News

Report touts Bay Area as mega-powerful region facing challenges

 
In 2016, more than 162,000 people commuted daily into the Bay Area from farther-flung regions like the Sacramento area, Northern San Joaquin Valley and the Monterey Bay area -- numbers that are substantially up from 2013. (Source: U.S. Census Bureau American Community Survey 2016 one-year estimates. Analysis: Bay Area Council Economic Institute.)

Silicon Valley is an economic powerhouse, and some of the cogs that drive it are more functional than others, claims a new report recently released by the Bay Area Council Economic Institute.

The report cites a number of statistics that point to the Bay Area as a major economic power in not just the U.S., but the world.

● If the Bay Area were a country, its economy would be the 19th largest in the world, with a gross domestic product of $748 billion. That's bigger than the economies of Saudi Arabia and Switzerland.

● Between 2014 and 2017, the Bay Area's gross domestic product grew at an annual rate of 4.3 percent, higher than the U.S. and faster than most of the world's 25 largest economies.

● The national economic impact of Bay Area companies was $1.4 trillion in 2014.

● People moving into the area tend to be more affluent, working in high-margin industries, while those moving out tend to be lower-wage and working in lower-margin industries.

The region continues to be a tech epicenter. The San Jose metro region has the highest concentration of high-tech jobs in the country. In 2017, 45 percent of the U.S. venture capital invested was put into Bay Area companies.

And within the world of Silicon Valley tech companies, there are some clear winners. Since 2013, the report states, Alphabet, Apple and Facebook have increased their revenues 10 times faster than the rest of the Fortune 500 companies.

Challenges

Yet all is not rosy in the region, the report assets. It points out the region's shortcomings – without calling them fatal flaws.

"Predicting an impending end to (Silicon Valley's) historic run has become a cottage industry," the report's authors state. "And certainly the Bay Area's ongoing economic success cannot be taken for granted. … These concerns are real but the doomsayers focus too often on the dark clouds on the horizon, rather than on the green shoots coming out of the ground all around them."

Around 2014, the cost of living began to outpace increases in the median wage in the Bay Area. And in 2016, between 37 and 39 percent of households in the San Jose and San Francisco-Oakland areas were burdened by housing costs, a similar proportion to what's been reported in other Bay Area counties.

Today, 46 percent of Bay Area residents say they are considering leaving the region within the next few years, according to a 2018 Bay Area Council poll.

The report states that the Bay Area has outperformed the nation in nearly every economic measure, except for population growth. "Individuals and families that otherwise might move to the Bay Area to find opportunity have been prevented from doing so by the Bay Area's high and accelerating cost of living, increasing congestion, and aging infrastructure," its authors note.

The region is also permitting fewer homes in relation to population increase than other national metro regions. Between 2003 and 2017, the Bay Area yielded about 312 new home permits per 1,000 new residents. During the same time, the Boston region permitted about 445 new homes per 1,000 new residents and the New York region permitted 404.

Also, compared with other parts of the state, job growth in the Silicon Valley region and San Francisco skewed far higher than the number of homes permitted between 2007 and 2017.

In contrast, California regions like Placer County, the San Joaquin Valley, and Yolo County had roughly equal levels of job and housing growth. And Sacramento County permitted nearly twice as many homes as jobs that were created during the same time period.

The report also points out that traffic is highly correlated with economic activity, and notes that large numbers of people are commuting from increasingly faraway places. More than 80,000 people commute into the Bay Area from the northern San Joaquin Valley each day, the report says.

Meanwhile, home prices in the central core of the Bay Area continue to escalate as the ratio of housing units to jobs tilts further askew. Between 2007 and 2017, the report states, Silicon Valley added 200,364 jobs, while only 72,887 housing units were permitted.

The report is the 10th in a series produced since 1997 by the Bay Area Council Economic Institute and McKinsey and Company, with support from PwC, Wells Fargo, San Mateo County Economic Development Association and North Bay Leadership Council.

The Bay Area Council is a public policy organization with membership from large area employers.

Kate Bradshaw writes for The Almanac, the sister publication of /the Mountain View Voice.

Comments

16 people like this
Posted by A second opinion
a resident of Whisman Station
on Jul 12, 2018 at 10:27 pm

Any company or consultant can created a report that says whatever the sponsors want. Here is another opinion: politicians who continue to do the bidding of big business will soon become political casualties - replaced by real patriots not beholden to giant corporations or foreign regimes. Who says so? I do and so should you. Stand up or get trampled.


