Less than 25 percent of workers and just 40 percent of households in metro San Jose are able to rent or buy average-priced housing, according to a new report from the Silicon Valley Competitiveness and Innovation Project.
The new analysis underscores some of the region’s long-term affordability trends and the impact on quality of life and business competitiveness. Compiled by Peninsula-based Collaborative Economics, the data show that the average rent in May for a two-bedroom apartment in metro San Jose was $2,917 — and that residents would need to earn $116,680 annually to afford that. Yet the median income in the area was $57,400 for individual workers and $91,500 for households, according to the most recently available statistics, the study says.
The project was launched last year by the Silicon Valley Leadership Group and the Silicon Valley Community Foundation.
The new housing data tell a “compelling story,” project manager Janine Kaiser said, about issues of economic equity and business competitiveness.
“Folks who have been living here for a long time are being priced out,” she said. “There are sweeping ramifications for residents in terms of quality of life. And this represents a key challenge for businesses,” hampering their ability “to recruit new talent for their work forces and to the region.”
Citing data from the California Association of Realtors for the first quarter of 2015, the report says only 44 percent of Santa Clara County households could afford to purchase an entry-level home — defined as costing $833,850, or 85 percent of the county’s median sale price. That percentage shrank to 29 percent in San Mateo County (where an entry-level home was $1.11 million in the first quarter) and 27 percent in San Francisco ($1.15 million).
Even well-paid technology and science workers are feeling the impact. With a median salary of $121,000 in 2014, they are generally able to rent in the region, according to the new data, though less than half would be able to buy a home of median value in metro San Jose. The median home value there is close to $925,000, according to a Bloomberg analysis cited by the study.
The Silicon Valley Competitiveness and Innovation Project attempts to mobilize businesses in support of affordable housing. It advocates for a permanent state funding source for affordable housing as well as for investment in transportation infrastructure.
Contact Richard Scheinin at 408-920-5069, read his stories at www.mercurynews.com/richard-scheinin and follow him at www.twitter.com/RealEstateRag
Housing analysis
Here are highlights of a new report from the Silicon Valley Competitiveness and Innovation Project:
— Less than 25 percent of workers and just 40 percent of households in metro San Jose are able to rent or buy average-priced housing.
— The average rent in May for a two-bedroom apartment in metro San Jose was $2,917; residents would need to earn $116,680 annually to afford that.
— In Santa Clara County, only 44 percent of households could afford in the first quarter of 2015 to purchase an entry level home, defined as $833,850, or 85 percent of the median sale price.
