Thursday, May 15, 2008
Thousands of new technology industry and other professional jobs and a burst of new housing construction attracted more new residents to San Francisco in 2007 than in any year in nearly a decade and drove the city's population to a new high of more than 824,000.
The 12,284 arrivals were drawn to an estimated 10,000 new jobs and the city's enduring panache - good weather, views, arts and culture, restaurants, and access to the outdoors.
But San Francisco still has some of the highest housing prices in the world and a long-standing housing shortage, so where will all these people live?
At least some of them will occupy the 2,500 new homes added in 2007 - the most housing created in the city in at least 19 years - and in the 3,281 units the city authorized for construction last year, the tangible result of city government's efforts to make up for minimal housing production in past decades.
Parts of the South Bay kept pace with San Francisco's job and housing growth - with San Mateo County adding jobs and San Jose constructing slightly more housing - but other neighboring counties fell behind San Francisco in both categories, according to statistics recently released by several state agencies.
Professional job market good
Workforce observers say that computer-systems designers and people who perform other professional, scientific and technical services have seen San Francisco as a good job market in recent years. Meanwhile, technology companies such as Yahoo and Google have opened offices in the city in part to accommodate employees and clients who don't want to commute to Silicon Valley.
"San Francisco has had a lot going for it for a long time, but some of those things matter more now than ever before," said Jed Kolko, a California economy expert at the Public Policy Institute of California. "There's a very educated and skilled workforce here, and it's a place where a lot of people want to live."
Compared to much of the United States, San Francisco's economy is not dependent on housing development and therefore was not hurt by a loss of construction and other housing-related jobs that were lost elsewhere as part of the mortgage crisis, Kolko said.
Some observers said the city's economy is tied to the success of the technology industry more than ever before, and, for that reason, it is affected less by national economic trends.
"The economies of San Francisco and Silicon Valley appear to increasingly be merged into one economy focused on technology and not necessarily tracking the rest of the U.S.," said Gabriel Metcalf, executive director at the civic think tank San Francisco Planning & Urban Research Association.
Metcalf said that while a handful of major corporations have abandoned San Francisco as their headquarters over the years - Bank of America Corp. and Chevron Corp., for example - major companies continue to open offices in town.
In 2006 and 2007, Yahoo Inc., Microsoft Corp. and Google Inc. farmed out some of their work to San Francisco offices, and new companies have begun to spring up the way they did a decade ago.
Businesses' interest in San Francisco may be partly explained by a shift in the technology industry. The growing number of online-media and business-software firms are drawing on the city's traditional strength in design, advertising and programming, as opposed to producing computers and microchips in Silicon Valley.
"San Francisco is significant to Google, as we have many users, employees, advertisers and publishers here, and it is an important base for recruiting," said Sunny Gettinger, a spokeswoman at Google. "We are happy to have a presence in the city that will allow us be more responsive to customer needs and cut down commute times for many of our employees."
The state groups San Francisco with San Mateo and Marin counties as one employment region when calculating job growth, and San Francisco has accounted for roughly 55 percent of new jobs in recent years. Last year, the region gained roughly 21,000 jobs after adding about 23,500 in 2006.
In contrast, the employment region that includes Alameda and Contra Costa counties lost about 8,500 jobs in 2007, according to Paul Fassinger, the research director at the Association of Bay Area Governments. The decline was partly due to a drop in construction and other home-building jobs as a result of the nationwide mortgage and credit crisis, he said.
In San Francisco, the opposite was true: About 2,500 housing units were added in 2007, up from 1,900 in 2006 and 1,800 in 2005 - and 70 percent higher than the city's 20-year average. San Francisco placed sixth in the state behind San Jose, Sacramento and several other cities in the number of homes added last year.
The building boom is in line with goals set out by the city's Planning Commission and Mayor Gavin Newsom to add more housing to comply with state mandates and to help ease the city's long-standing housing shortage.
City statistics suggest the trend will continue. In 2007, the 3,281 units authorized for construction was a 41 percent increase from 2006. Projects on the horizon - including Rincon Hill, the Transbay Terminal area, Hunters Point Shipyard and Candlestick Point and other new rezoning in neighborhoods in the city's east side - could add tens of thousands of homes.