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

No wonder people are still moving to Austin, Texas. More surprisingly, people are also moving to San Francisco.

Over the last 12 months, San Francisco has had the second largest number of employees by region in the United States, according to LinkedIn. The January data, which measures when people update their location on their profiles, shows that for every 100,000 LinkedIn users, 83 moved to San Francisco in the last 12 months. The workers are mostly from Los Angeles, Dallas-Fort Worth, and Washington DC.

Where people move to — and leave — has a big impact on the city’s financial success and what industries can thrive there. Telecommuting holds the promise that high-paying jobs can spread from superstar coastal cities like New York and San Francisco to the more affordable and economical Heartland regions. To some extent, this is the case, but new data from LinkedIn shows the appeal of major cities can still be strong, even those affected by the pandemic.

The data shows a significant change in population trends for San Francisco, which has not seen a net gain in LinkedIn data since 2017. The San Francisco metropolitan area experienced the largest population decline from 2020 to 2021, losing more than 125,000 residents, according to latest Census data available.

One reason for the decline is a lack of affordable housing, which means tech workers with six-figure salaries can’t afford to live there. When the pandemic hit, the large concentration of people in the Bay Area working in remote tech-friendly jobs made it possible for many to leave in search of cheaper, greener pastures. Other reasons for leaving may include high levels of homelessness and income inequality facing the region, although it is also possible that reports of the urban hellscape in San Francisco may have been overstated.

Indeed, more people are coming to San Francisco now than leaving. At the end of last year, almost two people came to the metropolitan area for every one who left (LinkedIn cannot provide a net change in regional membership since the beginning of the pandemic). The area is still being beaten by Austin, which still has lower prices and no income tax, but has been around for years now.

Why do people move to San Francisco? In some sense, it is a matter of popular cities continue to be popular. That means people still find value and work there. The Bay Area is rich in culture, with people – and culture and food – from around the world. While tech companies have been downsizing lately, the area is still home to giant and profitable businesses, meaning there are still plenty of opportunities for workers.

There’s reason to believe that people aren’t just coming back to San Francisco because they want to. The move back also represents a solidification of remote work policies, where many companies have come down on the side of hybrid work, where people are still expected to be in the office some of the time. In other words, people who want to move somewhere else permanently are forced to return to the Bay Area, even though they may be in a different location.

The decision to return to the Bay Area could also come from employees hoping to have face time with their bosses before a potential recession. Studies have shown that bosses see people in the office as happier and more likely to consider them for promotions.

It even still looks like people who come into the office for a while. 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 their offices. 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.

Instead of leaving the city, many people move to the suburbs, where housing rents are more affordable. You may still have to travel to work, but the longer commute doesn’t seem so bad if it’s just 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 post-pandemic employer plans by WFH Research.

LinkedIn data, of course, only includes people who update their profiles, so it’s limited in scope to professionals who keep their LinkedIn profiles up-to-date. A reversal of the population decline has not been shown in other data sources, but lagged data from the US Postal Service shows 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 from the US Postal Service compiled by Riordan Frost , senior research analyst at the Harvard Joint Center for Housing Studies.

“It’s true that there’s some recovery that’s happening in terms of people moving there,” Frost told Recode.

California overall sees more people leaving the state than entering it in 2022, with a deficit of 343,000, but that’s 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 until 2021.

Perhaps all this represents the middle of nature, as people try to find a better quality of life and opportunities. For many, it may be in the suburbs outside of the big city.