Silicon Valley, a region located in the southern part of the San Francisco Bay Area, is one of the most expensive regions to live in the United States, and many residents lack access to affordable housing. In 2018, the median home price across the area was $1.18 million, the highest of the 100 largest metro areas in the U.S. The growth of the technology industry in the area, including major companies like Google, Facebook, and Apple, is frequently cited as a major cause of the issue. There have been local efforts to address affordable housing, as well as state measures in response to housing issues across California (see California housing shortage).
Silicon Valley does not have concrete boundaries, and is defined differently by different organizations. Thus, housing initiatives and data often come from specific cities, counties, or metro areas, rather than the entire region. Statistics referencing the "Silicon Valley" refer to Joint Venture Silicon Valley's 2019 Index, which includes all of Santa Clara and San Mateo counties, as well as select cities in Alameda and Santa Cruz counties.
Cost and availability of affordable housing
In 2018, the median rental rate in Silicon Valley was $2,911, the highest of any major metropolitan region in the United States. At $3.20 per square foot, the San Jose metro area has the second highest rental rate per square foot in the United States, behind San Francisco at $3.42. In comparison, the median rental rate per square foot in New York was $2.67; in Las Vegas, it was $1.20. The 2018 median home price in Silicon Valley was $1.18 million, a 21% increase from 2017. Almost 90% of low income renters in the San Jose-Sunnyvale-Santa Clara metro area were cost burdened in 2017, meaning they spent more than 30% of their income on housing. Over a third of mid-income renters were cost burdened as well.
In the San Jose-Sunnyvale-Santa Clara metropolitan area, there are 30 available and affordable housing units for every 100 extremely low-income households below 30% of the area median income. There are 43 available and affordable units for every 100 low income households below 50% of the area median income. The average monthly inventory of homes for sale in Silicon Valley has seen a major decline in past years: in 2011, there were around 7,000 homes for sale each month; in 2018, there were just over 3,000.
Housing that is being built in the area is not necessarily affordable. In California, local governments work with the state government to develop a Regional Housing Need Allocation, the number of housing units that should be created in an area to meet its housing needs. Between 2015 and 2018, Silicon Valley cities permitted 85% of units needed to reach the goal for residents in the Above Moderate Income category, or residents who make above 120% of the area median income. However, for very low income, low income, and moderate income residents, there has been far less housing production; 5%, 6%, and 2% of the need has been met for those groups, respectively.
Impact of the tech industry on housing costs
The technology industry began in this area in the 1960s and 70s, when semiconductor manufacturers moved into the area (hence the nickname "Silicon Valley"). In following decades, focus shifted to personal computers, software development, and internet-based businesses. The industry caused immense growth in the region: from 1960 to 1980, the population of Santa Clara County more than doubled. The population has continued to grow, but not at such a rate (from 1980 to 2010, the population in Santa Clara County grew by about 38%). Home prices continued to climb with population growth and tech industry expansion, even after the dot-com bubble burst. They did not fall until the Great Recession in 2008, which caused the median home price to go down over 30%.
A major cause of high housing costs in Silicon Valley is expansive job growth without adequate housing production. In 2018, close to 36,000 new jobs were created in the area (34% of which were tech jobs); only 8,400 new residential units were issued permits. While high paid tech workers can generally afford to live in the region, others cannot. To afford a two-bedroom apartment in Santa Clara County, an individual must earn at least $54.60 an hour, or $113,560 a year. California software developers earn an average of $60.27 an hour; in contrast, the average elementary school teacher earns $39.40.
Corporate housing investments
Several Silicon Valley companies have taken steps to aid the area's housing shortage.