• People are flocking back to New York and staying away from Silicon Valley, Jefferies analysts said.
• USPS mail forwarding data shows New York occupancy is growing as financial giants reopen offices.
• Big Tech’s late return of offices is likely to lead to a population decline in the Bay Area, Jefferies said.

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In the US, the second phase of migration from the pandemic era has begun.

The pandemic and associated lockdowns sparked mass exodus from densely populated cities as millions of Americans moved during the crisis and many fled metropolitan areas. The vaccine-assisted reopening is now sufficiently advanced that some of these trends are reversing their course.

USPS email forwarding data suggests Americans are returning to major east coast cities, Jefferies analysts, led by Jonathan Petersen, said in a note this week. In Manhattan, 4.3% of households moved out during the pandemic, but regained 0.31% of occupancy by May and June. That figure should rise, the team said, as “all signs point to further acceleration into July”.

The moves could be related to financial services giants encouraging employees to return to their offices, Jefferies said. The news sparked “a scramble for apartments” as those who left at the start of the pandemic returned to New York.

Read more: Dealmaker dinners are back and interns are ready to hit the bars. Wall Street’s appetite is returning and New York City restaurants prepare for a rush.

Boston has similarly seen a quickening of summer migrations, the note said, while that city’s population is lower than it was just before the pandemic.

Chart over Jefferies.

Jefferies

Northern California, on the other hand, is struggling to recover. The occupancy change in San Francisco was flat in May and June, Jefferies said, and the total population remains about 3.4% lower than in March 2020. The decreases in Silicon Valley stayed around 0.2% each month. The lack of population growth could be explained by tech companies postponing their return dates to the second half of the year, the analysts said.

Sunbelt cities like Raleigh, Jacksonville, Charlotte, and Austin remain clear winners of the pandemic relocation cycle. The strong population growth continued into the second quarter, and occupancy rates rose more than 1% in many of these cities due to the pandemic.

Every market that saw net immigration in the second quarter was either in Texas or the southeast, Jefferies said. Four of the five fastest growing cities were in Florida’s major hubs such as Orlando, Miami, Jacksonville and Tampa, the company added.

Chart over Jefferies.

Jefferies

USPS data also suggests that the city-to-suburb exodus wasn’t nearly as large as early narratives suggested.

Rural areas benefited most from lockdown-related emigration, with population growth increasing in early 2020 and only slightly decreasing in the following year. And while the urban population has recovered with the reopening of the U.S., suburban occupancy has largely remained unchanged.

The city-to-country shift is likely to be driven by Americans moving into second homes in the country, Jefferies said. Those expecting permanent teleworking likely also played a role in the population shift, the team added. This means that the urban comeback could get even bigger in the coming months, especially on the east coast.

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As San Francisco expands a hotel program to rent rooms for the vulnerable homeless during the pandemic, the city is facing a roadblock: some residents find it more attractive than another permanent option.

Shelter-in-place hotels, which opened to vulnerable homeless people during the pandemic, offer private rooms with bathrooms and three meals a day. However, the program is only temporary. In contrast, newly available permanent supportive housing in a recently renovated hotel has shared bathroom facilities and charges 30% of a resident’s income as rent.

To date, around 70% of emergency shelters have offered places in the renovated 232-unit Granada Hotel, which the state bought for $ 45 million last year. Abigail Stewart-Kahn, interim director of the Department of Homelessness and Supportive Housing, announced regulators last week.

“We have seen a decline in the rate of people living in temporary shelters, unlike anything else in San Francisco when they were offered permanent supportive shelter,” said Stewart-Kahn. “That is basically understandable.”

She said, “We have never had shelter more beautiful in many ways” than permanent supportive shelter.

“We respect people’s right to turn down their housing agency,” she said, adding that the city would work on more options.

This poses a problem for the city, which has made a pledge not to kick anyone who moved into a shelter-in-place hotel and is undergoing a renovation program before November 15 last year. The city is now trying to find permanent places before federal refunds may expire by October. According to the city, almost 61% of hotel residents have not yet received a transfer.

The Board of Supervisors passed an emergency ordinance on Tuesday that aims to move 560 more homeless people to emergency shelters over the next two months. The ordinance will expand the federally reimbursed program that rents hotel rooms to around 2,000 vulnerable homeless people, occupies even more hotel rooms and provides permanent living space for residents who want to qualify and move.

Keegan Medrano of the Coalition for Homelessness criticized the city for what he saw as shifting the blame on residents for refusing internships. Medrano said permanent supportive housing doesn’t have the best reputation among the homeless.

“We are in a difficult position where we want people to move into supportive housing on a permanent basis, but honestly a lot of it is unacceptable and not in good shape,” said Medrano. “Many don’t have WiFi, they don’t have good air filter systems. They are hot, they are small, they gather. “

Medrano said he hoped residents realized that the hotel had offered a place in the Granada, that the hotel had been newly renovated, which may be different from other permanent supporting housing units. Medrano urged officials to invest in en-suite locations while the city is considering buying more hotels to convert them into housing.

The city is currently trying to deliver on its promise made by an ordinance of the Board of Directors, which is expected to be extended on Tuesday, to find permanent accommodation for hotel residents. Hundreds of units are currently empty and the Granada Hotel is only half full, the homelessness department said. If hotel residents decline seats, the city can offer them to other eligible persons. Supervisors and supporters say more than 600 people still on the street are ready to document to move in.

Mallory Moench is a contributor to the San Francisco Chronicle. Email: mallory.moench@sfchronicle.com Twitter: @mallorymoench

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