Unsurprisingly, people are still moving to Austin, Texas. More surprisingly, people are also moving to San Francisco.
In the past 12 months, according to LinkedIn, San Francisco has seen the second largest increase in its working population of any area in the United States. January data, which measures when people update their location in their profiles, showed that for every 100,000 LinkedIn users, 83 moved to San Francisco in the past 12 months. Workers mostly coming from Los Angeles, Dallas-Fort Worth and Washington DC.
Where people move to – and leave – has huge implications for the financial success of those cities and what industries can thrive there. Remote work carried the promise that high-paying jobs could spread from superstar coastal cities like New York and San Francisco to more affordable and economically struggling central areas. To some extent, it happenedbut new data from LinkedIn shows the pull of major cities may still be strong, even those hit hard by the pandemic.
The data represents a significant change in population trends for San Francisco, which had not seen any notable net gains in LinkedIn data since 2017. The San Francisco metropolitan area experienced some of the largest population declines from 2020 to 2021, losing more than 125,000 residents, according to the latest Census data available.
One reason for the decline was a lack of affordable housing, which meant even tech workers on six-figure salaries he could not afford to live there. When the pandemic hit, the high concentration of people working remote tech jobs in the Bay Area meant that many were leaving to seek out cheaper, greener pastures. Other reasons to leave maybe include high rates of homeless And income inequality the area overlooks, although it is also likely that it reports a file urban hell in San Francisco it may have been overrated.
In fact, now more people are coming to San Francisco than leaving. By the end of last year, nearly two people came to the metro area for every person who left (LinkedIn was unable to provide the net change in area membership since the start of the pandemic). The area was still beaten by Austin, where prices are still relatively cheaper and where there are no income taxes, but it’s been that way for years now.
Why do people move to San Francisco? In a sense, these are popular cities that continue to be popular. This means people are still finding value and work there. The Bay Area is culturally rich, with people – and culture and food – from all over the world. Although tech companies have recently cut back on hiring, the area is still the base of their gigantic and lucrative businesses, meaning there is still plenty of opportunity for workers.
There’s reason to believe that people aren’t returning to San Francisco just because they want to. The comeback also represents a consolidation of remote working policies, where many companies have sided with hybrid working, where people are still expected in the office for some time. In other words, people who would have wanted to move elsewhere permanently have been forced back to the Bay Area, though perhaps to different places than where they were.
The decision to return to the Bay Area may also come from employees hoping to confront their bosses ahead of a potential recession. Studies have shown that bosses view people who work in offices more favorably and are more likely to do so consider them for promotion.
However, it only seems like people come into the office sometimes. Offices in and around San Francisco have some of the lowest office occupancy rates in the country, according to data from Castle, which supplies key building access cards to businesses across the country and thus has visibility into when people commute to the office. During the week of December 29 to January 4, office occupancy was about 20% of pre-pandemic levels, while the national average was 33%.
Rather than leave the cities, many people have moved to more peripheral areas where rental prices are more affordable. They may still have to commute to the office, but a longer commute doesn’t seem so bad if they only have to do it a few days a week. On average, according to a December survey of post-pandemic employer plans from WFH Research.
LinkedIn data, of course, only includes people who update their profiles, so it’s limited to professionals who stay updated on their LinkedIn profiles. A reversal in population decline has not yet manifested itself in other data sources, but late data from the United States Postal Service shows far fewer people are leaving the San Francisco Bay Area than before the pandemic. The number of people leaving San Francisco based on the number of change of address forms filed in the city dropped to 12,000 last year, down from about 48,000 in 2020 and 18,000 in 2021, according to change of address data of the United States Postal Service compiled by Riordan Frost, senior research analyst at the Harvard Joint Center for Housing Studies.
“It’s fair to say there’s a recovery happening in terms of people moving there,” Frost told Recode.
California as a whole saw more people leaving the state than entering in 2022, with a deficit of 343,000, but this was down from the nearly 500,000 net people who left the state in 2021. County-level census data for 2022 they will be published in March, but so far there is only visibility until 2021.
Perhaps all of this represents a natural middle ground, as people seek both a better quality of life and opportunity. For many, it might again being in the suburbs outside the big cities.
After years of population loss, people are returning to the Bay Area. Carlos Avila Gonzalez/San Francisco Chronicle via Getty Images