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11-MAY-1994 04:41:18.56
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Date: Wed, 11 May 1994 04:40:01 -0400
From: Dharm Guruswamy <gurd@xxxxxxxxxxx>
Subject: Silicon Valley
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Comments: To: [email protected]
This might be of interest...
---------- Forwarded message ----------
Date: 10 May 94 18:08 PDT
From:Bill.Michel@xxxxxxxxxxx
To: "Recipients of conference list.svbike" <bikecommute@xxxxxxxxxxx>
Subject: Public Affairs Series: Housing Bac
Although many of us have yet to figure Carl out (some would say his heart
is in the right place wrt the issues we care about, some would say that
he's just a slimy glad-handing politico...), this paper of his says some
interesting things.
Bill
HIGH-TECH EMPLOYERS SEE HOUSING AS BOTTOM-LINE ISSUE
San Jose Business Journal: November 1, 1993
By Carl Guardino
A young family moved from Silicon Valley to Livermore, where they could
rent a three-bedroom home for less than $800 a month. When there is no
heavy traffic, the morning commute to her high-tech job takes an hour.
To be at work on time, she must leave by 6 a.m. It's not unusual for
her to see other parents feeding their children in the car on the way
to day-care.
The Santa Clara County Manufacturing Group has just completed a survey,
the first of its kind, on the housing preferences of high-tech workers,
who comprise one-third of the Santa Clara County workforce. The
resulting data directly challenges our traditional assumptions about
housing and transportation preferences.
HOUSING COSTS
The survey showed that nearly half of the high-tech workers currently
renting a home would consider purchasing an attached home or a detached
home on a smaller lot in exchange for affordability.
Across the country, the average price of a new single-family detached
home is $95,000. In the San Francisco Bay Area, it hovers at
$248,000--the main cost factor being land costs. In Silicon Valley,
residential land prices can run as high as $600,000 an acre. By
moderately increasing the number of housing units built on each acre,
we can significantly reduce the cost of a home, and in turn, its
affordability: The median price of a condo or townhouse is $156,000.
PAYCHECKS VS. PAYMENTS
The survey revealed that the key reason high-tech workers do not
purchase a home is the price, with its accompanying high monthly
payment. Only 10 percent cite "lack of interest" to purchase a home as
their explanation.
High-tech workers are among the best-paid sector of employees in the
county workforce. Yet the dream of home ownership is too often out of
reach. To buy a $250,000 home, with a 10 percent down payment, a
Silicon Valley worker must produce $25,000 in cash, and then manage
monthly mortgage payments of $1,652. You would need a salary of $5,898
per month, or $71,000 a year. Countywide, the median income of a
one-person household is $33,249.
Even engineers at high-tech companies, traditionally well paid, have a
tough time purchasing a home at Silicon Valley prices. The industry
salary standard for first-, third- and fifth-year engineers at
high-tech companies working on defense contracts averages around
$35,000, $46,000 and $53,000, respectively.
To remain competitive, employers must recruit and retain a qualified
workforce. A poll by Gerston and Associates in May, 1991, found that
20 percent of workers under 30 years old said they had actively sought
employment outside the region in the past year. The top two reasons:
housing and transportation.
COMMUTE TIME AND DISTANCE
The survey showed that nearly 20 percent of the high-tech workers
polled live more than 15 miles from their job sites. In addition, it
revealed that nearly half of these workers currently renting would be
interested in purchasing a condominium or townhouse within 15 minutes
of work, rather than purchasing a detached home an hour from the job.
Equally important, more than two-thirds of all respondents prefer
future housing developments in existing urban areas over expansion in
outlying areas like Coyote Valley.
Sixty-five thousand workers commute into Santa Calara County each day.
Some commutes, from as far away as the Central Valley, have led to
harrowing stories of four-and-a-half-hour roundtrips. Long commutes
impact more than just a company's concern about employee morale and
additional sick leave. It also impacts and employee's time for family
and community.
COMMUTE CHOICES
The Survey revealed that 65 percent of high-tech workers would take
rail transit if it was within a half-mile of the home and job.
Bay Area employers and residents lose an estimated $2 billion a year
due to time lost in traffic jams.
In November 1992, Santa Clara county voters overwhelmingly passed
Measure A. This 20-year transportation initiative will build a
world-class rail transit system to link communities thoughout the
county with major employment, enterainment and education centers.
Still, we must couple our land-use decisions with this rail transit
network, or workers will not have an option to single-occupant
automobiles.
