Chief among the factors negatively impacting the Bay Area economy is the shortage of housing. Many workers struggle to find housing they can afford, while businesses are facing upward pressures on wage levels, and often have difficulties recruiting employees. According to a recent article in the San Francisco Examiner, "Bay Area residents have some of the highest salaries in the nation, but they spend 48 percent of their income on housing, compared to 33 percent in Seattle and 24 percent in Charlotte, N.C."

"They also spend roughly 70 hours each year sitting in traffic. If they spent those hours at work, it would translate to a 5 percent increase in productivity, according to Randolph. Only San Francisco residents use public transit in significant numbers - 31 percent, compared to 10.6 percent or fewer in other Bay Area counties."

In recent years, new housing construction has not nearly kept up with the pace of job growth, particularly in booming job centers such as Silicon Valley, where just over half the housing needed for expected workers and their families by 2010 is projected to be built. If current trends continue, the Bay Area economy is projected to grow by an additional 1 million new jobs in the next 20 years. Local jurisdictions have zoned for only a little over half the amount of housing needed to accommodate these workers and their families, assuming a region-wide average of 1.5 workers per household. This will leave a staggering excess of 250,000 jobs over employed residents by 2020, leading to higher housing prices and more long-distance commuting.

In part as a result of this inadequate supply of new housing, the region already suffers from extraordinarily high housing costs. According to the National Association of Home Builders, five of the 10 least affordable places in the country to buy a home are in the Bay Area. The California Association of Realtors estimates that as of May 2001, just 19 percent of Bay Area households could afford to buy the region's median-priced home of $484,000. Renters also face a skyrocketing housing market. According to the National Low-Income Housing Coalition, Marin, San Francisco and San Mateo counties are the least affordable counties for renters in the United States.

The region, therefore, faces a tough choice: increase the rate of housing development, particularly near job centers, or take measures to manage the rate of job growth in the region. The Bay Area's continuing dynamism and ability to attract talent and investment depend directly on the region's ability to plan responsibly for its future growth. The Bay Area Vision is a strategy for the region that could address the shortage of housing - particularly affordable housing - and imbalances between jobs and housing. By adopting this strategy throughout the region, we could help reduce long-distance commuting, traffic congestion and the escalating cost of doing business in the Bay Area.