10 people like this
Posted by @Second
a resident of Cuesta Park
on Jul 12, 2018 at 10:56 pm

I'm with you! We'll vote these Republicans out of office, impeach Trump and Pence, and fill the Supreme Court with left-wing Justices! Together as real patriots, we're going to take our country back!


15 people like this
Posted by Build, baby, build
a resident of another community
on Jul 13, 2018 at 9:55 am

The CA housing crisis is a transpartisan issue. It needs to be addressed immediately, at the state level, by building more housing in job-dense areas. Local governments and their voters are content to jack up property prices in their own district, to their own benefit. This forces people to live farther away from where they work, increasing traffic and commute times. If people could live near where they work, traffic would be manageable.


15 people like this
Posted by Robyn
a resident of another community
on Jul 13, 2018 at 3:23 pm

Why not consider building job centers where the workers live? And where they can afford to live and raise their families? The central valley has lots of open space and relatively inexpensive housing. Salinas, to the south, also has plenty of open space. With technology, workers and work from home.


12 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 13, 2018 at 3:57 pm

Robyn, that's exactly what they did. FAANG etc all started here because that's where the workers are. Surprise, surprise, economic centers attract more people and more businesses. Usually, this is a positive feedback loop that leads cities to grow. Instead, the newly wealthy landed class here, like yourself, decided they'd rather keep seeing those home prices rise, pulling the ladder up behind themselves.


8 people like this
Posted by psr
a resident of The Crossings
on Jul 13, 2018 at 3:57 pm

psr is a registered user.

@@second
"Vote these Republican out of office"? Really? This is California and it has been run solely by Democrats, without a peep of conservative input, for decades. The result is rampant illegal immigration, high taxes, declining schools, decreasing open land, congestion, reductions in city services per capita as populations explode (because any money has to pay for outrageous retirement packages for government workers rather than more police and fire services) and a host of other ills. In short, a hot mess.

You can blame a lot of people for the problem, but the Republicans aren't among them. It's about time Democrats take responsibility for the mess they have made. In case you've forgotten, There is a liberal super-majority in this state. Conservatives haven't had state-wide impact here for a VERY long time.


12 people like this
Posted by anthodyd
a resident of St. Francis Acres
on Jul 13, 2018 at 6:37 pm

Robyn's comment is the most constructive- instead of perpetuating the mad "commute culture" from the Central Valley, why not build tech facilities within the very communities that house the workers that make the economy grow? There need not be the "prestige value" to be found in a satellite facility, but it would be offset by the attraction for the very techies who would enjoy the shorter commute and economic advantage denied them by a "Silicon Valley" address.
There would be mucho benefit for those communities (Sacto, Monterey, etc) who could then share the current prosperity, besides reducing the inconvenience of our belabored commute routes. Need I mention that HSR and electro-Bart could proceed at a more relaxed pace, according to their accustomed schedules?


3 people like this
Posted by YIMBY
a resident of Another Mountain View Neighborhood
on Jul 14, 2018 at 5:26 pm

@anthodyd

Tech companies do build where the workers are. That's why they're building in the Bay Area. Do you think there's some unserved enclave of software engineers sitting in a rural part of Kentucky, twiddling their thumbs and waiting for Google to open up shop?


18 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 14, 2018 at 8:25 pm

Google imports is a registered user.

What percentage of Google employees are here on worker visas? They come to work for Google - not to live in Mountain View. So yes, Google should expand to Manteca and add housing there. But instead, Google and other giant corporations have a plan to ruin residential neighborhoods with highrise housing everywhere - looking down on all of you. And most homeowners are too foolish or preoccupied to see it coming and too politically impotent to head it off.


25 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 14, 2018 at 8:53 pm

Fantastic, just in time, we get the thinly-veiled xenophobia ("imports" and "worker visas"). Mountain View is thankfully better than that, but it's good to have the occasional reminder that it's still floating about.


12 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 14, 2018 at 10:16 pm

Google imports is a registered user.

Lol is still looking for a highrise condo he can afford. He will post any con that comes to mind.


16 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 14, 2018 at 10:27 pm

Tell us more about those "imports" and people on "worker visas" you want to keep out. Maybe you'd like to Build The Wall?


