For years, the recipe for creating a vibrant tech hub seemed pretty straightforward. It wasn’t just a matter of attracting tech companies to a particular area; you also needed local universities to pipeline tech talent into those companies, transportation infrastructure (airports, highways) to connect the tech hub to the larger world, and the necessary amenities to keep technologists in place once they settled.
Over the past several months, pundits and analysts have questioned whether the COVID-19 pandemic will permanently disrupt that recipe. New data from Blind (which anonymously surveys technologists) and ROOM8 (which produces an app that connects people with roommates and apartments) suggests the answer is… complicated. Sure, the pandemic could radically change how these hubs look and operate in years to come, but some of the impacts might not be as dire as some expect.
To narrow down the study, the two companies focused on technologists in Silicon Valley, New York City, Seattle, Los Angeles, Chicago, and Austin. Overall, some 30 percent of technologists had moved out of those hubs over the course of the pandemic. Here’s the city-by-city breakdown:
The survey also offered up two very important points. First, in all six of the surveyed tech hubs, some 50 percent of respondents said that their employers were allowing them to work remotely, either full-time or most of the time.
Second, some 40 percent of respondents said that, although they’d moved away, they also planned to move back within 3-12 months. If we take those respondents as representative of the technology industry as a whole, it seems that a substantial portion of technologists have only left their native tech hubs until the pandemic settles, with the full intention of moving back. Employers’ increased willingness to let their employees work remotely has no doubt influenced such decision-making.
While every tech hub is different, the tech giants of the Bay Area have made it clear over the past seven months that they’re increasingly open to employees working from anywhere. First, Twitter announced that the majority of its workforce would work from home on a permanent basis, followed in quick order by Facebook. Google, after extending its work-from-home policy to mid-2021, then announced that it would embrace a “hybrid” model wherein employees could work remotely a substantial portion of the time.
Across the country, other companies have similarly embraced a permanent state of flexible or all-remote work. That’s had a significant ripple effect, as many technologists take the opportunity to relocate to other places with a lower cost of living (and closer proximity to family, in many cases). In turn, the price of rentals in some of the nation’s biggest tech hubs, including San Francisco and New York City, have fallen noticeably.
The rise of remote work, coupled with tumbling rents, have led some to declare that the big tech hubs are a thing of the past. However, this new data shows that a significant portion of those who’ve left fully intend to come back—in which case, we could be primed for a significant tech-hub revival once the pandemic passes. While that’s good news for the tech hubs that rely on technologists for their very survival, it could also mean that rents and the cost of living in these places will start rising yet again.