Dive Brief:
- Some Silicon Valley and San Francisco tech companies are moving to lower-cost cities like Phoenix, according to The New York Times.
- Wages, taxes and energy cost about 25% less in Phoenix than they do in San Francisco, according to Moody’s Analytics. And according to Zillow, the median home price in the Phoenix metropolitan area is $221,000. Contrast that with San Francisco, where the median home price is a whopping $812,000.
- Yelp, Uber and several other Silicon Valley-based businesses have recently opened offices in the Phoenix region, reports the Times.
Dive Insight:
Opening offices in more affordable cities can help companies retain their tech employees, who have to deal with high rents and brutal commutes in California.
“San Francisco is a terrible place for entry-level people,” Lawrence Coburn, chief executive of DoubleDutch, told the Times. Coburn says infrastructure and housing are “failing” in the Bay Area.
While businesses relocating to less expensive areas is nothing new, the trend appears to be taking off in Phoenix in particular. San Francisco and San Jose-area tech and engineering jobs grew 7% last year, according to Moody’s Analytics. In Phoenix, which one-fifth as many tech jobs as the Bay Area, tech and engineering jobs grew 8% from a year ago.
