"As of January 1, 2015 the average household size in Palo Alto was 2.47 residents compared to the county average of 2.97."

Such averages are meaningless. There is no such thing as an average household, nor is there 0.01 of a person (excepting Lizzie Borden's household). I challenge you to make your point in realtistic, illustrative terms.

I am very literate numerically and statistically, so do your best.

How will the population grow if there isn't enough housing? I don't understand how the mismatch of jobs and housing growth fits with population projections. These seem disconnected and possibly wishful thinking.

@ confused

A few points.

There is now a shortage of housing for the recent population growth associated with the strong job growth. So at least so far "don't build and they won't come" is a theory in conflict with the evidence.

How does this work. There are two explanations.

One is that people double up--as a choice they make or have to make faced with rapidly rising rents and prices. This has happened in our region.

Second, some people move to adjacent counties and commute back in.

This process, very real in fact, has the effect of hurting most those who cannot afford the rising prices and rents and have to move or double up. It means that we become a region of older homeowners who bought a long time ago and increasingly wealthier newcomers.

The projections going forward assume that the housing shortage will be dealt with.

The collective communities in the region hold collective inconsistent positions. As a group they favor and approve new job growth while many are ambivalent about housing. There is now growing pressure for and recognition of the bad social and economic implications of a persistent housing shortage.

Most cities are struggling with these conflicting views and we will see how it works out over the next 5 to 15 years.

@ counterclockwise

I guess you are not a sports fan.

There is no average San Francisco Giant but the team does have a batting "average".

It is calculated by dividing the number of hits made by the team by the number of at bats that count (not walks or sacrifices)--I suspect you know this already.

Similarly, average household size is calculated by dividing the number of people by the number of households. So if a city has 10,000 households and 25,000 residents, the average household size is 2.5.

The point in baseball is that a team with a batting average of .290 likely has more players hitting .290 or more than a team with a batting average of .250.

So Palo Alto with an average household size of 2.47 most certainly has a higher percentage of 1 and 2 person households than a city with an average household size of 3.0 and that has implications for housing policy--particularly when we know that all cities will have the greatest growth in residents aged 65 and above who have an even smaller average household size.

So, yes there is maybe no average household but there certainly is an average household size.

I'd be interested to learn more about the demographic trends in Palo Alto, specifically, rather than Santa Clara County in general.

I'm one of those older homeowners you speak of. I live in SPA far from the madding downtown crowd. I assume the reason so many startups locate downtown is due to the proximity to Stanford, the same reason Hewlett and Packard started here. Yes, housing is very expensive here, to rent or buy. How many new units would have to be built to significantly lower prices enough to be affordable for most of the downtown tech workers who now commute long distances? I don't think anyone knows the answer or has the magic formula or algorithm to give us that answer. Lots of opinions though! I've supported the idea of increased height limits for housing, not more offices. Would that work? Property owners and developers favor building more offices because they produce more profit. So, what will it take to effect changes to correct the jobs/housing imbalance? A question I don't have an answer for. Please come forward you folks much smarter than me!

Gale, most startups locate downtown instead of the Research Park because twenty something\'s want to work someplace with street life - restaurants, shops, and nightlife - and be able to live near work or take the train instead of driving. And, of course, most people who want to work long hours and take a big risk with their careers are in their 20s. (Though bravo to the older programmers who set out on startups rather than spend their days at the big companies!)

A different height limit for residential sounds like a good idea. I believe Neilson Buchanan has proposed the same thing. Also, aside from the height limit, Palo Alto zoning doesn\'t let you build the full three stories of residential over retail - compared to office, where you can go up all three. At a time when we\'re restricting office space and need more housing downtown, that doesn\'t make much sense.

There\'s also a number of places like the Frye\'s site and 27 University that would be perfect for more housing over ground-floor retail, rather than just more offices.

As of 2012, San Francisco had a 1.5 percent payroll tax, that brought in $400 M to city coffers.

What would you estimate, Dr. Levy, the hypothetical effect of such a thing here?

I would not mind so much being overrun by this new species if there were something in it for me.

And what about my comment a few posts back about taxing realtors rather than having a parcel tax, or in addition? How much of a "residential real estate transfer tax" hypothetically would we need to impose to match the $10 M per year of the recent and renewed parcel tax?

