By George Avalos
San Jose Mercury News.
Rachel Massaro knows about crunching numbers. An ocean scientist by education and experience, she did data research and analysis with the Department of Oceanography at the University of Hawaii and also conducted research with the National Oceanic and Atmospheric Administration. Massaro joined Joint Venture Silicon Valley in 2009 and now is the senior researcher for the Silicon Valley Institute for Regional Studies.
The San Jose Mercury News recently interviewed Massaro about economic conditions and challenges in Silicon Valley and the Bay Area. This has been edited for length and clarity.
Q: What’s your assessment of the Silicon Valley economy?
A: If we look at job creation, we are seeing higher employment growth. Median household income and per capita income are outpacing inflation. We are doing very well.
Q: What are other areas of strength that you see for the economy here?
A: We are seeing steady demand for leases for commercial real estate. We’re also seeing steady approval for development of nonresidential projects. That could lead to more jobs over the next couple of years.
Q: Why is there demand for this kind of development?
A: Our companies are growing in Silicon Valley, they need room for expansion. Large blocks of that kind of office space is hard to come by. There was a lot of commercial vacancy during the recession, and now we have been filling up that excess space. The occupancy levels are much higher for commercial real estate.
Q: What are some areas of concern?
A: There are plenty. Housing, transportation, poverty and income inequality.
Q: How serious is the housing situation?
A: Housing is a critical issue for Silicon Valley and it has been for some years. Prices for homes are increasing year after year. We are approaching the million-dollar mark for median home prices in this area. All-cash buyers represent a significant part of the market. It’s no wonder that only 30 to 40 percent of first-time buyers can afford to purchase a home in Silicon Valley. More young people are living with their parents. Multiple families are living in one home. You have a lot of people who live in Silicon Valley during the work week and then going back to where they actually live for the weekend.
Q: What about transportation? Anything look more encouraging?
A: We have not seen much improvement in the traffic situation. About 200,000 commuters are driving into Silicon Valley every day. A total of 1 million people are driving to work within Silicon Valley in their own cars. In the past few years, commute times in some area have increased up to 33 percent. Because traffic is so horrendous, that impacts our quality of life.
Q: Anything encouraging about transit?
A: Overall, transit use hasn’t increased significantly. But on some systems there has been a big bump in usage, so that’s encouraging.
Q: What is encouraging about the housing situation?
A: We need to build more housing for our residents, and the past year or two, we have been building enough housing for our current levels of population growth. But this isn’t enough to make up for the lack of residential construction during the recession. We are encouraged that more than 80 percent of the housing that is being approved is for multifamily housing. That tends to be dense and to be located near mass transit.
Q: What are the strongest industries in Silicon Valley right now?
A: The tech sector continues to see a lot of growth. We also are seeing a growing share of jobs in community infrastructure and services. This includes more health care, social services and education jobs.
Q: What other industries look strong?
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A: What we are seeing in Silicon Valley and throughout California is there is strong growth in jobs for hotels and food services, as well as retail and construction. Those often happen when there is more disposable income.
Q: What are some weak industries?
A: We are still losing manufacturing jobs. However, one of the few areas of manufacturing where we see more employment is computer design and manufacturing.
Q: What other weak industries do you see besides manufacturing?
A: IT repair services are losing a lot of jobs. With advances in technology happening so fast, we tend to replace damaged tech equipment. We just get a new tablet or phone because they are significantly upgraded with each new generation.
Q: What is a surprising trend that you’re seeing in the Bay Area economy?
A: We’re seeing more startups in San Francisco than in Silicon Valley. We don’t know if it’s because the chicken or the egg, but we are seeing more hip young people living in San Francisco, and those go hand-in-hand with more startups in that city. We found that in early 2015, there were 8,600 startup companies in San Francisco and 7,400 in Silicon Valley.
Q: Overall, what’s your outlook for Silicon Valley?
A: The Silicon Valley economy is doing very well. But we certainly have some challenges that we must address.
Organization: Joint Venture Silicon Valley
Title: Vice president and senior research associate
Residence: Palo Alto, Calif.
Five things about Rachel Massaro
She loves working with data.
Was an emergency medical technician for six months.
Attended graduate school at the University of Hawaii.
Favorite book is “Introduction to Physical Geography” textbook from college freshman year.
Favorite activity is spending time with friends and family, especially over brunch.