The Microsoft.DotNet.Web.Spa.ProjectTemplates::2.0.0-rc2-final SPA template currently has a little issue with making EF work properly. If you encounter this issue you’ll notice that running Update-Database in the Package Manager Console results in ng serve being run, which prevents the migrations from being applied.

To fix the issue, we need to slightly change Program.cs and Startup.cs as follows:

    public class Program
    {
        public static void Main(string[] args)
        {
            // This needs to have all of the code originally in BuildWebHost
            WebHost.CreateDefaultBuilder(args)
                .UseStartup<Startup>().Build().Run();
        }

        // This is only invoked by EF
        public static IWebHost BuildWebHost(string[] args) =>
            WebHost.CreateDefaultBuilder(args)
            .ConfigureAppConfiguration((ctx, cfg) =>
            {
                cfg.SetBasePath(Directory.GetCurrentDirectory())
                  .AddJsonFile("appSettings.json", true) // require the appsettings file!
                  .AddEnvironmentVariables();
            })
                .UseStartup<Startup>().UseSetting("DesignTime", "true").Build();
    }

In Startup.cs look for app.UseSpa inside of Configure:

            app.UseSpa(spa =>
            {
                // To learn more about options for serving an Angular SPA from ASP.NET Core,
                // see https://go.microsoft.com/fwlink/?linkid=864501

                spa.Options.SourcePath = "ClientApp";
                // Get the "DesignTime" configuration param set above
                bool.TryParse(Configuration["DesignTime"], out var designTime);
                // Only launch the server if we are in development mode AND we are not in design time (which is EF)
                if (env.IsDevelopment() && !designTime)
                {
                    spa.UseAngularCliServer(npmScript: "start");
                }
            });

With those changes Entity Framework starts working perfectly again. Hope this saves people a few hours.