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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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The Four E's--Population Growth in the Peninsula and Region

Uploaded: Jul 18, 2015
In 2014 the Bay Area added 85,000 residents of which 40,000 were on the peninsula and 21,600 in Santa Clara County. The regional growth rate was a little over 1%, higher than the state or nation but well below growth rates from 1950 through 1990.

Births continue to add to the regional population although Bay Area birth rates are below replacement rates, below the national average and well below historical levels. But the above average population growth is the result of above average job growth.

Bay Area firms like Apple, Google, Facebook and LinkedIn continue to add jobs and plan for additional expansions. Data released last week show another strong quarter for VC funding in the region with the Bay Area again capturing 50% of national funding with second quarter funding exceeded only by the second quarter of 2000.

Job and population growth are expected to slow in the coming years but remain near 1% per year, declining further after 2025.

Below are some beginning thoughts on how population growth relates to the economy, environment and equity.

Population growth and the economy

High tech firms, who have a choice of locating anywhere, continue in large numbers to choose the Bay Area for expansion and start-ups. They do so for a variety of reasons including the ability to attract talented workers. Despite the pressures of high housing costs and congestion, individuals and families continue to choose the region and peninsula as evidenced by the job and population growth and the demand for housing. The region saw rising sales and home prices in June. housing sales

The influx of new residents, many from abroad, has supported the growth in jobs, wages, profits and tax revenues and the sharp decline in unemployment that is currently experienced in the region.

Without the ability to attract workers, these positive aspects of economic growth would be diminished. While the most benefits accrue to those in the tech sector, the economic growth has spurred retail spending, construction and allowed local governments to rehire teachers and public safety workers.

But, as everyone knows the job and related population growth has not brought only positive impacts.

Population growth and the environment

The surge in job and population growth has led to an increase in travel, both for work and other activities, and a surge in home prices and rents.

Our roads are more crowded despite increases in CalTrain and BART ridership. Although Bay Area school enrollment has not grown, some districts have seen increases while others see falling enrollment.

In general, coming out of the recession, public services did not keep up with the pace of population growth.

From a peninsula perspective, most communities are dealing with increased congestion, travel times and parking challenges—again despite rising public transit use.

So far the measures to protect regional air quality have kept the air better than decades ago despite the growth. Water may be a long-term issue if the drought continues and responses cannot be adopted.

From a traffic and water perspective, would it be better for Bay Area residents if growth slowed or moved elsewhere, probably yes but at some cost to economic vitality. But while an individual city might choose to limit job growth, the collection of Bay Area communities on the whole welcomes job growth.

But from most environmental perspectives, growth here is better than elsewhere. Bay Area residents use less energy and water than in inland counties adjacent to the region or in the Central Valley. Global emissions are, indeed, global and it is hard to argue that other areas have more stringent emission reduction policies than California.

Population growth and equity

The benefits of economic growth are rarely shared equally. The largest equity challenge from my perspective about recent population growth is the impact it has had on rents and home prices. For most families, the cost of housing has risen far faster than their incomes, including for most middle income families. There are other equity issues in our region and society but housing and the associated costs of commuting (time and money) are the ones most associated with population growth.

Would rents and home prices have increased less if the recession were still around, almost certainly the answer is yes. Would they have increased less if we had built more housing, again the answer is almost certainly yes.

In either case it is unlikely that rents and home prices would not have increased as the economy recovered.

I have lots of ideas about how to address these multiples priorities and growth challenges but I want to hear from readers first.

Do remember that this column is about the peninsula and region and is not Palo Alto specific.

Comments

 +  Like this comment
Posted by Techie, a resident of Menlo Park,
on Jul 18, 2015 at 8:14 pm

It's definitely true that you can create new products and companies here much more easily than anywhere else in the world.

However, you state that most of the benefit of tech has gone to those in the tech sector. It's worth asking how much has shown up in the value of land underneath homes and offices. After all, if this geographic area has a unique cluster of firms and workers that allows new tech to be created here, the land as a fixed input should receive a huge chunk of that value. It would be interesting to quantify just how much land has appreciated here compared to the rest of the country.


 +   1 person likes this
Posted by Neal, a resident of Community Center,
on Jul 19, 2015 at 7:01 am

Let's not lose sight of the fact that over population is a global problem. With seven billion people, humans have become a pox on the planet and the Bay Area won't be able to isolate itself from the fallout for ever. For example, global warming, air pollution and over fished oceans just to name a few. Let's hope the brilliant minds of the Bay Area can figure out a way to control our reckless breeding habits.


 +   7 people like this
Posted by Cheryl Lilienstein, a resident of Barron Park,
on Jul 19, 2015 at 9:14 pm

Mr Levy is a member of the newly formed Citizen's Advisory Committee for the Comprehensive Plan which is specifically prohibited from advocating a position in any public forum outside the CAC. This is an advocacy piece. How will the city's rules be applied in this case?

Will Palo Alto Online remove this blogger out of respect for the city's rules?


 +   10 people like this
Posted by Forward, a resident of Another Palo Alto neighborhood,
on Jul 21, 2015 at 8:43 am

Perhaps Cheryl did not read the end of the posting:

"Do remember that this column is about the peninsula and region and is not Palo Alto specific."

No advocacy in the piece that Steve wrote.
Cheryl is just upset that Steve does not march in lockstep with her group, PASZ, so she is trying to silence those that do not agree with her.


 +   4 people like this
Posted by Aleks Totic, a resident of Palo Verde,
on Jul 21, 2015 at 9:53 am

Housing and traffic, the two things that make me question whether I'll stay here forever.

