Confidence in the Bay Area’s economy has eroded as many residents worry that exorbitant housing costs could help usher in a significant downturn, a new Bay Area Council poll revealed Saturday.
Just 31 percent of those surveyed said they believe the Bay Area’s economy today is better than it was six months ago — a steady erosion from the 35 percent who felt that way last year, 46 percent in 2015 and 53 percent in 2014.
“These results are troubling, and the negative outlook in the Bay Area is a little out of whack with the national results that show rising consumer confidence nationwide,” said Micah Weinberg, president of the Bay Area Council Economic Institute.
Surveys from the University of Michigan and The Conference Board have both shown strong increases in nationwide consumer sentiment. The Michigan report issued Friday was among the strongest levels for the measure in decades, while The Conference Board survey announced Tuesday was at its best level since 2000. Gallup’s U.S. Economic Confidence Index, however, fell last week to its lowest weekly average since the presidential election.
In the Bay Area, 76 percent of 1,000 residents surveyed by the council believe “the housing shortage threatens our regional economy.”
What’s more, a growing percentage believe a “significant economic downturn” will slam the Bay Area economy sometime in the next three years, according to the survey. Forty-five percent felt that way — a significant rise from the 37 percent who expressed that view a year ago.
The Bay Area Council — a business-sponsored, public policy advocacy organization — believes the root problems undermining confidence in the economy need to be addressed quickly.
“We are playing a risky game with the Bay Area’s golden goose,” said Jim Wunderman, the council’s president.
The region’s residents made a clear connection in the poll between the housing shortage and the Bay Area’s ability to keep creating jobs.
“It’s not a housing crisis, but it is a housing-supply crisis,” said economist Christopher Thornberg, founding partner with Beacon Economics.
Bay Area residents have been reluctant to support enough housing development to keep pace with job creation, and the increased demand and limited supply have boosted home prices, Thornberg said.
“Somebody can afford to buy those houses. Otherwise the prices wouldn’t be up there,” Thornberg said. “The high-income people are displacing the lower-income people who can’t compete for these expensive homes. And that does stink for a lot of people in the Bay Area.”
A recent economic study by San Jose-based Silicon Valley Leadership Group charted the jobs and housing gap, which has gotten worse in Santa Clara and San Mateo counties.
Over the last five years, the number of jobs in Silicon Valley has increased 24.5 percent and the population has grown 6.4 percent, the leadership group found. But the number of housing units has increased by just 2.6 percent. That means the housing stock is increasing at only around one-tenth the pace of job growth.
In a series of polls released this week, the Bay Area Council also said 46 percent of Bay Area residents would like to leave the region sometime in the next few years. The impulse to flee and the concerns about the economy could begin to feed off of one another, Weinberg warned.
Nevertheless, the nine-county region is in an excellent economic position to tackle its housing and economic woes, he said.
“The Bay Area has perhaps the best economic foundation of any region in the world to fix these problems,” Weinberg said. “But you have to build the houses on top of that foundation. And you need to build roads on top of that foundation to connect to the homes.”[“Source-mercurynews”]