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David Woltering’s Abstract for Paper to be delivered at

53rd International Making Cities Livable Conference

Caring For Our Common Home: Sustainable, Just Cities & Settlements

Pontificia Universita Urbaniana

Rome, Italy

June 13-17, 2016

“Explosive Economic Growth in the San Francisco Bay Area has Created Significant

Job Growth and Opportunity, but at what Cost? How can Elected Officials, their

Staffs, and Community Members Manage this Growth to Maintain and Promote

Healthy, Sustainable, and Equitable Communities?”, David Woltering, AICP, MPA,

Community Development Director, City of San Bruno

Abstract: This paper examines the extraordinary economic growth the San Francisco Bay

Area has experienced since 2010 and discusses challenges associated with this growth.

The paper concludes with a description of specific actions, measures, and/or programs local

communities are undertaking or could undertake to help address the challenges and better

manage this growth toward maintaining and/or promoting healthy, sustainable, and

equitable communities. The paper not only describes the San Francisco Bay Area growth

phenomenon and some of its challenges, but offers first-hand experience and perspectives

from a local community trying to address these challenges.

The San Francisco Bay Area includes nine counties and 101 cities, including the City and

County of San Francisco and “Silicon Valley.” The region is well known for being a world

leader in technological innovation and entrepreneurship. Since 2010, the Association of

Bay Area Governments (ABAG) indicates that within the region approximately 307,000

new jobs (2010-2013) (and approximately 600,000 by 2016) were created; 270,000 new

residents (2010-2014) (and approximately 300,000 by 2016) were added; yet only an

estimated 40,000 (2010-2014) (and approximately 60,000 by 2016) new housing units

constructed. While the region is clearly experiencing an economic boom, there are many

challenges including a significant shortage of housing, resulting in skyrocketing housing

costs; displacement of tenants; and extremely long commutes and traffic congestion.

Regional agencies and local governments are considering and implementing various

measures and programs to better link jobs, housing, and transit as well as to increase the

production of housing for all economic sectors to address these challenges. The paper

describes and suggests actions, measures and programs to help address the challenges.

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“Explosive Economic Growth in the San Francisco Bay Area has Created Significant Job

Growth and Opportunity, but at what Cost?”

By: David Woltering, AICP, MPA

53rd International Making Cities Livable Conference on Caring for Our Common Home:

Sustainable, Just Cities & Settlements

Rome, Italy, June 13-17, 2016

The San Francisco Bay Area and its innovation hub “Silicon Valley” have emerged from the

Great Recession of 2007-2009 into a period of explosive economic growth with significant

opportunities and benefits for some, but not without some serious costs and challenges for others.

In fact, these costs and challenges are so significant that many would say the San Francisco Bay

Area and Silicon Valley are in crisis! These challenges range from a substantially worsened

housing shortage and skyrocketing housing costs resulting in displacements of people from their

homes to periods of near gridlock traffic congestion, and to a growing income and equity

disparity among those living and working in the region.

The San Francisco Bay Area and Silicon Valley are well known as a hub of creativity,

innovation and entrepreneurship. These attributes have largely been associated with

commercializing technological advancements for financial success. Examples over time include

developing transmission tubes and transistors to create and forward radio communication;

developing silicon chips and microprocessors to create personal computers and a broad array of

consumer electronic devices; and developing new networking and business platforms to create

social media applications such as Facebook and YouTube and sharing economy business models

like Uber car share. The region is home to these and hundreds of other technology, social media,

and sharing economy businesses including such well-known firms as Apple, Cisco Systems,

eBay, Genentech, Google, Intel, and Netflix. These attributes of creativity, innovation and

entrepreneurship used widely in the region to generate significant commercial success and

prosperity for some for decades, need to be used now to address the significant social and

economic challenges and human hardship within the region and help to achieve and maintain a

San Francisco Bay Area and Silicon Valley that holistically is a healthy, sustainable, and just

place for all to live and work. Moreover, without the broader focus of these attributes to address

the social and economic hardships being experienced in the region, the current economic boom

will not be sustainable. The focus of this paper addresses a primary social and economic

challenge facing the San Francisco Bay Area and Silicon Valley region at this time and for the

foreseeable future - the challenge of providing both an adequate supply of housing as well as

housing that fits the affordability needs of the various household income groups within the

region. Further, this paper describes various aspects of the current explosive economic growth

and related opportunities; some of the impacts and challenges of this growth, focusing on

housing impacts and challenges; as well as communicate what some local and regional agencies

are or could be doing to address these impacts and challenges. The paper concludes with some

lessons learned and an important call to action.

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San Francisco Bay Area

The San Francisco Bay Area (California) includes nine counties and 101 cities, including the

City and County of San Francisco and “Silicon Valley.” “The counties and 2010 populations for

each within the San Francisco Bay Area are as follows:

Alameda (1,510,270)

Contra Costa (1,049,030)

Marin (252,410)

Napa (136,480)

San Francisco (805,240)

San Mateo (718,450)

Santa Clara (1,781,640)

Solano (413,340)

Sonoma (483,880)

The Nine County San Francisco Bay Area

The land area of the Bay Area is approximately 4.4 million acres (1.78 million hectares)

(excluding bay waters and large lakes). As of 2010, approximately 17.8 percent of this area is

developed with urban uses. The amount of land developed in each county varies from a low of

five percent in Napa County to a high of 80 percent in San Francisco County. Approximately 28

percent of the region is identified as protected open space. In 2010, the estimated population of

the Bay Area was 7.15 million residents (current estimate is about 7.4 million). The regional

employment for all nine counties combined was 3,385,300 jobs in 2010.”1

“The regional supply of housing for all nine counties was a total of 2,750,000 units in 2010

(multifamily: 717,000; attached/townhouse: 508,000; and detached/single-family: 1,525,000);

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the projected housing demand from 2010 to 2040 in the region is 489,100 (multifamily); 380,000

(attached/townhouse); and -169,100 (detached/single family) for a net 2010-2040 demand of an

additional 700,000 units.”2 The projected demand for housing is anticipating a shift to

multifamily and attached housing from single-family detached housing as the region is expected

to absorb another 2 million in population generally into its urban centers by 2040.

