It wasn't possible before because companies couldn't figure out how to effectively manage a workforce remotely. Now that they've been forced to learn, this will be explored with renewed vigor. There are a lot of highly talented foreign workers who will work for a fraction of US salaries.
Companies that are good about integrating foreign workers into their existing teams are already reaping the benefits of this. Fortunately for Western tech workers, the majority of companies are terrible at integrating their offshore workers and have very outdated concepts of "outsourcing" where trusted local workers send robotic tasks to offshore teams being paid ridiculously low salaries. This model will continue to fail and should slow the enthusiasm for offshoring for a lot of companies.
If a tech company is sourcing engineers in an office work environment, they need to pay salaries competitive for the location of said office. (You can find great engineers in Jakarta, but you have to relocate them to SV and pay SV rates)
If everything is remote work, you hire the same worker, and pay them Jakarta rates (you can sub Jakarta for any very-low COL city).
Well that’s offset by the fact you no longer have to get a small one bedroom near a large city downtown.
Without the commute suburbs or smaller cities offer much bigger and better spaces for less. Why pay $4.5k for that one bedroom in SOMA when you can get a 4 bedroom home in Sacramento for the same price.
I can't help but feel that this is going backwards. Cities are effective engines for value generation. Being in a city is valuable due to network effects, density, and overall efficiency that suburbs lack. Increased urbanization has gone hand-in-hand with increased prosperity for centuries. People don't pay $4.5k for a one bedroom in SOMA (just) to be close to the office.
It's too early too say if the historic value of cities will be replaced by the internet, IMO. YC makes each batch move to SV for a reason.
SV isn't a city; it's mostly suburban sprawl. In most metro areas, you can get to reasonable property prices while still being in the gravitational well of a city even if you wouldn't want to commute into the downtown every day day.
What if I live somewhere for other reasons? Anyway, it doesn’t really matter how expensive or big my home is, switching to work-from-home means I have less of that home available to me.
If you have seas of empty skyscrapers and closed storefronts/restaurants, that's not going to be a city most people are going to have any interest living in.