Published 4:00 am, Tuesday, April 25, 2017
Photo: The Washington Post, Getty Images
Like most of America’s true paradigm shifts, the growth of Silicon Valley’s tech industry started with lots of slow-burning embers—then exploded into a full-scale conflagration seemingly overnight. It took its name from the semiconductor businesses that seeded a patch of Northern California in the 1960s, attracting brainiacs from around the world. But the modern history of the place really began in 1976, when Steve Jobs and Steve Wozniak first huddled together in a stuffy Los Altos garage to invent a cool, affordable personal computer, the Apple I—and a company that borrowed its name.
Ever since, Silicon Valley has been the engine of tech innovation in the United States, powered by life-changing ideas, optimism, bushels of venture capital cash, and lots and lots of coders, engineers, and developers.
And something else, too: nosebleed-inducing real estate prices. That has led to a national quest to find the next Silicon Valleys—the ones that America’s up-and-coming tech talent could actually afford to live in.
The harsh truth is that even the decent month’s salary earned by many skilled Silicon Valley workers these days barely covers one of those fabled Los Altos garages. The sky-high prices may explain why the number of folks moving to the region dropped by 27% from 2012 to 2015, according to the latest data from the think tank Joint Venture Silicon Valley.
“Silicon Valley is still the hub it’s always been,” says John Reed, senior executive director for the tech recruiting firm Robert Half Technology, headquartered in Menlo Park, CA. “There are other markets, though, that are bringing on tech professionals at a greater pace.”
Of course, some of those alternate tech meccas—Boston, Seattle, Denver—already have prices that rival the original valley. So where are the next tech superhubs—the cities bursting with opportunities, fun, and affordability?
“You may get paid a little bit less if you take a job in, say, Austin, but the cost of living is so much lower,” says John Boitnott, digital consultant for Entrepreneur magazine. “And you’ll be able to have a better existence.”
So, as an upstanding service to the United States’ fastest-growing industry, our data team ranked the 500 largest U.S. cities by these tech-savvy factors—and then eliminated those where housing affordability is out of whack, even for a decently paid engineer or developer.
- Percentage of employment in the tech industry
- Share of technology/engineering jobs out of all job postings on indeed.com and Dice.com
- Operations of major tech companies, including Google, Amazon, Apple, Microsoft, IBM, Facebook, and Cisco
- Number of startups per capita
- Number of tech companies per capita, including smaller ones that may not be household names
- Tech crowdfunding projects and tech meet-ups per capita
- Real estate and rental affordability (based on 28% or less of an average engineer’s salary)
Got all that? Put on your best wearable tech, and let’s check out these 10 cities to get your geek on.
1. Austin, TX
Median home price: $392,000
Average salary of engineering jobs: $87,600
In 1967, IBM was the first big tech corporation to open its doors in Austin. It took some time, but the gates have since opened wide. Titans such as Google, Apple, and Facebook now compete for the most promising grads from the University of Texas–Austin. Local endeavors like RetailMeNot, an online coupon company, and HomeAway, an Airbnb competitor, have grown into multinational firms.
And each year, the South by Southwest conference brings thousands of attendees together to celebrate emerging (and sometimes whimsically emerging) technologies. This year, the Austin company Kasita, a builder of smart tiny homes, made a big splash.
The startup energy is palpable when you enter Capital Factory, a renowned local incubator brimming with code-wrangling and device-juggling folks. For as little as $350 a month, they get access to co-working space, meet-ups, hack-athons, and, best of all, frequent happy hours with like-minded engineers.
Austin has seen more upscale restaurants lately, where investors close big deals, but great $3 taco places still abound. A home goes for $392,000—not exactly cheap, but still way less than half the price in San Francisco. And most of these properties are stand-alone houses with yards out back. Prices in the city had been rising in the double digits for the past few years, but the appreciation slowed to just 5% in 2016.
Oh yeah—it’s a cool and welcoming place, too. “Different lifestyles are celebrated here,” says Paul O’Brien, a startup consultant and entrepreneur at Austin’s MediaTech Ventures. “That comfort with so many different perspectives enables us to try new things and be creative.”
