Too Little New Housing To Cost the Bay Area Tens of Thousands of Jobs

Bell Partners, Northern California, Bay Area, Bell Institutional Fund VI, Pennsylvania Public School Employees’ Retirement System

By Sharon Simonson

The Gen Xers and echo boomers feeding the youthful population wave remaking neighborhoods south of San Francisco’s Market Street and in The Mission eventually will move to the ‘burbs.

Bay Area real estate The RegistryBut not enough of them will go to absorb all of the Bay Area’s large single-family housing stock, resulting in oversupply by 2040.

That’s the conclusion of a forecast of the region’s jobs, housing and population growth in the next 30 years prepared for the Association of Bay Area Governments and the Metropolitan Transportation Commission.

It’s also a new and credible perspective on a question that has vexed the commercial and residential real estate communities as they look ahead: Will the tide of largely single young people pouring into San Francisco stay, or, if they wed, marry and have children (and even if they only age), will they migrate to the suburbs?

Put another way: Will a group of 80 million people (as large as the highly influential baby boomers), who are already transforming the workplace and have evidenced a strong predilection for the urban, later chose fenced yards and ranch homes?

The 152-page demographic forecast forms the basis of a 30-year transportation and land-use template, Plan Bay Area, adopted July 19 by the MTC and ABAG for the nine counties. It offers one glimpse into the region’s 2040 workforce profile and size, the anticipated growth and dispersion of housing and jobs, and the change in ethnic and racial makeup.

Professional services employment is expected to lead growth nationwide in the next three decades, and the Bay Area will capture a disproportionate share of that expansion. The same is true of education and health services and the leisure and hospitality sectors. Broadly, the Bay Area’s share of national employment should rise after falling nearly nonstop since 1990—the dot.com boom being the exception.

Professional services employment, already the region’s largest with nearly 600,000 jobs and 18 percent of local employment in 2010, will grow faster than any other in the next 27 years. By 2040, professional services are expected to represent more than one in five jobs in the region, or more than 973,000 positions.

Education and health services will see U.S. job growth of nearly 67 percent from 2007 to 2040; the Bay Area will see not quite 70 percent job growth in the same sectors, or 130,000 new jobs. Regional leisure and hospitality employment will rise 39 percent to 462,500 by 2040, faster than the 36.6 percent growth rate expected for the country at large.

Based on current local planning, San Francisco and the Silicon Valley neighborhoods immediately south of state Highway 237 including North San Jose and Santa Clara will be the largest recipients of new jobs in the region with worker density rising in the Silicon Valley hub by as many as 24 jobs an acre and even more in San Francisco.

By 2040, Hispanics will be the largest ethnic group in the region with 35 percent of the population up from less than 25 percent in 2010. Whites will fall from 45 percent of the population to about 32 percent. Asians will rise to not quite a quarter of the population from just more than a fifth.

The forecast is one of 17 “supplementary reports,” including a 2,228-page environmental impact statement, prepared to direct MTC and ABAG as they work to achieve the region’s compliance with the 2008 California Sustainable Communities and Climate Protection Act.

The law requires the state’s 18 metro areas to cut greenhouse-gas emissions from cars and light trucks by 15 percent over the next 20 years. It tries to do that by putting housing, offices and transport in tight proximity to reduce individual car travel and use.

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