Move aside, San Francisco and Seattle — Oklahoma City and Kansas City are becoming the new hotspots for tech innovation and development.

According to a Zillow report published on Thursday, Southern, Midwestern and Plains states are attracting technology startups thanks to high levels of affordable housing, robust economies with healthy jobs growth, a large talent pool and great standard of living, which includes a low cost of living and short commute times.

“Markets smack in the middle of the so-called ‘Silicon Prairie’ top the list of those that may appeal to growing tech companies, followed by markets in the Midwest and the South that have the ability to draw talent and the tech companies looking to hire them,” read the report.

“Eroding affordability and relatively lackluster quality of life put the nation’s more stereotypical tech hubs at or near the bottom of the rankings.”

Oklahoma City, Kansas City and Jacksonville rose to the top of Zillow’s list primarily due to high housing affordability, a challenge for tech workers in established tech hubs along the West and East Coasts.

The median home price in Oklahoma City is $137,998, which is nearly equal to the down payment needed to purchase a home in San Francisco. Zillow estimates the average tech worker in San Francisco spends 40 percent of their income on a monthly mortgage.

While housing affordability allowed Oklahoma City to zoom to the top of the pack, Kansas City scored high thanks to a large labor pool and livability.

Using data from LinkedIn, Zillow determined Kansas City was ripe for startups thanks to the city having a healthy share of millennials over 25 with bachelor’s degrees in software development, artificial intelligence or data science. The city also scored well in livability since the average worker only needs to commute 21 minutes to work.

Jacksonville nabbed the No. 3 spot due to it’s “market hotness,” which is based on a market’s ability to retain and attract new talent. With a median home price of $190,108, Jacksonville is more affordable than Florida’s other hubs while offering amenities that young tech workers will like, such as a vibrant entertainment scene and quick access to cities including Miami and Atlanta.

On the other hand, San Diego, Los Angeles, San Francisco and the greater Bay Area, New York and Washington, D.C., fell to the bottom of the list as low housing affordability, long commute times, and an overall expensive cost of living is driving startups and tech workers elsewhere.

“Lack of affordability is a major concern for tech hubs: Los Angeles and the Bay Area have the worst affordability rankings of all markets examined in this study,” Zillow explained.

Email Marian McPherson

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