DEVELOPMENT
a lot of instability in neighborhoods and places people have been able to afford to live ,” says Kendra Lewis , president of the Sacramento Housing Alliance .
Strech agrees that housing stock and prices are a big problem . Workforce and national supply chain issues , including lumber shortages , threaten to further slow construction and add to the cost . His organization is pushing state and local governments to lift some regulation and fees to speed up more development in the short term .
“ The uptick in activity has really created a positive narrative for our industry to say we need to get serious about housing in California , and we need to figure out ways to break down barriers and provide our residents with the shelter they want and they need ,” he says . “ We need to address that crisis right along with the pandemic .”
More commercial real estate options are needed too , Broome says . As the pandemic lifts , he hopes more tech companies will want a physical footprint in Sacramento to accommodate relocated employees and hire from a growing pool of highly skilled workers . Similar to residential real estate , Sacramento can offer better prices for offices than the Bay Area . But in recent years , Broome ’ s fielded inquiries from large companies for 200,000-square-foot office space that just “ doesn ’ t exist in the community .” Projects in developments such as Aggie Square adjacent to the UC Davis Medical Center , will help , Broome says .
But because the companies don ’ t have time to wait a year or more for new construction , Broome has proposed marketing and leasing some state buildings to commercial clients . “ We have to start pivoting away from our old real estate model ,” he says . “ We haven ’ t had the right real estate model in 20-30 years .” Solano County is also making moves to attract more headquarters . Burris is focusing on a need for more flexible corporate space that caters to high-tech companies , including in the biotech and food innovation industries . He expects to see even more businesses follow their employees and relocate to his area in the years ahead . “ Just with that momentum , the companies that they work for , especially smaller ones , will have to seriously consider moving
“ It made sense for us to relocate , because it wasn ’ t going to materially affect our business in a negative way being up here . A lot of the talent we needed , we could find in the Sacramento area .”
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towards where their employers are going ,” Burris says .
Workforce and capital also remain issues . Sustaining a larger local tech industry will mean training more employees in computer engineering and other in-demand fields . And attracting new investment funds and startup accelerators to the area is key to providing opportunities for tech workers with entrepreneurial aspirations and convince them to stay and found their businesses in the region , facilitating the shift from a government town to a tech hub .
“ If we can get those funds off the ground , continue to build out acceleration space and continue to vacate office real estate , since we don ’ t build offices , you ’ re really going to see things come together in the next three to four years ,” Broome says .
Other factors likely to affect the long-term trajectory of the trend are less tangible . The recent surge provides evidence the region can attract a highly coveted workforce . But one big question , and a challenge for leaders , is whether that migration continues and whether those workers stick around post-pandemic .
Many experts expect that major workplaces , especially in the tech industry , will continue to accommodate and , in some cases , even promote remote work . Dropbox and Twitter are among the companies that have already announced plans to make working from home the norm , not the exception . Other tech giants , including Facebook and Microsoft , have signaled that they will keep the option on the table for many of their tens of thousands of employees . In another sign of the shift to flexible work , Pinterest in August 2020 paid $ 89.5 million to cancel a lease on a 490,000-square-foot office in San Francisco .
Those changes have emboldened more workers to consider leaving the Bay Area . And even a partial return to normal office culture could help the Sacramento area continue to attract more tech workers to its communities . “ If you don ’ t have to commute every single day , that extends the distance people are going to move for their workplace ,” UOP ’ s Michael says . “ Sacramento is too far away for daily commuting , but if it ’ s once or twice a week you need to be available , it ’ s more viable than in the past .”
But there are other changes that could slow the shift . The Bay Area exodus is also causing rents in San
58 comstocksmag . com | January 2021