Tech executives and workers have fled Silicon Valley over the course of the pandemic, lured to red states by a lower cost of living, the possibility of remote work, and low taxes.
In other words, Northern California has suffered a “brain drain” to states such as Texas, Florida, Colorado, and Utah.
Before the pandemic, the Bay Area already had more people moving out of the region than into it, and the trend was only exacerbated by the coronavirus. The number of people leaving the area almost quadrupled in 2020, and, since September 2020, the outflow averaged 49.8%, according to moving company moveBuddha. This means that for every person who has moved to Silicon Valley in the past year or so, two have left.
The office vacancy rate spiked to 16.7%, a phenomenon that has not occurred in a decade, with many tech companies allowing their employees to work from home indefinitely or moving their offices to places such as Texas for cheaper rent and zero state income taxes.
Tech executives say that the pandemic forced them to take stock of their lives and gave them a new set of choices because of their high salaries and ability to work remotely.
“We looked at our lives, and it was a choice between living somewhere expensive, crowded, and filled with struggle,” said Mike Rothermel, a senior product designer with Cisco, who moved from the Bay Area to Boulder, Colorado, during the pandemic, “or living in a place with better schools, a more small-town feel, and generally a better place for a family. It just made a lot of sense for us.”
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Tech industry insiders say that the opportunity to be closer to their families and part of a closer-knit community, while having similar career trajectories, pushed them to consider more rural and suburban lives.
“One of my happiest times every day is going out and plucking the eggs from my chickens,” said Adam Sharp, Twitter’s former head of news, government, and elections.
“Many people want that simple slice of life that gives them real pleasure, I’ve heard this from many friends in the tech industry,” said Sharp, who now lives in his hometown in a suburban part of Connecticut after spending most of his career in large cities where tech companies have traditionally flourished.
Tech scholars say that much of the allure of moving away from Silicon Valley to areas like Texas or Florida is attributable to the narrative by some Big Tech CEOs that California is no longer an innovative place for businesses to prosper.
“A large part of what causes people to move is the mythological element created by Elon Musk and others who say that California is not the future,” said Ramesh Srinivasan, a tech and sociology professor at UCLA.
“They say California, with all of its taxes and regulations, is not cutting-edge anymore, and that registers with people. They take that signal and consider other places to work and play,” said Srinivasan, who grew up in the Bay Area and still has family there but now lives in Los Angeles.
The pandemic has redistributed tech workers from a few large, urban tech hubs to other places around the country, especially because many in the tech industry have the ability to work from anywhere and are not tied to an office building.
It has become easier for tech startups in cities outside of places such as California and New York to hire young college graduates and early career workers in new and growing tech hubs.
One in 5 tech workers who lived in a major city center before 2020 said they expect to live in a smaller city post-pandemic, according to a survey by One America Works, a tech-focused nonprofit organization.
Many states such as Texas, Florida, Utah, and Wyoming have aggressively courted tech businesses with tax incentives and other business-friendly strategies while already having low or nonexistent state income taxes.
“Low levels of regulations and low taxes, the ‘good for business’ kind of states, are the types of environments where many folks from Silicon Valley have decided to move to,” said Sharp.
Srinivasan from UCLA said that cities like San Francisco, the home of Silicon Valley, have historically been hubs of business activity and innovation because capital and wealth are concentrated in such areas.
This is quickly changing, though, and many businesses, particularly new startups, no longer have to be in the Bay Area in order to access such capital and investment, he added.
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“The classic concept in urban sociology of wealth and resources in cities attracting the best and brightest is starting to change, and everyone is becoming more nomadic and fluid these days,” Srinivasan said.
