As long as tech companies are willing to pay the salaries they're paying, unwilling to open up shop outside SF, and refuse to consider allowing long-distance remote employees, the problem will continue.

Source: Please consider all the job openings you're aware of, and try to keep a count of the fraction that would be closed to remote-only candidates.

Ideally, startups would look at those costs, do the analysis, and make the decision to locate elsewhere in order to minimize risk. But SF (and NYC) have a kind of legendary status as being where successful tech companies begin. I think that status makes it difficult to consider the value of location based on a cost-benefit analysis.

Paradoxically, the sector that has the knowledge and employee base to be geographically independent are also the ones that pay the most for their location. At a gut-check level I feel there is quite a bit of "Irrational Exuberance" going on in the VC/Tech sector right now.

When looking at where to locate my startup we considered SF but when I ran the numbers our runway would be severely limited. Instead we could run for years off of personal savings in the southeast. Instead of being forced to raise VC money I could control my own destiny.

There are definitely strong network effects of living in the valley. They are not strong enough to beat out market forces if you have the skills to make the product yourself. A single person has a lot more leverage than they did 10 years ago. Most tech companies don't require hordes of engineers. There are smart and talented people everywhere.

The majority of tech happens outside of the valley, and its status as the center of innovation is more likely to be a quirk of history than an act of predestination. Build great products that people love to use and everything else will follow.

Over time, the rising cost of living will at some point drive people to want to live elsewhere, and then companies will be under less pressure to purchase expensive office space in SF. But believe me, it's not some irrational desire to make less money that causes tech companies to "insist" on leasing office space in the SF market rather than in the cheaper markets in other parts of the bay.

The real problem here is that programming is driven by the young, and they generally don't have the same demand for cheap housing as those who are starting families. Generally speaking, people move out of SF when they have kids and are looking for good schools and more affordable housing. So I guess the cost of providing the more expensive office space for the cheaper (younger) worker works out for tech.

So what you need is a sea change in the desirability of living in SF on the part of the younger/cheaper recruits that tech companies need. This is just a business decision at the end of the day.

The move to SF has been much more recent and mainly fueled by the desire of younger workers to live/work in more densely populated areas. And then most startups started basing out of SF proper to be closer to these workers (and appear “cool”) so now you have all the big startup successes based in the city proper.

There is a disproportionate amount of companies starting or moving into SF over even just the past 5 years. Before, if you're starting a tech company, it could be equally common to start it in the peninsula (maybe even more so), say Palo Alto or Mountain View and the like. Nowadays, the default choice is SF and that's majority of the cases by far.

I think collectively, the whole environment is pushing towards building SF into the New York of the west, except instead of banks and the financial industry filling up the town, it's tech companies. I'm not saying it's the agenda of anyone in specific (in government or otherwise) to build out SF that way, I'm saying it's what we're all collectively doing, whether intentional for some of us or simply riding the waves for others.

SF is a city that used to support many industries. Tech is obviously the one industry that is almost the top earner overall (or might even be the absolute top earner by industry). It seems like an obvious factor (and a big one) that's driving anyone not in tech away. In some cases, at the lowest end of the income spectrum, they might not have anywhere to be driven away to other than to the streets. Another anecdotal point is that recent popular article about how <$105k is considered low income in SF.

If this is indeed a factor, one of the things we collectively as part of the tech industry can do, is to intentionally spread ourselves away from SF, into other areas of the bay area. I get it that people want to live in the bay area for its climate and all the conveniences. There's no reason why there can't be tech companies HQ'ing in East Bay, for example. (and I'm not talking about just Oakland, but everywhere from San Leandro down to Fremont, or further east like Pleaston, Livermore, Walnut Creek, etc.)

Anecdotally, during remote work, I’ve seen a lot of younger people who aren’t on visas go live wherever/not move to SF for their jobs even if their team is in SF, while the established SF residents with houses and families stayed, as they did in the South Bay. The difference is that people who worked in the South Bay but hated it were never living there and instead in SF, so it hasn’t hollowed out as much as SF, which was more of a choice. Also from what I’ve seen, immigrants from India/China preferred to live in the South Bay anyway.

SF is great and I think it’s inevitable that it will see a resurgence. My guess is that young people at some point, being inherently contrarian, will eventually start rejecting remote work and want to live the lavish tech office lifestyle with other 20-something’s again. Likely the 2010s Google/Facebook experiences will be viewed with nostalgia and young people will try to recreate it in their new companies - it already almost doesn’t exist anymore since major company offices are sparsely attended and have had all the perks slowly cut back.

As a tech worker here, I and others engineers I know are becoming disenfranchised with the housing prices around here to the point that I'm casually exploring where I might want to move next in 4 years or so if this situation doesn't reverse itself.

