I think you might see companies considering hiring people who live in Bakersfield, Sacramento, maybe even Nevada instead of San Francisco, but there's a vast difference between "usually working from home", and "Needs an international flight to get to the office" and "Literally works in a time zone that doesn't share any office hours with their boss".

If the glaring problems with SF were fixed, this is still one of the best places in the world to live quality-of-life wise. Weather, accessibility to some of the best nature in the world, great food, entertainment, etc.