Forget San Francisco. Silicon Desert is the new hotspot for startups.

In 2008, at the height of the housing crash, few people would have pegged Phoenix, Arizona, as the next tech-world hub. But these days, business is booming in the desert metropolis: Weebly, Uber, and Yelp have already set up shop there. This is in no small part thanks to Phoenix’s affordability, not to mention its culture of innovation that makes almost anything feel possible.

A Growing Job Market

This past June, Forbes identified Phoenix as the “clear rising star” for tech and information jobs in the next few years. The workforce in the area has expanded over 39% since 2010, which constitutes the third highest increase for any metropolitan area in that time period — just behind San Francisco and Silicon Valley.

Kiplinger also ranked Arizona as the state with the second-fastest projected job growth rate in the country for 2016. This is no surprise considering that the city is attracting more Bay Area tech stars by the day, including Shutterfly, DoubleDutch, BoomTown and many more.

In addition to the healthy job market, Phoenix also plays host to an abundance of incubators and coworking spaces to help early stage growth companies get their feet off the ground. Meanwhile, Phoenix Startup Week — an annual startup conference — has doubled in size since its inaugural 2015 event, with over 4,400 attendees and 175 expert speakers at the event that took place in February.

Reasonable Cost of Living

It’s no secret that Silicon Valley and San Francisco are expensive. Really expensive. The total cost of living in San Francisco is 62.6% higher than the national average. Here are a few statistics to put that in perspective: the median home price in San Francisco is $841,600 versus the national $188,900, and even grocery shopping in the Bay Area takes its toll: a pound of cheese is $7.10 to the national $5.

In Phoenix, though, prices are still livable. Conor Dougherty, writing for the New York Times, shares that “the median home price in the Phoenix metropolitan area is $221,000, according to Zillow,” and a quick Google search shows that a pound of cheese comes in at a very reasonable $4.78.

An index of business costs compiled by Moody’s Analytics confirms that “wages, taxes and energy cost about 25% less in Phoenix than they do in San Francisco.” For businesses, this means lower costs of operation, for everything from electricity to rent, and a lower cost of living that benefits employees at large.

The Spillover Effect

Whether you want to call it the “spillover effect” or basic economics, the entrepreneurial community is certainly in the midst of some big changes. “As startups across San Francisco and Silicon Valley try to contend with high salaries and housing costs, many are expanding to lower-cost cities in the West,” writes Dougherty. And the migration isn’t just limited to startups; billion-dollar tech companies are opening outposts in cities that have lower costs of living, too.

Communities like Phoenix are reaping the benefits. The influx of tech jobs is reinvigorating the city that was once known as the “poster child” of the 2008 housing crash. The city now boasts a healthy and growing entrepreneurial community — and though it has a long way to go before it catches up to Silicon Valley, the ambitious entrepreneurial energy in the city is palpable.

It might become increasingly trendy to move to Phoenix in the next few years, but one thing is for sure right now: business is booming.

(Image Credit: Jerry Ferguson/Flickr)