For years there has been talk of a possible exodus from the San Francisco Bay Area, triggered by the exorbitant cost of living and the long, sluggish commuting. But before the coronavirus, leaving the area meant leaving some of the highest-paying and most respected jobs in America.
There are signs that the Exodus is finally taking place. Silicon Valley, America’s most famous innovation hub, may never be the same.
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Tech companies are giving their employees more freedom to work from anywhere. Employees are seizing the opportunity to move and forming the start of a shift that could transform not only the Bay Area but the cities where these technicians are building new homes.
It’s early yet and information on who is leaving and where to go is just coming in. But for those who seek, the evidence is there.
Two things indicated that Justin Thompson and his wife were not alone when they decided to move out of San Francisco this summer. After renting an apartment for five years, the couple decided to buy a three-bedroom home in Phoenix.
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First, their landlord offered to cut their rent by $ 250 per month if they signed their lease by October. (They refused.) And second, his dentist wasn’t surprised when Mr. Thompson went for a dental exam and said it was his last.
“He said,” I have people telling me the same thing almost every day, “said Mr. Thompson, who works for a data analytics company.
Google parent company Alphabet Inc. announced last month that employees won’t be returning to the office until the summer of 2021, in part so they can get one-year leases elsewhere. Facebook Inc. recently said its employees could be away that long too. The social media giant, with 52,000 employees, expects to move to an essentially remote workforce in the next decade and is now hiring a remote working director. Other companies, including Twitter Inc. and Slack Technologies Inc., have stated that most of their employees can finally work remotely.
Cybersecurity firm Tanium, headquartered in Emeryville, California, across from San Francisco, announced to its 1,500 employees in late June that they could work remotely permanently. According to a spokeswoman, 16% of the workforce at Tanium headquarters have formally applied for or asked for resettlement since then. The company’s executive director, Orion Hindawi, moved to Seattle last month.
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Around 40% of Facebook employees were interested in permanent remote work, said CEO Mark Zuckerberg in May, citing an internal survey. Three quarters of these employees said they could move to another location. Facebook declined to say how many employees have officially asked to move.
A survey of 371 Bay Area technicians conducted by the Hired recruiting market in mid-May found that 42% would move to a cheaper city if their employer asked them to work remotely full-time. Another poll conducted by Blind in late July, a platform that allowed workers to anonymously discuss their work, found that 15% of the 3,300+ professionals in the Bay Area who responded had left the region since the pandemic began – although unclear was how many they considered moves to be temporary. Of the remaining people, 59% said they would consider moving if their companies allow.
The Golden Gate Bridge and downtown San Francisco skyline ahead of Super Bowl 50 between the Denver Broncos and Carolina Panthers, February 6, 2016. (Kirby Lee-USA TODAY Sports)
While it’s too early to measure the total net outflow of technicians from the Bay Area, it is already having an impact on property prices. Rents have fallen for the first time in years. The median rent for a one-bedroom apartment in San Francisco fell 11% in July compared to the same month last year, according to rental platform Zumper, which analyzed nearly 11,000 listings in the city and several surrounding areas. In Cupertino, home of Apple Inc., and Mountain View, home of Google, the median rent for one-bedroom apartments fell more than 15%.
“The majority of tech geeks in the Bay Area won’t move out, but a minority significant enough to move the market,” said Anthemos Georgiades, CEO of Zumper. “This year is the first year it’s actually real.”
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While the pandemic has slowed or stalled rental increases in cities across the country, San Francisco stands out, said Joshua Clark, an economist with Zillow property search service. Rents in the city have fallen for the first time since the tracking started in 2014.
“The fact that San Francisco has gone negative is rare,” said Mr. Clark. He attributes this in part to the highs San Francisco’s housing costs reached before the pandemic.
Those who leave the area permanently cite a variety of reasons, but high housing costs tend to top the list. Between 2009 and 2019, the average cost of a single-family home in the San Francisco Bay Area nearly tripled to around $ 1 million. Even renting a bunk bed in a room with five other people can cost over $ 1,300 a month.
The region is also expensive in other ways. A cheeseburger and fries delivery can easily cost $ 25. An ice cream cone can cost $ 7. Before the pandemic broke out, classes in boutique gyms were routinely $ 30.
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A large tech brain drain could have a significant impact on the industry, the Bay Area, and other cities in the US looking to create more tech jobs, say executives and analysts.
Surveen Singh, 30 years old, moved from Houston to San Francisco almost six years ago to work for a large technology company. She used to commute about three hours a day between the west side of the city and her company’s headquarters in Silicon Valley. Like many technicians, Ms. Singh worked in transport on company-provided shuttle buses.