Tech workers flooded Hawaii in the pandemic. With remote work on the decline, what now?


Earlier this year, Tesla CEO Elon Musk told workers to return to in-person work 40 hours a week or risk being fired. Other corporate giants like Goldman Sachs have pushed similar policies during the current phase of the pandemic, making full-time remote work increasingly rare. — Image by pvproductions on Freepik

Stuck in her Seattle apartment last year with pandemic strictures still mostly in effect, Jaime Schilling saw a way out.

A fundraising specialist with the non-profit Heifer International responsible for donors in Northern California and Hawaii, she no longer needed to be in a particular location with most of the in-person work gone by the wayside.

So when she found out about, and was accepted into, a program called Movers and Shakas (Named after the thumb-and-pinkie out hand sign common in Hawaii) that aimed to entice remote workers to Hawaii with the promise of a free flight in exchange for working with local non-profits and organisations, Schilling jumped at the chance. She could work remotely, and perhaps meet with some Hawaii-based donors when it was a bit safer to do so.

She spent the next six weeks in Honolulu and elsewhere doing her regular job during the day. In her free time she helped a local non-profit beef up its marketing efforts to draw in more dollars for its mission to help farmers get their goods on the wider market.

"I'll never really look at an island vacation destination... the same way again," said Schilling, who also spent weekends with other remote workers restoring traditional Hawaiʻian fish ponds and cleaning beaches.

Pandemic-borne remote work has allowed some people to rocket across oceans and time zones while keeping their jobs and experiencing life in ways that were previously unimaginable. But that freedom has come with both benefits and costs for the people and places where they land, especially as companies start to call many remote workers back to the office.

That is perhaps nowhere more evident than in Hawaii, which saw an influx of remote nomads fleeing the mainland US during the pandemic.

When Covid-19 slammed the brakes on the archipelago's massive tourism sector, remote workers provided a trickle of dollars into an ailing economy. But on Hawai'i island also called the Big Island, in Honolulu, and elsewhere, outsiders, many from San Francisco, had myriad other effects, from buying up all the US$5 (RM22) Costco rotisserie chickens to helping increase already unaffordable housing prices that surged as outsiders bought homes sight unseen.

The most recent IRS data available show that 434 people left San Francisco for Hawaii by the time they filed their 2019 tax returns. The data included tax returns received between 2019 and mid-July 2021. That's compared to 249 people who had previously made the jump by the time they filed their 2018 returns.

The numbers are not nearly a complete accounting of people leaving the city for Hawaii during the early phase of the pandemic, but do reflect an increased flight there as offices shut down and remote work ramped up.

There aren't hard data sets of how many people came to the islands specifically to work remotely, according to Hawaii's economics and tourism authorities. But it doesn't take a spreadsheet of every remote worker who visited or moved to the islands during the pandemic to see the lasting impact they've left.

Many remote workers come to the islands with good intentions. That isn't always enough.

Just ask locals like Rechung Fujihira, the co-founder and CEO of the co-working space Box Jelly in his hometown of Honolulu. Remote working has brought a new mix of people from all over through his doors to get to know. And to grab a surfboard from Box Jelly's collection and head out into the waves with. "A lot of the people moving here are my friends, I meet them through work" Fujihira said.

Remote work has also allowed some people from Hawaii working on the mainland to come home and be closer to family, temporarily or for good, he said. Fujihira's space noticeably started to fill up with more remote workers in the spring of 2021 including more day passes than ever before, a boon for business.

But there can be a gulf between intended and real effects, especially when it comes to housing.

Fujihira said many, although not all, remote workers come from the tech industry, and can afford to snap up pricey housing on the island.

"People who have more buying power can come in and scoop a house easily. That part makes me sad," he said, adding that many locals have had to leave the islands because of a shortage of housing and rising prices. Las Vegas is a common-enough destination for locals that move to the mainland that it is often called, "The ninth island."

Like the Bay Area, Hawaii has struggled with a severe, region-defining housing shortage for decades. But the pandemic kicked things into a different gear on the islands, largely because people didn't have to show up to the office anymore.

"From March 2020 through the beginning of 2022, there were a record number of cash buyers, site unseen buyers in every real estate market" across the state, said Rebecca Morton, a broker with Coldwell Banker Island Properties in Kailua-Kona who oversees operations on the Big Island.

