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Can't afford Silicon Valley? 10 great US cities for software engineers

Mitch Pronschinske Senior Editor and Content Manager, HashiCorp

It's clear to most developers that Silicon Valley's high cost of living—especially housing—is a problem. While demand is high for developer talent, many software engineers are planning on leaving, or have decided not to come to the San Francisco Bay Area in the first place because the average developer can't afford a home anywhere near where they work.

That's true even on a six-figure salary at Facebook, as Matt Kulka shares on Vox:

It was my dream job, in a place that always had an almost mythical allure to me. When I said yes, I was filled with excitement. Five years later, I quit. Not because of the job—I loved working at Facebook. I left because I couldn’t afford to live in the Bay Area anymore, even on my generous six-figure Facebook salary.

Kulka is not alone. Reports point toward a growing exodus of people, which presumably includes software developers. The real-estate listing firm Redfin reports that one in four people in the Bay Area are now searching for homes outside of that area (see the chart below for where they are looking). In 2011 it was one in seven.

Areas where Bay Area residents search for homes on Redfin.com:

Image credit: Redfin

Whether your sentiments lean pro or anti Silicon Valley these days, this collection of resources and city rankings should be useful.

Why all the Silicon Valley angst?

You might argue that the cost of living in the Bay Area isn't as bad as in New York City or several other major cities, but I'm hard-pressed to find many people debating the common complaints about high rent and the inability for average software engineers to buy a house anywhere near their Silicon Valley offices.

That's often the sticking point.

The way our tax system is set up, it's much more cost-effective to own a home at a certain point (if you're interested in learning if you should buy a home, check out the NYTimes rent-or-buy calculator). So if you can't afford a home, it's hard for some to imagine putting down roots in the Bay Area.

Eight of the top 25 most expensive housing markets are in Silicon Valley. We know that every city has its high-priced neighborhoods and downtowns, but none have quite as many as the Silicon Valley corridor. A recent report says that San Jose has the highest median home price of any metro area in the country, at $1,050,000. According to PayScale you'll need an annual income of $212,800 to afford the mortgage on a house at that price. That's more than twice the median salary for software engineers in that area if you use PayScale's median for the San Francisco area.

Kulka (highlighted above), hired as a site reliability operations manager,  had a six-figure salary at Facebook and still decided it was better for his family to move back to Phoenix, Arizona. Another developer who had dreamed of moving to Mountain View decided instead to stay in Seattle after a cost-benefit analysis. Another stayed in Silicon Valley, but now he lives in a pod in a friend's living room. You can find plenty of stories like these.

Housing prices in the Valley have been climbing rapidly since 2012, and don't show any signs of slowing. Because of this, the Bay Area is one of the few places in the US where it's often more cost-effective to rent than buy. There's also a strong argument to be made for starting your tech business elsewhere.

Zillow housing prices in Santa Clara county

Image credit: Zillow

Ranking cities by important attributes

What's the best alternative to Silicon Valley? That question is too broad to answer, but there are plenty of other areas you might consider. You'll find additional alternatives beyond our list at the end of this article, but the cities cited below should be a helpful starter list for any developers looking to relocate to a less expensive housing market.

Below are are several city rankings by cost of living, developer salaries adjusted for cost of living, software engineering job openings, traffic, public transportation, and bike-friendliness.

Cost of living

There are plenty of sites that can give you cost of living estimates, such as Numbeo and Expatistan. But they're not very useful if you only sort by cost of living alone. You'll just get a list of small, rural towns.

Stack Overflow's 2016 developer survey used Numbeo's data to determine cities with the lowest percentage of median salary (for a developer with 5+ years experience) spent on rent (Apartment price = price in dollars of a 1-bedroom apartment in the city center). The only US cities in the top 10 were Austin, Seattle, Portland, and Los Angeles, in that order.

Looking purely at rent prices, CBS news and Housely both list major US cities with the lowest rental prices, but only three overlapped between the two lists: Indianapolis, Tucson, and Wichita.

