US tech workers who swore off the San Francisco Bay Area now coming back

Chief executive of Akash Network Greg Osuri (centre) leads a meeting in his company in San Francisco, on July 8, 2021.
Chief executive of Akash Network Greg Osuri (centre) leads a meeting in his company in San Francisco, on July 8, 2021.PHOTO: NYTIMES

SAN FRANCISCO (NYTIMES) - Last year, Mr Greg Osuri decided he had had enough of the Bay Area. Between smoke-choked air from nearby wildfires and the coronavirus lockdown, it felt as if the walls of his apartment in San Francisco's Twin Peaks neighborhood were closing in on him.

"It was just a hellhole living here," said Mr Osuri, 38, founder and chief executive of a cloud-computing company called Akash Network. He decamped for his sister's roomy town house in the suburbs of Columbus, Ohio, joining an exodus of technology workers from the crowded Bay Area.

But by March, Mr Osuri was itching to return. He missed the serendipity of city life: meeting new people, running into acquaintances on the street and getting drinks with colleagues. He moved back to San Francisco in April.

The pandemic was supposed to lead to a great tech diaspora. Freed of their offices and after-work klatches, the Bay Area's tech workers were said to be roaming America, searching for a better life in cities like Miami and Austin, Texas - where the weather is warmer, the homes are cheaper and state income taxes do not exist.

But dire warnings over the past year that tech was done with the Bay Area because of a high cost of living, homelessness, crowding and crime are looking overheated. Mr Osuri is one of a growing number of industry workers already trickling back as a healthy local rate of coronavirus vaccinations makes autumn return-to-office dates for many companies look likely.

"I think people were pretty noisy about quitting the Bay Area," said Mr Eric Bahn, a co-founder of an early-stage Palo Alto investment firm, Hustle Fund. "But they've been very quiet in admitting they want to move back."

Bumper-to-bumper traffic has returned to the region's bridges and freeways. Tech commuter buses are reappearing on the roads. Rents are spiking, especially in San Francisco neighborhoods where tech employees often live.

And Monday, Twitter reopened its office, becoming one of the first big tech companies to welcome more than skeleton crews of employees back to the workplace. Twitter employees wearing backpacks and puffy jackets on a cold San Francisco summer morning greeted old friends and explored a space redesigned to accommodate social distancing measures.

No one is quite ready to declare that things have returned to normal. Ridership on Bay Area Rapid Transit remains low, and nearly half of San Francisco's small businesses are still closed. Office vacancy rates are high. The city's downtown is still largely empty on weekdays.

But recent data supports the notion that tech workers are coming back. In an area near San Francisco's Financial District, where tech workers tend to cluster, average apartment rental prices dropped more than 20 per cent in 2020, according to census and Zillow data compiled by the city. That area saw the biggest price jumps in the city in the first five months of 2021.

In the bayside ZIP code surrounding the San Francisco Giants' Oracle Park, where nearly 15 per cent of residents worked in tech, average monthly rental prices dropped from US$3,956 (S$5,354) in February 2020 to about US$3,000 a year later. They rose to US$3,312 in May, according to Zillow data.

"This could mean that tech workers are coming back, although it could also mean that other people, who also value those areas, are taking advantage of the lower rents to move in," said Mr Ted Egan, San Francisco's chief economist.

Median San Francisco home prices, which bottomed out at a still-jarring US$1.58 million for a single-family home in December, recently hit US$1.9 million, according to the California Association of Realtors. That is higher than before the pandemic.

The net migration out of the San Francisco and San Jose regions - that takes into account people who moved in - was about 116,000 last year, up from about 64,000 in 2019, according to the analysis of the Postal Service data.

Nearly every year for several decades, thousands more residents have left Silicon Valley and San Francisco than moved in, according to state data. Often, this movement is offset by an influx of immigrants from other countries - which was limited during the pandemic.

The majority of those who left the Bay last year, CBRE found, were young, affluent and highly educated - a demography that describes many tech workers. It is a group that wants urban amenities like bars, restaurants and retail shopping, said Mr Eric Willett, CBRE's director of research.

"That's the group that left urban centres in large numbers," he said. It is also the group "that we are increasingly seeing move back".

There were some prominent industry defections from the Bay Area over the last 18 months. Oracle and Hewlett-Packard Enterprise moved their headquarters to Texas. Software-maker Palantir moved its headquarters from Palo Alto to Colorado. Mr Elon Musk, chief executive of Tesla, said he was moving to Austin.

Now some companies are expanding their Bay Area footprints. Google said in March that it would spend US$1 billion on California developments this year, including two office complexes in Mountain View. The company is also building a massive, mixed-use development that includes a 7.3-million square foot office space in San Jose. In September, Google will reopen its doors to employees. Most will come in three days a week.

Twitter is also opening a 30,000 sq ft office in San Jose's Santana Row this fall and an Oakland building next year, said Ms Jennifer Christie, the company's chief human resources officer.

About 45 per cent of employees at Twitter said they wanted to return to the office at least part time, Ms Christie said, but she expects that number to grow. "I do think there's a good number of people who still want to be in the San Francisco area," she said.