Each year, Joint Venture Silicon Valley, a regional nonprofit think tank, publishes its Silicon Valley Index, a report chock-full of data points attempting to paint a point-in-time portrait of the region.
This year’s data points confirmed a lot of what I’d observed anecdotally in my own circles: Essentials like housing, transportation, food and child care feel more expensive than ever. There’s a widening gap between the haves and the have-nots, more people are leaving for greener pastures, and mental health challenges like anxiety and depression are all too common – especially for people experiencing financial stress.
These statistics suggest that for many, Silicon Valley’s high cost of living has made the region inhospitable enough to drive them away. But for those who remain, it’s been exacerbated by unaffordable home prices, pay inequity and inflation.
Generally, this data set includes in its definition of Silicon Valley both San Mateo and Santa Clara counties, plus a few additional neighboring communities, including Fremont, Newark and Union City in Alameda County and Scotts Valley in Santa Cruz County. As a result, the territory includes a population of 3 million residents and 1.63 million jobs. Data is compiled by Joint Venture Silicon Valley’s research arm, the Silicon Valley Institute for Regional Studies.
Here are the top takeaways from the report.
1. Housing remains as expensive as ever. About half of all renters are financially burdened by housing costs: 45% of renter households spend more than 30% of their gross income on rent, and 22% spend more than half of their gross income on rent.
Meanwhile, homeownership remains out of reach for many. In 2022, the median home price hit $1.53 million, up 6% year-over-year after adjusting for inflation. Only 8% of all of the homes sold in the region were under $600,000. The share of first-time homebuyers who can afford the median-priced home is only 27%, and as low as 14% for Black and Hispanic/Latino residents. (This is compared to 61% of first-time homebuyers nationwide in 2022.)
2. There are also positive signs of housing growth. In 2022, 12,000 new residential units were permitted in San Mateo and Santa Clara counties – more than in any year since 1978. Of those, 80% are in multifamily buildings, and 900 will be affordable to people earning less than half the area median income. However, the vast majority of new housing opportunities are likely to be affordable only to high-earning households. (The average monthly rental rate in multifamily buildings was $2,920 during the first three quarters of 2022.)
3. Big tech companies employ a large proportion of local workers. The 30 largest tech firms make up 42% of employment in Silicon Valley, and a whopping 19% come from Google, Apple and Meta alone as of Feb. 1. Meanwhile, startups are getting less love: In 2022, angel investment declined 90%, from $360 million to $40 million.
4. More employees are working remotely, causing big changes for regional transit networks. Over a third (35%) of Silicon Valley workers now work from home, up from 28% in 2021 and 6% in 2019. This shift is part of the reason for a massive decline in the number of people using Caltrain, Silicon Valley’s primary commuter rail line: Caltrain ridership has fallen by 92% from pre-pandemic rates. The biggest shift in commute patterns was a 74% decline in San Francisco-based commuters heading to Santa Clara County between 2019 and 2021.
Still, monthly transportation costs were up 40% in Silicon Valley in 2022 from 2018, at an average of $739 compared to $526 for a family of four.
5. Pay gaps persist across race, gender and education divides. Between 2016 and 2021, white workers earned a wage that was on average 61% greater than that of Hispanic or Latino workers and 62% greater than Black or African American workers. In 2021, men earned $59,000 more than women when both groups had a bachelor’s degree or higher level of education. In addition, there is a significant gap in median income between people with less than a high school degree and those with a professional or graduate degree, totaling about $115,000.
6. Income inequality is widening. In 2021, income inequality rose by 5% in Silicon Valley while decreasing by 3% in the U.S. overall. Billionaires with primary homes in San Mateo or Santa Clara counties hold an estimated $63 billion in liquid wealth.
The top 10% of Silicon Valley households held 66% of the wealth in 2022, and just eight residents held more than that of the bottom 50% of households combined. Meanwhile, 42% of children in San Mateo and Santa Clara counties live in households that can’t make ends meet without extra help.
7. People are leaving Silicon Valley. Between mid-2020 and mid-2021, Silicon Valley’s population declined by nearly 39,000 residents, the highest figure on record for the region. In 2021, about 48,000 people moved away; around as many as relocated during the dot-com bust in 2001.
8. “Minimum wage is no longer a living wage in Silicon Valley,” the report says. “Even at the highest local minimum wage last year ($17.10 per hour in Mountain View and Sunnyvale), the least expensive household type — a two-adult household with no children — would be unable to meet their own basic needs without public or private assistance…Silicon Valley’s Self-Sufficiency wages — representing a no-frills, bare-bones minimum for affording basic human needs such as housing, childcare, food, transportation, and healthcare — were completely out of reach for the more than 302,000 workers in 2021 earning less than the statewide minimum wage of $14 per hour.” Overall, inflation has resulted in a $550 decline in the median household income.
9. Child care costs in particular have skyrocketed in the region. “The cost of full-time childcare at Silicon Valley’s licensed preschools has nearly doubled since the beginning of the Great Recession economic recovery period in 2010 – rising from $11,100 per year in 2010 to an estimated $20,500 in 2022,” according to the report. Overall, child care costs are rising at twice the rate of inflation.
In addition, as many as 1 in 5 Silicon Valley households are at risk for food insecurity but are not eligible for most public assistance programs.
10. Mental health challenges remain a problem for teens and adults alike. One in eight students in middle or high school reports that they have considered suicide. The share is higher for female students (16% compared to 7% of males), as well as those who identify as gay, lesbian, bisexual or not straight (36%), and highest for those who identify as transgender youth (38%). Anxiety and depression are also a problem for adults: “One in five Bay Area residents experience anxiety and/or depression most days of the week, with rates particularly high among young adults (ages 19-29), non-Hispanic Black, and Hispanic or Latino residents; rates are the highest for those who struggle financially,” according to the report. That proportion is down from 24% in 2021 and 30% in the second half of 2020.
However, the report notes, people that generally exhibit the highest rates of anxiety and depression are those who need sources of income or savings to pay for immediate spending needs. “Relieving near-term financial burdens facing Bay Area residents may alleviate mental health issues to a large degree,” the report states.
Access the full report here and additional data here.
The post Remote work rises and Caltrain ridership plummets: How Silicon Valley has changed three years since COVID appeared first on The Six Fifty.