Through the Envision San Jose 2040 community workshop, the city
of San Jose is asking residents to present plans for the next three
decades. A new vision is certainly needed, as the current one has
stifled growth, produced unaffordable housing, worsened traffic
congestion, and created a woefully inequitable community.
In 1970, the San Jose urban area was about half as dense as Los
Angeles. Shortly thereafter, city planners drew an urban-growth
boundary to achieve compact development. As a result, San Jose is
85 percent as dense as L.A., making it the third-densest urban area
in America. The law has also made housing unaffordable by
restricting the amount of land available for new homes. As Harvard
economist Edward Glaeser shows, “land-use controls play the
dominant role in making housing expensive.” When such controls are
applied to growing regions, says Joseph Gyourko of the Wharton
School, “high-income families outbid others for scarce slots.”
As the tech industry sprang up, land-use legislation accelerated
the growth in housing prices, and it continues to push low- to
moderate-income families out of the region today. Many make long
commutes from California’s Central Valley, but others have simply
left the state. Silicon Valley’s affordability problems are a major
contributor to the decline in the region’s black population, as
described in the San Jose Mercury News
earlier this month.
Census data show that the San Jose and Phoenix metropolitan
areas each house about the same number of families earning $100,000
or more per year. But Phoenix houses almost three times as many
families earning $50,000 to $100,000 per year, and more than three
times as many earning under $50,000.
Phoenix’s income distribution is similar to that of the United
States as a whole, while San Jose’s is skewed towards families
earning more than $100,000 per year. Of course, $100,000 doesn’t go
far in San Jose, where housing is four times as expensive as it is
in Phoenix.
In effect, San Jose has become like an exclusive country club,
open only to the very wealthy. While its members may enjoy its
amenities, everyone else is either denied access or forced to pay
an extremely high price just to peer inside the club’s gates.
San Jose’s artificial land shortage also increases costs to
businesses, stifling growth. As home to fast-growing high-tech
industries, Silicon Valley should be one of the nation’s
fastest-growing urban areas. Instead, it is one of the slowest.
Between 1990 and 2006, the number of jobs in the Phoenix metro area
grew by 75 percent, while jobs in the San Jose area actually
declined.
It wasn’t always this way. When San Jose-area housing was
affordable in the 1960s, its population grew by more than 5 percent
per year. The new vision’s regulations dampened annual growth to
2.0 percent in the 1970s, 1.4 percent in the 1980s, and a
depressing 0.7 percent in the roaring '90s.
Of course, San Jose isn’t alone. Thanks to a unique California
institution known as the local area formation commission, or LAFCo,
many other cities and counties in the state also have urban-growth
boundaries, which is why California has the nation’s least
affordable housing.
LAFCos have packed almost 95 percent of Californians into just
5.1 percent of the state’s land, making California urban areas 80
percent denser than those in other parts of the country. If
California had allowed cities to expand at the densities people
prefer, they would occupy 8.5 percent of the state, and housing
would be affordable. Is saving 3.4 percent of the state from
development worth the exorbitant prices Californians must pay for
housing?
Historically, the American dream of home ownership has been key
to California’s prosperity. San Jose’s current vision threatens
that dream, stifles growth, and is particularly unfair to low- and
moderate-income families.
This would mean allowing developers to build outside the
existing urban-growth boundary. Since California is nearly 95
percent rural open space, developing a few thousand acres of
marginal farm and rangelands will not hurt the state’s economy or
its environment.
This new vision for San Jose will improve the city’s livability
for all present and future residents, not just wealthy elites.
