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Companies predict that employees will not return to the office for months, leading to high vacancy rates in major cities. Kristina Partsinevelos from FOX Business with more.
San Francisco executives fear that a major flight of tech workers from the city due to remote work opportunities could have a “powerful” effect on the city’s economy over the next several years.
In a report detailing the city’s five-year financial plan, officials pointed to “dramatic evidence of emigration,” including a 25% year-over-year drop in apartment prices – heavily concentrated in areas where tech workers had lived.
“This suggests that office workers, working remotely, are the group leading the exodus, and low-wage workers who are much more likely to be unemployed,” the researchers wrote. “Emigration, and not just working from home, is another consequence of the shift to remote working during the pandemic.”
While some companies – like Twitter and Facebook – have pledged to ensure permanent flexibility in remote working, it’s unclear what percentage of other workers will be asked to return to the office when the pandemic subsides.
SAN FRANCISCO TAX REVENUES PLUNGE POINTS TO EXODUS OF RESIDENTS
San Francisco officials warn that if workers are not forced to return to their downtown office buildings, it could have “serious” effects on the local economy.
“The private sector office activities that boost the city’s overall economy and city tax revenues, locate in the city center to access a highly skilled and specialized workforce who reside in the Bay Area and constitute it, ”said the leaders. “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 reported a 43% year-over-year drop in sales tax revenue during the pandemic, which San Francisco chief economist Ted Egan attributed to a theft of individuals from the city, rather than a drop in activity due to the pandemic.
Egan told Fox News that while parts of California have seen lower sales tax revenue, other cities have seen higher online sales – but not San Francisco.
Data from moving company United Van Lines ranks San Jose, California as one of the cities with the highest influx of movers in 2020.
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