The Tech Boom’s Second Cities
Last summer, after our son was born, my husband and I left San Francisco, our home for about fifteen years, and moved to Fort Collins, Colorado, a college town that is about an hour’s drive north of Denver. San Francisco is almost improbably pretty, a soft macaron of a city, and we were sad to leave, but we thought that it would be better if we did. My husband is a college professor, and I am a journalist, so we make a decent living by most standards, except those of coastal U.S. cities. We could afford to live in San Francisco only because we’d been lucky enough to find landlords who were willing, out of simple kindness, to rent us a one-bedroom apartment for well under market rate. (As Nathan Heller described in the magazine a few years ago, many longtime working-class residents haven’t been so fortunate.) But then I got pregnant. Our friends down the street, also writers, had a two-year-old who slept in a walk-in closet. Our closet wasn’t big enough for that, and we couldn’t move to a larger place in San Francisco, since a two-bedroom apartment would have more than doubled our rent. So when my husband was offered a job in Fort Collins, we eagerly moved. A couple of months later, our friends decamped to Seattle.
My husband and I liked thinking that we were at the vanguard of an important economic and cultural shift toward this part of the country—“Fort Collins is the new Portland!” he kept telling people. We weren’t sure whether we had come up with this because it made us feel better about leaving a city that we had loved. Last week, though, a report from the Census Bureau on the changing population of U.S. cities confirmed that increasing numbers of people are moving to the region. Between the summers of 2014 and 2015, Denver was the fastest-growing large city in the country. Its population increased by nearly three per cent, a growth rate that surpassed that of Las Vegas, Austin, and Seattle, all of which have had turns at the top of the list. Denver also became one of the twenty most populous cities in the U.S., dislodging Detroit.
Detroit’s disappearance from the list is the sad but unsurprising manifestation of a decades-long population decline in Midwestern and Northeastern cities whose once-vibrant economies have been damaged by the offshoring of manufacturing jobs. Meanwhile, the ascents of Las Vegas, Austin, Seattle, and, now, Denver show another set of economic shifts, from real estate to technology. For decades, Las Vegas was the fastest-growing big city in the U.S., its expansion fuelled by a long housing boom that brought in huge numbers of construction jobs. Then came the real-estate bust and the recession. Stuck in homes that were worth less than what they had paid, people stopped moving as much. When migration picked up nationwide, Vegas was no longer the big beneficiary. For several years in a row, Austin was the fastest-growing big city; Seattle took its place briefly, in 2013, but Austin regained the position in 2014.
The shift toward tech has brought people to Silicon Valley cities like San Francisco and San Jose, of course, as happened during previous tech booms, but tech executives and investors have been somewhat more cost-conscious this time around. That has meant opening offices and hiring tech workers in secondary cities outside of Silicon Valley. Austin and Seattle have been big beneficiaries of that movement, as have some smaller cities, like Salt Lake City. In 2013, when the small-business blog at the Times started a series on what it called “startup cities” outside of the then-obvious tech capitals, one of its first posts was a profile of Austin.
It now appears that Denver is having a moment of its own. As in Austin and Seattle, a high concentration of good universities in Denver and nearby cities, like Boulder and Fort Collins, has contributed to the region’s well-educated workforce. The cost of living in Denver is also relatively low, as are real-estate prices. Though the city isn’t the headquarters for any big tech companies—like Dell in the Austin area or Microsoft and Amazon in Seattle—several of them, including I.B.M. and Oracle, have offices here.
The presence of those offices, and of the universities, has also helped create a vibrant startup scene: people get educated here or come here for jobs, and then they graduate or leave those jobs and become entrepreneurs. In other cases, established businesspeople are coming to Denver to start companies. Scott McNealy, a founder of Sun Microsystems, chose Denver as the headquarters for a data-analysis startup called Wayin. Explaining to the Denver Post why he left California, he said, “The prices of everything have skyrocketed. The regulations. The pension deficit. The traffic. It’s just not a fun place to go start.”
At this point, none of the Denver startups are well known, but investors seem to find them promising. Last year, the research firm CB Insights released a report that ranked Colorado sixth among states that had received the most venture capital, after California, Massachusetts, New York, Texas, and Washington. In 2015, Denver startups attracted more than eight hundred million dollars in venture-capital funding, led by technology, energy, food, and marijuana companies. At least some of the investments appear to be paying off: in 2014, Oracle paid more than a billion dollars to acquire Datalogix, a Denver-based data-collection firm.
Are these developments shifting the country’s cultural center of gravity, as my husband hopes? Maybe. “When you look at migration data, by far, most people who move in a given year are people in their twenties and early thirties,” William Frey, a demographer at the Brookings Institution, told me. This is also the age group that most influences our cultural obsessions and idiosyncrasies—old and independent enough to have disposable incomes, young and unencumbered enough to spend much of it on food, music, and art.
There are indications, already, that the tech economy is slowing, and that could have implications for the economic and cultural growth of Denver and its ilk, as investors become more nervous about funding unproven startups, and the companies, in turn, pull back on hiring. But for now Denver seems ascendant. “There’s a lot of cachet in moving to Denver,” Frey said. Told you so.
The Daily