Since you digressed a bit into baseball, I am posting again to add the detail that on my own blog I grasped for but did not quite reach a clever reference to Mario Mendoza, a mediocrity from the 1980s baseball who is immortalized for "The Mendoza Line" which to many people is a minimum standard of success, like a .200 batting average. I actually think it is something less tangible, having to do with the expression "hitting your own weight" i.e. a batter whose average was below his body weight. There was a period there wherein Mendoza started putting on weight, but his batting average did not increase proportionally. To me the Mendoza LIne is not .200 but is more like an irrational that cannot be described simply: There was also a yarn about the guy with the lowest average being "the strongest man" in that he held up the other 500 players in the charts they used to print in the Sunday paper. Mendoza arguably was better off as a 170 pounder hitting .200 than being a 235 pounder hitting .205.

I actually did hit .667 on a single at bat, my first hit in Senior Little League, as a 13 year old playing with 14 and 15s; it took me almost to mid-season to get a safety; I knocked Paul Hopper's hanging curve the opposite way off the right field fence, took two bases but cluelessly tried to stretch it to a triple and was thrown out by a mile. It's actually, of course, still a hit, but in the context of economics it is more like a hit and an out, or two bases and an out, 2 of 3, .667.

Web Link
e most irrational thing you do.

i am also saying something about "feed a pig slaughter a hog" in that the developers are getting fat and we should or could benefit, maybe by taxing them. Or indirectly by taxing their tenants.

Famously, a Palo Altan named Ron Conway moved to SF and helped Ed Lee get elected partly by getting some high tech companies exemptions from the payroll tax. I've never met or even seen Ron Conway but I presume he is more likely a porker (compared to a CEO like T.J. Rodgers who is an exercise nut).

And yeah, I admit I am carrying more on my frame than I did for the 1981 League Champion Titans: 30 percent more!

I argued that the 14-acre Fry's site should have a 7-acre park: we are way-behind in our per capita people to park acres ratio.

And there there is the problem of water.

My fruit trees died over the winter, and I wonder how much water the occupants of those new hotels around the corner are going to use.

The trouble with thinking this way is that there are always busts. More reasonable growth means more sustainability in the long run. If things get too expensive, it makes places like Detroit attractive, and our nation benefits.

It's interesting that we don't have any of the social pressure of some other wealthy nations to allow young families to buy homes and not take them up as ghost homes or live there forever. I suspect we'd end up with a lot of vacated housing stock if the tax laws changed. I wouldn't move into an apartment in PA, I'd move somewhere I could lead a better quality of life. As much as I enjoy it here, and have our friends, let's face it, the nature of this area is transient. There is a whole other depth to life when you live somewhere people are truly connected. (Count me as one who would probably move now if I could move the equity with me instead of losing so much of it. Subtract me from the list of people who will need a spot in an expensive senior facility here, I wouldn't want to grow old here anymore.)

Something interesting would be the age of the workers in the added jobs, as well as visa status. If Employers brought or bring 150,000 workers on H1B visas, do we project them to remain int he area? If the workers in the added jobs are aged 25 and under when hired fresh out of college, do we project them to remain in the area? The tech industry has college graduates flocking to Silicon Valley to take jobs, but they don't necessarily plan to stay here. It's a reverse of past practices, but some of these companies (Google) are mainly hiring college graduates in their Silicon Valley HQ these days. That doesn't mean they will all remain here. It's kind of like postgraduate education for them. Once they have the Diploma of Google Employment, then they can find a job elsewhere.

That is, when Google hires a college graduate fresh out of school, the hire is likely to work at HQ initially. If they hire at another location, or transfer an employee there, that employee is less likely than those at HQ to be a recent graduate. The recent graduates look for a different kind of housing situation than those with 10 years of experience and added age.

If the idea is to plan in a regional context, why do we tally jobs-housing "imbalances" town by town?

@curmudgeon

As a result of Prop 13, property taxes on housing don't actually cover the cost of services required, so its really the fairest way to have the cities which are driving growth pay for its cost. Its not a perfect system, but given the context it makes sense.

@Robert

I'm still trying to parse your Prop 13 comment. Do bear in mind that the bedroom community you live in owes its economic underpinnings to jobs elsewhere.

To elaborate on my original point: we must get beyond the legacy of 19th century context of individual towns and adapt to the 21st century reality of a regional jobs-habitation unit. Politics notwithstanding, inter-town boundaries are abstractions here--signs beside the road, if even that.

It makes much more sense to compile jobs-housing "balances" over representative commute zones, not within contextually meaningless city limits, and to periodically "redistrict" them. To illustrate: does it make more sense for an employee of VMware, whose campus is barely inside Palo Alto, to live in north Los Altos or in north Palo Alto? City-context accounting demands north Palo Alto, which is a much longer commute; rational regional reckoning allows the much more sensible Los Altos.

Bottom line: planning economists need to join Silicon Valley and innovate their thinking.