GO BankingRates compared median household incomes (generally, not just developers) with the income actually needed to live comfortably. If you look at the map, you'll see only a few cities where the income needed to live comfortably (orange circles ) is less than the actual median household income (blue circles).

You can assume that developer salaries will be higher than general median incomes, so its safe to say that many of the smaller gaps will close for developers.  This map makes it clear that there are a few cities you might want to avoid, such as the Bay Area, Boston, New York City, and Miami.

Image credit: GO BankingRates

Highest developer salaries adjusted for cost of living

Cost of living alone doesn't tell you much.  It's only when it's adjusted to average or median software engineering salaries in that area that you start to find some of the "best" cities for developers.

Glassdoor's 25 Best Paying Cities for Software Engineers is one of the most often cited reports on adjusted developer salaries, but given that numbers 2 and 3 are Bay Area cities, commenters have raised doubts about their methodology. Like all of the reports, it's just a new angle you can use to approach the question.

  1. Seattle, WA
  2. San Jose, CA
  3. San Francisco, CA
  4. Madison, WI
  5. Raleigh, NC
  6. Austin, TX
  7. Boston, MA
  8. Sacramento, CA
  9. Portland, OR
  10. Atlanta, GA
  11. Dallas-Fort Worth, TX
  12. Durham-Chapel Hill, NC
  13. Omaha, NE 
  14. Phoenix, AZ
  15. Salt Lake City, UT
  16. Denver, CO
  17. San Antonio, TX
  18. Charlotte, NC
  19. San Diego, CA
  20. Pittsburgh, PA

You can find the full 25 cities on Glassdoor's site, along with more granular adjusted salary info on each city.

InfoWorld also published a similar type of report in collaboration with Dice and PayScale. Their cities with the highest adjusted median salaries for software developers included:

  1. Seattle, WA
  2. Raleigh, NC
  3. Austin, TX
  4. Phoenix, AZ
  5. Salt Lake City, UT
  6. Atlanta, GA
  7. Dallas/Fort Worth, TX
  8. Houston, TX
  9. Detroit, MI
  10. St. Louis, MO

Its report also has city rankings for more granular job titles, including senior systems engineer, software architect, security architect, network architect, and IT program manager.

Help wanted: The number of software engineering jobs

It doesn't matter if salaries are high in an area if you can't find a job there. That's why it's important to know which cities have a high number of software development job openings.

The App Association recently published a study that included developer job openings across the US. These were the 26 cities with the most openings, according to its interactive map.

Irvine, CANew York City, NY
Los Angeles, CAWashington DC
San Diego, CABoston, MA
Seattle, WANewark, NJ
Portland, ORPhiladelphia, PA
Denver, COPittsburgh, PA
Phoenix, AZAnnapolis, MD
Austin, TXCincinnati, OH
Dallas, TXColumbus, OH
Houston, TXCleveland, OH
St. Louis, MORaleigh, NC
Chicago, ILCharlotte, NC
Minneapolis, MNAtlanta, GA

Source: App Association's "Six-Figure Tech Salaries: Creating the Next Developer Workforce"

Using the App Association data, we checked for any cities on their map (with over 1,000 job openings) and then checked NerdWallet's Bureau of Labor review, which ranks each city based on the number of "tech" jobs (a broader job set than just developers). Here are the cities that made both lists:

  • Seattle, WA
  • Denver / Boulder, CO
  • Raleigh / Durham, NC
  • Washington DC / Arlington / Alexandria, VA
  • Austin, TX
  • Boston, MA

Finally, we looked at stats for cities' general Science, Technology, Engineering and Math (STEM) job growth from Praxis Strategy Group. Here are the top 20 cities from its 2015 STEM job growth index.

