San Francisco, Amid Big Tech's Battles With City, Lost More Residents Than Anywhere Else in US

Almost every major metro area in the U.S. saw an exodus of residents in 2020, but none more so than notoriously expensive San Francisco, a new study found.

The most expensive city in the U.S. saw at least twice as many residents leave for other locations last year as it did in 2019, about 18 per 1,000 people. CBRE Group, a commercial realty firm, conducted its migration analysis based on U.S. Postal Service data.

Much of the outbound residents were young, affluent workers, Eric Willet, CBRE's director of research in Los Angeles, told Newsweek. Higher-end apartment rental markets showed the most vacancies, dropping rent prices overall.

"We can assume that a large chunk of it was tech workers given that they're a large segment of the economy," Willet said. "Overwhelmingly, though, when we look at the data, residents moving out of the Bay Area moved nearby. Very few individuals moving out of San Francisco moved out of state."

The findings reflect the allure of cheaper housing and more space across the bay, coupled with the flexibility of remote work, as what motivated so many San Franciscans to leave the city.

Colin Yasukochi, executive director of CBRE's Tech Insights Center, told Newsweek that in San Francisco in particular, many people found that they did not have enough space to work from home during the pandemic. What's more, with the unique amenities that attract people to cities shut down, it gave residents little reason to stay.

Millennials have been progressively relocating out of San Francisco for years prior to the pandemic, according to the study, mirroring a growing trend of tech giants setting their sights on other metro areas. Data from the nonprofit shows 63 percent of San Francisco-based companies have downsized their physical offices over the course of the pandemic, freeing up 15.8 million square feet of commercial retail space.

That's nearly a 20 percent rise in vacancies, and according to an survey of 83 founders and CEOs, at least one-quarter of those surveyed said about 30 percent of their workforce will remain remote. More than a dozen large companies, including Airbnb, PayPal, Salesforce and Twitter, have either downsized or moved in the wake of work-from-home.

Digital Realty and Oracle announced they would relocate their headquarters to Austin, Texas, and Credit Karma has relinquished its San Francisco offices altogether, according to the data. Optimizely, a software company, is leasing all 78,000 square feet of its headquarters, and though Yelp plans to maintain a presence in the city, it has also leased its entire headquarters.

Some CEOs have lambasted California, like Elon Musk, who very publicly announced last year he would move Tesla's facilities to Texas after conflict with local government over COVID regulations during the pandemic. Silicon Valley has had long-standing tensions with the general community and local government, which hit the tech sector with a "homeless tax" passed in 2018 and upheld in September 2020 following legal challenges.

The tax, which was put on the ballot by the Coalition on Homelessness to increase funding for homeless services like shelters, has seen support from many, including Salesforce CEO Marc Benioff. Twitter's Jack Dorsey and the city's Chamber of Commerce lobbied against the measure, which raises taxes on businesses earning more than $50 million a year by .5 percent, according to the legislation.

While city permits obtained by the publication Teslarati show Tesla's plans to expand its Fremont, California, factory indicate Musk's threats may have been nothing more than bravado, the number of people who moved from San Francisco to Texas during the pandemic rose by more than 30 percent, according to the study.

But most of the city's pandemic emigrants stayed close, with moves from San Francisco County to Sacramento County increasing 70 percent in 2020. Yasukochi said he's not concerned about the city's business sector losing influence or strength. In fact, he anticipates a kind of boomerang effect in its population very soon.

"People were all of a sudden free from reporting to an office," Yasukochi said. "We do expect people to kind of come back to the city of San Francisco once their employers start to require them to come back to offices at least part of the time. We've already seen some early announcement opening up their faces on a voluntary basis, but we expect to start seeing that on a much larger scale this summer."

San Fran
Protesters hold signs as they march along Market Street before a rally to show solidarity with Asian Americans at Embarcadero Plaza on March 26, 2021, in San Francisco, California. A new study found that the city has lost more residents to relocation than any other metro area in the U.S. Justin Sullivan/Getty Images