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There’s a big sign that San Francisco may be making a comeback.
Not surprisingly, people are still moving to Austin, Texas. Even more surprising is that people are also moving to San Francisco.
In the last 12 months, San Francisco has seen the second-largest increase in the labor force of any area in the United States, according to LinkedIn. January data, which measures when people update their locations on their profiles, showed that out of 100,000 LinkedIn users, 83 have moved to San Francisco in the last 12 months. The workers came mostly from Los Angeles, Dallas-Fort Worth and Washington DC.
Where people move – and move away – has a huge impact on the financial success of those cities and what industries can thrive there. Remote work promised high-paying jobs could spread from superstar coastal cities like New York and San Francisco to more affordable and economically troubled heartland areas. To an extent, that has happened, but new data from LinkedIn shows that the pull of big cities could still be strong even if they’ve been hit hard by the pandemic.
The data represents a significant shift in population trends for San Francisco, which had not seen any notable net gains in LinkedIn data since 2017. The San Francisco metropolitan area had some of the largest population declines from 2020-2021, losing more than 125,000 residents. according to the latest available census data.
One of the reasons for the decline was the lack of affordable housing, which meant even tech workers with six-figure salaries couldn’t afford to live there. When the pandemic hit, the Bay Area’s high concentration of people working in remote tech jobs meant many were able to move away in search of cheaper and greener pastures. Other reasons for abandonment may include the high levels of homelessness and income inequality the area faces, although it’s also likely that reports of an urban hellscape in San Francisco were exaggerated.
In fact, more people now come to San Francisco than leave. By the end of last year, almost two people were coming into the metro area for every one that left (LinkedIn was unable to provide the net change in the area’s members since the pandemic began). The area has still been surpassed by Austin, where prices are still relatively cheaper and where there is no income tax, but has been for years now.
Why are people moving to San Francisco? In a way, it’s about popular cities continuing to be popular. That means people can still find value and jobs there. The Bay Area is culturally rich, with people – and culture and food – from all over the world. While tech companies are hiring less recently, the area is still the home base of their massive and lucrative companies, meaning there are still plenty of opportunities for workers.
There’s reason to believe that people don’t come back to San Francisco just because they want to. The retreat also represents a solidification of remote working policies, with many companies siding with hybrid work, where employees are still expected to be in the office at times. In other words, people who might have wanted to move permanently elsewhere have been pushed back into the Bay Area, albeit perhaps in different places than before.
The decision to return to the Bay Area could also come from employees hoping to strike up a conversation with their bosses ahead of a possible recession. Studies have shown that bosses view people who work in offices more favorably and are more likely to consider them for promotion.
Still, it only looks like people are going to the office intermittently. Offices in San Francisco and the surrounding area have some of the lowest office occupancy rates in the country, according to data from Kastle, which provides building access cards to businesses across the country and thus has a view of when people are going into the office. In the week of December 29 to January 4, office occupancy there was about 20 percent of pre-pandemic levels, while the national average was 33 percent.
Instead of leaving the cities, many people have moved to suburban areas where apartment rental prices are cheaper. They may still have to commute to the office, but a longer commute doesn’t seem so bad if they only have to commute a few days a week. Office workers are expected to work from home an average of 2.3 days a week, according to a December survey by WFH Research into employer plans after the pandemic.
Of course, LinkedIn data only includes people who update their profiles, so it’s scope is limited to professionals staying up to date on their LinkedIn profiles. A reversal of the population decline has yet to show up in other data sources, but delayed U.S. Postal Service data shows far fewer people are leaving the San Francisco Bay Area than when the pandemic began. The number of people leaving San Francisco, based on the number of change-of-address forms filed in the city, fell to 12,000 last year, from about 48,000 in 2020 and 18,000 in 2021, according to change-of-address data collected by the US Postal Service Riordan Frost, senior research analyst at the Harvard Joint Center for Housing Studies.
“It’s fair to say that the people who are moving there are recovering somewhat,” Frost told Recode.
Across California, more people left the state than entered in 2022, with a deficit of 343,000, but that was down from nearly 500,000 net people in 2021. County-level census data for 2022 will be released in March, but so far Visible only until 2021
Perhaps all of this represents a natural middle ground as people seek to find both better quality of life and opportunities. For many, that might be back in the suburbs outside of the big cities.
