Every few months, someone predicts the death of Silicon Valley--or at least, the rise of whatever city will supplant it. Most recently, it's Derek Thompson at The Atlantic, who heard Brookings Institution scholar Bruce Katz say on an Aspen Ideas Festival stage that young and tech-savvy people want to move to cities, and Silicon Valley just isn't, outside the hyper-expensive San Francisco. Katz, who's out with a book heralding the ascendance of metropolitan regions, says this jeopardizes the Bay Area's continuing preeminence as the epicenter of the tech economy.
First of all, on the issue of walkability: Even if you accept that young people tend to like the super-dense, bar-and-coffeeshop lifestyle, that's not the only thing everyone wants. In a 2011 community preference survey by the National Association of Realtors, 61 percent "choose larger lots and needing to drive over smaller lots and being able to walk to schools, stores, and restaurants." San Francisco isn't for everybody. That's partially why regions are so important, as Katz hammers home in his book: An integrated economy needs all types of housing. The more it can be threaded together by public transit, the better, but plenty of talented people will still happily move to places where they have to drive. And according to the most recent available data, the metropolitan statistical areas that comprise most of Silicon Valley are more productive on a per-capita basis than the U.S.'s biggest and fastest-growing regions. It's still where all the money is: Even if those techies don't love suburban Palo Alto, they're happy to walk up and down Sand Hill Road to get it, and venture capitalists like to keep them around.
That's not to say Silicon Valley doesn't need more housing overall to keep up with projected job growth, as has been documented by study after study. And all those rich people can really stand in the way of growth. Although the regional planning body assigns specific housing construction targets to each jurisdiction, they often find ways around those baselines, and enforcement is pretty much non-existent.
And yet, despite the eyewitness observations of some commentators, housing is getting built. The Valley is represented by the two lines at the bottom of this graph--they're low overall, but still trending up, having almost doubled from last year.
But what about affordability, you say? Fair question. When you look at housing price indexes for major metros, those representing the Valley have risen, but not outrageously compared to others. Also, affordability still exists in vast swaths of the city. Though San Francisco proper's real estate prices are terrifying, they're dramatically lower just across the Bay in Oakland.
The nice thing about having a bunch of very wealthy tech companies is that they throw off a lot of philanthropic cash, so you also have organizations like the Silicon Valley Leadership Group, which set up a housing trust over a decade ago that's been financing new construction since then. To further secure the region's economic dominance, they'd be well-advised to push for a regional planning organization with real muscle--those that already exist have succeeded in preserving lots of open space, which is a great legacy to have left, but not what's called for in the future. And of course, that BART extension can't come soon enough.