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Plan Bay Area
Understanding the growth projections used by the Association of Bay Area Governments (ABAG)
Understanding the growth projections used by the Association of Bay Area Governments (ABAG) requires understanding the work of the Center for Continuing Study of the California Economy, an organization co-founded by my father, Robert K. Arnold.
Steven Levy, the economist advising ABAG, has prepared the projections of population, jobs and households for the 9-county Bay Area Region, based on models developed by my father and Steve, and utilized over the past 40 years by entities that require long term economic projections (over 10 years) for analytical purposes. One of the primary examples is the CA Energy Commission, which is doing long term planning for energy production in the state.
The website is www.ccsce.com and one can see the long history of reports and studies.
If anyone is interested I can provide an outline of the economic models CCSCE uses, their sensitivity to various economic assumptions, and why they work as well as they do. But there is always the key caveat: These are not forecast models. They are planning tools.
A frequently heard complaint by those opposing the Bay Area Plan about the results that CCSCE’s models result in significant growth in jobs, housing, and population for the 9 County - SF Bay Area. The good news is that CCSCE’s track record on jobs growth – they’ve been doing it since the late 60’s – is remarkably good. Better than the State Department of Finance. Much better. And it is why ABAG uses CCSCE models for these projections.
The bad news is that based on these models, when one looks out over the next 20 years, the SF Bay Area is facing a world of growth. And it is facing the growth because of the growth in high-tech jobs. These are jobs in the fastest growing industries in the US and they are growing much faster than other industries. The Bay Area has a huge share of the US jobs in these categories. It is the primary reason that the Bay Area has grown faster in the past 30 years than the rest of the US and will continue to over the next 20 years.
That is, unless the region says ”NO” to the some of the premier high paying job creators in the world, such as Google, Microsoft, Facebook, Apple, etc.
If you don’t say no to these employers, the growth is coming, because associated with high-tech workers (actually any workers) are the demands for goods and services. This is where the real numbers are in terms of jobs, population, and households. The biggest numbers are not in the high-tech sector; they're in the service sector. And that’s why high growth of high-tech jobs in the South Bay (and now South of Market in San Francisco - SOMA) leads to much greater numbers of jobs, population, and housing all over the region.
While there are models for job growth in an economic region, there aren't really economic models of WHERE people LIVE in that region. That's because workers live in housing and housing is built in geographies where the governing entities allow them to be built. This issue involves far more politics and the preferences of local communities express through their local planning agencies than economics. In other words, total housing is governed by regional economic models. But where the housing is built within the region is determined by many other factors.
The spreadsheets used by ABAG allocating housing among the cities and counties within the Bay Area are based on ASSUMPTIONS about where households are going to be approved by local land use agencies. And that’s why the Bay Area Plan is political: ABAG is allocating the households based on a political process.
An alternative approach from regional agencies could be to say to those South Bay entities where high-tech jobs are locating: you're approving the commercial facilities, so it's your job to provide the housing.
This hasn't happened, not even a little. Take a look at the number of jobs locating in Mt. View and how they’ve grown. (It’s huge because of Google.) Then look at the increase in households in Mt. View. They took the jobs. But they didn’t house the workers. Someone else has built the housing. The workers are living somewhere including increasing average household size among younger workers.
How about Facebook on the edge of the Dumbarton Bridge? How many additional housing units have been built in Atherton, Palo Alto, or Menlo Park? The answer is very few.
The Bay Area Plan is a direct consequence of a change in the South Bay. That area has been growing jobs for decades. But about 10-15 years ago the growth in housing slowed way down. Fremont, Milpitas, San Jose, have pulled way back for the same reason Marin has. They’re preserving open space and the city councils don’t want the additional cars or density within the city limits (one can see this by comparing the growth in population in the sub regions of Alameda, Santa Clara, and San Mateo Counties in jobs and population from 1980 – 2015.)
The data are overwhelming that the jobs are continuing to come into the SF Bay Area. But in the south bay the household growth has slowed that is pushing more housing demand north and east to Tracy and Manteca.
ABAG’s response; someone else has to take the housing. That’s a political decision, because no one is saying “no” to the high-tech firms. Apple wants to expand where it is. Go ahead. Facebook. Fine. Well, these firms are not located to any public transit “nodes.” All the talk and focus is on residential transit oriented development but not commercial transit oriented development.
And that’s the lever for Marin. We don’t want the jobs or the housing. It’s time to realize that if Santa Clara County is getting large numbers of jobs it’s their responsibility to house the workers and the workers serving the workers.
Not Marin's.