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“Go West, young man” is a phrase that first appeared in an Indiana newspaper in 1851 and was popularized 14 years later by New York journalist Horace Greeley. He was encouraging development of America.
Now nationwide real estate market analyst Zillow is exhorting high tech businesses to move inland for more affordable real estate and other opportunities. Reading the report’s conclusions, you can almost hear Greeley saying, “Go Midwest, young startups.”
Today, digital industries are a leading component of rapidly accelerating housing and commercial property prices on the west and east coasts. Even many high tech employees struggle to buy homes or find rentals near their workplaces in the metro areas of cities such as Seattle, San Francisco, San Jose, Los Angeles and Boston.
For example, according to a May 2019 Bloomberg article, RVs used as modular homes are a common sight near the campus of Google’s Silicon Valley campus in the San Jose metro community of Mountain View.
Asking to remain anonymous, a Google security guard who lives in one of the RVs as a renter told Bloomberg she would lose most of her income to housing if she were to rent a regular apartment locally. The article noted that median rent in Mountain View is now more than $4,000 a month, and the median home value is $1.8 million.
These kinds of experiences are creating a digital diaspora. High tech workers and companies are relocating to America’s heartlands from Kansas and Nebraska east to Ohio and from Minnesota and Wisconsin south to Texas.
According to the Zillow study, Oklahoma City and Kansas City are particularly strong emerging hubs for high tech industries among the Midwest’s Silicon Prairie communities. It also judged the following cities (some outside of the Midwest) as being what it called “hot markets” for tech expansion: Austin and San Antonio, Texas; Cincinnati, Ohio; and Jacksonville, Florida.
Zillow reported that all these metro areas are strong choices due to lower housing prices, greater livability, easier commutes, and high percentages of college-educated workers with tech skills. The exorbitant salaries tech companies face for top employees in areas with high cost of living is another reason why startups and the satellite campuses of large tech companies are moving inland.
In addition to its own real estate data, Zillow relied on information from the U.S. Census, the U.S. Bureau of Labor Statistics and LinkedIn (data about shortages and surpluses of potential employees with various tech skills).
In a June 2018 article titled “Life in the Silicon Prairie: Tech’s Great Migration to the Midwest,” Hustle reported that the growth of tech companies in the Rust Belt — stretching from Michigan south and east through Pennsylvania — is eliminating the myth of the area’s “lameness.”
It’s not surprising that Reuters in September 2019 called the Rust Belt a “house-flipping hotspot,” because cities such as Buffalo, Cleveland and Pittsburgh are attracting companies like Alphabet, Inc., (Google’s parent), Amazon and Uber. Also, the region has a rich inventory of old homes ready to shine again. So, as it contributes to a housing crisis in one part of the nation, high tech is aiding rejuvenation elsewhere.
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