Silicon Valley

The Heart of Silicon Valley

The San Francisco Bay Area includes the hub of creativity, innovation and entrepreneurship -

“Silicon Valley.” Silicon Valley is well known for advancements in communications, computer

technology, electronics, the internet, and social media. The heart of Silicon Valley is often

associated with the cities and areas of and between Palo Alto and San Jose within Santa Clara

County. The technology firms and support vendors of Silicon Valley continue to grow and

spread so the “Valley” now extends well beyond this core area of Palo Alto to San Jose to nearby

Alameda County, San Mateo County, San Francisco County, and beyond.

This transformation of Santa Clara Valley to high technology firms was relatively recent. As

described by Piero Scaruffi in A History of Silicon Valley 1900—2015, “[f]rom the late 1800’s to

about 1960 the area between Palo Alto and San Jose was known as the “Valley of Heart’s

Delight.” It was an extremely fertile agricultural area, with an endless expanse of flowering fruit

trees. The introduction of the refrigerated railroad car in the 1860’s made shipping of fruits and

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vegetables outside of the area possible and was instrumental in the development and expansion

of the fruit packing industry in the area. Approximately 39 fruit packing houses and canneries,

including the San Jose Fruit Packing Company, developed in this valley and prospered until

about 1960. At about that time, the transformation of the Valley to what it is today, a technology

hub, began to take hold.”3

“The transformation from the “Valley of the Heart’s Delight” to “Silicon Valley” resulted from

the coming together of a “do it yourself’ philosophy of the technology hobbyist, great

engineering schools (e.g., Stanford University), the transfer of technology of information from

academia to industry, massive public investment, and massive private investment.”4 The formal

birth of Silicon Valley was acknowledged in 1971 in a series of articles titled, “Silicon Valley,

U.S.A.,” published in Electronic News by Don Hoefler.5 Piero Scaruffi describes key mottos

that form the culture of Silicon Valley as “question authority,” “think different,” and “change the

world.”6

San Jose, California (Silicon Valley); source: Miyamoto International

A brief overview of the history of Silicon Valley which emphasizes the forces that have come

together to make the Valley what it is today is provided in the Appendix of this paper. This brief

history is given by way of a Timeline excerpted from Piero Scaruffi’s A History of Silicon Valley

1900-2015.7

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Silicon Valley today draws from the founding of Stanford University in 1891 and initial

technology start-ups like Hewlett-Packard in 1938-39, Shockley Transistor Corporation in 1956,

Fairchild Semiconductor in 1957, and Intel in 1968. Its history is a path of innovation and

tremendous job and wealth creation over the past more than 100 years, with significant academic

contributions from nearby Stanford University.

Enrico Moretti, in his recent book titled, The New Geography of Jobs, states that “Silicon Valley

has remained the innovation capital of the world, and it continues to lead all other metropolitan

regions in the breadth and scope of its innovative activity. It accounts for more than a third of all

venture capital investment world-wide, significantly more than twenty years ago. Every year

hundreds of smart, ambitious innovators move their startups from Europe, Israel, and Asia to the

Silicon Valley. The Valley keeps its position as the world’s number-one innovation hub not

because those who are born there are smarter than anyone else but because of its unparalleled

power to attract great ideas and great talent from elsewhere.”8

Moretti states further in his book that “in the world of innovation, productivity and creativity can

outweigh labor and real estate costs”. And, more specifically, he refers to three competitive

advantages that the San Francisco Bay Area has that has led to its success. He refers to these as

the “…forces of agglomeration: thick labor markets (that is, places where there is a good choice

of skilled workers trained in a specific field), the presence of specialized service providers, and,

most important, knowledge spillovers” (knowledge that is synergistically shared and beneficial

because of proximity). He states further that these forces ultimately determine the location of

innovative workers and companies and therefore shape the future of entire communities.”9 The

presence of excellent academic institutions, such as Stanford University, the University of

California at Berkeley, and the supporting State and Community College institutions in the Bay

Area, support the forces of agglomeration. Moretti acknowledges the critical importance of

higher levels of education as well as venture capital investment to the success of innovation

hubs.

Today, Silicon Valley, is the home of the worldwide leaders in semiconductors (Intel); personal

computers (Apple Inc.); and social media (Facebook); as well as countless other firms

demonstrating innovation, creativity and entrepreneurship.

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Silicon Valley is home to worldwide leaders in the Technology Sector

State of the Region – Employment, Population, and Housing

Although an impressive hub of innovation, the San Francisco Bay Area, like most other areas of

the United States and world, was negatively impacted by the global financial crisis of 2007-2009,

known as the Great Recession. The Bay Area experienced its share of job losses, business

closures and slowdowns, and residential property foreclosures. “A significant contributor to this

financial crisis was the collapse of the housing market leading up to this period of crisis. There

was the assumption that housing values would continue to appreciate and, therefore, mortgages

were provided routinely to individuals that could only afford the properties if there would be a

rapid increase in value and the opportunity to refinance and use the added value to then pay

down the mortgage and hold onto the property. Countless numbers of these mortgages were sold

and then further sold as securities in the financial markets. When the housing market did not

continue to appreciate in value, there was a resulting collapse in the nation’s housing and

financial markets. This circumstance led to a broad national and worldwide economic downturn,

job losses, evictions and foreclosures of properties. The United States Congress passed the

American Recovery and Reinvestments Act in 2009 to bail out large failing banks and

corporations. A major contributor to the housing debacle was the repeal of the Glass-Steagall

Act in 1999 that effectively reversed the separation, a form of check and balance, of investment

banks from depository banks. After the crisis, the U.S. Congress passed the Dodd-Frank

regulatory reforms to lessen the chance that this type of crisis happening again.”10

As the national and international markets have stabilized, the San Francisco Bay Area has been

able to rely on its attributes as an innovation hub and rebound from the 2007-2009 economic

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downturn. The rebound has turned into an economic boom in the Bay Area that has been largely

driven by the technology sector. Since 2010, new products and services and a worldwide appeal

and markets have brought strong expansion and job creation opportunities and record increases

in values to companies such as Apple, Cisco Systems, eBay, Facebook, Genentech, Google,

Intel, Netflix, YouTube, and so many more that call the Bay Area home.

The regional planning agency for the San Francisco Bay Area, the Association of Bay Area

Governments (ABAG), recently published an index of the Bay Area’s economy, population and

housing, titled, “San Francisco Bay Area State of the Region 2015.” It provides a very useful

overview of the opportunities and benefits that have come with the current boom period as well

as the related costs and challenges, as summarized below.

