How Downtown Palo Alto Has Changed Over The Last Three Years

I have lived in downtown Palo Alto now for about three years. I love it here. I used to live in San Francisco proper in another life, right on Dolores Park. I actually worked as a cook at Bi-Rite, which gives me some SF cred, I hope :-) But after moving back here, I do love being in Palo Alto and my wife works for the University, so it’s convenient for us now. All that said, the startup culture that was once here just three years ago has essentially vanished. Startups like Quora, Pinterest, Pulse, Zimride, and countless others have fled this storied, leafy suburb for other places, mainly San Francisco. There are countless reasons why young startups leave (rents driven by school districts, for one), the greatest being the draw of the greatest city on Earth.

But, there is another reason — it’s because one company, Palantir, is growing fast, has lots of money, is very, very particular about how physically close it remains to the best pool of talent for its business — Stanford University. I often see building and security guards from Palantir around town, and every now and then, I’ll chat them up and ask about how things are going. Back in February 2013, I asked one how many buildings they have — he said around 11, but going to 14 soon. I’d imagine they’re at 14 now.

Yes, of course, some startups are still here, like Ayasdi, Tune-In, Wealthfront, among others, and it’s nice to see some friendly faces, but it’s simply nothing like it was three years ago, and I can only imagine well before that. I don’t know what will happen moving forward. Maybe Palantir will get so big they’ll need their own big building (maybe Page Mill?), but I doubt they’ll want to let go of their Stanford gazebo. Or, maybe they’ll lobby for more office space, like the new building going up at Lytton and Alma (I know SurveyMonkey will be there, too).

Personally, I’m a renter and into my last year in Palo Alto, which is fine. I don’t matter, it’s the startups that matter. Maybe this is just the free market at work, no rent control, a dispassionate level of supply and demand. Or, maybe zoning laws and construction permits need to loosen up for more moderate priced housing. I know, incidentally, that Stanford itself has a hard time recruiting professors because many hailing from other locales wonder if they can afford to buy property anywhere close to The Farm. Recently, right behind Page Mill, Stanford finally unveiled another set of row houses earmarked for faculty, kept neatly under $1m per lot. (Stanford owns a LOT of land, so eventually, they’ll be under pressure to develop it, but not anytime soon.)

Anyway, not sure how to end this other than to say it’s just different here, and I can imagine how different it was from 5, or 7, or 10 years ago. And, maybe that’s just fine. I don’t want to single out one company because there are many forces at play here and no rules are being broken — one could argue the city should zone for more buildings. For now, at least, Palo Alto’s downtown is a very different place, and when I ask friends who want to meet up “When are you coming down here in the future?,” the answers are usually in the form of a laugh.

Haywire is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2014 Semil Shah.

“I write this not for the many, but for you; each of us is enough of an audience for the other.”— Epicurus