouping people together in larger, physical offices has been more effective.

“We also don’t want to have a lot of small offices around the world,” Zuckerberg said. “Our engineering offices are really hubs.”

Many of Facebook’s projects in the Bay Area will take years to come to fruition, a testament to the complexity and slow processes around transit and housing. Facebook donated $1 million in 2016 to study rebuilding the Dumbarton rail bridge for an additional connection from Silicon Valley to the East Bay, and the project is still in the planning stages. Partnership for the Bay, a group that includes Facebook and the Chan Zuckerberg Initiative — the philanthropic and investing entity founded by Zuckerberg and his wife, Priscilla Chan — wants to raise $540 million for housing over five to 10 years.

Zuckerberg streamed the weekly event after the Verge published leaked audio recordings of a previous question-and-answer session, where he said he would fight government efforts to break up the company if Elizabeth Warren were elected president.

Zuckerberg said Thursday that he stands by his comments.

Roland Li is a Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

Article source: https://www.sfchronicle.com/business/article/Zuckerberg-Traffic-housing-woes-hindering-14490820.php

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