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  Gridlock, the Leading Bay Area Economic Indicator
November 13, 2013

The good news is that the economy is improving. The bad news is that traffic flow is not improving. We’ve seen this movie before. Hark back to the SF Chronicle story of  May 2000 (http://www.sfgate.com/default/article/Hell-on-Wheels-Bay-Area-traffic-has-gone-from-2776057.php   May 28, 2000), when the dot.com boom was peaking:

It's an understatement to say traffic is getting worse. It's been ranked among the biggest concerns for Bay Area residents for more than a decade. But with the blazing economy putting so many workers on the road, the situation has become dire in the last two years. In some areas -- primarily in Contra Costa County -- it seems to have gotten worse in just the last few months.

Now, employment is at a five-year high but not quite back up to dot.com boom levels, and the SF Chronicle headline is once again “Traffic Jams Paralyzing Bay Area.” If the economy continues to improve, it’s only going to get worse.

For the first time in history, the Richmond-San Rafael bridge is experiencing commute hour gridlock as people working in Marin but can’t afford to live there commute form the east bay.

How we deal with it is critical to the future of the Bay Area. There are solutions, but they take political courage, and Bay Area residents and leaders continue to hedge their bets rather than make bold choices. The One Bay Area Plan, which tea partiers malign as “stack and pack” is based primarily on reducing greenhouse gas emissions as required by AB 32, but it includes measures to reduce “vehicle miles travelled” by implementing planning solutions that can also reduce gridlock on Bay Area roads.

While embracing the One Bay Area Plan, politicians from the outlying areas of Bay Area counties continue to support and advocate for freeway expansion in the various regional transportation agencies, including the one on which I am a board member, the Contra Costa Transportation Agency (CCTA). In the 2000 SF Chronicle article, the author concludes, quite correctly:

As soon as you create a new lane, it fills up. If you don't add the lane, the people will come anyway. We've got the evidence in front of our faces every day.

That’s not news. I learned that in Planning School at UCLA over 40 years ago.

Despite the fact that you can’t build your way out of congestion, we continue to expand Bay Area freeways while neglecting most other solutions. The fourth bore of the Caldecott will open any day. The CCTA is pushing for State Route 239 to join State Route 4 and I-205, opening up east Contra Costa for more development and more commuters. CTA is also pushing more “express lanes” or HOT Lanes in Contra Costa, a scheme that rents out HOV lanes to paying customers who are driving solo and don’t qualify as carpoolers. Highway 101 in Marin and Sonoma county continues to add lanes.

All is not lost. We are doing a few things right. Sonoma and Marin counties are building Smart Train. BART is being expanded. eBART is under construction.

But we are not doing enough, and we are not doing it fast enough. We continue to neglect our public transportation, like AC Transit. WETA continues to drag its feet in setting up a true ferry service. People continue to separate where they live from where they work. We are not building communities that have both jobs and the quality of life people crave. In “Is It Now Silicon Bay Area ?” (Contra Costa Times, November 13, 2013), UC Berkeley economics professor Enrico Moretti  notes in “The New Geography of Jobs,” “The expansion of the traditional Silicon Valley of Palo Alto and points south is due to several factors, including the trend among younger tech workers to want to live, work and play in vibrant urban centers.”

Incentivizing people to avoid commuting by providing jobs and quality of life in the same place can drastically reduce the commute. Ironically, many of the answers lie in back to the future. In the 1950’s, corporations, including Chevron and General Motors, dismantled an enviable commuter rail system to sell more cars and gasoline. Now, streetcars are providing economic revitalization for communities all over the U.S (http://www.katu.com/news/outdoors/Once-nearly-extinct-streetcar-gets-new-life-in-US-231595521.html).

We can have it all, but we have to be willing to invest in public transportation, rebuild our towns and cities for vibrancy, provide incentives for people to live where they work and vice-versa, and use technology such as on-lime meetings and telecommuting to reduce commuting.

Can we do it, or will we simply drown in a sea of traffic that will also raise sea levels and literally drown us?

