Coronavirus has some tech workers reconsidering their commitment to the San Francisco Bay Area.
The region's high cost of living, traffic, and housing crisis have long been pain points for professionals in the technology industry headquartered there — but now offices closures and work-from-home policies are prompting a renewed questioning of whether it's still worth it.
With companies like Twitter announcing that it will allow employees to work remotely even after pandemic lockdowns lift for good, some industry-watchers are predicting the city will rapidly lose its luster as workers decamp for more appealing locales.
In conversations with Business Insider, realtors in smaller cities say they're seeing increased interest from potential Bay Area buyers, regional development groups are scrambling to put out the welcome mats for remote workers, and investors are said to be looking to capitalize on the trend.
Balaji Srinivasan, a Silicon Valley investor and entrepreneur, predicted on Twitter that the lockdown and new work-from-home policies are removing some of the few incentives left for people to stay in the Bay Area. "The office isn't used, the industry is going remote. So SF is just pure repulsion. And people will fly away," he wrote.
The prohibitive cost of living in the Bay Area and lack of housing stock has already forced many — particularly younger generations — to consider relocating in recent years, said Skylar Olsen, senior principal economist at real estate listing firm Zillow. If permanent work-from-home policies become more and more prevalent post-lockdown, that may well accelerate the trend.
The multimillion-dollar question is whether that will translate into workers moving out to the suburbs, or going further afield.
Even if they can work remotely, workers are still likely to favour metropolitan areas with access to creature comforts over more far-flung locales: think a condo in downtown Bozeman, Montana rather than a cabin in the depths of Kootenai National Forest. "Our value we place on amenity-rich, walkable neighborhoods is still really high," she said, and that's unlikely to change after the lockdown lifts.
Real estate listing site Realtor.com said they saw a surge in people Bay Area looking for listings elsewhere as lockdowns came into affect. "The Bay Area's balance of within-metro and outbound home searches tipped substantially toward outbound starting in mid-March," spokesperson Cody Horvat said. "The share of traffic from the Bay Area looking outside of the area jumped up 3.4 percent in April compared to the same period last year, marking the largest jump in outbound traffic share so far in 2020."
That surge has since subsided, and the areas that saw the most interest from Bay Area users were Los Angeles and Riverside in California, Las Vegas, Houston and Chicago.
It's hard to quantify any potential lockdown-influenced increase in sales this early, with deals typically taking a month or more to close. But Tony Levison, a realtor in picturesque Bend, Oregon, said he's seen an uptick recently in interest from Bay Area buyers.
"It's a direct flight to most of the major cities on the West Coast ... you can get anywhere pretty fast, and you don't have ot deal with the city lifestyle any more. Lots of outdoor activities, smaller town, and for a lot of people in the major cities, it's a lot more affordable, too."
In Bozeman, Montana, Noel Seeburg, a realtor with Bozeman Real Estate Group, also said he's seen some increased interest — in particular from investors looking to buy up properties to rent to workers who might be relocate.
In Nevada — home to beautiful Lake Tahoe and bustling Reno — the government-backed Economic Development Authority of Western Nevada (EDAWN) is actively developing a new program in response to coronavirus to try and attract new remote workers to the state, Mike Kazmierski, the organization's CEO said, to be rolled out after the lockdowns lift.
"There's no need for that workforce, regardless of the lockdown, to be stuck with high prices, traffic, all those other issues ... associated with California, when they can do the exact same job 30 minutes away from a ski slope."
That said, there's at least one group predictably confident that the Bay Area won't lose its allure any time soon: San Francisco realtors.
Mariana Pappalardo, a realtor with Sotheby's, said she's seen some uptick in interest in people looking to get out of the city (one client is "more motivated than ever to get out of here and move to Tahoe") but predicted that work from home won't become the norm.
"Eventually, people are going to want to see people in the office," she said. "I think this trend of working remotely is going to be popular for a year, tops, and then the shareholders are gonna want to see some faces."
Plus, she added, San Francisco's incredibly dense network of talent will long continue to be a major draw.
"We have such a strong population ... nine out of ten of my clients have a PhD, where else do you get that? Those people are going to move to Montana and be bored out of their minds."
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