4 people like this
Posted by YIMBY
a resident of Another Mountain View Neighborhood
on Jul 15, 2018 at 1:01 pm

@Google imports

"But instead, Google and other giant corporations have a plan to ruin residential neighborhoods with highrise housing everywhere - looking down on all of you."

Google could build a high rise that stretches to the moon and you'd still look down on the residents of the top floor.


9 people like this
Posted by Just reading...
a resident of Waverly Park
on Jul 15, 2018 at 2:17 pm

I’m just reading the comments and am a little floor struck that LOL draws “xenophobia” from a comment re the fact that workers are here because they’re employed by tech not because they’ve fallen in love with Mountain View. Xenophobia is a pretty big stretch but I’ve noticed the name calling seems to start when somebody can’t accept another’s opinion as simply a different opinion. Pretty sad.

As for the lack of affordable housing, the problem will obviously continue to get worse if tech keeps expanding. Most of us living in suburbia aren’t particularly anxious to turn little Mountain View into Manhattan by continuing to increase density. So the answer is for the local city councils to stop approving expansion forcing tech to “spread the wealth”.


20 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 15, 2018 at 2:29 pm

@Just reading...

Did you miss the part about the "imports" coming in on "worker visas?" If that isn't xenophobia, what is? I find that most people who clutch their pearls at an accusation of xenophobia or racism aren't arguing in good faith, but that couldn't be the case here, could it?


6 people like this
Posted by mvresident2003
a resident of Monta Loma
on Jul 15, 2018 at 3:27 pm

mvresident2003 is a registered user.

@LOL exactly. Everyone who wants to protect MV/California from over-growth and population suffers from xenophobia and racism. Funny how when you say something often enough you believe it.


18 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 15, 2018 at 3:41 pm

mvresident, do you think people from Sunnyvale, Santa Barbara, New York, Pennsylvania, Louisiana, etc need work visas to come to Mountain View? Please, pretending to not understand people is really unbecoming.


Like this comment
Posted by mvresident2003
a resident of Monta Loma
on Jul 15, 2018 at 6:25 pm

mvresident2003 is a registered user.


7 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 15, 2018 at 6:46 pm

Google imports is a registered user.

Only legal imports have work visas. Migrants may or may not have work visas. These are English words for those of you concocting stories of "racism." Your posts read like something Google or the Krelim would commission. Keep up the gooood work.


24 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 15, 2018 at 7:02 pm

First rule when you're in a hole, stop digging. I'd tell you to put down the shovel, but it's so good when you show everyone you can't help yourself.

mvresident2003, still riding this train? No shame in updating your assessment when someone gives you more evidence.


6 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 15, 2018 at 8:21 pm

Google imports is a registered user.

"Lol" still hard at work. Say "hi" to "Vlad" for me. And start collecting your pay in American money just in case you ever reach America. They don't accept rubles at Target.


10 people like this
Posted by Just reading
a resident of Waverly Park
on Jul 15, 2018 at 8:23 pm

LOL I think you’re missing Google Import’s point. I believe what he’s referring to is the fact that all these people living here, creating the housing crunch and overcrowding, are not homegrown MountainView boys. They’re here because Google is importing them here from all over the world. While this may be necessary for tech companies to meet their engineering needs, it is not necessary to consolidate all the talent in this small geographic area as it compromises the quality of life for those of us who have enjoyed in the past a much more relaxed and affordable lifestyle here. It has nothing to do with xenophobia.


4 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 15, 2018 at 8:41 pm

Google imports is a registered user.

This topic is getting tedious with "LOL" communicating from some far away place.
How about a trivia question? Here goes. What is a Russian ruble worth in Americam currency? LOL should know. The ruble may increase in value in the coming hours when Trump announces that US companies should partner with Russian companies - as Trump companies have probably done for decades.


18 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 15, 2018 at 8:46 pm

"Just reading", please square that with "Google imports" post above yours. We can all agree that at least that one is xenophobic? If not, I'd really like one of you to tell me what you think xenophobia sounds like.


4 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 15, 2018 at 10:08 pm

Google imports is a registered user.

Say "proshchay" LOL.


16 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 15, 2018 at 10:16 pm

mvresident2003 and Just Reading, are you still on board with this person? As I said above, there's no shame in updating your assessment when new evidence is presented. "Google imports" keeps making it clearer and clearer what they actually meant.