Region’s Employment

“The Bay Area annual average wage and salary employment grew by 9.8 percent between 2010

and 2013 (See Figure 1.1, State of the Region 2015).

The region’s unemployment rate dropped from an average of 10.6 percent in 2010 to an

estimated 5.5 percent in 2014. The total wage and salary jobs grew by 307,000 between 2010

and 2013. Most of this growth occurred in the more urban counties of Alameda, San Francisco,

San Mateo, and Santa Clara. The significantly improved economy and related job opportunities

were important contributing factors to the region’s population increase. The region’s population

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grew by 270,000, or 3%, to about 7.4 million between April 1, 2010 and January 1, 2014. While

employment and population gains were robust, the production of housing was extremely low

during this same period, with fewer than 40,000 new housing units added. This is less than one-

half of the number of housing units that had been added in recent periods. The lingering impacts

of the housing market collapse, including tightening of credit, loss of financing, and developers

and contractors leaving the industry, have negatively impacted the ability to produce the needed

number of new housing units.

Important sectors of new jobs created during the period of 2010 through 2013 were in Health and

Social Services; Professional and Technical Services; and Information. The largest numbers of

net new health and social services and professional, scientific and technical service jobs went to

San Francisco County between 2010 and 2013. Nearly all of the job growth in the information

sector went to Santa Clara, San Francisco, San Mateo, and Marin Counties. Alameda County

saw the largest gains in manufacturing jobs. The jobs in the Professional and Technical Services

and Information sectors require higher levels of education and experience which the workforce

needs to satisfy to sustain the type of growth the region is experiencing. The workforce in the

Bay Area as compared to the State of California and the United States overall has a relatively

higher education attainment level, with larger percentages of individuals with Bachelor’s degrees

and Graduate and Professional degrees.

“Even with the relatively higher education attainment levels, providing adequately educated and

trained workers is a challenge in the region, as it was reported that 73% of the professional

engineers employed in Silicon Valley are foreign born, many of whom were educated abroad.”11

Not only is educational attainment very important to providing the needed skills in the workforce

to support economic expansion, it also relates directly to income expectations. Generally,

incomes in the Bay Area for those individuals with a high school education or less is under

$40,000 annually; with a Bachelor’s Degree generally between $60,000 and $80,000 annually;

and, with a Graduate or Professional Degree $100,000 or more annually.12

Jobs were added during this recent expansion period in the High Skill/High Wage

(Scientific/Information); Middle Skill/Middle Wage (Sales); and Low Skill/Low Wage levels

(Food Service). These levels translate into Tier 1 (High), Tier 2 (Middle), and Tier 3 (Low) in

the 2016 Silicon Valley Index. In terms of incomes, these tiers roughly correlate to the

educational levels noted above. “In 2015, in Silicon Valley and the Bay Area as a whole, median

wages for Tier 1 workers were about 4.6 times more than for Tier 3 workers. The gap between

Tier 1 and Tier 3 in terms of actual wages in Silicon Valley was $95,014 compared to a range of

$52,686 to $87,663 elsewhere in the Bay Area. Between 2013 and 2014, the share of low-

income (<$35,000 per year) households in Santa Clara and San Mateo counties declined from

19% to 17%, while the share of high income households (>$150,000 per year) increased from

29% to 30%.”13

The above information suggests substantial employment growth, but with incomes of significant

disparities based on occupation, education attainment levels, and locations. It is noteworthy, that

even with this significant economic expansion and job growth, “nearly 30% of the region’s

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population does not make enough money to meet their basic needs without public or private,

informal assistance.”14

Region’s Population

The Bay Area has added 270,000 new residents since 2010, reaching a population of 7.4 million

by 2014 according to the California Department of Finance (DOF). During this period, the San

Francisco Bay Area has grown at a more rapid rate than California as well as the United States

overall.15 (See Figure 3.1)

“This new population has generally been drawn to the areas of the Bay Area with the most jobs.

As an example, approximately one-third (32 percent) of the region’s population increase

occurred in Santa Clara County.”16

In terms of population composition, “Santa Clara became the County with the lowest median age

in 2009, because of the shares of working age population and children. San Francisco County has

the largest population between 20 and 29 years old (28 percent), and smallest population under

20 years of age (15 percent). As of 2013, Marin County has the highest percentage of population

over age 50.17

“The region is becoming more ethnically diverse as it grows. The non-Hispanic white

population, which had represented 52 percent of the population in 2000, dropped to 41 percent

by 2013. In contrast, the Hispanic and non-Hispanic Asian populations have each increased and

account for approximately 24 percent of the regional population as of 2013, growing 5 percent

and 9 percent, respectively, since 2010.”18 “Within the region, 30.2 percent of the 2013

population was foreign born, up from 27.4 percent in 2000 and 30.1 percent in 2010. The region

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has among the largest shares of immigrants in its population nationwide. Within the region,

Santa Clara County has the largest percentage of foreign born at 38 percent.” 19

“Overall, the City of San Jose in Santa Clara County has accommodated more of the region’s

population growth than any other city in the Bay Area since 2000. Between 2010 and 2014, San

Jose has received approximately 20 percent of the region’s population growth, an increase from

14 percent between 2000 and 2010.”20

Region’s Housing

“The location and wage characteristics of employment being created in the region, the growing

regional population, and transportation facilities to move the population around will all influence

the amount and location of housing demand. The population is generally locating in more urban

areas, closer to jobs and transportation facilities. San Jose, Santa Clara County (20%); San

Francisco, San Francisco County (12%); and Oakland, Alameda County (5%) combined have

accounted for more than one-third of the growth in the region since 2010.”21 The increasing

population and employment rates and lagging production of housing and increased housing costs

in the region have resulted in a significant challenge for the region to provide the quantity and

type of housing necessary to meet the range of household income needs of the growing

workforce. “Between April 2010 and January of 2014, the California Department of Finance

(DOF) estimates that the Bay Area added 38,300 housing units, an average of 9,600 units per

year. This production is significantly less than in prior periods: 2000 to 2010 (total of 231,600

units/23,300 per year average) and 1990 to 2000 (total of 187,500/18,700 per year average)”22

