Is Silicon Valley only for the wealthy?
Silicon Valley is in the midst of a major affordability crisis. New apartments and condominiums cater almost exclusively to an increasingly wealthy population, partially driven by an influx of tech wealth. A lack of housing supply at all levels, particularly for lower- and middle-class residents creates a cutthroat environment, with vacancy rates in Silicon Valley hovering around 2.5 percent and homeownership vacancy rates below 1 percent.
More jobs, but less homes.
A major imbalance between jobs and housing in the region paints a dire picture for the region: between 2010 and 2014, Santa Clara and San Mateo counties gained around 167,000 new jobs, but only added 22,000 additional housing residences; median rent in Mountain View is over $4,000/month, a 54 percent jump since 2012; and the median price of a home currently for sale in Palo Alto is over $2 million, more than double its price of $1.25 million three years ago.
Help from public and private sectors.
The response to the crisis has taken several forms, and is being combatted by both the private and public sector. In December 2016, Facebook officially pledged $20 million over the next five years for affordable housing, tenant assistance and job training in Menlo Park and East Palo Alto. This followed the approval by the City of San Jose a new percent cap on rent increases in San Jose’s 43,000 rent-controlled apartment units, with an 8 percent cap on properties where landlords had made significant capital improvements in April 2016. Palo Alto is also currently in discussions to adopt new zoning designations that would encourage construction of below-market-rate developments. The city currently requires developers to build 15 percent of their projects at below-market rate, or pay an affordable housing impact fee between 7.5 and 10 percent.
Coming together for a solution.
While there is no easy solution to these issues of affordability, what is true is that a coalition and collaboration by major stakeholders including employers, higher education institutions and local governments will drive action in the years ahead.