The San Francisco Bay Area is winning back workers after pandemic exodus

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Unsurprisingly, people are still moving to Austin, Texas. More surprisingly, people are also moving to San Francisco.

Over the last 12 months, San Francisco has seen the second-biggest worker population gain of any area in the United States, according to LinkedIn. The January data, which measures when people update their locations in their profiles, showed that for every 100,000 LinkedIn users, 83 moved to San Francisco in the last 12 months. The workers largely came from Los Angeles, Dallas-Fort Worth, and Washington DC.

Where people are moving to — and leaving — has huge repercussions for the financial success of those cities and what industries can thrive there. Remote work bore the promise that high-paying jobs could spread from superstar coastal cities like New York and San Francisco to more affordable and economically struggling Heartland areas. To some extent, that’s happened, but the new data from LinkedIn shows the pull of major cities could still be strong, even ones hard-hit by the pandemic.

The data represents a significant shift in population trends for San Francisco, which hadn’t seen notable net gains in LinkedIn’s data since 2017. The San Francisco metropolitan area had some of the biggest population declines from 2020 to 2021, losing more than 125,000 residents, according to the latest available Census data.

One of the reasons for the decline was a lack of affordable housing, which meant that even tech workers with six-figure salaries couldn’t afford to live there. When the pandemic hit, the Bay Area’s high concentration of people working in remote-friendly tech jobs made it so that many could leave to seek cheaper and greener pastures. Other reasons to leave maybe include high rates of homelessness and income inequality the area is facing, although it’s also likely that reports of an urban hellscape in San Francisco might have been overstated.

Indeed, more people are now coming to San Francisco than leaving. By the end of last year, nearly two people were coming to the metropolitan area for every one that left (LinkedIn wasn’t able to provide the net change in area members since the start of the pandemic). The area was still bested by Austin, where prices are still relatively cheaper and where there’s no income tax, but that’s been the case for years now.

Why are people moving to San Francisco? In some sense, it’s a matter of popular cities continuing to be popular. That means people still find value and jobs there. The Bay Area is culturally rich, with people — and culture and food — from around the world. While tech companies have been cutting back on hiring lately, the area is still the home base to their giant and lucrative businesses, meaning there’s still plenty of opportunity for workers.

There’s reason to believe that people aren’t just moving back to San Francisco because they want to. The move back also represents a solidification of remote work policies, in which many companies have come down on the side of hybrid work, where people are still expected in the office some of the time. In other words, people who may have wanted to move elsewhere permanently have been forced back to the Bay Area, though perhaps in different locations than they had been.

The decision to return to the Bay Area could also come from employees who are hoping to put in face time with their bosses ahead of a potential recession. Studies have shown that bosses view people who work in the offices more favorably and are more likely to consider them for promotion.

Even still, it only looks like people are going into the office some of the time. Offices in San Francisco and nearby areas have some of the lowest office occupancy rates in the country, according to data from Kastle, which provides building-access swipe cards to companies across the country and thus has visibility into when people go to the office. During the week of December 29 to January 4, office occupancy was about 20 percent of pre-pandemic levels there, while the national average was 33 percent.

Rather than leave cities, many people have moved to more suburban areas, where home rental prices are more affordable. They might still have to commute to the office, but a longer commute doesn’t seem as bad if they only have to do it a few days a week. On average, office workers are expected to continue working from home an average of 2.3 days per week, according to a December survey of employer plans post-pandemic by WFH Research.

The LinkedIn data, of course, only includes people who update their profiles, so it’s limited in its scope to professionals who stay up-to-date on their LinkedIn profiles. A reversal in population decline hasn’t yet shown up in other data sources, but lagging data from the US Postal Service does show a lot fewer people are leaving the San Francisco Bay Area than had been earlier in the pandemic. The number of people leaving San Francisco based on the number of change of address forms filed in the city declined to 12,000 last year, down from about 48,000 in 2020 and 18,000 in 2021, according to change of address data from the US Postal Service collected by Riordan Frost, senior research analyst at Harvard Joint Center for Housing Studies.

“It’s fair to say there’s some recovery happening in terms of people moving there,” Frost told Recode.

California as a whole saw more people leave the state than enter in 2022, with a deficit of 343,000, but that was down from nearly 500,000 net people leaving in 2021. County-level Census data for 2022 will be out in March, but so far there’s only visibility through 2021.

Perhaps all of this represents a natural middle ground, as people try to find both a better quality of life and opportunity. For many, that might once again be in the suburbs outside big cities.