Silicon Valley Techies Relocating Due To Covid Prefer Rocky Mtn Ski Country

They are bringing talent and money to new areas, mostly in the mountains which are a short flight from the Bay Area (and no rising sea levels due to climate change) but they are also importing the problem they left behind: sharply rising housing prices. JL

Katherine Bindley reports in the Wall Street Journal:

Liberated staffers, allowed to work from wherever they want are leaving the Bay Area to live in Western mountain communities like Boise, Idaho, and Park City, Utah. The arrival of tech-industry remote workers can complicate compensation where there is already a gap of $20,000 to $30,000 between local workers in other industries and those who work in tech. The newcomers have been a boon for local restaurants with outdoor dining, bike stores, guiding companies and construction companies. However, they also drive up costs for properties.“They’d have to make $300,000 a year to buy a house here.”

Tech staffers from the Bay Area are relocating across the country, bringing to their new locales the woes and upsides that go with some of America’s highest-paying jobs.

Employers including Facebook Inc., FB 2.93% Twitter Inc. TWTR 1.71% and Stripe Inc. have liberated their staffers, allowing them to work from wherever they want. As a result, some are leaving the Bay Area to live in Western mountain communities that they had already been drawn to, like Boise, Idaho, and Park City, Utah. The transplants are adding more wealth and business to their new hometowns but also widening wage gaps and raising real-estate prices.

“You do see some California hostility here,” said Lauren Williams-Elstein, 32 years old, who works for the fintech firm Mosaic and moved from the East Bay to Boise last month.

In Bozeman, Mont., with a population around 50,000 as of 2019, the median home price has risen to $515,000 from around $432,500 in a year, with inventory shrinking sharply, according to the Bozeman-based Gallatin Association of Realtors.

Amy Alvarado, an agent with boutique real-estate company Engel & Völkers AG, said that around 95% of her clients since the pandemic hit are coming from the Bay Area. Many make all-cash offers.

Les Craig, a partner with the venture-capital firm Next Frontier Capital, sees both downsides and advantages of arriving tech workers.

A transplant himself from Baltimore in 2015, Mr. Craig said the arrival of tech-industry remote workers can complicate compensation in a place where there is already a gap of $20,000 to $30,000 between local workers in other industries and those who work in tech. “If you have out-of-state workers coming in that are making proportionally even more than that, it accelerates this problem even further,” he said.

But his firm, which focuses on early-stage investments in tech companies in several Western states, has invested more than $28 million in 19 Montana tech companies, which together have raised an additional $174 million. On the salary front, with the increased venture-capital spending, he said, “I think we’re going to start seeing some equalizing with out-of-state jobs.”

He also sees any talent influx as a positive. “I hope for us that it means we finally forge a tech culture in the local ecosystem,” he said—a time when there are enough people in tech to create a natural networking effect. Three of his own friends, all in tech, have relocated from the Bay Area and New York since March.

In the ski-resort town of Park City, Utah, Casey Metzger, owner of the Top Shelf mobile bartending and consulting service, said all the newcomers have been a boon for local restaurants with outdoor dining, bike stores, guiding companies and construction companies. However, they also drive up costs for properties, he said.

“If we don’t pay attention to low-income housing, we’re going to be in trouble,” said Mr. Metzger.

Tiffany Fox, vice president of marketing for Summit Sotheby’s International Realty, said that in the past three months, she has had a handful of people knock on her front door to ask if she’s open to selling her house. (She’s not.)

She said every weekend in town now feels like the Fourth of July—good for some but not as good for others. While the real-estate market pulled in $1.49 billion from July through September, residents are posting comments on the local Facebook group expressing concerns about the newcomers, she added. “People are mourning Park City,” said Ms. Fox.

Jon Jessup, who founded the e-commerce software startup Cloud Conversion in Park City 12 years ago, said every time he takes his children to the park he meets tech workers who recently landed from San Francisco and New York. He recently played golf with a fellow ex- Oracle Corp. employee.

“Normally I’d have to go to San Francisco to meet guys like me,” he said.

Mr. Jessup had already had a couple of recent transplants ask his advice on starting companies of their own in Park City. But Covid-19 and the work-from-anywhere era have caused him to rethink his own operation: He’s closing his Park City office and making his workforce fully remote. He also thinks anyone luring talent to Park City will have an uphill battle, as far as salary goes, because of the rising cost of housing. “They’d have to make $300,000 a year to be able to buy a house here.”

Back in Boise, the software company Clearwater Analytics has already seen a handful of its 1,200 workers leave for big tech firms that offered them more money but didn’t require them to relocate. “We’re expecting this to be a trend that could actually be a significant issue for us,” said Cindy Blendu, chief human-resources officer for Clearwater, which has 1,200 workers globally.

Having long been an office-centric company, Clearwater implemented its own flexible remote-work policy that it will continue past the pandemic to stay competitive.

“You now have all these people moving in from different markets bringing in all different types of compensation,” she said, adding that she’s continually evaluating whether her firm is keeping up with Boise’s going rate for tech labor.

“Last year I would have said, yeah, I feel really good we’re paying market,” she said.