For the first time since 2011, Silicon Valley is losing more residents than it is gaining, mainly due to the high cost of living and other lifestyle issues. According to the Silicon Valley Competitiveness and Innovation Project (SVCIP), the area lost around 7,500 residents to other United States locations in 2015.
“The current installment of the SVCIP shows that while Silicon Valley continues to have a white-hot economy and high job growth, there are several warning signs,” wrote Carl Guardino, CEO of the Silicon Valley Leadership Group, and Emmett D. Carson, CEO of the Silicon Valley Community Foundation, in the report.
“Skyrocketing housing prices and increasing traffic congestion are eroding our quality of life and causing many residents to relocate to other parts of the country.”
The study cited several reasons, but the high cost of housing was paramount — with a 13 per cent increase, to $870,000, in median housing costs between August 2014 and August 2015. San Francisco didn’t fare much better, with average monthly rent for a two bedroom unit sitting at $4,200 in 2015, higher than any other major US metropolitan area. Silicon Valley commuters also spent 67 hours in traffic in 2014, a 13.6 per cent increase from 2010.
The net result of the data, according to the report, is leading to a talent drain. Education played a significant role in its findings, with STEM (science, technology, engineering, math) degrees conferred increasing by 5 per cent while New York City and Seattle saw an 11 per cent increase. Additionally, the organization suggested funding declines play a role.
“Slow growth in STEM degrees conferred and widening disparities in educational outcomes point to serious leaks in our talent pipeline. And, steady decreases in university and federal R&D funding mean there is less capital to fund innovation,” the report noted.
Layoffs at Silicon Valley companies like Yahoo and Twitter may be attibuting to the exodus as well.
According to the report, Seattle is likely benefitting from the migration out, and had the highest growth in STEM workforce, doubling between 2004 and 2014, and far outpacing Silicon Valley, Austin, New York City, Southern California and Boston. Seattle saw an increase of over 17,000 new residents (a little more than 3,000 per month) in 2014 as well.
Another metric indicated that the Seattle startup community is continuing its upswing — a 16 per cent rise in angel/seed funding, the only city in the report with an increase.
Source: Silicon Valley Business Journal