A California native, Morton said she moved to the Big Island in the 1990s and has lived more than half her life there. She pointed to one house that previously sold for US$800,000 (RM3.6mil). It went back on the market during the pandemic for US$950,000 (RM4.3mil), and eventually sold for over US$1mil (RM4.57mil).

The market has cooled somewhat in recent months, as it has elsewhere because of rising mortgage lending rates. But the median sale price of a single family home on the Big Island in July was still US$456,000 (RM2mil), 7% more than during the same month last year. The median price of a condo was up 11% from last July, at US$540,000 (RM2.46mil), according to Coldwell Banker.

Morton said the core of her clients come from the Bay Area tech industry. She said during the pandemic many executives, in particular, relocated to Hawaii from the mainland.

But not everyone who poured into the islands during the full-on remote working period has been able to stay. That too has had consequences for the housing market.

Earlier this year, Tesla CEO Elon Musk told workers to return to in-person work 40 hours a week or risk being fired. Other corporate giants like Goldman Sachs have pushed similar policies during the current phase of the pandemic, making full-time remote work increasingly rare. Apple has begun requiring many employees to return to the office three days a week, with Google following the same route for its US employees as of earlier this year.

"Remote work still exists, but is sometimes hybrid, which precludes something like coming to Hawaii for a month," said Nicole Lim, the Honolulu-born director of Movers and Shakas.

But that doesn't mean housing for locals is suddenly opening up. Morton said while many buyers aren't living in Hawaii full-time, they are holding onto the properties as short-term vacation rentals.

Hawaii's housing price boom has benefited some locals. Like many long-time San Franciscans who sold their homes for a tidy sum when one of the tech booms drove up prices, some Hawaii residents have done the same.

"During (Covid-19) our real estate markets were inundated" with buyers, said Rebecca Villegas, a member of the Hawaii County Council on the Big Island whose district covers North Kona on the western coast and extends inland.

"Families who were our workforce who happened to have a home could make a really sizable profit and moved to the mainland," Villegas said. "The number one indicator is the number of Teslas on the road with out of state license plates."

One sign of just how much full-time remote work has dried up on the mainland is that Movers and Shakas, the program that brought Schilling and others to Hawaii, has shifted focus partly due to a lack of applicants.

Lim, the group's director, said the remote work program's first cohort in January 2021 (Schilling was part of the second) received 90,000 applications for about 50 spots, but today there wouldn't be enough people for a cohort.

These days Movers and Shakas runs the Hawaii Talent Onboarding Program, or HITOP. Its focus is on integrating people moving to the islands for a job located there into the local community and culture, and to convince them to stay in a place where there are shortages of everything from doctors to hotel workers, said Lim.

HITOP works through employers sponsoring workers who want to integrate as new or returning residents in Hawaii, with events focused on cultural education, community service, and networking, said Lim. The program includes pointers on when to wear aloha attire and give flower leis, cultural cues, and visits to Iolani Palace where Hawaiʻian monarchs resided before being overthrown in a bloodless American coup.

"We want people to be aware that they might be seen as an outsider, but not in a way that's about... guilt or shame," she said.

While Schilling has since moved to San Francisco to be closer to the bulk of her donors, her work in Hawaii isn't over. She still gets on Zoom calls weekly with the nonprofit she worked with, North Shore Economic Vitality Partnership, its CEO Kevin Kelly, and another member of her cohort, David Buerge, to help with the group's networking and fundraising campaigns.

"The pandemic created this weird opportunity," Kelly said. "In the small nonprofit world it's really valuable to have talent within reach." That has made a difference for Kelly's group. Beurge helped facilitate his employer making a donation, and he wrote letters to help get a bill passed during the recent state legislative session to fund a food safety program in line with the group's aims.

Beyond staying in touch with Schilling and Buerge, Kelly, who is from Texas but has lived in Hawaii for decades, said he is hopeful Lim's work that started with remote workers will help attract people to the islands, and keep them there.

"Hawaii is certainly not for everybody," Kelly said, noting that many people come searching for paradise and aren't prepared for the searing tropical heat, rugged terrain and isolation that can come with living on the islands. "New people, it takes a while to get real friends and a community around them."

But, he said, nothing compares to the islands.

"When you leave places you miss your friends. Leaving Hawaii was so different in that I just missed being in Hawaii." – San Francisco Chronicle/Tribune News Service

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