Silicon Valley is seeing employment growth and a record number of megadeals, but it’s coming at a rising cost — especially when it comes to housing and income inequality, according to a Wednesday report by Joint Venture Silicon Valley. For the third year in a row, more people are leaving the area than are coming in, the 2020 Silicon Valley Index says.
“The granularity of migration data in this year’s Index is eye opening — we’re essentially turning over our
population by nearly 5% every year, with the influx of foreign immigrants increasing our region’s diversity and tech talent base,” Rachel Massaro, Joint Venture vice president and director of research for the institute, said in a release.
There have been 821,000 new jobs created in the Bay Area since the recession, but only 173,000 new housing units, said Russell Hancock, Joint Venture CEO and president of the institute Russell Hancock. This lends itself to skyrocketing home prices and “creaking infrastructure,” he said in the release.
The median home price is more than $1 million, making it the highest in the nation. More than 11,000 people in San Mateo and Santa Clara counties are homeless, according to the report, which the organization releases every February. Additionally, 30% of residents aren’t meeting self-sufficiency standards as the cost of goods and services has gone up by 2.7% in the last year.
Income and wealth inequality are growing as costs rise, with wealth inequality hitting “a historic high as 13% of households hold more than 75% of the region’s wealth,” according to the report. While 13% of households have more than $1 million in net assets, 37% have less than $25,000 in savings.
Still, the unemployment rate hit a 19-year low at 2.1%, and Silicon Valley added around 30,000 new jobs, outpacing state and national numbers. In 2019, regional gross domestic product went up by $17 billion.
Venture capital also saw positive numbers, with $42 billion being invested in Silicon Valley and San Francisco companies, Joint Venture says. There were also a record 92 megadeals, and 22 local companies debuted on Wall Street.