Silicon Valley Paying the Price for Its Own Success

By CHARLES PILLER

Sept. 20, 1999 12 AM PT

It can be hard for people outside Silicon Valley to take the region’s planning nightmare seriously. (“Problems in the epicenter of high-tech wealth creation? Don’t make me laugh,” I hear you say.)

But anyone who values the new economy should take pause at yet another report predicting that the valley’s massive growing pains--traffic congestion, housing hyperinflation, a steep decline in key measures of public education and environmental degradation--may well strangle its high-tech boom within a few short years.

Regions all over the world, Los Angeles among them, emulate Silicon Valley. They should be careful what they wish for, given the data in “Silicon Valley Projections 99,” produced by the Assn. of Bay Area Governments for the Silicon Valley Manufacturing Group.

For example, driving speed in peak commute hours is the second-worst in the nation--recently surpassing New York for that dubious distinction. Angelenos may not be impressed, but in less than three years, Silicon Valley will take their crown for the worst traffic.

And the region is projected to add about 400,000 jobs in the period between 1995 and 2010--but only 100,000 housing units--less than half the projected need just to keep up with that growth. With median housing costs rising above $400,000, fewer than 30% of valley families can afford to buy their own homes.

The result of these and other grim trends are an increasingly unsustainable tangle of great wealth amid stunning shortcoming in everyday life for most residents.

The area’s public transit services are so poor that refugees from the freeways have to budget up to three times as much time as drivers for a variety of key routes.

How many sensible, busy people would choose public transit under such circumstances? Precious few, as shown in a poll of attendees at a recent conference to discuss the report, the vanguard of the concerned citizens and businesses: 76% drive solo every day.

The biggest outcry about the acute shortage of affordable housing, surprisingly, is not coming from the working poor or homeless, but from the middle-class--teachers, police officers, firefighters who are priced hopelessly out of the market and must commute hours every day.

“Some say it is leading to a class war,” said Deborah Mesioh, an aide to U.S. Sen. Dianne Feinstein (D-Calif.).

The focus of the conference (“Surviving our Success: Solutions for the Next 10 Years”) was answers, though. And there’s no shortage of eager, energetic people working hard. Carl Guardino, chief executive of the Manufacturing Group, which also sponsored the meeting, is fond of saying that valley executives are doers not whiners. Guardino himself brims with energy for fixing the growth-related problems and has plenty to show for the efforts:

* His group backs the local Housing Action Coalition, which has won 71 of 72 not-in-my-backyard battles before local authorities in 16 communities, resulting in approval for 23,000 affordable housing units that promote the use of public transit. Some of the projects have become models for urban planning across the nation.

* He’s working with other valley agencies to raise $20 million to provide 5,000 low-cost home loans.

* The Manufacturing Group has helped build coalitions that have pushed through legislation to raise the regional gas tax to finance public transit. A number of light-rail, bus and train improvements have been implemented or will be in the next few years.

Anyone with experience in civic affairs knows that near-fanatical commitment made possible each one of these victories and the many others I haven’t listed.

Yet all the indicators suggest that the many projects and successes amount to a drop in the bucket when the problems grow on “Internet time.” Every year, the Silicon Valley’s creative, determined advocates of sound public policy redouble their efforts, develop creative ideas and work incredibly hard to see them through--just like the industry itself. And every year the problems get far worse.

They might view Sisyphus with envy; he at least had the same thankless job every day.

So I asked Guardino: Should growth be capped to allow the area’s carrying capacity to catch up? He answered carefully, and for good reason: Question the imperative of unbridled growth? That’s heresy to his masters--the Silicon Valley’s large high-tech companies.

“Forty years of bad land-use planning can’t be fixed overnight,” he said. “It’s going to take a Herculean effort to gain ground.”

Then he added: “Too many employers are still not hooked into efforts like the Manufacturing Group that look past the next quarter to the next quarter-century.”

The last point was notable. Guardino’s own conference drew fewer than 300 people--the vast majority representing business associations and public agencies--far fewer than attend a typical seminar on Java programming.

Leaders from Quantum, Solectron, Watkins Johnson, Abbott Labs and United Defense gave presentations; Intel, Hewlett-Packard, Sun Microsystems and IBM had token representation. But where were Cisco, 3Com, Apple, Microsoft, Yahoo and the valley’s other giant employers and leaders? Fewer than half of the companies on the Manufacturing Group’s own board of directors were represented.

Where were all the high-tech execs, instead of jumping on stage to rally the troops, demanding action? Simple: They’re busy competing, lobbying for tax breaks, merging, making money and helping the Internet change everything. Building the new economy.

As they say, if you toss a frog into a pot of boiling water it will leap for its life. But put it in a pot of cold water and turn up the heat and it will let itself gradually be boiled alive.

What will it take to shock the industry into jumping? Six-hour commutes? Median housing costs above $600,000? An even greater labor shortage than they face in today’s supposed crisis?

I keep wondering if the valley might be boiled alive.

Times staff writer Charles Piller can be reached at charles.piller@latimes.com.

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Pricey Housing, Long Commutes

Construction of new housing has lagged job growth, leading to hyperinflation in the Silicon Valley housing market, which in turn forces more and more people to commute hours daily by car.

Jobs Outpace Housing Availability...

Households

2000: 801,410

2010*: 872,850

Increase: +71,440

Jobs

2000: 1,328,900

2010*: 1,501,930

Increase: +173,0300

...and Silicon Valley Home Prices Skyrocket...

Average home price

1995: $293,703