This combination of a lag in construction of new units and the increased population coming to

the region has created a classic supply and demand condition, with the cost of housing escalating

dramatically given the inadequate supply to meet the demand. “The type of housing being

constructed is also changing. From being well under 50% of the housing type being permitted in

2000, the proportion of multifamily housing units being permitted in 2013 is over 70% as

compared with single-family units.”23 (See Figure 4.5)

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“The higher shares of multifamily housing are being permitted in the counties that are more

urban, with strong job and population growth: Alameda, San Francisco, and Santa Clara

Counties.”24 “Seventy percent (70%) of these multifamily residential units were permitted in

Priority Development Areas (PDAs), areas that ABAG, the region’s planning agency, has

identified as being close to transportation facilities, jobs, and services and, consequently,

preferred for new growth and the reduction of vehicle miles traveled and greenhouse gas

emissions.”25

Housing Need

“The State of California Department of Housing and Community Development (HCD) forecasts

the total number of housing units needed statewide and disperses these housing production goals

to the various regional governments for assignment to the counties and cities within regions.

These numbers and process are referred to overall as the Regional Housing Needs Allocation

(RHNA) process. These housing goals are to accommodate the projected jobs and housing

growth. Not only are the total number of needed units projected, but a breakdown of the number

of units by the household income level as well. The income levels are as follows: Very Low;

Low; Moderate; and Above Moderate. Generally, housing is considered affordable if the

households do not spend more than 30% of their annual income on housing costs. The four

household income levels used by California are based on Area Median Income (AMI): very low

income households make from 0 to 50 percent of AMI; low income households make from 50 to

80 percent of AMI; moderate income households from 80 to 120 percent of AMI; and above

moderate income households make more than 120 percent of AMI.”26 “During the RHNA

period between 2007 and 2014, Bay Area jurisdictions permitted 49 percent of the total projected

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housing need: 214,500 (RHNA need projected); 105,904 (Housing Units permitted) = 49%).

This compares with 92 percent during the prior RHNA period of 1999-2006. The primary reason

for the reduced performance in not meeting the RHNA targets was the slowdown in production

of housing related to the Great Recession.”27 (See Figure 4.10)

Historically, jurisdictions have been most successful at permitting above moderate income units;

it has been very challenging for them to facilitate the permitting and subsequent construction of

housing units for lower income households.

Dissolution of Redevelopment Agencies

The dissolution of Redevelopment Agencies in California in 2011 by the State government,

without a replacement funding source, has resulted in a loss of approximately $250 million

annually for the production of affordable housing in the San Francisco Bay Area. This

circumstance creates further challenge to not only housing production, but the production of the

type of housing (i.e., lower income units) that meets the needs of the population.

Preservation of Existing Affordable Housing

Preservation of existing affordable housing is another challenge to meeting the housing needs of

the population. Housing units that have been deed-restricted for lower-income households

typically have sunset or expiration periods for the restrictions at a specified future date. In a

market that has a shortage of housing, these units, generally, are expected to adjust to prevailing

market rates when the restrictions expire. The new rates would, typically, be much higher than

the deed-restricted rates, and beyond the affordability of the current occupants. “There are

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currently 6,888 affordable housing units in the Bay Area that are in this category and at risk of

conversion to market-rate housing in the next five years. Most of these units are located in San

Francisco and Santa Clara Counties.” 28

Housing Tenure

Whether housing units are owned or rented (housing tenure) is also an important consideration in

this discussion. “In 2013, of the total number of housing units in the Bay Area, 45% were rental

units. The number of owner-occupied units decreased by approximately 7,600 units during the

period of 2010 to 2013.”29

“Vacancy rates for combined tenures have dropped in most counties from 2010 to 2013, except

Napa and Marin Counties. The median range of vacancy rates dropped from about 5%-11% to

approximately 4%-8%. However, when considering only homeowner vacancy rates, in 2013 all

counties in the Bay area were less than 2%.”30

During this period of increased demand and reduced supply of housing, prices for both rental and

for sale housing have increased dramatically. “From 2010 to 2014, the counties with the greatest

growth in employment in technology-related fields experienced the largest percentage increases

in average rents. Rents increased by 44 percent in Santa Clara County, 43 percent in San Mateo

County, 36 percent in San Francisco County and 34 percent in Alameda County. In 2014,

average monthly asking rents were highest in San Francisco County ($3,105), followed by San

Mateo County ($2,367), and Santa Clara County ($2,213).”31 “Between 2010 and 2014, the

median sales price for homes sold in the nine-county Bay Area increased from $410,000 to

$610,000, a 49% increase during this four year period. In 2014, San Francisco County had the

highest median sales price at $975,000, followed by San Mateo County at $843,000. In 2014,

Solano County was more affordable with a median sales price of $292,000” 32 “On average, for

homeowners, between 2010 and 2013, their median monthly costs decreased by approximately

9%, likely because they could refinance their existing mortgages to lower interest rates or older

homeowners were able to pay off their mortgages.”33

Housing Affordability

“Typically, housing costs are considered to be affordable when they are less than 30 percent of

household income; households paying 30 percent to 50 percent of their income on housing are

considered to be cost burdened; and households paying 50 percent or more of their income on

housing are considered to be severely cost burdened. In the Bay Area, homeowners generally

have substantially higher household incomes than renters. In 2013, the regional household

income for homeowners was $104,000 and $52,100 for renters. In 2007, 43 percent of owner

households (647,000) and 47 percent of renter households (474,000) had housing considered to

be unaffordable, based on typical affordable housing costs standards. By 2013, 32 percent of

owner households (496,400) and 49 percent of renter households (585,000) had housing that was

considered to be unaffordable.”34

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Opportunities and Challenges

Opportunities

The economy of the San Francisco Bay Area has rebounded exceptionally well from the Great

Recession of 2007 to 2009 - breakthrough technological innovations, creation of wealth,

extraordinary regional investment, substantial growth in new jobs, and enormous professional

and personal growth opportunities! The region added 307,000 new jobs between 2010 and 2013.

This economic boom has been largely driven by the expansion of technology firms within and

related to the innovation hub know as Silicon Valley. The growth of firms like Apple, Cisco

Systems, Facebook, Genentech, Google, Intel, Netflix, YouTube, and so many more in the Bay

Area has fueled this expansion. Examples of the creation of wealth are as follows: Apple was

reportedly valued (see Timeline) at $205 billion in 2010 and as of November of 2015 valued at

$674 billion (CNBC.com); Google was valued at $180 billion in 2010 and as of November of

2015 valued at $514 billion (CNBC.com); and, Facebook as of November of 2015 valued at

$306 billion.