AIR QUALITY
The survey found that less than 14 percent of the workforce live within
a mile of a rail transit station. Not surprisingly, that is why the
survey also found that 90 percent of those polled use their car to
commute.
While Measure A will substantially build the transit that workers
indicate they will use, future residential, commercial and industrial
construction must be linked to that system.
Healthy air is more than just an important quality of life issue for
employees. It is a bottom-line fiscal issue for Silicon Valley
employers.
With the passage of Regulation 13 by the regional air district, it is
now the responsiblility of employers to "drive" their employees out of
their single-occupant automobiles--the single greatest source of air
pollution.
Until the Bay Area meets California Clean Air Standards, Regulation 13
is estimated to cost the region's employers $320 million each year.
LOOKING AHEAD
Residential lenders and home builders face tremendous obstacles in
providing homes our workforce can afford. High-tech employers must
work with them to help overcome these obstacles. At the same time,
lenders and builders must assist high-tech employers, and their
employees, by building a wide range of housing types, strategically
located, to help employers meet the economic challenges of a global
market place.
To help address the housing challenge, over the next few months the
Manufacturing Group will launch several initiatives:
* Release a study on how local government can further streamline the
housing development process. Time is money: For each month a housing
project is delayed due to regulatory red tape, it cost developers and
consumers an additional $500 per unit.
* Compile a land-use inventory of vacant and under-utilized parcels in
the county's 15 cities. This information will aid cities in
identifying vacant residential land, and where appropriate, re-zoning
vacant industrial and commercial land for home contruction.
Historically, high-tech employers have sat on the sidelines as housing
decisions--size, type and location--were made. Concerns about
competitiveness have chipped away at their lack of interest. The link
between housing decisions and a healthy economy is too strong to
ignore.
The Manufacturing Group's survey provides information on
ground-breaking trends. It's time we build on them.
Carl Guardino is vice president of the Santa Clara
County Manufacturing Group.
11-MAY-1994 04:41:18.56
To: IN%"URBAN-L%TREARN.BITNET@xxxxxxxxxxxxx" "Multiple recipients of list
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CC:
Subj: Silicon Valley
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Date: Wed, 11 May 1994 04:40:01 -0400
From: Dharm Guruswamy <gurd@xxxxxxxxxxx>
Subject: Silicon Valley
Sender: Urban Planning Discussion List <URBAN-L%TREARN.BITNET@xxxxxxxxxxxxx>
To: Multiple recipients of list URBAN-L <URBAN-L%TREARN.BITNET@xxxxxxxxxxxxx>
Reply-to: Urban Planning Discussion List <URBAN-L%TREARN.BITNET@xxxxxxxxxxxxx>
Message-id: <01HC783O9NVK8ZFJJN@xxxxxxxxxxxx>
Comments: To: [email protected]
This might be of interest...
---------- Forwarded message ----------
Date: 10 May 94 18:08 PDT
From:Bill.Michel@xxxxxxxxxxx
To: "Recipients of conference list.svbike" <bikecommute@xxxxxxxxxxx>
Subject: Public Affairs Series: Housing Bac
Although many of us have yet to figure Carl out (some would say his heart
is in the right place wrt the issues we care about, some would say that
he's just a slimy glad-handing politico...), this paper of his says some
interesting things.
Bill
HIGH-TECH EMPLOYERS SEE HOUSING AS BOTTOM-LINE ISSUE
San Jose Business Journal: November 1, 1993
By Carl Guardino
A young family moved from Silicon Valley to Livermore, where they could
rent a three-bedroom home for less than $800 a month. When there is no
heavy traffic, the morning commute to her high-tech job takes an hour.
To be at work on time, she must leave by 6 a.m. It's not unusual for
her to see other parents feeding their children in the car on the way
to day-care.
The Santa Clara County Manufacturing Group has just completed a survey,
the first of its kind, on the housing preferences of high-tech workers,
who comprise one-third of the Santa Clara County workforce. The
resulting data directly challenges our traditional assumptions about
housing and transportation preferences.
HOUSING COSTS
The survey showed that nearly half of the high-tech workers currently
renting a home would consider purchasing an attached home or a detached
home on a smaller lot in exchange for affordability.
Across the country, the average price of a new single-family detached
home is $95,000. In the San Francisco Bay Area, it hovers at
$248,000--the main cost factor being land costs. In Silicon Valley,
residential land prices can run as high as $600,000 an acre. By
moderately increasing the number of housing units built on each acre,
we can significantly reduce the cost of a home, and in turn, its
affordability: The median price of a condo or townhouse is $156,000.