Traffic jams paralyzing Bay Area
By Gary Richards
Posted:   11/10/2013 12:01:00 AM PST
Updated:   11/12/2013 08:08:32 AM PST

Bay Area commuters are getting a sinking feeling as we see firsthand what economic recovery looks like -- miles of brake lights on commutes so congested we're wasting hours a week inching to work and back.
It almost makes you miss the recession.
Commuters say trips that took 30 minutes a year ago now may take 60 or more. It's happening on Highway 85 in the South Bay, Highway 101 along the Peninsula, Interstate 880 through the East Bay and Interstate 680 from the Sunol Grade to the Benicia Bridge.
Forget talk about Twitter stock. When people gather around the office water cooler, it's often to gripe about traffic, traffic, traffic.
Highway 24 in Lafayette, Calif., October 2013. (Kristopher Skinner, Bay Area News Group)
San Jose had the 13th worst congestion in the nation in 2010, but now ranks fifth, according to Inrix, which monitors traffic nationwide. Delays are also growing through San Francisco and Oakland, which are counted together and are considered the country's third most congested city, a spot it has held for years.
"It's gotten noticeably worse, even in the last two weeks," said KQED traffic reporter Joe McConnell. "Every morning has been nightmarish.
"Something may have tipped, but it could be like trying to connect any particular stormy day to climate change or just bad weather."
Mostly, experts say, the congestion is a testament to the growth in jobs in Silicon Valley, San Francisco and the East Bay as the economy recovers from the Great Recession. And that has exacerbated problems that were already worse here than elsewhere.
Where drivers nationwide spend about 38 hours stuck in traffic a year, drivers in California's most urban areas waste 62 hours a year, says the Texas Transportation Institute.
"It takes me 1.5 to 2 hours to drive 30 miles from San Jose to Livermore each evening," said Sean Lamson of his I-680 trek.
If Brenda Nguyen hears a crash reported along her route from San Francisco through the Caldecott Tunnel, her 22-mile drive can turn into two hours. "Bank on it," she said. "It used to be maybe 50 minutes at its worst."
Chris Lee of San Jose just wants to get her kid to class on time at Archbishop Mitty High School in west San Jose.
"In the past few months we have noticed a huge increase in the time it takes to get from 280 and 87 to Saratoga Avenue," she said. "We are now almost late every day, even though we allow 35 minutes to go about four miles."
Other than an improving economy that's putting workers back on the road, here are some factors behind our growing woes: Truck traffic from the Port of Oakland to the Central Valley has turned I-80, I-580 and I-880 into big rig alleys. Thieves continue to steal copper wiring at metering lights, and when they don't work, highway traffic backs up. Road construction is underway seemingly everywhere. Schools are back in session. Gas prices have fallen 28 cents a gallon over the past year. And more traffic on the road means likely more crashes that make things even worse.
While ridership on BART, Caltrain, light rail and buses continues to grow and carpool use is on the rise, there are simply too many of us driving solo to work.
Honolulu ranks as the nation's most congested city, followed by Los Angeles, San Francisco-Oakland, Seattle and San Jose. New York is No. 6.
Through the early part of this year, 61 of America's top 100 cities with the worst congestion saw delays worsen compared to the year before -- and San Jose's jump is at the top of the list. In 2012, only six cities experienced increases.
"That's incredible, to have such a huge increase so quickly," said Jamie Holter of Inrix. "San Jose people really have no choice but to drive."
Traffic delays dropped by more than 22 percent during the recession of 2008, says Inrix, making any increase now seem unbearable. But make no mistake, traffic officials say, delays are on a rapid spiral upward and might be a sample of what is down the road as highway work wraps up and state transportation dollars dwindle.
"We are only experiencing the tip of the Silicon Valley congestion iceberg," said Rod Diridon of the Mineta Transportation Institute. "Since what we knew of as full employment before the Great Recession, government has been unable to invest significantly in highway capacity expansion."
He says Silicon Valley will soon bump against "terminal gridlock" like the kind that occurred in Beijing six years ago when commuters were trapped in their cars for days.
"The capital of China was nearly paralyzed for almost seven days while that massive traffic jam was cleared," Diridon said. "That crisis doesn't happen gradually. There is no quick fix."
Not unless we have another recession.
Contact Gary Richards at 408-920-5335.
Bay Area job market at five-year high
By George Avalos
Oakland Tribune
Posted:   10/15/2013 05:37:07 PM PDT | Updated:   28 days ago