2. Atlanta, GA
Median home price: $349,900
Average salary of engineering jobs: $85,000
Atlanta is (almost) a secret in the tech world. It’s one of the few cities to have Google Fiber’s gigabit-speed service—roughly 50 times faster Wi-Fi than the rest of America. It flies. Also speedy: the path to homeownership. You can score an affordable home, within either the thriving city limits or the suburbs, a co-working space for $300 a month, and a sweet, low cost of living.
The city pulls talent from top-notch schools like Georgia Tech to feed its long list of Fortune 500 companies. The fertile Southern soil has generated nearly 2,000 tech companies.
“We have a growing startup community with a lot of momentum,” says David Lightburn, co-founder of Atlanta Tech Village, a co-working space where established entrepreneurs serve as mentors for newbies. “It’s a community that’s very pay-it-forward—with successful entrepreneurs who are willing to give back.”
Entrepreneurs often get their start at Georgia Tech’s Advanced Technology Development Center, which claims to be the largest and oldest campus-based tech incubator in the country.
Median home price: $280,000
Average salary of engineering jobs: $84,600
Minneapolis boasts a certain coolness factor (and we’re not just talking about its ungodly frigid winters), plenty of tech talent, and an exciting startup culture. That may be because the city is the home of a dozen universities, including the University of Minnesota, which churn out highly educated tech workers.
Lots of early-stage tech companies here revolve around the health care industry, thanks to local big businesses like the Mayo Clinic and UnitedHealth Group. But new business ideas spring up every day from locals, including SportsEngine, which helps sports leagues manage websites.
These startups are moving into old warehouses and historic buildings across the downtown area. Co-working spaces like COCO and Restore Colab provide affordable open-space workstations, along with conference rooms, whiteboards—and those ’70s faves, beanbag chairs.
“What they call ‘Minnesota nice’ is real,” says John Malone, a software engineer at Apruve, a financial tech startup in Minneapolis. “The startup culture here is very positive, with everyone trying to help each other out. It’s a different work ethic [from Silicon Valley]. Things are flexible.”
Median home price: $330,000
Average salary of engineering jobs: $87,500
There may be no better place to launch a tech career than the Research Triangle Park, one of the world’s most prominent research centers for biotechnology and engineering. It’s home to Fortune 100 companies such as IBM, Cisco, and Sony Ericsson.
Raleigh and Durham form two points of the Research Triangle; Chapel Hill is the third. Housing prices in Raleigh-Durham are low, and the stock of homes is beautiful, from sleek apartments downtown to Georgian-style homes in the suburbs. Just a few hundred dollars can get you a desk at the area’s many co-working offices—even one in the basement of a renovated tobacco warehouse. How’s that for an entrepreneurial spirit?
And when folks aren’t coming up with the next Tinder or smart home appliance, they can relax at the Boxcar Bar + Arcade. As the name suggests, the joint boasts two dozen beers on draft and more than 70 arcade games. Bring on the Ms. Pac-Man tournaments, stat!
Median home price: $179,900
Average salary of engineering jobs: $74,800
When Uber chose to test its robot-driven taxis in Pittsburgh last year, many wondered why it wasn’t happening in San Francisco. But the Steel City is the home of Carnegie Mellon University, where the technology for the autonomous taxi is being developed.
The onetime manufacturing hub has become decidedly high-tech in recent years. Google and Intel already have a foothold here, and the German software company SAP and virtual reality headset provider Oculus are setting up new offices. The city has also spun off noteworthy startups like the artificial intelligence company Argo AI, which just received $1 billion from Ford to develop—you guessed it—self-driving cars.
And the best part about the city may be its very low cost of living. Homes are affordable, and two-bedroom rentals go for an average of $822. Meanwhile, a ticket to Thrival, a terrific festival that mixes innovative robotics and biotech projects with concerts, will set you back just $35.
6. Chicago, IL
Median home price: $299,900
Average salary of engineering jobs: $85,100
Silicon Valley ideas meet the Midwestern way of life in Chicago. This has created a low-key and collaborative startup community.
Excelerate Labs offers a nationally acclaimed accelerator program driven by Sam Yagan, co-founder of OKCupid. Each selected company gets $75,000 in cash to build product for a final demo in 13 weeks. And a rich stream of talent comes from renowned universities like Northwestern University and the University of Chicago.
