The dangers threatening the long-term prosperity of the Bay Area’s revived economy are easy enough to identify. But overcoming them would require a forceful exercise of political
By far the worst culprit is the runaway cost of local housing, which can eat up twice as much income percentage as in other expanding business centers such as Seattle or Charlotte, N.C. Other prosperity killers are painfully long commutes, increased immigration obstacles for highly educated foreigners and a lack of tax breaks to attract growing companies.
These findings come from separate studies issued last week by the Bay Area Economic Forum and the Public Policy Institute of California. The Economic Forum report warns that our revived local economy cannot long sustain itself without continuing to attract top talent from around the world.
Bay Area business success is driven by industries based on knowledge and innovation, such as high-tech, biotech, medical research and financial services. In order for the kind of people who spark this economy to continue coming here and remaining, it is necessary to deliver an attractive quality of life.
But an attractive lifestyle becomes increasingly unobtainable when the high cost of living — most especially housing cost — leaves virtually no disposable income for a median $70,000 salaried professional after paying for necessities.
Nor does it help that Bay Area commuters spend an average of 70 hours a year stuck in traffic, or that the California tax structure discourages cities from welcoming new businesses or new housing, or that post-Sept. 11 immigration crackdowns make U.S. residency harder to attain for the highly educated Chinese and East Indian professionals who start one-third of the Bay Area’s emerging technology companies.
The more limited focus of the Public Policy Institute report supports the disturbing central concept that high housing expenses are a dead weight on the California economy. The institute found that California is the third-poorest state in income/housing imbalance.
Unfortunately, it is much easier to see these problems than to do anything to fix them. Where does the money for more and cheaper housing come from? Where can additional housing be placed in the densely populated Bay Area? Where is the money for public transportation good enough to actually get people out of their cars? What could realistically be done to keep the business environment strong and encourage innovative entrepreneurs to set up businesses here?
However, understanding what questions need to be answered is at least making a start toward resolving the looming problems. Any Bay Area solution must be arrived at regionally, not by individual cities. And there is no time to waste.