SAN FRANCISCO -- The Bay Area job market is at a five-year high, having recovered nearly all the jobs erased by the Great Recession and heading toward the sky-high employment levels of the dot-com boom, according to the Bay Area Council's annual economic forecast.
"The Bay Area will continue to grow much more quickly than the state and the nation, and by the end of 2015, job totals in the Bay Area will be back to the levels of the dot-com period," Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast, said in an interview after his presentation to the council Tuesday.
At present, the nine-county Bay Area employment totals are about 282,000 jobs below the peak of just under 3.6 million reached in January 2001. So the region would have to add an average of roughly 10,500 jobs a month to regain the heights of the dot-com boom by the end of 2015.
That would be a steep increase in the pace of job gains in recent months. During 2012, the Bay Area posted an average gain of about 9,400 jobs a month, but over the 12 months that ended in August, the average gain was about 5,600, this newspaper's analysis of data from the Employment Development Department shows.
Jordan Levine, an economist with Beacon Economics, said the council's glowing forecast, which is sponsored by Accenture and the Federal Reserve Bank of San Francisco, is "not outlandish," though at the upper end of what he expects to see in job growth.
"We do expect growth to pick up in 2014 and 2015 after we get past the headwinds from Washington, D.C.," he said.
The Bay Area has a recent precedent for rapid job growth. During 2000, the average gain for the region was 12,000 a month.
"As the U.S. economy speeds up, the Bay Area will speed up," Nickelsburg said.
Next year, total payroll jobs should increase by about 2.6 percent in the Bay Area, 1.9 percent in California, and 1.6 percent in the United States, according to estimates presented at the forecast. During 2015, they are expected to increase by about 3.3 percent in the Bay Area, 2.2 percent in California and 1.7 percent in the U.S.
The South Bay is the key player in both the job gains that have occurred and those anticipated.
"Santa Clara County is driving the job growth in the Bay Area," noted Tracey Grose, vice president of the Bay Area Council's Economic Institute.
During the 12 months that ended in August, the Bay Area gained 62,000 jobs, and 26,000 of those, or 42 percent of the total, were in Santa Clara County. The San Francisco-San Mateo-Marin metro area gained 21,000 jobs, or 34 percent.
The Bay Area's recovery of jobs lost since the depths of the financial meltdown is a key benchmark. "From a psychological standpoint, this is huge," Grose said.
The tech sector is the main driver of the Bay Area's employment surge, but industries such as retail, biotech, health care and communications also are important players.
In addition to the jobs created directly by the tech sector, there are spinoff effects, said John Del Santo, senior managing director for Accenture, an outsourcing and consulting firm. He said every new tech job helps to spin off 4.5 other jobs in retail, housing, financial services and other sectors.
"Tech is important, but a lot of industries are contributing to this," Del Santo said.
Despite the rosy outlook, experts warn that the region faces challenges from shortages of skilled labor, heavy traffic and an inadequate supply of affordable housing.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos
Bay Area hiring climbs toward pre-recession levels, with nearly 200,000 new jobs projected by 2018
Raj Abhyanker, founder and CEO of  Palo Alto-based LegalForce, has tripled his staff during the past three years.
View Slideshow

Paolo Vescia
Raj Abhyanker, founder and CEO of Palo Alto-based LegalForce, has tripled his staff during the past three years.

