Is living in Silicon Valley a dream or a nightmare?
I have lived and worked in Silicon Valley for almost 50 years. I have watched it grow and change from a “little sister” suburb of San Francisco to what has become the technology innovation center of the world. When I first moved to the South Bay in 1970, the name Silicon Valley had not yet been coined. But it didn’t take long as the semiconductor companies and chip makers made their homes in Mountain View, Sunnyvale and Santa Clara. With silicon the major component of the new technologies, the new moniker was a natural.
The rapid innovation enabled by the new silicon technologies, combined with the concentration of top universities and venture capital firms created the explosion of new firms in computer hardware (Apple), social media (Google, Facebook) and many other technology-related companies. The list of tech companies headquartered in Silicon Valley and the wider Bay Area is unlike anywhere else in the world, and literally thousands of multimillionaires have been created over the past 20-plus years as employees of early stage companies cashed in stock options making them richer than they could have imagined when their employers went public — the American Dream. Now, with the pending initial public offerings of Uber and Lyft, thousands of new multimillionaires will be minted, realizing their dreams.
But, after the new multimillionaires look to take their winnings and try to turn some of their after-tax wealth into their dream homes, they may awaken to the nightmares faced by many Bay Area residents — unaffordable homes, overcrowded schools and hours-long commutes. There are not that many “dream homes” on the market, and those that are list for $6 million-$30 million. Beyond that, it is questionable whether there are enough desirable single-family homes that may not be “dream homes” available on the market within reasonable commute distance. And this is just today.
The recently approved Related Santa Clara project will eventually build out more than 5 million square feet of new office space (enough for 20,000 employees) near Levi’s Stadium, with only 1,680 apartments (enough for about 3,500 people). Apple recently purchased a total of 85 acres in the same area, which could enable more than 20,000 more employees to work there. San Jose is pushing forward with the Google Diridon project with 5 million square feet of office space — another 20,000 employees — but only sought 2,600 housing units, 25 percent of which would have to be “affordable.”
This nightmare will continue over the next 20 years as commercial development and hightech, high-income jobs outpace housing at all levels. Commute traffic will get much worse, and schools, already with 25-30 students per class, will deteriorate, as there is little space to build new schools. Already people in all sectors of the service industries are moving to the Central Valley, resulting in fast-food restaurants and retail stores advertising $17 per hour plus benefits to try, unsuccessfully so far, to attract new hires — and they still can’t fill all openings. People are unwilling to commute four hours round trip to take a low-wage job.
This is a nightmare created by high-tech corporate success, and we need to wake up and demand our local representatives address the externalities these businesses are creating. There is no simple solution to ending the nightmare. Perhaps some form of per-employee charge that can help fund affordable housing, or a sizable development fee to be used for housing. Otherwise the nightmares will get worse.