On a regular workday, it takes bartender Chris Nault 90 minutes or more to get to his job at the Sports Page Bar and Grill in Mountain View, across the street from the Google campus. It was much better, he said, in the days when he rented an apartment near Middlefield Road and his drive to work was a matter of minutes.
But Nault couldn't afford to continue living in Mountain View. The rent for his two-bedroom apartment was $2,200 a month five years ago, but it steadily notched up to nearly double that today. He and his wife moved to South San Jose, where they now pay less each month for their mortgage on a larger townhouse.
He has no regrets, he said, except for his grueling workday commute.
"It's one of those death-and-taxes sort of things," Nault said with a shrug. "But I have customers here who are driving all the way from the El Dorado Hills."
This story is a familiar one in Silicon Valley. A dearth of affordable housing and a glut of jobs have gone hand-in-hand, creating a tangle of problems as workers seeking housing are pushed out to the Bay Area's fringes and beyond. The imbalance of jobs to housing has pushed up the cost of living in jobs-rich cities on the Peninsula and the South Bay, as residential development lags far behind the creation of office space.
Experts warn that the jobs-housing imbalance is spurring an exodus of workers to more affordable locales, who are facing increasingly daunting commutes -- a situation that could threaten the future of the labor pool underpinning the Silicon Valley economy. Major employers have appealed to city councils and planning commissions throughout the Bay Area to encourage more housing development.
"We're not just talking about a housing issue, we're talking about an economic issue," said Carl Guardino, CEO of Silicon Valley Leadership Group. "If we can't recruit and retain talent, then we can't continue to foster the innovation economy."
As a result, individual cities' land-use decisions have become regional issues. Elected officials often pledge their commitment to nurturing affordable housing, balanced growth and income diversity. Yet the data shows lopsided growth tilted in favor of new office and commercial buildings.
Between 2010 and 2016, Santa Clara County added 166,800 new jobs, but only 25,440 new housing units were built, according to the California Department of Finance.
Much of the housing that is being built is affordable only to the well-heeled, not those earning median or below-median incomes. From 2007 to 2014, South Bay cities had guidelines for future development, called housing elements, that aimed to add about 34,500 homes for very low-, low- and moderate-income households.
In fact, barely a quarter of that number were built, according to the Association of Bay Area Governments. Instead, the cities prioritized high-end homes. Los Altos approved more than 10 times as many homes as its housing element called for in the highest income category. Milpitas approved nearly seven times as many high-end homes.
The South Bay is at a "turning point" for facing the limits of the suburban growth and provincial decision-making that have dominated much of its history, said Gillian Adams, a senior planner with the Association of Bay Area Governments. A smarter regional planning mindset needs to take hold, she said.
"We're not at that point anymore where cities can think they're not connected to their neighbors," she said. "That's a hard transition to accept -- we have a lot of smaller communities that grew up at the same time and they're hitting the same mid-life crisis.
"And there's not many examples of where you go from here. Everyone is trying to figure it out at the same time," she said.
Recent growth favors jobs
Several cities in Santa Clara County have added a staggering number of jobs between 2010 and 2014. Data collected by the American Community Survey as part of the U.S. Census, which is often cited by city planners, shows that cities including Mountain View, Palo Alto, Sunnyvale and Santa Clara have each supported upwards of 10,000 new jobs in just four years, while building just a fraction of the housing units necessary to accommodate all those new employees.
In Santa Clara County, Mountain View's North Bayshore continues to be the epicenter of extraordinary office growth, fueling fears that jobs-heavy development will overwhelm Santa Clara County's housing and transportation infrastructure. Mountain View bolstered its job count from 67,327 in 2011 to 81,217 in 2014 -- over 20 percent net new jobs. Job increases over the same period include 14,547 in Palo Alto, 12,930 in Sunnyvale and 17,814 in Santa Clara.
Housing development over the same period reveals that the jobs-housing imbalance has worsened significantly. For every home built in Palo Alto, for example, nearly 14 jobs were created. The ratio drops to just over three jobs for every housing unit in Santa Clara.
Perhaps the best example of the growing concern over unfettered office growth is the recently approved Santa Clara City Place project, a 240-acre swath of undeveloped land roughly three times the size of Disneyland. Once it's built out, the development will create 5.7 million square feet of new office space and 1.5 million square feet of retail. The project is expected to add more than 25,000 new employees to Santa Clara, most of whom will be commuting to work, according to city reports.
Although the project received a unanimous vote of the Santa Clara council on June 21, and plenty of praise -- with council members calling it anything from a "minor miracle" to "Santana Row on steroids" -- city staff conceded that the project causes significant and unavoidable impacts to the region's jobs-housing imbalance. The project includes 1,360 housing units at most, significantly below the expected demand for housing as a result of the new office park.
This didn't sit well with everyone. The city's planning commissioner Sudhanshu Jain spoke out at the meeting calling the City Place plan rushed and completely contrary to the city's general plan, which calls for a projected 28,500 new jobs between 2010 and 2035. City Place and a nearby 48-acre property recently acquired by the Chinese technology company LeEco, Jain said, could single-handedly push the city way over those expectations.
Santa Clara certainly isn't the only city exceeding growth projections. Mountain View's general plan estimates the city will have 80,820 jobs by 2030, and a population of about 86,330. The most recent numbers for 2016 show that there are already 81,217 jobs in Mountain View and 77,925 residents, according to Randy Tsuda, Mountain View's community development director.
Perhaps it's a sign that tensions are running high in Santa Clara County over the jobs-housing imbalance, but City Place has provoked an unusual level of ire from the neighboring city of San Jose. San Jose city planners blasted the project, calling it a violation of Santa Clara's general plan that would force San Jose to carry the burden of housing and providing city services to support what they called a tremendous and irresponsible development north of Highway 101.
