San Francisco leaders warn tech worker exodus could have ‘severe’ economic effects | Fox Business

Is remote work here to stay?

Companies are anticipating that employees won't return to the office for months, causing major cities to have high vacancy rates. FOX Business' Kristina Partsinevelos with more.

San Francisco leaders are concerned that a significant flight of tech workers from the city owing to remote work opportunities may have a “powerful” effect on the city’s economy over the coming years.

In a report detailing the city’s five-year financial plan, officials pointed to “dramatic evidence of outmigration,” including a 25% year over year decline in apartment prices – concentrated heavily in areas where tech workers had lived.

“This suggests that office workers, working remotely, are the group leading the exodus, and the not low-wage workers who are much more likely to have become unemployed,” researchers wrote. “Out-migration, and not merely working at home, is another consequence of the shift towards remote office work during the pandemic.”

While some companies – like Twitter and Facebook – have committed to permanent remote work flexibility, it is unclear what percentage of other workers will be asked to return to the office when the pandemic subsides.

SAN FRANCISCO TAX REVENUE PLUNGE POINTS TO RESIDENT EXODUS

San Francisco leaders are warning that if workers are not required to return to their downtown office buildings, it could have “severe” effects on the local economy.

“The private sector office activities that drive the entire city economy, and the city’s tax revenue, locate in downtown to access and build a workforce from the highly skilled and specialized labor that resides in the Bay Area,” leaders said. “If it is no longer necessary to physically bring workers into downtown offices – or for those workers to live in the Bay Area – then the consequences for the regional economy could be severe.”

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The city previously announced a 43% year over year decline in sales tax revenues during the pandemic, which San Francisco’s chief economist Ted Egan attributed to a flight of individuals from the city, rather than a decline in activity due to the pandemic.

Egan told Fox News that while areas throughout California experienced a decline in sales tax revenues, other cities saw an uptick in online sales – but San Francisco did not.

Data from moving company United Van Lines listed San Jose, California, as one of the cities that saw the largest outflow of movers in 2020.