PAYCHECKS VS. PAYMENTS
The survey revealed that the key reason high-tech workers do not
purchase a home is the price, with its accompanying high monthly
payment. Only 10 percent cite "lack of interest" to purchase a home as
their explanation.
High-tech workers are among the best-paid sector of employees in the
county workforce. Yet the dream of home ownership is too often out of
reach. To buy a $250,000 home, with a 10 percent down payment, a
Silicon Valley worker must produce $25,000 in cash, and then manage
monthly mortgage payments of $1,652. You would need a salary of $5,898
per month, or $71,000 a year. Countywide, the median income of a
one-person household is $33,249.
Even engineers at high-tech companies, traditionally well paid, have a
tough time purchasing a home at Silicon Valley prices. The industry
salary standard for first-, third- and fifth-year engineers at
high-tech companies working on defense contracts averages around
$35,000, $46,000 and $53,000, respectively.
To remain competitive, employers must recruit and retain a qualified
workforce. A poll by Gerston and Associates in May, 1991, found that
20 percent of workers under 30 years old said they had actively sought
employment outside the region in the past year. The top two reasons:
housing and transportation.
COMMUTE TIME AND DISTANCE
The survey showed that nearly 20 percent of the high-tech workers
polled live more than 15 miles from their job sites. In addition, it
revealed that nearly half of these workers currently renting would be
interested in purchasing a condominium or townhouse within 15 minutes
of work, rather than purchasing a detached home an hour from the job.
Equally important, more than two-thirds of all respondents prefer
future housing developments in existing urban areas over expansion in
outlying areas like Coyote Valley.
Sixty-five thousand workers commute into Santa Calara County each day.
Some commutes, from as far away as the Central Valley, have led to
harrowing stories of four-and-a-half-hour roundtrips. Long commutes
impact more than just a company's concern about employee morale and
additional sick leave. It also impacts and employee's time for family
and community.
COMMUTE CHOICES
The Survey revealed that 65 percent of high-tech workers would take
rail transit if it was within a half-mile of the home and job.
Bay Area employers and residents lose an estimated $2 billion a year
due to time lost in traffic jams.
In November 1992, Santa Clara county voters overwhelmingly passed
Measure A. This 20-year transportation initiative will build a
world-class rail transit system to link communities thoughout the
county with major employment, enterainment and education centers.
Still, we must couple our land-use decisions with this rail transit
network, or workers will not have an option to single-occupant
automobiles.
AIR QUALITY
The survey found that less than 14 percent of the workforce live within
a mile of a rail transit station. Not surprisingly, that is why the
survey also found that 90 percent of those polled use their car to
commute.
While Measure A will substantially build the transit that workers
indicate they will use, future residential, commercial and industrial
construction must be linked to that system.
Healthy air is more than just an important quality of life issue for
employees. It is a bottom-line fiscal issue for Silicon Valley
employers.
With the passage of Regulation 13 by the regional air district, it is
now the responsiblility of employers to "drive" their employees out of
their single-occupant automobiles--the single greatest source of air
pollution.
Until the Bay Area meets California Clean Air Standards, Regulation 13
is estimated to cost the region's employers $320 million each year.
LOOKING AHEAD
Residential lenders and home builders face tremendous obstacles in
providing homes our workforce can afford. High-tech employers must
work with them to help overcome these obstacles. At the same time,
lenders and builders must assist high-tech employers, and their
employees, by building a wide range of housing types, strategically
located, to help employers meet the economic challenges of a global
market place.
To help address the housing challenge, over the next few months the
Manufacturing Group will launch several initiatives:
* Release a study on how local government can further streamline the
housing development process. Time is money: For each month a housing
project is delayed due to regulatory red tape, it cost developers and
consumers an additional $500 per unit.
* Compile a land-use inventory of vacant and under-utilized parcels in
the county's 15 cities. This information will aid cities in
identifying vacant residential land, and where appropriate, re-zoning
vacant industrial and commercial land for home contruction.
Historically, high-tech employers have sat on the sidelines as housing
decisions--size, type and location--were made. Concerns about
competitiveness have chipped away at their lack of interest. The link
between housing decisions and a healthy economy is too strong to
ignore.
The Manufacturing Group's survey provides information on
ground-breaking trends. It's time we build on them.
Carl Guardino is vice president of the Santa Clara
County Manufacturing Group.