The San Francisco Bay area is a popular place to call home, with its thriving industry and reputation as one of the happiest and healthiest places to live in the country. Yet a new report reveals that residents are leaving the Silicon Valley for more affordable places. Many of these departing residents are American-born technology professionals, who take their knowledge and expertise to other markets. While San Francisco and the Valley have no shortage of talented newcomers, the increase in workers looking for jobs in other areas has left many wondering what the region needs to change to keep them.
The fact is it's just too hard to live in the world's center of technological innovation, so thousands of professionals are getting out. Here are a few of the biggest reasons why.
Not enough affordable housing.
Much has been written about housing shortages in San Francisco and Silicon Valley, and it doesn’t look like the situation will greatly improve soon. Despite a bit of a tech contraction, unemployment is miniscule and hundreds of jobs are added each month to a region with an already severely limited housing supply. As a result, home prices are at all-time highs and furnished apartment rentals average nearly $3,500 a month for a unit in a moderately-priced part of San Francisco.
For a young professional trying to start a family while launching a career, the high cost of living can make Silicon Valley an impossibility. There are some signs that this is getting slightly better. Facebook recently offered employees $10,000 to live closer to its Menlo Park headquarters. Mountain View recently voted in several pro-growth candidates and gave its thumbs up to building more than 10,000 new units of high density housing. San Francisco now has a record 62,000 housing units in its pipeline (although many are luxury units). All of this sounds good but probably won’t change the housing ecosystem all that much for several more years. It’s a rough environment for young entrepreneurs who are often told they must be in the Valley to be near the money and talent needed to launch and scale companies.
Professionals can instead choose to relocate to Austin, Seattle and similar cities that have thriving tech industries. A similarly-sized furnished apartment in Austin costs only $1,300 a month, rising to just over $1,900 a month if professionals want to live in more expensive parts of town. This is in addition to less expensive utilities, groceries, restaurant prices and transportation.
San Francisco has an exciting nightlife, shopping and culture. All of these are things that appeal to young, single professionals as they begin their careers, as well as older single people who don’t plan on having children. However, families more often choose to live outside of the city, as proven by a 2012 report that San Francisco had the lowest percentage of children of any major metropolitan area. Finding a home suitable to raising children is one challenge, as is the cost of those homes. According to the Mayor’s Office of Housing, the percentage of children in the highest and lowest income brackets has grown, while middle-class families appear to to be raising their families elsewhere. Oakland and other East Bay locations have often been the immediate recipient of this migration.
Tech hubs further afield are reaping the benefit of this migration as well. When it’s time to raise a family, Durham, North Carolina, and Huntsville, Alabama are both considered among the top cities for technology jobs and both have significantly lower costs of living than Silicon Valley. As professionals research opportunities in other areas of the U.S., they factor in the quality of schools, cost of homes and proximity of those homes to the areas where they’ll be working.
Less competition for jobs.
All of the cost-of-living and lifestyle factors aside, one of the biggest benefits of leaving Silicon Valley for other tech hubs relates to the big fish, small pond theory. So much competition exists in Silicon Valley, it is difficult to stand out. In a smaller city with newer businesses, however, a Silicon Valley native may rise to the top of a pile of resumes, especially for those who choose cities that are considered emerging tech hubs, such as Denver or Miami.
For professionals interested in launching a new startup, these markets are especially attractive. Instead of toiling alongside the hundreds of other innovative new businesses scattered around Silicon Valley, entrepreneurs can launch their ideas in an area where there are fewer startups. Resources may not be stretched as thin in these areas, making it potentially easier for them to quickly scale their new businesses.
Silicon Valley is an exceptional place to build a career, but it presents difficult challenges for even the toughest worker. However, with so many up-and-coming tech hubs in the U.S. and across the globe, professionals are realizing they are not limited to one region to be successful. As American-born tech workers leave the Valley faster than they arrive, this net loss is turning into gain for dozens of other regions. Ultimately, this is a good sign for the health of technology in the U.S. as a whole.