Further indicators of this expansion and opportunities relate to patent registrations and venture

capital investment. “Silicon Valley patent registrations continued to rise in 2014, reaching

19,414, up from 16,975 in 2013. The largest share (40.5%) of the patents were in Computers,

Data Processing and Information Storage, with a large share (25.6%) in Communications. The

number of patents in Computers, Data Processing and Information Storage more than doubled

between 2009 and 2014 to 7,857. Venture capital investments in Silicon Valley and San

Francisco increased by $4.7 billion from 2014 to 2015, reaching $24.5 billion. The breakdown of

this investment is $11.13 billion in Silicon Valley and $13.34 billion in San Francisco. This

amount of venture capital investment in the Bay Area is the highest number since 2000. The

region’s share of California and U.S. venture capital funding increased between 2014 and 2015

from 67% to 73% and from 39% to 42%, respectively.”35

Challenges

The explosive economic growth in the San Francisco Bay Area since 2010 has resulted in

significant job and population growth distributed unevenly through the region. While

approximately 307,000 new jobs were created between 2010 and 2013 and the population

increased by 270,000 between 2010 and 2014, fewer than 40,000 new dwelling units

(approximately 9,600 annually) were permitted for construction during this period. This housing

production level is less than one-half of the average of recent period production levels. And,

even these higher past production levels did not provide an adequate housing supply to meet the

region’s needs. Projecting forward, it is anticipated the population of the Bay Area will increase

by 2 million by 2040 and that another 700,000 housing units will be needed to satisfy that

demand. An annual production level in excess of 23,000 units would be needed to meet that

demand.

The challenge is not just supply of housing, additionally, it will be important to address the “fit”

of the housing provided. Type, tenure, location, and affordability are all important fit factors.

The workforce of the Bay Area has a broad range of occupations and wage levels. Employment

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centers are dispersed. Transportation infrastructure has improved but needs to be expanded to

meet the needs of the growing population. There is a general shift to more urban locations for

both employment and housing. It will be important to provide more high density, multifamily

housing within urban areas close to employment centers and transportation facilities, a mix of

rental and for-sale housing, and housing that is affordable to the full range of household income

categories that comprise the Bay Area. To date, not only has providing an adequate supply of

housing been difficult to achieve, but fit has been a significant challenge as well. During the

2007-2014 Bay Area RHNA housing cycle, only 49% of the number of overall projected housing

units needed was realized, with only 27% in the Very Low household income category and 24%

in the Low Income category. The total unit shortfall during this period was 108,596 units Bay

Area wide.

Housing Crisis?

As population and employment increased in this environment of a shortage of housing supply

and an inadequate housing fit in the Bay Area, both rents and sale prices for housing units have

increased dramatically. Between 2010 and 2014 rents increased by 44% in Santa Clara County

and median home sales prices increased by 49% in the Bay Area overall. In 2014, San Francisco

County had the highest median home sales price of $975,000.

Other challenges in this housing market relate to the dissolution of redevelopment agencies in

California in 2011 and the resulting loss of about $250 million a year for affordable housing in

the Bay Area. Another concern is the expiration period is near for approximately 6,888 housing

units currently deed-restricted to be affordable. Once those deed restrictions have expired, the

units are likely to move to market rate and not be affordable to the intended household income

groups. Another factor that is affecting housing availability is the short-term rental business

model that is being forwarded by firms like Airbnb, whereby long-term rental housing stock is

being acquired and used for vacation rentals. Finally, prior to the dramatic escalation of rents

and mortgages during the last three to four years, market rate rents and mortgages were more in

reach to typical renters and home buyers. In the current market, it is not uncommon for rent

increases to be 15% to 50% or more, forcing individuals from their homes with limited options,

other than paying well above 30%, perhaps 50%, 60%, or more, of their total household income

for housing costs, moving in with others, leaving the area, or in a worst case scenario moving to

their cars or streets. The regulatory environment of cities, counties, and State agencies is

attempting to address this situation, but it is extremely complex, with many interests involved,

and the private sector actions involving significant rent increases and even, in some cases, forced

evictions to facilitate substantial rent increases for the next group of occupants, happen more

quickly than the ability to put adequate protections in place.

Although this current economic boom in the San Francisco Bay Area has come with significant

job growth and opportunity, it has contributed significantly to the “housing crisis” and related

challenges the region is experiencing.

18

A worst case scenario is depicted below of a homeless encampment below a 13th Street highway

overpass in downtown San Francisco.

Homeless encampments become housing of last resort in the region.

19

Local, regional, and State officials have been holding Town Hall meetings to discuss the housing

crisis and to work with citizens, both property owners and those subject to potential substantial

rent increases and displacement, to determine solutions.

Plan Bay Area 2040 Meeting, Oakland, California, February 20, 2016

Plan Bay Area 2040 Meeting, Oakland, California, February 20, 2016

20

Town Hall Meeting, San Mateo, California, February 22, 2016

Town Hall Meeting, San Mateo, California, February 22, 2016

Many perspectives were shared at the Town Hall meetings on the “housing crisis” in the San

Francisco Bay Area. Many individuals described having limited incomes and receiving

substantial rent increases, well in excess of 15%, sometimes as much as 50% or more, that made

21

it difficult for them to continue to occupy their residence and/or be forced to leave (i.e.,

displaced). It is clear that particularly tenants face significant uncertainty about their ongoing

financial and home security. As stated previously in this paper, by 2013, 32% of home owners

and 49% renters were occupying housing that was considered not affordable to them, based on

their income and housing costs. Given the inability to adequately produce and the difficulty

protecting housing for the lower income households as described earlier, these households are

particularly vulnerable. The escalating rents and mortgages worsen this circumstance, increasing

displacement and hardship.

At the Town Hall meetings, not all comments were from tenants. There were some landlords

that spoke about the costs to properly maintain properties, increasing rents reasonably and fairly

over time, and being opposed to formal regulatory constraints on how much or how often they

could raise their rents. They indicated distain for those landlords that arbitrarily and excessively

raised rents.

