|
Getting your Trinity Audio player ready...
|
Recent Trends
The region has seen a surge in job and population growth with the highest growth rates up and down the peninsula from San Francisco to San Jose. The region added 499,000 jobs and 323,000 residents from 2010 through 2014 and the growth is continuing into 2015.
This job growth has reduced unemployment and made room for new residents to join the workforce. Between April 2010 and April 2015 the regional unemployment rate declined from 10.2% to 4.1% reducing regional unemployment by nearly 2/3 from 383,400 to 163,900.
This growth has brought an increase in traffic and housing prices and rents. The substantial rise in housing prices and rents has been caused in part by a substantial shortage of new housing construction. Only on the past two years have new residential permits exceeded 20,000 per year and even that rate has been unable to keep pace with population growth.
In 2007 there was an average of 2.7 residents per household. That ratio would mean that the 546,578 added residents from 2007 through 2014 would require 202,436 new housing units. But only 113,810 units were added, which left a shortage of 88,626 housing units for these years.
The Comp Plan Years to 2030
While the future is uncertain, some trends are very likely to occur. The reason is the aging and eventual retirement of most baby boomers by 2030. In 2030 the oldest boomers, born in 1946, will be 84 and the youngest boomers, born in 1963, will be 67. The peak baby boomer retirement period will be between 2020 and 2030.
There is broad consensus among leading national forecasting firms, the UCLA Anderson School Forecast and CCSCE on three broad job growth trends:
1) 2015 and 2016 will see a continuation of strong job growth in the nation, state and region
2) Job growth rates will decline sharply in the following four years to 2020.
3) Job growth rates between 2014 and 2030 would be below 1% per year between 2014 and 2030 to reach the 2030 regional projection in Plan Bay Area. In contrast, the growth rate for our metro area was 6.0% for the past 12 months.
The recent surge in job growth will taper off.
But population growth will continue at, perhaps, a slightly slower pace and with predictable changes in the age structure of the population. Regional population growth would average 0.8% per year between 2014 and 2030 to reach the 2030 Plan Bay Area regional population projection. Note both the regional job and population/housing projections are being revised this year.
Demographic Trends
The California Department of Finance projects three major demographic trends for our region and county:
1) Birth rates have declined and are expected to remain lower to 2030. At the state and county level no growth is expected in school age population to 2030.
School enrollment projections released in December 2014 by the California Department of Finance show an anticipated small decline in K-12 enrollment in Santa Clara County from 275,614 students in the 2013-14 school year to 266,802 in the 2023-24 school year and for San Mateo County a small decline from 94,613 to 93,692.
2) Roughly half of the increase in state and county population will be in residents aged 70 and above and the next largest portion will be in residents between 55 and 70.
3) Most population growth at the state and county level will be in Hispanic and Asian populations, partly driven by immigration but an increasing share will be from children of existing residents.
As a result of these trends, the demand for smaller housing units may increase and the average number of people per housing unit will fall. This is likely as a large share of the growth in households will be for those headed by someone 65 and over and a large share of these households are one or two residents. There will also be slightly fewer children per household.
This is already a trend in Palo Alto with its above average share of residents over 65 compared to the county. As of January 1, 2015 the average household size in Palo Alto was 2.47 residents compared to the county average of 2.97.
Conclusion
These are the regional trends in which Palo Alto and other Bay Area communities will be planning their job and housing choices for the future.