Silicon Valley remains the nation's leader in tech job creation, but its innovation economy is imperiled by inadequate levels of housing construction, skyrocketing home prices and a migration of residents to other states, according to a report released Thursday.
"The gap between job and housing growth is large and widening," stated the 2018 report by the Silicon Valley Competitiveness and Innovation Project, which is headed by the San Jose-based Silicon Valley Leadership Group.
From 2010 through 2016, the number of payroll jobs in Silicon Valley increased 29 percent — but the total number of housing units in the region rose a feeble 4 percent. Silicon Valley's population rose just 8 percent over that period, an indication that a growing number of people are commuting to work from outside of the area. The report defines Silicon Valley as Santa Clara County, San Mateo County and San Francisco.
In 2016, Silicon Valley performed well compared to its rival innovation hubs. Silicon Valley's total jobs in its innovation industries jumped 5 percent in 2016. During the same year, tech jobs increased 4 percent in Seattle, 3 percent in both Southern California and Boston, 2 percent in New York City, and 1 percent in Austin, Texas.
The pace of employment gains appears to have crested in the tech sector — not just in Silicon Valley, but nationwide. During 2015, technology employment zoomed 8 percent higher. Among the rival innovation hubs, only Seattle showed stronger growth in 2016 compared with 2015.
The year 2016 was the most recent full year of available data culled from federal labor statistics, which were analyzed by Palo Alto-based Collaborative Economics.
Despite the sturdy employment gains, the sheer lack of housing remains the most formidable hazard that can jeopardize Silicon Valley's booming economy, the report found.
Silicon Valley's median housing costs — a blend of home prices and apartment rental rates rocketed 10 percent higher during 2017, rising faster than most other innovation hubs. Home prices rose 9 percent in Seattle, 6 percent in Austin, 5 percent in New York City, 4 percent in Boston and 3 percent in Southern California.
Traffic is becoming worse in Silicon Valley at a much faster pace than other tech hubs. From 2010 through 2016, average commute times soared 18.9 percent in Silicon Valley. Over the same period, commute times rose 14 percent in Seattle, 8.2 percent in Southern California, 7.7 percent in Boston, 7.1 percent in Austin and 6.3 percent in New York City.
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