Since SF has some of the worst governance in the country, maybe it won't last that long. There's always East Bay.

Facebook’s HQ is Menlo Park (suburb). Google’s is in Mountain View (suburb). Apple’s is in Cupertino (suburb). Netflix’s is in Los Gatos (suburb).

The only big city downtown is actually SF. I would characterize San Jose as a giant suburb. All the other so called cities are really suburbs. Oakland has a small downtown but is across the Bay and has virtually no tech scene.

Particular kinds of tech tend to cluster together typically due to a founding company. South Bay is where hardware companies cluster. Enterprise software tends to cluster around Oracle in the mid Peninsula area. New software companies now cluster mostly around SF. I think the people who found new companies want access to the existing labor pool so they found the companies close to similar existing companies.

If you work for FB in Menlo Park, you probably don’t want to commute down from SF. You would waste a lot of your time doing so. You also probably prefer to live in a nicer place than a fish tank. So if you can find a nicer place than a fish tank and that is still close to work, then you would jump at it. Even if you prefer fish tank style, most of the fish tanks aren’t actually that nice: 600 sq ft and a view of your neighbor’s balcony. 600 sq ft is kind of small once you get married. Also, $3400 sounds better going to a mortgage than an apartment if housing prices appreciate. You can always sell.

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.

I've never understood why so many tech companies over the last decade went up to SF. Before that most were down the peninsula and in San Jose. I'd pick the lower peninsula over SF no question.

It's hard to agree on pricing though, San Jose has one of the most expensive prices per sq. foot in the country. According to certain charts even higher than SF. Which I never understood, the density is much lower and there seems to be more space but from what I understand it's because most properties are big(ger) houses on large lots that take up a lot of space.

Is there anything more to it than that?

I'm happy to see tech spread out a bit. The absurd housing prices in San Francisco aren't healthy for either the tech companies nor the non-tech neighbors.

At some point in many engineers' careers, the startup scene becomes a bit less appealing. This isn't just because of work-life balance or ageism -- it's because most startups only need a few senior-level employees. The majority of startup employees are young because startups need people to do entry-level work, and young people are willing to. If you want to do truly interesting, challenging, senior-level programming work, you are far more likely to find it at a large company than at a startup.

That's not to say that there isn't plenty of boring work at large companies, because there is a ton of it, but rather that large companies have more open positions for senior-level engineers doing interesting work than startups do. Their benefits are also quite good, which matters more when you have a family. Most of these large companies are in the south bay, and if you are going to work at one of those companies, you might as well live nearby and save yourself the aggravation of a long commute, whether it be by car, train, or Google bus.

I know plenty of people who live in SF, and frankly some of them end up going out in San Francisco less often than I do. Most of their weeknights consist of going home, eating dinner, and watching TV or reading a book, just like most people. The big difference is that they pay over $3k for their apartments, and I pay half that. If you're going to have a conventional, boring home life 5 days a week, you might as well save some money. I can go to San Francisco whenever I feel like it.

I wouldn't know any statistics but, in general, Silicon Valley is much more centered in the South Bay and than it is in San Francisco and those who work at Adobe, Sun, Apple, Oracle, etc. would normally live either on the Peninsula or in the San Jose area.

Just to take Apple as an example, in general, it is pretty crazy for the thousands of people who work in Cupertino (which is immediately adjacent to San Jose and is some 50 miles from most points in San Francisco) to live somewhere other than the South Bay or at least the Peninsula - from which locations the commutes would be pretty modest (still likely 20 minutes or more for most people but not the hour-plus it would be from the City).

Some people undoubtedly live in San Francisco while working at Apple simply because they like the City so much and prefer to live there in spite of the long commute. But these would likely be unusual exceptions and not the rule.

I moved from SF to a smallish city in my late 20's, and I was only able to find one tech job to apply to, and it wasn't even for a technology I already knew. I was offered the position, and spent the next 6 years treading water at a mediocre job because there just weren't any other options: I could either stay at that job, or leave a town I loved.

When my wife and I decided it was time to move (she had just completed her Master's), job opportunity weighed heavily in our decision making process. We had a lot of other considerations (we wouldn't live someplace we didn't like just because it was good for our careers), but we wanted to make sure we at least had multiple options when it came to work, and that is absolutely something the Bay Area provides.

Peninsula is losing out to SF itself for a lot of companies, too.

For a startup, having service providers in an area is important, but investors are more important, and remain reluctant to do anything remote to themselves.

If you are starting a company today and want the top decile of talent, you will mostly find them looking for remote roles. You will find some great workers who live in the big cities, and still want the in office experience, but by far the best people are living remotely.