“Affordability is certainly one perk among many” in Chicago, says David Kalt, founder of Reverb.com, an online marketplace for music gear. “At the end of the day, you want to spend your money where it can make the most impact—on your product and your people.”
Chicago isn’t known for turning out “unicorns” (companies valued at $1 billion) yet. But Groupon and Grubhub were founded there, demonstrating that it is possible to hit it big in the Windy City.
7. Tempe, AZ
Median home price: $320,000
Average salary of engineering jobs: $80,200
In the “Silicon Desert,” Arizona State University is a powerhouse of technology advancement. Innovators create wearable tech for the visually impaired through the sense of touch, and develop 360-degree sensors for driverless cars. The ASU Research Park is a 30-year university and industry collaboration, with tenants like GoDaddy, a web hosting company.
West Coast tech companies are taking note. The digital satellite telecommunications company ViaSat has set up a new research facility in the Research Park. Amazon leased offices last year and is now recruiting 70 software developers.
Every February, entrepreneurs converge on nearby Phoenix for the five-day PHX Startup Week, featuring educational events, one-on-one mentor sessions, lively debates, and competitions.
Oh, and it’s free.
The housing market also looks good for buyers on a budget. They can snag a spacious, single-family house with a stunning desert landscape in the low $300,000s.
Median home price: $328,000
Average salary of engineering jobs: $78,400
It’s not just ski bums and bunnies who love Salt Lake City. Coders, self-starters, and angel investors have also become fans. Blue-chip companies like eBay and Adobe have offices in the city, reaping the benefits of a skilled workforce, low taxes, and cheap real estate.
That has led to an overflow of entrepreneurs. Venafi, which protects digital keys, heads up a thriving cybersecurity sector. Instructure, an online course management system, is among the hottest unicorns in edtech. Plenty more “soonicorns”—startups with the potential to become unicorns—have attracted investment from the likes of PayPal co-founder Peter Thiel.
When they’re not coding, techies can show off their true colors at the local version of Comic Con, at the “Dawn, Day and Night of the Running Dead” zombies vs. humans 5K-ish race, and the Salt City Steamfest, a costumed festival of 19th-century mechanics. Nerd-tastic!
9. Madison, WI
Median home price: $269,900
Average salary of engineering jobs: $74,000
Madison has been an epicenter for big-brained Midwesterners since the University of Wisconsin–Madison was founded in 1848. But its startup tech scene has really just ballooned in the past decade. Since then, Epic Systems, a health care software firm, and EatStreet, an online food-ordering venture, have become household names.
On the UW-Madison campus, one floor of student housing is set aside for student entrepreneurs to foster close collaboration. Gener8tor is a hot spot for early-stage companies on the prowl for office space and mentorship. The accelerator invests up to $140,000 in each high-growth startup multiple times a year.
10. Richmond, VA
Median home price: $205,500
Average salary of engineering jobs: $84,900
Attend just one session of 1 Million Cups Richmond, a weekly event for entrepreneurs to meet and exchange ideas, and you come away feeling hell-bent on staking your own startup claim in this historic Southern town. The scene is backed by a state tax credit that encourages early-stage investment in tech startups, and talent from schools like Virginia Commonwealth University and the University of Richmond.
The nonprofit group UnBoundRVA has a program that guides entrepreneurs from low-income communities, who get business training and hands-on guidance in launching their companies within a year. Incubators like Lighthouse Labs and the Annex provide office space, mentorship, and funding to fledging companies.
The city also has a wealth of hippie outposts where the tech-obsessed can hang. The Galaxy Diner cooks up sci-fi-themed morsels like Nuclear Waste Burgers or Super Nova BLTs into the wee hours. Because Nuclear Waste Burgers are best consumed very late at night.
This article “Silicon Valley Shake-Up: These Are the Next Top Tech Towns” appeared on Real Estate News and Advice from realtor.com.
* Data: realtor.com, Bureau of Labor Statistics, indeed.com, Dice.com, CrunchBase, AngelList, Kickstarter, Meetup, Department of Housing and Urban Development, Google, Amazon, Apple, Microsoft, IBM, Facebook, Cisco.
The average salary of engineering jobs is weighted-average calculated, using median occupation salary and share of occupation out of total jobs, from Bureau of Labor Statistics data.