Here's Why San Francisco Is A Costly Place To Live
BY BRIAN DEAGON, INVESTOR'S BUSINESS DAILY
01/22/2015 02:32 PM ET
There's a big reason why the cost of living in the San Francisco area is sky-high.
Venture capital firms pumped $15.7 billion into the San Francisco metropolitan area in 2014. That's more than double the amount of the San Jose, Calif., area, 50 miles south of S.F. and long considered closer to the heart of Silicon Valley. The San Jose region attracted the second-most VC funding last year, according to the National Venture Capital Association. San Francisco and San Jose were followed, in order, by Boston, New York and Los Angeles.
The VC money pouring into San Francisco is fueling the area's rapid expansion of tech companies. The expansion has created high-paying jobs and population growth, driving up the cost of living.
San Francisco received 33% of the $48.3 billion that U.S. venture capital firms invested in 2014. It's home to Twitter (NYSE:TWTR), Salesforce.com (NYSE:CRM) and Yelp (NYSE:YELP), along with privately held companies such as ride-sharing firm Uber and accommodation services provider Airbnb, both of which are expected to have an initial public offering this year.
The San Jose area, which includes Silicon Valley cities such as Palo Alto and Cupertino, is home to some of the largest tech firms worldwide. They include Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Facebook (NASDAQ:FB) and Hewlett-Packard (NYSE:HPQ).
For the first time, Los Angeles moved into the top 5. The region received $2 billion in venture capital funds. Companies such as Google, Facebook, Yahoo and Microsoft (NASDAQ:MSFT) have been expanding their presence in the LA area.
