San Jose, CA, may be the heart of Silicon Valley, but cities like Washington, DC and Boston could give the region a run for its money, according to a new report from Cushman & Wakefield.
The report ranks metros based on the share of adults with a four-year college degree as well as the number of knowledge workers and tech workers. Nearby San Francisco trailed San Jose, followed by DC, Boston/Cambridge, MA, and Raleigh/Durham/Chapel Hill, NC.
In his analysis of the report, CityLab editor Richard Florida points to another measure — venture capital investment in high-tech startups — as a better gauge of tech-hub potential. In that case, San Francisco, New York, San Jose, Boston and Los Angeles lead the list. DC ranks No. 10 and North Carolina’s Research Triangle is No. 17.
Tech hubs can be a boon for an area's GDP, job creation and transportation infrastructure, but their emergence also has strong implications for local residential development. Multifamily construction has been booming in these areas as tech workers seek housing close to work, transportation and lifestyle amenities. Seattle and San Francisco have seen this development firsthand, as both have added residential units by the tens of thousands to meet rising demand.
Still, these and other cities continue to experience increased pressure on their already-strained markets. California's technology boom only intensified the area's affordable housing shortage. The Bay Area alone has four major counties each coming up 10,000 rental units short of what residents requiring affordable housing need. The state’s affordable housing crisis only stands to worsen if homebuilders can't ramp up their activity to meet population growth.
Seattle, too, is feeling the squeeze presented by its thriving tech community. With giants like Amazon, Facebook and Google planting roots there, populations are increasing and the city is seeing record development in its downtown as a result. However, a shortage of land and strict zoning regulations are together positioning the market for an even more serious housing crunch. Strong demand has homes on the market for an average of 25 days in Seattle, CNN reported.