Individual Stories

There have been countless personal stories shared over the past several years in newspapers,

periodicals and at Town Hall meetings about the housing crisis in the Bay Area. A

representative samples of these stories is provided below.

Husband 83 years of age and Wife 70 years of age, Palo Alto, Santa Clara County, California:

Husband and wife are given an eviction notice and asked to leave their $800 a month apartment

in Palo Alto in 60 days. The couple’s combined income was only a few hundred dollars a month

more than their rent. They moved out, after a six-week extension, packing most of their

belongings into a storage unit and began living out of their car. The husband was undergoing

kidney dialysis treatments. This circumstance began back in July of 2012. At that time, the City

of Palo Alto had a homeless population in excess of 157 people and only about 15 shelter beds.

A 2013 census showed Santa Clara County having more than 7,000 homeless people, the fifth

highest homeless population per capita in the country and among the highest populations

sleeping outside or in unsuitable shelters like vehicles. After about a year and one half of living

out of their car, the husband passed away; about six months later the wife was able to find a

room in a home to rent that required about 80% of her income. A county social worker was able

to assist to locate the room. During the period of living from their car, the couple showered at

public gymnasiums and obtained food at local food donation centers. (Dispossessed in the Land

of Dreams, New Republic, December 13, 2015, by Monica Potts)

Father of Three Children, San Mateo County, California:

A father and his family received an eviction notice and were without housing for several months.

He was paying $1,040 a month for rent for a one-bedroom apartment; after he and his family left,

the rent was increased to $2,100 per month. During a several month period before he and his

family were again able to find affordable housing in the area, he received permission from the

owner of the auto repair shop where he was employed for him and his family to sleep in the

shop. Otherwise, during this period, his children were in school or with family and friends

22

during the day when he worked. (Town Hall Meeting, San Mateo, California, February 22,

2016)

Husband and Wife, Belmont, San Mateo County, California:

The husband is a Middle School teacher in Foster City, San Mateo County, and his wife is a

nurse. The couple have three young children. Their landlord doubled their rent and they expected

to be displaced from San Mateo County. Fortunately, they found an accommodating landlord

who rented them a three-bedroom home they could afford in the City of Belmont, San Mateo

County, for $3,100 a month which they could afford. They were able to avoid displacement,

retain their jobs and community connections. (The San Mateo Daily Journal, December 28,

2015)

80 year old Woman who owns Three Rent-Controlled Units, San Francisco County, California:

The woman indicates she has owned the three housing units for many years and the rents are

rent-controlled at approximately $600 a month each, substantially under market value. The rents

are so low that she is not able to properly maintain her properties. (Town Hall Meeting, San

Mateo, California, February 22, 2016)

Single Mother with Adult Daughter, San Mateo, San Mateo County, California:

This past year the mother received a $1,100 monthly rent increase at her two bedroom San

Mateo apartment. She is now forced to spend nearly 60% of her monthly income on housing.

She is a single mother of an adult daughter and reluctant to seek a roommate because her

daughter also is struggling to afford rent in nearby South San Francisco. (The San Mateo Daily

Journal, December 28, 2015)

French Nuns Operating Soup Kitchen Face Threat of Eviction, San Francisco, California

The sisters of Fraternite Notre Dame’s Mary of Nazareth House, who operate a soup kitchen in

the Tenderloin District of San Francisco, can’t afford a monthly rent increase of more than 50%

from $3,465 to $5,500. “It is very, very hard to find a place for a soup kitchen where people can

feel welcome and where we can set up a kitchen for a reasonable price.”36 “Faith-based

organizations throughout the city are struggling to pay rent while providing social services to the

needy.”37 (The Press Democrat, February 10, 2016)

Options

The explosive economic growth that has occurred in the San Francisco Bay Area since 2010 has

brought both significant job and population growth to the region. Unfortunately, the production

of housing in terms of the number of units needed and the fit of those units in terms of factors

such as type, tenure, location and being affordable to the full range of household incomes within

the region has lagged substantially behind. During the last RHNA housing cycle, 2007-2014, in

the Bay Area only 49% of the identified needed housing units were permitted for construction

overall, and only 27% of the identified units needed for very low income households and 24%

for low income households. Thirty-two percent (32%) of homeowners and 49% of renters

occupy homes that are technically not affordable, based on their household incomes and housing

23

costs. Thousands of individuals (estimates of 6,000 in San Francisco County by Jennifer

Friedenbach of the San Francisco Coalition on Homelessness and another 7,000 in Santa Clara

County by Monica Potts, author of Dispossessed in the Land of Dreams) are completely without

homes. And, it is estimated that 700,000 additional housing units will be needed to support the

expected 2 million additional residents to the region by 2040.

“What’s the vision? Housing, housing, and more housing, choices to meet the broadest of needs,

available to all, affordable to all, secure to all.” How do we get there? By when? These are

some of the objectives and thoughts that come to mind as the people of the San Francisco Bay

Area consider and address options to address the housing crisis in the region. Preserving,

protecting, increasing, and rethinking also come to mind in terms of addressing this housing

need. Urgent, Short-term, and long-term also are part of the thought process. This situation is

not just about sustaining the general prosperity the region is experiencing, even with this on-

going crisis, it is about addressing a fundamental need for shelter and creating a San Francisco

Bay Area and Silicon Valley that holistically is a healthy, sustainable, and just place for all to

live and work.

State, regional, and local governments as well as non-profits have undertaken many planning

efforts and have or are taking action to implement a variety of measures and programs to meet

the housing needs of the Bay Area. These measures and programs generally attempt to link jobs,

housing and transportation facilities; facilitate the construction of more housing for all household

income groups; preserve existing housing, particularly affordable housing; protect the rights of

individuals to have housing; facilitate the construction of more housing; and, more efficiently use

existing housing. Examples of some of these planning measures and programs are provided

below.

