Remember that when much of Silicon Valley was established, the sorts of people who worked at those companies mostly had no interest in living in SF. Same with the Boston area. (There was a period when Boston metro had basically no tech at all and SF is similar.)
San Jose is also not really a city in the way SF is. I used to go to conferences there fairly regularly. (Intel's IDF was there for a number of years before decamping to the Moscone.) Was there for another event a few years back and I was sort of surprised how relatively run down a lot of the downtown still was. Some new restaurants and the like but not really what I expected in SV.
I wonder how much of it is because the executives live on the Peninsula in places like Woodside or Portola Valley and would have a short and pleasant drive to a mountain view office.
also the areas south and east of san jose are far more affordable. if you actually want to buy a home in the bay area, your best shot is somewhere just outside of Milipitas.
Distance didn’t matter so much when the freeways moved at speed. Big Tech just never relocated to account for the drastically worsened mobility situation in the region. But the newer breed of tech companies is in the city, often right off a BART or Caltrain stop.
This is also a function of where the employee lives. If you reside in say mountain view, your commute likely will be under 20 minutes to the vast majority of South Bay tech companies. Less true if you live farther away, say in South San Jose.
But many don't want to live in Mountain View, they want to live in SF (where the rents are close to what they'd pay in mountain view). With no traffic, that commute is around 45 minutes, during traffic it can easily be double or more.
You are seeing different populations. I suspect people without kids on average prefer SF, while those with kids, on average, prefer the South Bay suburbs. (note: I am a recent transplant to Mt View from SF and have a toddler).
Consequently, SF companies have the same problems: the people without kids are nearby, but the ones with kids tend to be far away and are harder to hire.
There's no optimal location, unless you specifically are trying to select for junior vs. more senior talent.
> where the rents are close to what they'd pay in mountain view
Having just moved, I can assure you that Mt View rents are significantly lower than SF. For "nice area" (1990+ construction, convenient) 2-3 bedrooms, you are looking at something like $4+/sq foot/month in SoMa vs. ~$2.5/sq foot/month in Mt View (Palo Alto is considerably more expensive than Mt View and gets close to SF prices). That said, the reduced ability to live without a car cuts into the price savings significantly. (e.g. my family had to get a second car after moving)
San Jose is also not really a city in the way SF is. I used to go to conferences there fairly regularly. (Intel's IDF was there for a number of years before decamping to the Moscone.) Was there for another event a few years back and I was sort of surprised how relatively run down a lot of the downtown still was. Some new restaurants and the like but not really what I expected in SV.