New trend in tech: Exiting the region
Silicon Valley remains far ahead of other regions in markers of innovation, like employment in technology and degrees in scientific and technical fields, according to a new study. But high housing prices contributed to a loss of residents in 2016, something the Bay Area has not seen since last decade’s recession.
The Silicon Valley Competitiveness and Innovation Project defined the area of study as San Francisco, San Mateo and Santa Clara counties for most measures.
Employment in the region grew by 29 percent, and the supply of housing increased by 4 percent between 2010 and 2016, the latest year with available data. Jobs in “innovation industries,” including software and biotechnology, accounted for 26 per-
cent of the jobs in the region, unchanged from the previous year.
Commuters in the region now spend an average of 72 minutes on the road each day — second only to New York City, at 74 minutes, the study found. And median home values in Silicon Valley rose above $1 million.
The area saw nearly 2,000 new residents per month in 2015. That changed to a loss of 42 residents a month in 2016, as more people moved elsewhere in the U.S.
On the surface, 42 people leaving per month doesn’t seem to make a dent. But Brian Brennan, vice president of the Silicon Valley Leadership Group, which backed the project along with the Silicon Valley Community Foundation, said that it’s a “dramatic shift” from a year earlier. Figures for 2017 were not available.
Cost was a factor for attorney Kate Downing, who made headlines in 2016 when she wrote an open letter resigning from the Palo Alto Planning and Transportation Commission because she could no longer afford to live in the region.
“I’ve seen dozens of my friends leave Palo Alto and often leave the Bay Area entirely,” she wrote. “I’ve seen friends from other states get job offers here and then turn them down when they started to look at the price of housing.”
Downing said Wednesday the study confirms that many people can’t afford to settle down in Silicon Valley. Before leaving for Santa Cruz to start a family, Downing said, she and her husband, a software engineer, were sharing a home with a couple for $6,200 a month. The home itself cost $2.7 million, she said.
“We’re just not building enough housing. More correctly, cities are not permitting developers to build enough housing,” Downing said. “I think more affordable housing would have kept us in Silicon Valley.”
In turn, the scarcity of affordable housing has been one of the main driving forces behind people leaving the area, she noted. In the San Jose metropolitan area, the median home price exceeds $1 million.
The study showed the importance of immigrants, “the lifeblood of our community,” Brennan said. Without foreigners coming to the region, the exodus would have been much larger.
The region saw 2,506 new foreign residents a month in 2016, down slightly from 2,793 a month in 2015.
The number of undergraduate and advanced level science and technical degrees awarded to students per capita grew 16 percent in 2016. In K-12 schools, standardized test scores showed small gains.
Some relief to housing woes could come from legislation expanding housing options near public transportation, the study’s authors noted. Housing and transportation are causes championed by the Leadership Group, a public policy trade association backed by more than 300 companies.
“None of us have a crystal ball,” Brennan said. “What it does suggest is that we really need to take seriously the things that are causing people to leave, housing prices again being a big driver.”