Specific Area Plans/Master Plans guiding the location of jobs and housing in proximity to

transit facilities;

Zoning Regulations to encourage mixed-use development patterns and increased

residential densities at appropriate locations, linking jobs, housing, and transit facilities;

Inclusion/Below Market Rate Policy to require that market-rate developments include a

certain percentage of affordably priced residential units for income-specific households;

Residential and Commercial Impact Fees on market-rate residential development and

commercial development that are used to develop or preserve affordable housing;

Secondary Dwelling Units to create additional residential units on individual properties;

Density Bonus Programs to allow greater density to incentivize the assembly of parcels

and the inclusion of more affordable housing units;

Streamlined Permitting Processes as an incentive for projects that meet specified housing

goals;

Condominium Conversion Ordinances to regulate conversion of rental apartments into

for sale condominiums and to generally provide tenant protections;

Just Cause Eviction Ordinances to allow evictions only for legally delineated

circumstances;

Rent Stabilization Ordinances to regulate the percentage of annual rent increases;

24

Home Sharing Programs where extra capacity, i.e., an extra bedroom, in an existing home

can be offered in exchange (e.g., HIP Housing, San Mateo, California) for home services

or payment or some combination of the two; and,

Housing First Programs to provide a housing accommodation as a base for stabilizing

those transitioning from homelessness and oftentimes physical, emotional, and

psychological challenges.

Lessons Learned

There has been a tremendous amount of work completed over time to address the housing needs,

present and future, in the San Francisco Bay Area. The Plan Bay Area 2040 effort by the

Association of Bay Area Governments (ABAG) and the Metropolitan Transportation

Commission (MTC) has been particularly comprehensive and useful to guide development in a

pattern to link jobs, housing, and transportation, with concentrations of jobs and housing near

transit facilities. Addressing the housing needs, particularly for those of greatest need, ranging

from low income households to the homeless, is extremely complex, costly, and controversial. It

is evident from looking at the RHNA history of permitted housing in the Bay Area that the

private sector is capable of satisfying the housing needs for above moderate income households

and moderate income households, but not the needs of lower income households. There is a clear

and long-term deficiency in meeting the housing needs of these lower income households which

existing measures and programs are not meeting.

The level of housing production needed to address current and projected demand for housing in

the Bay Area is in excess of 23,000 units annually. Recent production levels have averaged less

than 10,000 annually. Present measures and programs are not achieving the housing production

levels needed.

The uncertainty for tenants, resulting from real or potential evictions without cause and well-

above reasonable rent increases, displacing them from their homes, community associations, and

familiar surroundings has become a frequent occurrence in the Bay Area. The economic, social,

and health impacts of this circumstance needs to be more fully addressed with appropriate

protections.

The impacts of housing need on people can be immediate and urgent, short-term, and long-term.

In this current environment of an economic boom, with rapidly escalating rents and large

increases in employment and population, there are deficiencies in all three areas. Measures and

programs are needed to support people in the immediate circumstance of loss of housing, to

support people’s ability to continue to have housing, and to address anticipated long-term

housing production needs.

Call to Action

There is significant human hardship and need being experienced in the San Francisco Bay Area,

even during a period of economic expansion, because of an inadequate supply of housing and the

fit of the housing primarily in terms of being affordable to the broad needs of the population.

This housing supply and fit deficiencies must be addressed. Additionally, providing basic

25

protections for people to retain housing as well as support during periods of housing transition is

needed. Current programs and measures related to housing policy and practice need to be re-

evaluated. There is a need to be willing to think differently and disrupt or retool old processes

that are not producing the outcomes or meeting the housing needs of the region. Comprehensive

approaches that are adaptable to local and regional circumstances need to be developed to

address the housing concerns mentioned related to the following:

Housing Supply;

Housing Fit;

Housing Protections; and

Housing Transitions.

Additionally, and very importantly, reliable and dedicated funding sources need to be secured to

ensure, in particular, that the housing needs of the lower income households are met. The

attributes of creativity, innovation and entrepreneurship used widely in the region to generate

significant commercial success and prosperity for decades for some, need to be used now to

address the significant social and economic challenges and human hardship associated with this

housing crisis and help to achieve and maintain a San Francisco Bay Area that holistically is a

healthy, sustainable, and just place for all to live and work. The region needs to solve its housing

crisis and, in the process, potentially be a model for how this is done to the wider society and

world.

With the tremendous wealth being created by the leading technology firms in semiconductors,

computers, and social media in this region, there are resources and mutual interests for

partnerships among the governmental, business, and non-profit sectors with beneficial

“knowledge spillovers” to address the region’s housing needs. A broader, deeper, more

inclusive, authentic, and sustainable prosperity is possible for the region as these partnerships

successfully address the region’s housing challenges. There is no question the resources are

available within the region. On March 19, 2013, at his inaugural Mass, Pope Francis made

concern for the poor the key line of his homily, insisting that “authentic power is service,”

especially service to the poorest, the weakest, and the least important (i.e., disenfranchised).”

Let the San Francisco Bay Area be about authentic service and truly prosper!!!

26

CITATIONS 1 Dyett & Bhatia, Urban and Regional Planners, in association with ESA and AECOM, 2040 Plan Bay Area, Public

Review Draft EIR, April, 2013, p. 2.3-2. 2 Dyett & Bhatia, Urban and Regional Planners, in association with ESA and AECOM, 2040 Plan Bay Area, Public

Review Draft EIR, April, 2013, p. 2.3-5. 3 Scaruffi, Piero. A History of Silicon Valley 1900-2015. 2015 ed. Amazon CreateSpace, 2015. Print. p. 4. 4 Scaruffi, Piero. A History of Silicon Valley 1900-2015. 2015 ed. Amazon CreateSpace, 2015. Print. p. 432. 5 Scaruffi, Piero. A History of Silicon Valley 1900-2015. 2015 ed. Amazon CreateSpace, 2015. Print. p. 4. 6 Scaruffi, Piero. A History of Silicon Valley 1900-2015. 2015 ed. Amazon CreateSpace, 2015. Print. p. 432. 7 Scaruffi, Piero. A History of Silicon Valley 1900-2015. 2015 ed. Amazon CreateSpace, 2015. Print. pp. 448-470. 8 Moretti, Enrico. The New Geography of Jobs. Boston: Houghton Mifflin Harcourt, 2012. Print. p. 85. 9 Moretti, Enrico. The New Geography of Jobs. Boston: Houghton Mifflin Harcourt.2012. Print. p. 124. 10Wikipedia.org, Financial Crisis of 2007-08. 11 Proceedings of the State of the Valley Conference, Silicon Valley’s Annual Town Hall Meeting, City of San Jose,

Print. Presented by: Bank of America and Joint Venture Silicon Valley. 12Massaro, Rachel, 2016 Silicon Valley Index, for Joint Venture Silicon Valley, Institute for Regional Studies, , p.

