May 28 (Bloomberg) -- California’s Santa Clara County, the heart of Silicon Valley and home to two of the three most valuable companies in the world, has a shortage of almost 54,000 affordable housing units to shelter its lowest-income workers.
The affordable-housing deficit totals almost 669,000 units throughout California as surging rents outpace wage growth for the lowest-level jobs, according to a study to be released today by California Housing Partnership Corp. Six in 10 low-income households in Santa Clara County, where Apple Inc. and Google Inc. are headquartered, spend more than half their take-home pay on rent, according to the San Francisco-based nonprofit.
“Securing an affordable place to live in Silicon Valley has become a burden in the last 15 years,” Kevin Zwick, chief executive officer of Silicon Valley Housing Trust, a San Jose, California-based community lender that helped author the report, said in a telephone interview. “Anybody working in the lower end of the service economy, earning $20 an hour or less, has virtually no options.”
Silicon Valley’s widening income gap is being driven by explosive wealth creation at firms such as Cupertino-based Apple, the biggest company by market capitalization, and Mountain View-based Google, ranked third, behind ExxonMobil Corp. Hiring at technology companies is drawing thousands of skilled workers to the valley, fueling home-price gains in tony enclaves such as Palo Alto and Los Altos as funding shrinks for housing needed by retail clerks, security guards and medical assistants, the report said.
Federal and state funds for Santa Clara County affordable-housing projects last year plunged 82 percent to $19.7 million from $107.7 million in 2008, according to the report. Only about 34,000 affordable residences exist for almost 88,000 low-income households that need them. Apartment rents in San Jose, the county’s biggest city, jumped 6.5 percent in the first quarter from a year earlier, more than gains in San Francisco and Seattle, to lead all U.S. cities, according to Reis Inc.
“The economy needs all these types of service jobs, but the only way to stay is to double up or triple up in an apartment,” Zwick said.
Low-income workers were defined as earners making up to 50 percent of the county’s median $91,425 household income in 2012, and would include restaurant servers making as little as $19,040 to substitute teachers taking home $41,810, said James Pappas, policy associate at the San Francisco-based housing partnership.
To contact the reporter on this story: Dan Levy in San Francisco at email@example.com