Only 3.7% of the households and businesses that filed address changes in five Bay Area counties from March to November 2020 left California, a total of 4,264 move outs, according to the data.
In contrast, 72% of changes resulted in moves to other Bay Area counties and about a fifth of the 115,243 address changes went elsewhere in California. USPS didn’t provide batches of address changes from a ZIP code totaling 10 or fewer, citing privacy concerns. The data covers Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara counties.
The migration doesn’t add up to an exodus, said Jeff Bellisario, executive director of the Bay Area Council Economic Institute, a business-backed think tank. But it still represents a significant population shift, pushing apartment rents and future tax revenue down, he said. “Some of the data points we’re tracking do imply greater movement than in the past.”
The most popular out-of-state destination was Washington state, followed by Texas, Oregon, Nevada, Colorado, Idaho and New York.
The majority of the 1,227 households that moved to Washington went to King County, which includes Seattle. The coastal tech hub has been a popular destination for tech workers for years and has satellite offices from numerous Bay Area tech giants like Google and Facebook. Salesforce, San Francisco’s largest private employer, has a significant Seattle division after buying local software company Tableau. Amazon and Microsoft are also hiring rapidly.
But Seattle housing prices remain substantially lower. A median one-bedroom apartment is $1,500, much less than San Francisco’s $2,650, according to real estate firm Zumper.
Housing costs remain a huge disparity between the Bay Area and the rest of the country and often cited as the main reason to move.
Mark Glaser, a longtime homeowner in San Francisco’s Excelsior, moved to Santa Fe, N.M., during the pandemic, drawn by the substantially cheaper cost of living and more peaceful atmosphere.
“It’s been great. I really enjoy being here,” said Glaser, who is an innovation consultant for the New Mexico Local News Fund.
His family found a $2,500-per-month three bedroom home in Sante Fe. Similar San Francisco listings can easily top $5,000 a month, even after major rent declines last year.
“The expense of the Bay Area was just a little crazy,” he said, comparing it to a hamster wheel “where you’re just trying to survive.”
Glaser and his wife are able to work remotely. He misses his Bay Area friends, but given the ongoing pandemic, wouldn’t be seeing them much anyways.
Buying a house in New Mexico is getting more difficult, with low supply, rising demand and low interest rates creating a competitive marketplace. That’s happening across the country. Home prices in Boise, Idaho, have jumped to a record $433,250, up 22% in the past year. Idaho was the fifth-most popular state for outmigration among the five Bay Area counties.
The second-most popular destination for people leaving the Bay Area was Texas, which had 749 change-of-address records from the Bay Area, mostly for Houston, Austin and its northern neighbor Williamson County.
Major Silicon Valley and San Francisco companies, including Hewlett Packard Enterprise and Oracle, have also moved headquarters to Texas in recent months, where there are lower taxes, cheaper real estate, fewer regulations and no personal income tax. But companies are maintaining some offices in the Bay Area and it’s unclear how many workers will leave with top executives.
“We’re certainly seeing a wave of companies seeking to cut their costs and locating to an area where they’re going to see better profit margins,” said Chuck DeVore, vice president of national initiatives at the Texas Public Policy Foundation and a former California state assembly member.
The movement of these companies brings to mind memories of previous shifts.
DeVore points out that California has lost the bulk of a tech-focused industry before: aerospace. Companies like Boeing shuttered their California factories in recent decades due to high labor, land and compliance costs.
The message from companies was, “We can’t run an industry based on nostalgia. We’ve got to get out of here,” DeVore said. “Maybe that’s beginning to happen right now in high tech.”
Alarm bells are ringing in Silicon Valley.
“If we continue not making changes, we will truly be facing an exodus,” said Ahmad Thomas, CEO of the Silicon Valley Leadership Group, a business advocacy coalition whose members include the biggest tech giants.
The group is urging state and local officials to tell businesses that taxes won’t increase further as the economy recovers from the pandemic. California’s tax policy is more volatile because anyone can attempt to raise taxes through a ballot measure.
“We’re never going to win an affordability contest,” Thomas said. “No one comes to California because it’s cheap.”
He wants to see a better regional strategy around highlighting the Bay Area’s advantages, like its highly qualified labor force and culture of innovation.
“We still have a high quality talent pool,” Bellisario said. “We’ve got great world-class universities. This venture capital ecosystem has not disappeared.” But the rise of remote work represents a new threat as workers can collect California-level wages while living in far less expensive regions.
Femi Ajayi used to live near his job at Univfy, a Los Altos technology company that supports fertility counseling. After the pandemic erupted, the company closed its office and Ajayi returned to his hometown of Atlanta.
He had a relatively good deal in Silicon Valley, paying $1,300 a month for a unit he shared with one roommate. But now his condo mortgage is $1,100 per month and he’s close to family.
“I do love California and the weather and the hiking, but it was just too expensive,” he said. “I would come back if I got another job opportunity and it was just too good to pass up.”