29. 13 Massaro, Rachel. 2016 Silicon Valley Index, for Joint Venture Silicon Valley, Institute of Regional Studies, pp.

26-28. 14 Massaro, Rachel. 2016 Silicon Valley Index, for Joint Venture Silicon Valley, Institute of Regional Studies, p. 28. 15Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 40. 16 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 40. 17 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, pp. 42-43. 18 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 44. 19 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 45. 20 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 48. 21 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 48. 22 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 52. 23 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 55. 24 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 56 25 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 57. 26 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 58. 27 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 59. 28 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 61. 29 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 62. 30 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 54. 31 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 63. 32 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, pp. 65-66. 33 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 67. 34 Association of Bay Area Governments. State of the Region 2015: Economy, Population, Housing, p. 71. 35 Massaro, Rachel. 2016 Silicon Valley Index, prepared for Joint Venture Silicon Valley, Institute for Regional

Studies, pp. 34-36. 36 Har, Janie. “Nuns who feed homeless face eviction”, The Press Democrat, 10 Feb. 2016, Section B: 1-2. 37 Har, Janie. “Nuns who feed homeless face eviction”, The Press Democrat, 10 Feb. 2016, Section B: 1-2.

27

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30

APPENDIX: A Timeline of Silicon Valley

A Timeline of Silicon Valley, excerpted from Piero Scaruffi’s A History of Silicon Valley 1900-

2015, is provided immediately below:

1891: Stanford University founded

1938: Two Stanford University graduates, William Hewlett and David Packard, working

in a garage in Palo Alto produce their first product, a precision audio oscillator

1939: Hewlett-Packard becomes a company

1946: The Stanford Research Institute is founded

1951: The Stanford Industrial Park is conceived

1955: Private investors or “angels” (including John Bryan, Bill Edwards and Reid

Dennis) establish “The Group” to invest in promising companies

1956: William Shockley founds the Shockley Transistor Corporation in Mountain View

to produce semiconductor based transistors to replace vacuum tubes

1957: Rockefeller Brothers invests in Fairchild Semiconductor, the first venture-funded

start-up in the San Francisco Bay Area

1961: One of Santa Clara Valley’s first venture capital firms, Davis & Rock, is founded

by Tommy Davis and Arthur Rock

1963: Syntex, a pioneer of biotechnology moves from Mexico City to the Stanford

Industrial Park

1964: Syntex introduces the birth control pill

1966: Hewlett-Packard enters the business of general-purpose computers with the HP-

2115

1966: There are approximately 2,623 computers, with about 1,967 of them in the Defense

Department

1968: Intel (Integrated Electronics) is founded by Philip Noyce, Gordon Moore, and

Andy Grove to build memory chips

1973: Vinton Cerf of Stanford University coins the term “Internet”

1976: Steve Wozniak and Steve Jobs form Apple Computer and build the first

microcomputer in Jobs’ garage in Cupertino

1976: Biochenist Herbert Boyer and venture capitalist Robert Swanson found Genentech,

a major biotechnology company

1977: 27,000 people are employed in the semiconductor industry in Silicon Valley

1980: The Arpanet, which was initially developed by the United States Department of

Defense, and the technical foundation for the Internet, has 430,000 users, who

exchange almost 100 million e-mail messages a year

1980: Apple goes public for a record $1.3 billion

1984: Apple introduces the Macintosh, which revolutionizes desktop publishing

1985: The Arpanet is renamed the Internet

1990: Between 1970-1990 the population of San Jose almost doubles, from 445,779 to

782,248

31

1992: Intel becomes the world’s largest semiconductor manufacturer

1994: The “Band of Angels” is founded by “angels” to fund Silicon Valley start-ups

1994: There are 315 public companies in Silicon Valley

1995: Steve Kirsch’s Infoseek pioneers “cost-per-impression” and “cost-per-click”

advertising

1998: Two Stanford students, Larry Page and Russian-born Sergy Brin, launch the search

engine Google

1998: Pierre Omidyar founds eBay, an Internet location to auction items

1999: Marc Benioff founds Salesforce.com to move business applications to the Internet,

pioneering cloud computing

2000: 32% of Silicon Valley’s high-skilled workers are foreign-born, mostly from Asia

2000: There are 417 public companies in Silicon Valley

2000: 10 billion e-mail messages a day are exchanged over the Internet

2001: Apple launches the iPod

2004: Mark Zuckerberg founds the social networking service Facebook at Harvard

University and relocates to Palo Alto

2005: San Jose’s population of 912,332 has exceeded the population of San Francisco,

and San Jose becomes the 10th largest city in the United States

2005: More than 50% of all jobs outsourced by Silicon Valley go to India

2005: Yahoo!; Google, America Online (AOL) and MSN (Microsoft Network) are the

four big Internet portals with a combined audience of over one billion people

worldwide

2005: 52.4% of Silicon Valley’s high-tech companies launched between 1995 and 2005

have been founded by at least one immigrant

2005: Former Paypal employees Chad Hurley, Steven Chen, and Jarwed Karim launch

YouTube

2006: Jack Dorsey creates the social networking service Twitter

2006: The Bay Area is the largest high-tech center in the Unites States with 386,000 high

tech jobs

2006: YouTube is bought by Google for $1.65 billion

2006: Tesla Motors introduces the Tesla Roadster, the first production automobile to use

lithium-ion battery cells

2007: 48% of Apple’s revenues come from sales of the iPod

2008: Apple launches the iPhone

2008: Google owns 70% of the Internet search market

2008: Venture capitalists invest $4 billion into green-tech start-ups, which is almost 40%

of the U.S. investment in this area of high-tech

2008: 20% of the smartphones in the world use an operating system made in Silicon

Valley

2009: Google’s market value is more than $140 billion

2009: Facebook has 150 million users in January and is growing by 1 million users a day

32

2010: Google is worth $180 billion

2010: Apple is worth $205 billion, third in the U.S. after Exxon and Microsoft

2010: Apple introduces tablet computer, the iPad

2010: Facebook has 500 million users

2013: 92% of smartphones in the world use an operating system made in Silicon Valley

2013: Worldwide sales of smartphones exceeded one billion units

2014: Facebook has 1.3 billion members, Google owns 68% of the searches in the U.S.

and more than 90% in Europe, and LinkedIn has 300 million members.