As the pandemic continues, one thing it has led to is a mass exodus out of California. Not only are the people leaving, but tech companies are following in their footsteps. With people working from home, it’s no surprise that people are looking for a breath of fresh air from endless commutes and rising housing prices. As a result, companies like Facebook and Twitter have even offered their employees the option of working from home permanently despite the catch of a reduced income if an employee moves elsewhere.
The San Francisco Chronicle reports that “Rents in San Francisco are down 27 percent from a year ago, and the office vacancy rate has spiked to 16.7 percent, a number not seen in a decade.” Companies that have spent millions of dollars on leases are now breaking those leases to establish headquarters elsewhere. “Pinterest, which has one of the most iconic offices in town, paid $90 million to break a lease for a site where it planned to expand.” Sahin Boydas who once lived in Cupertino relocated his family to Texas and found that the cost of living was much lower than it is in California stating to the San Francisco Chronicle, “For the same price as their three-bedroom apartment in Cupertino, they have a five-bedroom home on an acre of land.”
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Not only is this happening on the state level but also on the local level. The Press Democrat found that, “Many of those leaving are weary of the seasonal wildfires, tight pandemic restrictions, local political environment and high cost of living,” and were being replaced by buyers from Silicon Valley. Ethan Brown, director of business development of the Sonoma County Economic Development Board, states that “A lack of affordable housing is not a good thing for younger workers who were born and raised here and are not in those high-paying manufacturing and tech industries.”
According to San Francisco Bay Area news, KPIX 5, another one of the biggest motivators is that other states like Texas and Nevada don’t have a wealth tax. Patrick Gleason for Forbes states that California is already prepared with another tax proposal. “One of those proposals is Assembly Bill 1253, which would’ve raised California’s top marginal income tax rate, already the nation’s highest, from 13.3% to 16.8%.” Podcast Host Joe Rogan also announced that he would be leaving California for Texas after landing a $100 million deal with Spotify and Dallas News reports that Texas’ lack of wealth tax would keep $13 million in his pockets rather than to the California tax.
It’s yet to be seen what the impact of tech companies leaving will be in the long run, if it won’t have an impact at all, or if nothing will change because other tech companies will fill the space they’ve left behind. Maybe it’s a good thing that tech workers are leaving because it could open a door to lowering the cost of living, it could be a bad thing to have enormous companies that contribute to the local economy up and leave California, or maybe they’ll just do what they did in California and that is price out people in the surrounding areas of other states and bring the same issues that led them to leave in the first place. Apple is already “opening a $1 billion, 133-acre campus,” in Austin.
