Removing Bay Area’s ?‘self-created’ economic limits
Micah Weinberg, Ph.D., president of the Bay Area Council Economic Institute, will be the keynote speaker for North Bay Business Journal’s 2015 Construction Conference on May 27, talking about the state of the Bay Area economy.
From mid-2011 through January of this year, he was a senior policy adviser on health care matters for the council, an advocacy group backed by nearly 300 of the region’s largest employers. Now he manages the council’s research team.
Since 2011 Weinberg has led his own health care and economic-development research firm, Healthy Systems Project. He has been a regular guest expert in news media, journals and lectures on the transformation of health care, focusing on insurance market reforms under the Affordable Care Act.
Weinberg spoke to the Business Journal about what’s most concerning for employers in the region. In the interview, he warns of a “bubble mentality” of taking the currently hot economic growth in San Francisco and Silicon Valley for granted.
“As economic development planners begin to think about the next five years, there is a likelihood of another economic downturn, and it could come sooner,” he told the Journal.
What are the top five issues facing Bay Area businesses?
Weinberg: We won’t be unique in our perspective of this.
First is housing affordability at all levels of income. You often hear about “affordable housing.” It’s important to make sure that we have government subsidized housing for very-low-income people, but we’re at a point now when folks making hundreds of thousands of dollars a year are finding that they have very limited to no housing options. In addition to being a tremendous financial strain for families across the income spectrum, it’s a real challenge for employers, who are having trouble with attracting and retaining talent because of the fairly high cost of living in the Bay Area.
This is largely attributable to a lack of supply of housing. We’ve underbuilt by about 100,000 housing units a year for the past 30 years on the coast of California. We’ve certainly underbuilt in the Bay Area by tens of thousands of units every year for the past several decades.
When I talk about economic development with other communities across the nation - I’ve done economic-development studies in Ohio, Illinois, North Carolina and lots of other places - largely the conversation is how do we attract industries here, how we retain the industries that we have, what industry clusters do we want to build and how do we export more goods. That is important, to some extent, in the Bay Area, and it’s more important, perhaps, outside of the urban core. And we definitely need to think about growing businesses.
But broadly speaking, our challenges in the Bay Area are self-created. It’s not much a matter of attracting businesses here. It is getting a handle on some of these substantial regional challenges that we have in order to ensure we keep this regional economy, which is the envy of the world, from essentially choking itself out, because of a lack of affordable housing, because of clogged highways.
Second: regional transportation. We should already have a BART 2. We should already have another bridge across the bay. We should already have many more ferries. There are some improvements to our roads that need to happen, but much more than that there are improvements to how we use our existing infrastructure that need to happen.
There is a lot more we need to do to increase throughput on our existing highways. There are all sorts of intelligent metering systems and mechanisms for charging folks for using different highways at different times that could dramatically reduce commute times while we got a better throughput on the highways.
The issue is we really don’t do any of this on a regional level. There are these HO/T [high-occupancy or toll] lanes near San Jose. There are different places - almost randomly, it seems - we’ve got different types of HOV lanes. In some places, roads are metered; in some places, they aren’t.
Some say that HOV lane utilization rates, if they are 10 percent, they’re doing good, and that metering lights are only really needed at poorly designed choke points and should not be applied to a wide area.
Weinberg: Part of the problem is that we create a lot of poorly designed choke points in the Bay Area by doing a lot of the transportation development on the county or local level. Highways go from four lanes to two. We have a lot of problems we have created for ourselves.
You’re right, there are a lot of different strategies that need to be deployed in concert with each other. There are some that are more effective. There are some that are less effective. But because we have 110 or more local governments, special districts and JPAs [joint powers authorities] in the Bay Area, there is a very limited capacity to the regional transportation funding and planning that we really need to do.