But it doesn't matter. The Bay Area region is going to see serious emigration over the next 5 yrs and it'll be primarily the people that SV wants to keep around: younger people who can't afford to lay down roots in SV and furthermore understand it would be stupid to do so at these prices. Especially with engineers, I refuse to believe most under 30 aren't already well aware that the economics favor living cheap, saving up, and then getting out.
Tech is very compatible with remote work (even at a low level when you think in terms of microservices and PaaS), and moving operations or starting fresh is relatively easy. Even the networking argument is thin: there are already concentrations of talented engineers in a bunch of major cities. Not to mention I've self-learned almost everything relevant anyway. Conferences and assorted other BS are largely pointless.
So what's left? Investors and existing companies. I believe this is why we haven't seen a substantial exodus thus far. I think the argument about career advancement issues being in a non-HQ office doesn't really hold as much water for the large companies. I also think tech companies look at good engineers located outside the expensive SV bubble as a kind of subsidy: revenue isn't nearly as sensitive to geographical distribution of employees as is cost.
With investors the story may be different. They want to keep a close eye on their companies and finding good engineers to take a chance on your startup is much easier in a high-density tech zone. But why would entrepreneurs want to suffer the incumbent costs? Assuming the same size of investment round, wise founders would choose to minimize their burn rate by locating somewhere closer to the midpoint on the spectrum of tradeoffs (e.g. Boulder/Denver, Austin, NYC outside Manhattan, Seattle, LA, etc).
TLDR: It seems like the status quo is far too tenuous to continue to hold indefinitely.
I'm kind of surprised that public companies with heavy presence in the Bay Area aren't coming under pressure from investors to relocate their operations to cheaper locations.
But then I realize that most Bay Area salaries do not compensate for the living expenses, so companies aren't bearing the full brunt of the living costs on their payroll.
However, that makes less sense in a cul-de-sac suburb + highway situation than it does in a city with more public transit options and fewer highways. You basically have to rezone and buy out several lots and put up apartments and the entire neighborhood changes. So if your house gets bought up, you may benefit but it may drop if you live near it but don't sell to the developer.
I see this in Chicago. Graph price of single family 3 bedroom home and 3 bedroom condo. The prices track. The SFH is worth about double... When condo prices fell in 2008, SFH prices fell too.
In Chicago, a 300k condo and a 600k single family home ARE substitutes. I know many people that could afford either. As the delta shifts one way or another, more of them will opt for the other choice.
Of course good luck convincing J. Random Householder of that