5 Reasons Why Oakland Will Be The Next Big Startup Hub

June 10, 2015

9:00 am

Oakland is the Bay Area’s greatest paradox. No city in Northern California offers the same dichotomy of third world crime with first-class business opportunity. These days, the trend is heading much more in the direction of the latter. In 2014 Oakland experienced its lowest rate in violent crime in over a decade.

It’s been said many a time that Oakland is the “Detroit of the West”, and that nickname is just as relevant today as it was at the height of automobile production in the 1970s. Detroit is a city that’s been through a lot, to say the least, but it’s also starting to emerge as a land of opportunity. You could say the same about Oakland as well.

Oakland even has its own China town (pictured).

 

Highlighted by Pandora, there are hundreds of startup companies that call Oakland home, and the number keeps rising. Here are the reasons why:

1) Oakland needs business growth more than San Francisco or San Jose, and will go out of its way to accommodate
Oakland rolls out the red carpet for would-be businesses, including generous tax breaks. If your startup sets up shop in a deemed “Enterprise Zone”, Oakland could give you a credit of up to $37,440 over a 5-year period for every new eligible employee. And it’s not like if you moved your company to Oakland you’d be the only one making that move: there are more than 300 startups in the city now.

2) Tech workers already live in Oakland
One of the great reasons why Silicon Valley spread into SF in the first place was the fact that many workers were adamantly choosing to live in the city. In effect, the businesses slowly started following their workers. Since the emergence of SF’s tech scene this past decade, two things have started happening: rents have become too high for even many area tech workers, and Oakland has seen the addition of hundreds of restaurants, bars, and other amenities to make it more enticing to jump across the Bay. Google and Yahoo busses pick up residents in Oakland for a reason.

3) There’s an abundance of office space
There’s some pretty simple math at play here. Oakland has slightly more square miles than San Francisco, and half the population. There’s plenty of room to grow. The neighborhoods near Jack London Square, Grand/Lake, and uptown are poised to absorb more companies, including the now-vacant space where Sears used to be.

4) Oakland tech growth is already happening
According to the Bureau of Labor Statistics (BLS), the Oakland metropolitan area (which excludes Silicon Valley, San Francisco, Berkeley and the North Bay) grew its computer industry by over 5 percent from 2013 to 2014. The BLS’s vaguely defined computer industry predominantly includes developers, systems analysts, and technical support roles. The growth is happening quietly, but it’s happening all the same.

5) The costs make the decision easy
Not that office space is affordable in Oakland when compared nationally, but it’s infinitely less expensive than San Francisco or the Peninsula. Could be a major reason why Sunset Magazine just announced its move from Menlo Park in the Peninsula to Oakland, where it will likely pay close to $30 a square foot (in contrast to the $50 or $60 you’re likely to pay in Menlo Park or San Francisco).

So what do you get when you combine an educated workforce, affordable commercial real estate, and a town that’s on the rise? The next major technology hub, that’s what.

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Chad Reid serves as the Director of Communications for JotForm, a popular online form builder. He loves all things related to cats, and never turns down free food.

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