It is surprising that all the long term urban planning assumes traffic growth. I can't imagine what the SF->Palo Alto commute will be 10 years from now.

It is surprising because we are reinventing everything, except things that currently hurt the most. I do not think driverless cars are the solution, they will create more traffic, not less. Yes, it'll be efficient traffic, but you'll still travel an hour to work.

I'd love to see someone make an attempt to imagine what a functioning Bay Area would look like with less traffic. Where would housing, offices be? That would be an inspiring vision. The current plan feels like a slow motion suffocation, where I'll have to leave one day because traffic jams have reduced my mobility to bicycle-only.

My view of the problem is simple:
- traffic is caused by people living too far from work
- they live too far from work because office space and housing permits are decoupled.
- the way out is to tie the two together. Every new office building permit should be tied new housing within 2 miles for every job created. Housing for 3 people for every job sounds about right.
- In the areas with severe housing/job imbalance, we can adjust the ratio: new office might require 5 housing spots.
- this can be tweaked with special permits for offices that allow telecommuting N days a week, etc.


 +   1 person likes this
Posted by stephen levy, a resident of University South,
on Jul 21, 2015 at 10:12 am

stephen levy is a registered user.

@ Neal

I support activities like family planning, education and economic growth that make it easier for individuals, families and countries to reduce high fertility rates.

I do not call individuals with high fertility rates in places like Africa and other poor areas "reckless" as I cannot judge their culture or specific situations.

And I do not support the killing of girl babies (I know Neal did not suggest this) as a method of population control and feel strongly that empowerment of women in poor countries is an ethical and effective strategy for a better world.

@ Techie

I am sure that the tech boom has increased property values here compared to slower growing areas although I do not have data to quantify this.

But it is also true that the job and population growth has been accompanied by increases in income, spending and tax revenues that have broad benefits along with pressures on traffic and housing costs.

Today a new report explored the equity implications of Bay Area growth and the impact on housing costs.

[Web Link housing costs and equity]


 +   4 people like this
Posted by Techie, a resident of Menlo Park,
on Jul 21, 2015 at 12:22 pm

@Aleks - I think the future has fewer people driving themselves and more people taking the train and even really nice shuttles like the Google buses. Once the commute gets over 45 minutes, a lot of people would prefer to opt out of driving themselves as long as the bus or train is clean and pleasant to work in. Wifi and cellular data are game-changers in this - it was much harder to work while commuting even a decade ago, and you can see the results in the Caltrain ridership numbers.

New housing should be built and concentrated around the train stations. For job areas that don't have train stations (like SRP or the office parks in Menlo Park near FB), the professional employers should get together and create a shuttle system like Google's. (Maybe the cities need to require them to do this since otherwise traffic doesn't cost them anything.) It's not that expensive compared to the cost of rent in the Peninsula - it shouldn't be more than $5k/worker/year.

You don't need to get everyone to take the shuttle or train to make a difference. Even shifting 20% of the commuters like Google has done would cause a massive reduction in traffic for those who drive.

It's really quite feasible to reduce traffic from high-income commuters, but the companies don't have an incentive to do it on their own. You have to wonder why the cities who are complaining about traffic haven't made it a requirement.


 +   1 person likes this
Posted by stephen levy, a resident of University South,
on Jul 21, 2015 at 2:31 pm

stephen levy is a registered user.

A friend just asked what are the 4 E's.

I wrote an earlier blog and forgot to reference it here.

The 4 E's are economy, environment, equity and efficiency and the earlier blog post is here

[Web Link ]


 +   3 people like this
Posted by Curmudgeon, a resident of Downtown North,
on Jul 22, 2015 at 3:22 pm

"New housing should be built and concentrated around the train stations."

While building high density (portion deleted) by the tracks keeps new housing out of our established single-family neighborhoods, that is the only problem it solves, and it creates some doozies.

Leaving aside moral issues like economic social segregation, implementing this proposal will generate enduring gridlock on the surrounding roads, as the inhabitants do their daily errands in the perfect traffic storm of urban dwelling densities and suburban driving necessities.

Our regional development paradigm is suburban; residences are commonly miles from services. It would take a huge clearcut and redevelopment effort to change that. Ain't gonna happen in any foreseeable time frame.

Let's get practical. The most logical and workable venue for housing growth is in our single family districts, especially the high-end neighborhoods where land utilization is least efficient. Nor can the postwar tracts ultimately be spared.

I can hear readers out there reaching for rocks, wishing they knew where my front window is.

But do visit Downtown North to experience such a mixed density neighborhood. It works very very well, looks good, and it is the realistic future.


 +  Like this comment
Posted by Edward Syrett, a resident of Menlo Park: The Willows,
on Jul 24, 2015 at 2:06 pm

Edward Syrett is a registered user.

Mr. Levy's comments apply to Menlo Park in aces and spades. We in MP have a geographical problem not shared by most other mid-Peninsula communities. Our downtown commercial area is west of El Camino Real and the Caltrain tracks. PA's two downtowns are east of those barriers; a large portion of the land to the west of PA is the Stanford campus. ECR in Redwood City is still a barrier but the revitalized Broadway area is west of it, and where major arteries like Jefferson cross the tracks, there's grade separation. Farther north, Caltrain was elevated back when funds were available to do so, so access to commerce along streets like Laurel in San Carlos isn't impeded.

I've said elsewhere that Menlo Park would "work better" from a transportation point of view if the entire city could be picked up and rotated ninety degrees, then set back down with Santa Cruz Ave. parallel to ECR rather than perpendicular to it. Not a feasible plan, just a thought experiment.



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