Jobs and Housing in the Development Pipeline

The housing crisis in Silicon Valley and throughout the greater Bay Area has, by universal agreement, been exacerbated by economic and employment growth far outpacing the expansion of the housing supply.  Nearly all experts have called for more and faster residential development to ease the crisis, and the State of California is enacting legislation aimed at accomplishing that goal.

Before that legislation can make a material difference in the situation, any short-term changes in the existing balance between jobs and housing will be governed by what developers already have in process in the “development pipeline.”  That pipeline includes:

• Applications Submitted for various land use entitlements, such as site development or conditional use permits under zoning regulations or tentative maps under subdivision regulations;
• Approved Projects that have received those entitlements but are not yet under construction; and
• Projects that are Under Construction.

The table below summarizes the development activity, as of January 2022, in nine Santa Clara County cities where most development is taking place.[1] Overall, these cities have 3.49 jobs in the pipeline for each housing unit. Because of the high volume of development in San Jose, SV@Home maintains more detailed and frequently updated information on the Jobs and Housing Pipeline in San Jose.

It is noteworthy that five cities – Cupertino, Gilroy, Los Altos, Milpitas and  Morgan Hill– each have fewer than one job for each housing unit in the pipeline.  The other four cities all have more than two jobs for each housing unit in the pipeline, with some being significantly higher.  Overall, these four cities collectively have 4.11 jobs for each unit in the pipeline. While there is no one scientific response to the ratio of employed residents to housing units, SV@Home uses a ballpark figure of 1.4 jobs to new homes.

Approved projects may take years to be completed.  Some, like Google’s proposed development at Diridon Station in San Jose, will take up to a decade to build out.  Some proposed projects are questionable for any number of reasons; the Related Companies project on Tasman Drive in Santa Clara is on a former landfill site, which poses environmental challenges.

SOURCES: Data published by each city. “Approved Applications’ includes projects with entitlements for which the developers both have or have not applied for Building Permits. The employment projections are derived by applying square-footage-per-employee factors to building floor areas by four building types: 250 square feet for office/R&D; 1,500 feet for hotels; 550 feet for retail/restaurant; and 2,500 feet for manufacturing/warehouse. All are figures applied to a building’s gross square footage. SOURCE: U.S. Green Building Council.

*San Jose’ data published on-line is limited to “major” developments: 50+ dwelling units; 25,000+ square for commercial development; and 75,000+ square for industrial/office development

[1] The cities of Campbell, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, and Saratoga are not adding a significant number of homes or jobs.  The unincorporated area of Santa Clara County does host significant development, primarily on the Stanford University campus, but the County does not post jobs or housing units production on its website.