In a letter to Santa Clara, San Jose planning director Harry Freitas wrote that only 13.5 percent of the project's employees are estimated to live in Santa Clara, increasing demand for residential units by 15,408 and likely boosting the region's total population by 40,677people. The assumption, Freitas said in the letter, is that San Jose will remain Silicon Valley's bedroom community, leaving the city strapped for cash as job growth continues to explode farther north.
"Cities that have significant fiscal challenges (such as) jobs-poor cities like San Jose provide the bulk of services to our most in-need communities in the South Bay," the letter states. "This project will perpetuate the wealth and resource divide between cities and further aggravate disparity in our county."
Sohagi Law Group, retained by the city of San Jose, sent a letter objecting to the nearly 140,000 daily vehicle trips that are expected once the project is built out. Those trips include an estimated 10,000 commuters during the morning hours and 12,000 commuters during the evening, causing significant delays on highways 101 and 237.
Santa Clara officials say that they are well within their right to approve the jobs-heavy project. In an interview with the Voice, Mayor Lisa Gillmor described the project as a major opportunity that the city couldn't afford to pass up, and that Santa Clara is lucky that the developer wanted to use over 180 acres of former landfill. She said it is highly unusual for the city of San Jose to butt into another city's planning process -- something she said could set a "dangerous precedent."
"Apple is building their spaceship campus right on their border, but we respect the city of Cupertino and the decisions they made," Gillmor said. "It's certainly going to impact us dramatically and we're going to have to make provisions for that, but you didn't see Santa Clara objecting to Apple Computers."
Almost every other city in the region has its own examples of massive tech-fueled development on the horizon. Cupertino -- already bracing for impacts later this year when Apple's 2.8-million-square-foot "spaceship" campus comes online -- is also considering adding an additional 2 million square feet of offices immediately to the south as part of a Vallco Shopping Mall redevelopment. In Sunnyvale, city officials have already doled out about 5.4 million square feet in office development approvals to redevelop the Moffett Park neighborhood, located just east of Mountain View's North Bayshore. When fully built out, the office district is expected to bring 24,000 new jobs.
As he endorsed the first leg of the Moffett Park expansion last month, Sunnyvale Councilman Jim Davis characterized the office park as part of the solution for the regional housing crisis.
"It's a terrible thing that our children can't afford to buy housing in our town, but we're working diligently to generate money so we can build affordable housing," he said. "Maybe this will give us some of the resources we need to build some homes."
The project is providing $8.5 million in housing fees, or roughly enough to build 19 affordable-housing units, based on current market costs.
Why aren't cities building housing?
It's hard not to see the appeal of office development. City Place is projected to increase the city of Santa Clara's property value by 17 percent, and yield between $9 million and $14 million in annual rent -- the project is on city-owned land -- and annual tax benefits estimated at $17 million, according to acting city manager Rajeev Batra.
Commercial and office development are seen as cash cows for cities. A fiscal analysis by San Jose late last year found that for every 1,000 square feet of medium-density apartment development, the city loses $421 annually when things like the cost of city services are factored in. The same amount of commercial and industrial development brings in an average of more than $1,000 in net revenue, thanks to sales, property and hotel taxes and the like.
At a Palo Alto City Council meeting in September, Santa Clara County Supervisor Joe Simitian said the so-called "fiscalization of land use," where cities focus on planning and zoning that maximizes annual tax revenue, is a major problem that constrains housing growth throughout California. City officials are going to act in their perceived self-interest, Simitian said, so it shouldn't be a surprise that growth is lopsided in favor of the more lucrative projects.
"I remember in the 1990s ... Silicon Valley created six jobs for every unit of housing it created," he said. "And then we were surprised that there was a housing shortage or that there was a high cost attached to the housing that was available."
Data from the peak growth period of the dot-com boom confirms that there was a similar growth pattern to what is seen today: The county had added roughly 130,000 new jobs between 1995 and 2001, while adding just over 30,000 housing units. Housing growth was strongest in Cupertino and San Jose, but North County cities like Mountain View, Sunnyvale and Palo Alto added just over 1,000 new housing units during that critical period.
Rather than let that trend continue, the business community in the Bay Area -- the same group driving the job growth -- has made a concerted effort to appeal to city planners to shift the focus toward more housing. The Silicon Valley Leadership Group, which represents more than 400 companies, has focused for decades on housing as an important part of land-use policy, according to Guardino. He said California's "broken tax system" penalizes cities for building homes, but having a more balanced growth policy needs to be a priority.
"For way too many years, San Jose has been the bedroom community for Silicon Valley," he said. "The more we can build homes close to jobs, the shorter the commutes, the less impact that we have on the environment."
In theory, Guardino said, everyone is in favor of more affordable places to live in Silicon Valley. But the kinds of housing that make it possible -- high density apartments near transit centers, for example -- bring local residents out in force to fight it. Individual companies seeking balanced growth in the Bay Area, he said, need to show up at city meetings to act as a counterweight.
Companies have a vested interest because it's challenging to recruit new employees when the cost of living is so high, and the only reasonably priced homes are rental units located far from the jobs-rich cities. Nearly 40 percent of Santa Clara County employees travel at least half an hour to get to work each day, according to census data from 2014.
"It's really difficult to convince someone coming out of college to work here when that means a dorm-like experience not even close to where they work," Guardino said. "For Silicon Valley to be a sustainable valley, we have to come to grips with our housing prices."
Read the entire Out of Balance series:
Part 1, Acres of office space