Recently, the New York Times published an article and podcast titled, “The most empty downtown in America.” It outlined the story of San Francisco’s rise as a tech hub, with highly paid young adults employed at growing companies such as Yelp, Salesforce and Uber.
These workers spent money at local coffee and lunch spots, creating a need for another set of service and hospitality workers. It was a virtuous cycle until the COVID-19 pandemic sent tech workers to work from home.
As has been widely reported, tech companies embraced virtual work and were among the first companies to publicly announce that they would not mandate “Return to Office.” Workers relocated away from the high-cost city, further cementing their work-from-home intentions. As a result, San Francisco lags most downtowns in office usage.
Where most downtowns now have surpassed 50% office occupancy, San Francisco remains around 46%. Much of this situation traces to San Francisco’s “all-in” decision to focus on tech as its primary business sector period. New York City is feeling similar impacts; a recent Bloomberg analysis revealed that the increase in remote work, and therefore fewer workers eating, shopping and entertaining near their Manhattan offices, is costing NYC $12 billion in annual tax revenue.
I thought this would be a good time to share the Santa Clarita Valley’s economic development strategy and how it is designed to prevent such a siloed approach. While many people still think of SCV as a residential community that serves as a bedroom community to jobs in Los Angeles, SCV is quietly becoming a job center.
We target a diverse set of industries to create a resilient economy. We focus on attracting companies in different business sectors: aerospace and defense, technology, digital media and entertainment, advanced manufacturing, medical device, and corporate headquarters. These sectors are targeted because they are complementary to each other and the L.A. region, while also being distinct enough that they have different economic drivers, reducing the risk that macro-economic trends will affect all sectors simultaneously.
We have seen this approach play out over the past few years.
For example, filming activity skyrocketed during the pandemic as people embraced new streaming channels and content. During that same time period, however, travel declined and orders for new planes stopped, negatively affecting our aerospace sector. That sector is now rebounding as travel has resumed, while tech companies, including streaming content producers, are right-sizing their operations for the long term.
It is no accident that SCV has these diverse sectors. It is a deliberate strategy designed to ensure ongoing employment opportunities and tax generation, which helps us maintain our high quality of life.
The SCV Economic Development Corp.’s mission is to bring high-quality jobs to the Santa Clarita Valley. We bring together leaders from the public, private and academic sectors to create an integrated approach to economic development for the SCV. Learn more at SCVEDC.org.
Holly Schroeder is president and CEO of the Santa Clarita Valley Economic Development Corp.