2011 Index of Silicon Valley - Silicon Valley Community Foundation

Housing
The region is still bearing the impact
of the housing crisis as home sales
plummet and foreclosures slow.
PLACE
WHY IS THIS IMPORTANT
The affordability of housing affects a region’s ability to maintain a viable
economy and high quality of life. Lack of affordable housing in a
region encourages longer commutes, which diminish productivity,
curtail family time and increase traffic congestion. Lack of affordable
housing also restricts the ability of crucial service providers—
such as teachers, registered nurses and police officers—to live
in the communities in which they work. The current financial
crisis has greatly added to housing pressures in the region.
HOW ARE WE DOING
Achieving a seven-year high, affordable housing units accounted for 23
percent of approved new housing construction in 2010. While
this value represents a doubling over the prior year, variability
from year to year is based in large part on total new housing
approvals. In 2009, 53 percent fewer total new housing units
were approved than in 2008. And in 2010, 83 percent fewer total
new housing units were approved than in 2009.
In 2010, average monthly rents declined for the second consecutive
year to $1,575, following a three year period of steadily increasing
rates. This accounts for a nine percent decline since 2008, but
only a one percent drop from 2009 levels. Following a similar
pattern, median household income decreased two percent in 2009.
After increasing since 2007, home affordability for first-time homebuyers
leveled off in 2010 in most regions and dropped in Silicon Valley
and Santa Barbara. The year 2010 marked the third consecutive
year that Silicon Valley was the least affordable California region
for first-time home buyers. Sacramento home affordability
continued to outpace other California regions, reaching a high of
81 percent in 2010.
The housing cost burden ticked up in Silicon Valley and California for
renters and declined slightly for homeowners in 2009. Thirtyseven
percent of Silicon Valley renters had housing costs greater
than 35 percent of their income in 2009, a three percent increase
from 2008 levels. Up one percent from the prior year, for 43
percent of California renters, housing costs represented more
than 35 percent of their total income in 2009. For homeowners,
2009 marked the first year since 2002 in which the housing cost
burden declined by one percent.
The number of home sales in Silicon Valley dropped 46 percent between
2004 and 2009. In addition, from June 2009 to 2010, sales increased
ten percent. The region’s average sale price slid following 2007
and remained essentially unmoved from 2009 to 2010.
After peaking in 2008 at 8,830, Silicon Valley foreclosures continued
to drop in 2010. The number of foreclosures in Silicon Valley fell
17 percent in 2009 to nearly 7,300 foreclosures. California
foreclosures followed a similar pattern, falling 20 percent to
189,792 foreclosures in 2009.
Building Affordable Housing
Affordable Units as a Percentage of Total Approved New Residential Units
Silicon Valley
35%
30%
25%
20%
15%
10%
5%
0%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Note: Beginning in 2008, the Land Use Survey expanded its geographic definition of Silicon Valley to include cities northward along the U.S.
101 corridor (Brisbane, Burlingame, Millbrae, San Bruno and South San Francisco)
Data Source: City Planning and Housing Departments of Silicon Valley
Analysis: Collaborative Economics
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