Image credit: Praxis

Traffic and transportation

In several countries, vehicle payments and maintenance are the second highest costs of living, after housing. If you can live without a car in a city, it will be more affordable.  If it has less traffic, or offers a shorter commute to work, that city will waste less of your time, and your car will last longer. 

Here are Numbeo's traffic index ratings.  The cities are sorted by a time index, where the cities at the top have the shortest estimated commutes.

Source: Numbeo traffic index rankings

Some cities haven't been included on this list. For example, Raleigh is missing, so there's probably a population minimum to be included.

The other city rankings to check out if you don't have a car include public transportation scores and bike-friendly scores. Walk Score has both:

Source: Walk-score transit and bike-friendly city rankings

You might want to look into the criteria for these scores if public transportation or bike-friendliness is important to you. But a good transit score doesn't necessarily mean it won't take over an hour to get downtown from one of the outlying towns in a metro area.

Putting it all together

By now you've probably noticed a handful of cities that keep showing up in most of these lists. The last one I'll include is from Zip Recruiter, which is based on cities with the most new tech job activity. Fast Company added some data to its rankings, so check out its write-up.

Here are Zip Recruiter's up-and-coming tech city rankings:

  1. Austin, TX
  2. Raleigh, NC
  3. Provo, UT
  4. Fort Collins, CO
  5. Hartford, CT
  6. Indianapolis, IN
  7. Boise, ID
  8. Manchester, NH
  9. Nashville, TN
  10. Eugene, OR

Many new cities made that list that didn't appear in the  other rankings so far. 

These lists, along with the list below, should be viewed as ideas to get your city search started. Use these calculators and tools to plug in salary and location information that is relevant to you.

Ultimately, developers above the junior level can probably live comfortably in almost any city outside of Silicon Valley. The final decision should come down to what city feels most comfortable to you.

If you need to live near the mountains, live near the mountains. If you prefer small towns, find a small town. These preferences are often determined by the environment in which you grew up, and your travel experiences. There's nothing wrong with letting your gut decide. Developers are valued highly just about everywhere these days, so you can make it work just about anywhere you want to go. The question is how far your money will go.

The best option is to get a job that allows you to work 100% remotely. When you find that job, why live in just one city? Become one of those digital nomads and live in Cambodia for 6 months, then see what Berlin is like for the other half of the year. I've talked to developers who have children and could still find a way to do this. Check out Nomad List for useful information on the world's cities.  

Below is our list of US cities that offer a lot of advantages for software engineers, and that provide a wide variety of environments.

Our picks

Based on cities that we saw frequently in all the lists shared in this article, we give a little more weight to cities that ranked in the "Highest developer salaries adjusted for cost of living" section.

Seattle, WA

Glassdoor real adjusted salary: $105,735

InfoWorld adjusted median salary: $80,800

Austin, TX

Glassdoor real adjusted salary: $91,185

InfoWorld adjusted median salary: $80,500

Raleigh & Durham, NC (Research Triangle)

Glassdoor real adjusted salary: $94,142

InfoWorld adjusted median salary: $80,800

Denver & Boulder, CO

Glassdoor real adjusted salary: $85,878

Phoenix, AZ

Glassdoor real adjusted salary: $87,997

InfoWorld adjusted median salary: $77,600

Portland, OR

Glassdoor real adjusted salary: $89,374

Dallas-Fort Worth, TX

Glassdoor real adjusted salary: $88,294

InfoWorld adjusted median salary: $75,600

Atlanta, GA

Glassdoor real adjusted salary: $89,286

InfoWorld adjusted median salary: $76,100

Houston, TX

Glassdoor real adjusted salary: $84,493

InfoWorld adjusted median salary: $75,500

Boston, MA

Glassdoor real adjusted salary: $90,171

If you have any personal stories or opinions about avoiding, leaving, or embracing the Valley, share your experiences below. They might be helpful to someone who could be in a similar situation. It might also be helpful to point out any FUD you've seen recently around this conversation. Are there any cities you would put on this list — or remove from it? 

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