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The COVID-19 pandemic has hit and downtown San Francisco has was never the same Again. Tech companies got workers in the country’s least affordable housing market to work remotely indefinitelyand they haven’t looked back.
But they haven’t looked far either, as new data reveals that this shift hasn’t come at the expense of Silicon Valley’s growth.
The San Francisco Bay Area tops the list of fastest growing US cities in a report by the Kenan Institute of Private Enterprise, which seeks to paint a broad picture of the fastest growing metropolitan areas as businesses establish a new post-pandemic normal. So how could San Francisco decline during the remote work zone when its metropolitan area tops the list for fastest growth?
At the end of 2020, about 45% of jobs, or 1.79 million in total, were eligible for remote work in the Bay Area, according to the Bay Area Council Economic Institute. Since then, data on downtown facilities actually used by workers, provided by Castle systemshas consistently shown that San Francisco lags other major cities when it comes to returning to work.
And just last month, San Francisco Mayor London Breed said remote work had become a permanent fixture in many people’s lives and would likely lead to “big successto the city budget as commercial property values plummet. “The fact that, through mid-2022, most of the city’s vacant space is on the sublease market, and still generating rent for building owners, is an indication of the lag between a decline demand for offices and a reduction in property tax. ”, the office of the comptroller of San Francisco written in a memorandum the same month.
The new Kenan Institute study suggests that downtown San Francisco had to die for the surrounding metropolitan area to thrive.
The pack leader
Some local economies are growing faster than others due to a mix of microeconomic and business factors, the Kenan report says, as it ultimately informs how and where Americans choose to live and work.
The report measured real-time growth in gross domestic product for the year to August 2022. It looked at data on employment rates, skill and wage levels, growth potential of industry, etc to forecast the economic growth of the largest economically connected metropolitan areas in the United States. Although the report did not say so explicitly, the impact of remote work was ubiquitous in the findings.
The top five metropolitan areas on this list include two cities in Texas, a state that exploded in the age of remote work, and the top 10 includes two North Carolina cities.
The San Francisco Bay Area claimed the top spot on the list with 4.8% growth in 2022, driven by technology, innovation and start-up growth. The pandemic-fueled shift to remote working has been key to “broadening the value and cultural status” of companies like Zoomlook at the report.
The second region on the list is Austin, Texas, which has become a tech hub, with a harvest of Amazon, Oracle, Googleand You’re here offices in the city. With its GDP growing 4.3% this year, the report notes that labor gains may have peaked as Austin businesses slow hiring.
Next is Seattle, the home of MicrosoftAmazon and Boeing. Its GDP grew by 3.5% in 2022, driven by industries like software and biotechnology. The city has witnessed the adoption of clean technologies in construction and manufacturing projects, attracting job seekers interested in environment-related jobs.
In fourth place is the Raleigh/Durham area of North Carolina, commonly referred to as the research triangle for its strong university-powered biotechnology research base. The fifth city on the list is Dallas, Texas, which stood out as the only metropolitan area to experience population growth during the height of the COVID-19 pandemic. Denver, Colorado is next, as it benefits from people returning to the city to escape urban areas. Next are Salt Lake City, Utah and Charlotte, North Carolina. Growth in New Orleans, Louisiana, and Orlando, Florida, which occupy the ninth and tenth places respectively, is related to tourism and hospitality.
As the U.S. economy braces for continued interest rate hikes and a potential recessionthe effect on local economies could vary depending on the “nature of the slowdown”, according to the institute.
Here is the full list:
1. San Francisco Bay Area, California
2.Austin, Texas
3.Seattle, Washington
4. Raleigh and Durham, North Carolina
5. Dallas, TX
6. Denver, Colorado
7. Salt Lake City, Utah
8. Charlotte, North Carolina
9. New Orleans, Louisiana
10. Orlando, Florida
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