For Founders, S.F. Still Has Cash And Caché. But Will Remote Workers Come Back?

Source: Bay Area Inno, Sara Bloomberg
Photo: Getty Images (Patrick Heagney)

While there was a large migration out of the city last year, San Francisco’s population appears to be normalizing, Jeff Bellisario, executive director of the Bay Area Council said.

There’s a reason people come the Bay Area. The weather. The food. The diversity. It’s also still the beating green heart of the tech industry and the center of venture capital activity during the pandemic.

Reports have shown that investments boomed in 2020 and there doesn’t seem to be an end in sight. At the same time, many workers have left San Francisco for more affordable housing and lifestyles.

So what does that mean for San Francisco? Both uncertainty and endless opportunities.

While there was a large migration out of the city last year, San Francisco’s population appears to be normalizing, Jeff Bellisario, executive director of the Bay Area Council, told me.

“I think moves that maybe would have occurred over two or three years happened over a couple of quarters,” Bellisario said. “And I think the data points are already showing more of a normal movement in and out of San Francisco.”

A lack of affordable housing is still one of the biggest challenges for workers who want to move here for a new job – or move back for a job they’ve performing remotely over the past year and a half.

The question that still lingers: how will a sizable remote workforce impact the rest of the city over the next few years?

According a report in the San Francisco Chronicle, the city might bring in less tax revenue from the tech industry than previously forecasted because, even though the city collects business taxes based on so-called “gross receipts,” aka sales rather than payroll, having fewer employees physically located in the city still translates to a reduction in the amount of taxes collected.

In other words, the city needs to get workers back in physical office spaces if it hopes for a full recovery. Concerns about the delta variant has caused a lot of businesses to delay their reopening plans, and remote workers have gotten accustomed to working from a couch, doing laundry around Zoom meetings or taking care of kids.

While it might take some time, new businesses of all sorts could eventually fill up spaces left largely vacant due to covid.

“It’s not as if our office space is going to be empty forever,” said Bellisario, sounding a note of optimism. He added however that “new companies are not going to pop up overnight, companies are not going to move in overnight. So the office market is reliant on those existing tenants coming back in a big way. And I do think large metros like San Francisco will be the slowest to recover from this.”

One point in favor of the city’s recovery? There’s still a huge infrastructure for tech and venture capital.

The Bay Area alone pulls in nearly half of all venture capital investments nationally, according to Pitchbook data, showing that reports of the region’s decline as a startup and innovation capital are largely premature.

Despite the uncertainties and challenges, Bay Area business leaders are thinking ahead to 2022 and many are preparing for hybrid work models that involve bringing people back into offices part-time, Bellisario said.

For a lot of people, that probably means living close enough to the office that you’re only a BART ride away.

https://www.bizjournals.com/sanfrancisco/inno/stories/news/2021/10/01/remote-hybrid-work-uncertainty