7 people like this
Posted by Robyn
a resident of another community
on Jul 16, 2018 at 7:57 am

LOL, please substantiate with facts, not generalities, your assertion that I am among the "newly wealthy landed class here, like yourself.." Again, be sure that your facts are about me not some other person. Otherwise, your statement is incredible and merely an unjustified insult intended solely to disparage me. Here are your words:
1. Newly
2. Wealthy
3. Landed Class

Provide your factual basis.

Thank you.


8 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 16, 2018 at 8:16 am

Robyn, you're a Bay Area homeowner, which means that you've become a millionaire solely due to that. Hence, wealthy and landed. Newly might be up for dispute, were you a millionaire before?

Thanks in advance.


5 people like this
Posted by Robyn
a resident of another community
on Jul 16, 2018 at 8:44 am

State your specific facts.


10 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 16, 2018 at 8:53 am

Robyn, I think you might have missed my latest post, so I'll post it again here:

You're a Bay Area homeowner, which means that you've become a millionaire solely due to that. Hence, wealthy and landed. Newly might be up for dispute, were you a millionaire before?


4 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 16, 2018 at 9:04 am

Google imports is a registered user.

LOL's President just finished his new conference with Trump. Maybe these gangsters will sell or rent LOL a room in a Putin or Trump Tower right here in Mountain View.


8 people like this
Posted by Robyn
a resident of another community
on Jul 16, 2018 at 9:59 am

LOL, I did read it. It is devoid of facts.
You write in general terms. For instance, do you know anything about mortgages? Not every home in the Valley is paid for 100%. Not everyone has 1 million dollars in equity as you insinuate. Not every house is valued north of 1 million dollars.
You know nothing of my financial situation or that of others you disparage.

Again, state your facts, if you have any.
I expect you have none so I am signing off.

This discussion has devolved to people calling each other racists. Name calling does not encourage debate.


10 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 16, 2018 at 10:11 am

The careful reader will note that not a single word of that is a denial.


6 people like this
Posted by Robyn
a resident of another community
on Jul 16, 2018 at 10:14 am

Greetings,
I forgot to include a comment about visas. They are for temporary workers: H1B is good for 1-6 years; H2 A/B is good for one year and up to three years.
The statement by Google Import is factual. People here on visas are by definition temporary. You can read more at www.uscis.gov
He or she is not racist for stating the obvious.


5 people like this
Posted by Robyn
a resident of another community
on Jul 16, 2018 at 10:16 am

LOL state you facts.
All you are doing is discouraging people from disagreeing with you. That is self-serving. I am merely asking you to substantiate your statements without my input. You failed to do so.


6 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 16, 2018 at 10:26 am

Robyn, as I'm sure you're aware, the Terms of Use on this website state the following: "You agree not to disclose personal information about another person." My comments so far have been within the terms of use. You, on the other hand, are free to post information about yourself, and the careful reader will not that you have not denied what I posted.


4 people like this
Posted by Google imports
a resident of Sylvan Park
on Jul 16, 2018 at 10:30 am

Google imports is a registered user.

I just looked up the tallest buildings in Mountain View where "LOL" could live if he ever gets a work visa. The tallest seems to be Hanger One at Moffett Field. Could be difficult to buy or rent there. But then we have Avalon Towers on El Camino near Showers. It is currently used as an apartment complex with rents (for new tenants) from $3,600 to $5,700 (listed online). But I believe the building was actually built as a condominium complex which can sell units. Maybe it can only sell units when it stops being an apartment complex. The conditions of approval would need to be checked. So there is hope for LOL if he ever gets here and has some legal income.


10 people like this
Posted by LOL
a resident of Old Mountain View
on Jul 16, 2018 at 10:34 am

"Google imports," do you have an actual point? Or are you just having some weird anti-Russian fever dream? I can't quite understand why you think I'm Russian or live overseas, but you're really not helping your case for "no xenophobia here."


7 people like this
Posted by TroLOL
a resident of Another Mountain View Neighborhood
on Jul 16, 2018 at 11:14 am

Please don't feed.


8 people like this
Posted by YIMBY
a resident of Another Mountain View Neighborhood
on Jul 16, 2018 at 11:34 am

@Robyn

Oh come on, any property owner in the Bay Area that's owned for more than 8 years has seen their property values massively appreciate. You can't hand-wave that away, or the fact that you benefit financially from the housing crisis.


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