Millennial migration favors San Jose despite cost of living, says census

The Bay Area is getting more mixed messages on the seemingly perennial question of if and how quickly residents are fleeing the region and the state, as the finance company Smart Asset released a report Friday claiming that San Jose is one of the most popular destinations for millennials on the move despite its high cost of living.

Smart Asset economist Derek Miller sorted through U.S. Census data to figure out which U.S. cities got the greatest inflow—i.e., the margin of new residents relocating to a city over the number of those moving away—with the ever-topical millennial demographic, here defined as anyone between the ages of 20 and 34 in 2016.

Suffice to say, San Francisco did not acquit itself well with the trend, despite previous census analyses revealing that the city’s median age is gradually getting younger with each passing year. Instead, millennial movers reportedly favored San Jose, which came in seventh place on Miller’s list, the only California city to break the top ten.

Here’s how the numbers sorted:

• For 2016, Miller reports that 19,943 new residents ages 20-34 came to San Jose between 2015 and 2016, while 14,447 moved away, for a net gain that beats out eighth place Denver, Colorado by nearly 400 but comes nearly 200 short of matching sixth place Newport News, Virginia.

Photo by PBK PG/Shutterstock

• The census reports that San Jose’s total population in 2016 was 1,031,942, up 4,382 from the previous year. This would mean that the city’s net gain of younger adults was actually greater than its net gain of the population in general—which seems paradoxical but just means that San Jose had a net loss in some other age bracket somewhere. Also of note: These figures come from the American Community Survey, which is an annual estimate of population and the Census Bureau adjusts the figures up and down as better information comes along.
• Naturally, the most likely explanation for San Jose’s youth boom is Silicon Valley jobs. Market Watch reported in 2017 that “millennials working in tech are being hired almost 50 percent more than their workforce.” The fact that Seattle, another west coast city with a pronounced tech scene, came in first on the list buttresses this impression. Note that Oakland came in 18th place on Miller’s list, while San Francisco failed to break the top 25.
• Note also that, although cheaper on average than San Francisco, San Jose suffers the third-highest commercial rents in the country on sites like Zumper and ApartmentList (which don’t necessarily reflect the city’s full rental stock but do reveal what many new transplants will encounter while apartment shopping). In 2016, median rents were lower—by nearly $250 on Zumper, for example—but were still the third highest nationwide, behind only SF and New York City.

• Where Millenials Move [SmartAsset]
• American Community Survey [US Census]
• Silicon Valley’s Age Problem [MarketWatch]
• Berkeley Rents Lowest In Bay Area [Curbed SF]
• SF Rents Sluggish [Curbed SF]