On an annual basis, the Silicon Valley Leadership Group surveys its members in order to highlight the good and bad elements of doing business in Silicon Valley. Each year, housing is cited as a top impediment. Housing affordability along with cost of living issues serve as a choke point for recruiting and retaining top talent to Silicon Valley.
Despite the downturn in the economy, housing persists as a key issue for people who struggle to work and live in the Valley. Demand continues to lag behind supply creating a tight housing market. Our standard metrics for tracking housing indicates that housing has become more affordable however, when compared with the nation, it is clear that housing costs in Silicon Valley pose much more of a problem. For example, nationwide, the National Association of Home Builders Housing index for affordability indicates that 74.6% of the homes sold in the first quarter of 2011 were affordable to median income families. That is a dramatic improvement over 2006 where 40.6% of the homes sold were affordable. However, in the San Jose Metropolitan Statistical Area, the figures are 53.5% and 13% respectively. Again, although affordability has seemingly improved, when competing with other regions for top talent, housing prices are a key impediment. In Chandler Arizona, the site of a fairly new Intel fabrication plant, 85% of homes sold were affordable to median income families.
If the Valley is to remain a leader in innovation, growth will continue to be a challenge. In fact California is slated to grow by a city the size of San Jose every 7 years. The Association of Bay Area Governments projected that Santa Clara County would need to provide an additional 60,000 homes in order to keep pace with demand between 2007-2014. Where do those people live and how do we make sure the additional growth enhances our community, economy and environment? These are central questions for the Leadership Group, and in the realm of housing we specifically focus on advocating for the types of homes that are most difficult to build – condos, townhomes and apartments. Why are these homes difficult to build? While most people agree that housing is a key issue, when it comes time to build an apartment complex, no site is perfect. There is always a reason that the housing should not go in anyone’s backyard. As a result, housing construction lags behind the need and basic economic theory kicks in as prices go up.
The Leadership Group works on many levels to help create a policy and regulatory environment that is conducive to building more homes and to create neighborhoods, cities and communities that attract the best and the brightest. To find out more about how you can get involved, please contact the Leadership Group or read through the website for direction and suggestions.