With the number of engineers all feeling the same, it's possible to find enough people to willing to be a co-founder and move to a much cheaper part of the world during the formative months/years when your company is pre-profit. Take Silicon Valley investing connections, a mobile workforce, rising housing prices and you basically have a confluence of forces that will accelerate a diaspora of engineers to more places in the world without necessarily giving up on the tech community that makes SF so desirable. Once decent sizeable tech communities show up in more places, the greater the likelihood that engineers in the Bay Area look around and tell themselves "This just isn't worth it. I'm paying a premium to be around colleagues, but now my colleagues are everywhere and it's just not worth it anymore."

At the end of the day every engineer without rent control is going to face a financial decision once a year when rents are raised that could make moving elsewhere more attractive. What's the point of improving at your job and earning raises when most of your raise ends up going into your landlord's pocket. Do that 2-3 times and you are either going to look into someway of getting into rent control unit or you're going to start considering other options elsewhere.

All you really need to stay in the area for is to create a solid enough professional network that you'll gain access to the smart capital in the region. Once you have that, you can go anywhere since investors will know you, what you're capable of and that investing in you and your business is a good idea. If this happens often enough, you're going to start to see more VCs comfortable with this approach that they'll be able to tell offer job candidates coming through the VC hiring offices positions in portfolio companies located in places that might be more desirable to a tech worker than SF.

I stay in SF because some of the most interesting tech jobs are here. Once that is no longer a valid assumption and my professional network is sufficiently geographically distributed, I no longer have anything tying me solely to San Francisco.

I can't count the number of conversations I've had with other engineers about thinking about moving to Berlin or Portland or even trying to set up shop in some cheap remote paradise where we would have the financial liberty to invite friends to come out and hang out in a guest room for weeks to months at a time so long as they pay the airfare and living arrangements. Top places on my list when I entertain ideas like this are small beach towns along the Northeast of Brazil. I'm often amazed at how many of my engineer friends are onboard with this ideas, more than willing to exchange San Francisco so long as they know they will have engineering peers and interesting engineering problems to solve in some other locale.

Even the cultural attractions that made San Francisco awesome have been co-opted by the hipster culture and gone mainstream enough that SF no longer has the strong lead on novel cultural innovations that it once had.

    "It's an odd thing, but anyone who disappears is said to be 
    seen in San Francisco. It must be a delightful city and 
    possess all the attractions of the next world"

    -- Oscar Wilde

I think the real issue with Silicon Valley's future isn't financial, it's cultural. I believe it is rapidly becoming a second Wall Street: the place where young professionals tough it out for a few years until their bank accounts and resumes are good enough for a more fulfilling job in a cheaper and more preferable location without the cost and the crazy.

The Bay Area is a great place to make money, but is it truly a great place to live? Strip away the nice weather and trendy restaurants, and it's hard not to notice how much of the communitarian counterculture that peaked in the 60s has been, like so much of the world today, eaten by software.

To me, the most logical conclusion is to organize and create the political will to create the housing necessary to alleviate prices. This could be on a regional level - building more housing throughout the east bay and peninsula, or organizing on the city level to re-zone and re-develop parts of the city that can most easily support denser development.

Not everyone will like it but as long as you have more people than the anti-more-housing crowd and are organized to vote, it can be done.

VC is a feudalistic, oligarchic reputation economy, concentrated in a tiny (now congested and overpriced) geographic area. Since they're not content to be passive investors (although their portfolios would perform better than they were) but want to actively manage, they only fund companies within 30 miles of them.

Tech workers don't have much of a choice. If you want to have a career in this game, you have to live where the jobs are.

The Bay Area is expensive. But, if you have a tech job, the pay balances out easily. Sometimes excessively.

There is tons of interesting tech work in the Bay. Not just pay the bills and go home work. But, work that is fascinating in itself. If you can’t find fascinating work here, maybe your interest in tech is limited to the paycheck. That’s totally respectable. But, you’d probably be happier some place more family friendly, or with mountains, or with a culture less focused on work -even if your bank account won’t grow as fast.

The arts culture has fallen off recently as rents have risen and the drug/homeless epidemic has really picked up in the past two years. But, it’s SF is still a beautiful city full of wonderful things. And, a lot of (mostly dog) poop.

I suspect this is just the beginning of the move away from the Bay Area. Give it twenty years and small offices and remote workers distributed across the country will be very normal. Wages (and Bay Area house prices) will reflect that.

Before that, it was rare for tech workers to live in SF. Most would live in South Bay and come up to SF to party on weekends.

Also, salaries went crazy in the last 8-10 years. Once all these rich tech workers came to the city that thought they knew best because they were rich and young, that's probably what caused the shift.

Tech companies have a huge incentive here - they can now start hiring engineers at non Bay Area prices. Which, if enough companies do it, means your salaries are at risk. Nobody cares that it’s expensive to live here, they only pay because they all insisted on in person offices. By going remote they can stop paying Bay Area rents and compensation levels.