By Moya Liu
The coronavirus pandemic is driving down rent prices in San Francisco and the Bay Area as homeowners are leaving the area en masse. According to a new report by Zillow, inventory in SF rose 96% between 2019 and 2020. According to Realtor.com, the average price for a studio apartment in San Francisco has gone down 31% compared to last September, which represents the largest rent price drop for any county in the country.
The core motivation for this rapid increase in empty homes is the COVID-19 pandemic. As more Californian technology companies allow employees to work remotely, people are increasingly interested in finding more spacious homes at more affordable rates. Dropbox, the latest San Francisco-based tech company, announced that its employees will have the option to make the shift to remote work permanent. The company said in a blog post on October 13 that it will instead keep “Dropbox Studios” in the cities where it currently has offices, including San Francisco, Seattle, Dublin and Austin, Texas. Extending its mandatory work-from-home policy through June 2021, the company said in the blog post that “the data shows the shift to remote work, though abrupt, has been successful overall,” Moreover, “… most employees say they’re able to be productive at home (nearly 90%) and don’t want to return to a rigid five-day in-office workweek.”
Aside from a shift to permanent remote work, interestingly, a few companies now offer employees incentives to move out of the Bay Area. For instance, the e-commerce and mobile payment company Stripe is offering a $20,000 bonus to employees who choose to move away from San Francisco, New York City or Seattle. But it comes with a 10% pay reduction. One of the goals behind this initiative is to reduce employee stress by encouraging workers to live in more affordable cities.
As the pandemic has walloped the entertainment, nightlife, and restaurant sectors, San Francisco and Bay Area residents no longer have access to many San Francisco cultural attractions. Besides the decline of its vibrant city scene, San Francisco is also experiencing a multitude of other crises, including but not limited to the long-running housing and homelessness emergencies, a transit network in meltdown, and a severe fiscal challenge that faces a $54.3 billion budget deficit. These issues could further encourage residents to re-evaluate living in such an expensive region.