Blanca Torres
Reporter- San Francisco Business Times
Email  | Twitter  | Google+  | LinkedIn
The founders of TubeMogul, a maker of advertising software, wanted to avoid growing pains last year just as their hiring was about to skyrocket.
So they set up a top-notch recruiting team and within the last three years quadrupled the company's workforce to more than 120 people in its Emeryville offices.
The company is one of many firms in the Bay Area adding workers at exponential rates — pulling the region out of the Great Recession and setting it on track for several more years of job growth.
“It’s gotten easier over time,” said Brett Wilson, co-founder and CEO of TubeMogul, of ramping up headcount in a short amount of time. “When most people walk in the door, they can feel there is something happening here.”
The next five years look promising for the Bay Area’s job force with San Francisco, Marin and San Mateo counties projected to add close to 74,000 jobs and the East Bay estimated to add about 124,000 jobs between now and mid-2018, according to data from Beacon Economics, a San Rafael-based firm.
Overall, the west side of the bay experienced significant job growth in the past few years and surpassed pre-recession levels of 1 million jobs, while the East Bay is still climbing to reach its pre-recession peak of 1.05 million jobs.
San Francisco, Marin and San Mateo counties’ metropolitan area hit a peak of 1 million jobs in 2008, then dropped to low of 929,500 during the first quarter of 2010, and then rebounded back to 1 million jobs during the third quarter of 2012.
Since then, the number of jobs continued to grow to reach 1.02 million by June. For the years to come, Beacon projects employment will grow 2.2 percent in 2013 and then between 1.1 and 1.8 percent per year from 2014 to 2018.
“Although several sectors have fared exceptionally well, the gains in San Francisco have been relatively broad-based,” states a report from Beacon Economics. “San Francisco’s strong presence in the technology and professional services space has helped it to leverage the nationwide drive toward efficiency and productivity.”
The East Bay will see annual increases in the range of 1.5 to 2 percent for the next few years, but Beacon estimates the region will hit an all-time high of 1.075 jobs by the end of 2016.
In the past couple of years, construction hiring has ramped up in the East Bay, with 5,300 new jobs since April 2012 and the industry accounting for 40 percent of the nonfarm job gains during the past year.
A thriving job market also pushes down unemployment, which is about 6 percent in San Francisco, Marin and San Mateo counties and 7.4 percent in the East Bay.
Much of the job growth that the West Bay experienced was in professional and business services and information sectors, which includes many of the jobs created by technology companies. Job seekers these days might not recognize the job market of just four or five years ago, when employers continued chopping payrolls.
Twilio, a business communications firm based in San Francisco, also invested in developing recruitment and orientation programs about a year-and-a-half ago in anticipation of substantial growth. The company expects to double its workforce in 2013 to 250 employees, up from 125 in 2012.
As part of orientation, new employees create apps that can work with the company’s communication systems for businesses. The first step, however, is bringing in the right employees, which is competitive in the Bay Area.
“You have to lean into recruiting and get good at it,” CEO Jeff Lawson said. “You have to build a great company people want to work at.”
Technology-related companies have driven significant job increases recently, but other sectors adding new jobs include education, health, construction, and leisure and hospitality.
Local chain Patxi’s Pizza grew from 120 to 418 workers from 2010 to 2012. Build Group, a general contractor, started up in 2007 just as the construction industry took a nosedive and yet grew from 104 employees in 2010 to 154 in 2012.
Growth, however, poses challenges. For Raj Abhyanker, founder and CEO of LegalForce, has tripled his staff during the past three years to more than 150 workers, but said finding the right people in today’s job market is “very difficult.”
“The changing legal landscape is creating demand for new models of accessing lawyers,” Abhyanker said.
His company, however, has a hard time competing with traditional law firms for entry-level attorneys.
What’s clear is that many of today’s new jobs don’t follow conventional models.
Wilson, of TubeMogul, said fast-growing companies have to find employees that understand the realities of that kind of rapid growth. Workers may enjoy perks like free food and in-house bike-sharing, but also have to accept working long hours or taking company stock instead of cash.
“There’s lots of people who are tuned in to that trade off,” Wilson said. “They’re risk-seeking and they want to do something different.”
Blanca Torres covers East Bay real estate for the San Francisco Business Times.


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