Research shows San Francisco slow to recover from pandemic, remote tech work major factor

SAN JOSE, Calif. - New research shows that San Francisco is still struggling to recover from the pandemic, while San Jose is showing signs of recovery at a much higher rate.   

The study takes a look at 25 large economies across the country and based on the findings, San Francisco was one of the hardest hit cities during the pandemic.  

After coronavirus spread throughout the world in 2020, California Governor Gavin Newsom declared a state of emergency, implemented mask requirements and issued a stay-at-home order. 

"When the pandemic hit, it was very easy for these companies to pivot to remote work and a lot of them did that," said Abby Raisz, Research Manager with Bay Area Council Economic Institute.     

The Bay Area Council Economic Institute says as a result, San Francisco’s tech employees had more options when choosing a place to live.   

"We also have an affordability crisis, a housing affordability crisis and that paired with this concentration in tech, made it very easy for workers who no longer had to commute or come into an office to say hey, I’m going to go to Austin, TX where I can afford a single-family home for $400,000," said Raisz.  

The Institute's Pandemic Recovery Index shows San Francisco ranks 24th out of the 25 largest economic regions in the country. The Index examined affordability, jobs, economic activity, investment and people. San Jose fared much better, coming in at #16. Many large Silicon Valley tech companies chose not to remain fully remote.  

"They’ve invested a lot of money in their campuses there. They’re sort of older, more mature. So, it didn’t make a lot of sense to fully pivot to remote work when the pandemic hit," Raisz said.    

San Jose’s Office of Economic Development says its recovery efforts focused on housing stabilization and food distribution. It also issued $3.76 million in small business, rent relief grants to ease the pain of the pandemic.   

"I don’t think it’s going to get too much worse than it is now, but it’s kind of a matter of what do we do with all of this vacant space now?" Raisz said.     

San Francisco’s office vacancy rate jumped 24 percentage points from 2019-2022. No one knows what future workforces will look like, but Raisz says thousands of leases are due to expire in San Francisco over the next few years.